The Road To Psychedelics Legalization, Part 1: Psychedelics Vs. Cannabis

The emerging psychedelic drug industry is off to a booming start. In the first full year of public companies in this sector, many psychedelic stocks produced strong investor returns.

Those gains were powered by a combination of exciting clinical research on psychedelic drugs, massive capital flows into the sector, and very strong investor sentiment. See: The Year In Review For Psychedelic Stocks: 2020

The industry has been rapidly advancing. Media coverage has been positive and plentiful.

One question remains. What about the legalization of these drugs?

The road to legalization

Roughly a half-century ago, psychedelic drugs were heavily criminalized as (supposedly) dangerous drugs with no known medicinal uses.

This drug Prohibition was a reaction (over-reaction?) to the 60s cult figure Timothy Leary, and his encouragement to younger people to “tune in, turn on, drop out.”

Drug Prohibition put the brakes on (among other things) scientific research on the potential of psychedelic drugs to treat an assortment of mental health disorders.

Fifty years later, a Mental Health Crisis now spirals out of control globally. Over 1 billion people suffer from stress-related afflictions like depression, anxiety, addiction, and PTSD.

Thanks to the COVID pandemic (and related lockdowns), the numbers of people affected by such stress-related conditions are increasing exponentially. Conventional therapies have proven to be woefully inadequate in treating these conditions – which is why we now have a “crisis” in mental health.

In recent years, the doors have creaked open again to medical research on psychedelic drugs. Clinical testing has been producing spectacular results. Even better, an economic study on psychedelics-assisted therapy (using MDMA for PTSD) shows the potential for enormous cost savings.

But the general population won’t have access to these drugs unless/until they are legalized for medicinal use. This brings us back to the original question: when will these drugs be legalized?

For some investors, the question needs to be framed in even more open-ended terms. Will these drugs be legalized at all?

Those looking toward the cannabis industry for guidance may be apprehensive. While Canada has legalized cannabis nationally for both medicinal and recreational use, few other jurisdictions have gone that far.

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The writer holds shares in MindMed Inc, Numinus Wellness, Cybin Inc and Mind Cure Health. Mind Cure Health is a client of Psychedelic Stock ...

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