The psychedelic realm is emerging as a popular investor choice, could rival cannabis

Bethan Rose Jenkins, Cannabis News Writer/Editorial

Amid the rise of legal weed, another potential market appears to be emerging psychedelics. Anticipated to completely transform the mental health market, which is valued at around $2.5 trillion in the U.S. alone, psychedelic substances are steadily making the jump from the black market to the regulated market.

Recent reports claim that the number of companies who deal with drugs that contain Ibogaine an ingredient commonly used in ayahuasca ceremonies and psilocybin the dominant ingredient in magic mushrooms is growing exponentially. So much so, in fact, that investors are confident psychedelics will overtake cannabis in disrupting the $70 billion mental health market. 

Many investors who are setting their sights on the psychedelic industry are believed to be transitioning from the cannabis industry. Early-stage cannabis investors in particular will strive to avoid missing out on a swift industry boom, say experts.

Both cannabis and psychedelics are federally illegal in the U.S.

Since the black market is teeming with psychedelic substances, investors are becoming attracted to the blossoming legal industry. Cannabis also saturates the black market, but legal avenues have managed to capitalize on existing customer bases by ensuring their products are lab-tested, and developed in accordance with the highest health and safety standards.

Both industries share similar appeal, what with each market’s main ingredient being a federal illegal substance; not only in the U.S. but also, across much of the world. Nonetheless, cannabis lures much more powerfully on a recreational level, considering the fact that certain strains of cannabis don’t possess mind-altering properties. Psychedelics, on the other hand, are renowned for producing “trippy” side effects.

This isn’t to say that investors are shying away from investing in the psychedelics space, however. As the regulatory outlook continues to transform, risk-taking investors are putting their confidence in the prospective industry’s likelihood for growth. One example is an investor for Facebook and PayPal named Peter Thiel, who is dabbling in psychedelic substance investments. Another is the chief executive of Dr. Bronner’s Magic Soaps, which describes its hemp products as “psychedelic-assisted therapies to heal the soul!”

Psychedelics have been decriminalized in a number of U.S. cities

Back in May 2019, Denver Colorado became the first U.S. city to legalize psilocybin. One month later, the Californian city of Oakland followed in Denver’s footsteps, before Santa Cruz decriminalized psilocybin in January of this year. Furthermore, during the recent Election Day in November 2020, both Oregon and DC voted to relax restrictions on psychedelic drugs. 

Despite widespread acceptance of psychedelic substances in the U.S., the industry is trailing far behind cannabis, which could be legalized on a federal level under President-Elect Joe Biden. Furthermore, it should be noted that decriminalization does not legalize the drug. Rather, decriminalization is a loosening of criminal penalties imposed for personal cannabis use.