2022 was a milestone year for the psychedelic industry and its advocates, with massive victories in the realms of decriminalization and legalization, clinical trials, and business. And it seems that we are not going to have to wait long to see the accomplishments of 2022 superseded, as 2023 is shaping up to be an even more paradigm-shifting year than the one that preceded it.
Therefore, in this article, I will walk through the three main storylines that those interested in psychedelics should keep an eye on in the coming months, and provide specific examples for each.
The three storylines which will help change societal psychedelic paradigms are: legal and regulatory changes; clinical trial results; and business decisions by the leading psychedelic research companies.
Possible Psychedelic Legal and Regulatory Changes in 2023
2022 saw some major steps forward in the domain of liberalizing psychedelic laws throughout North America. While we saw the DEA increase the allowed production rates for research psychedelics, and the Canadian province of Alberta creating a system for psychedelic therapy, by far the most impressive of said steps was the US state of Colorado voting in a referendum to decriminalize natural psychedelics and legalize psilocybin-therapy healing centers.
But while Colorado’s 5.8 million people decriminalizing many psychedelics was a leap forward, 2023 could see California’s 39.2 million residents follow their lead.
This could happen through the passage of Senate Bill 58, which would decriminalize the possession of natural psychedelics such as psilocybin magic mushrooms, DMT and ibogaine. While Bill 58 is not as comprehensive as the recently passed Colorado ballot measure — it does not allow for legal psilocybin therapy for example — the sheer size of California would make this the most consequential legal advancement of psychedelics since the War on Drugs began.
That being said, there is no guarantee that this bill will pass, as previous —albeit much more comprehensive — versions of the bill were rejected. However, following psychedelic victories elsewhere in North America, this newly slimmed-down version of the psychedelic decriminalization bill has never looked more likely to pass.
Another possible major milestone to watch is a court case in Canada whose results could legalize psychedelic-assisted therapy for mental health disorders across the country. Here, plaintiffs are arguing that by denying them access to a medicine that can help their health, the country is violating their constitutional rights. Many legal scholars believe this case is likely to be decided in favor of the plaintiffs, as a nearly identical case involving medical marijuana was previously decided in the plaintiff’s favor — which effectively forced the Canadian government to legalize medical cannabis.
Major Psychedelic Clinical Trial Results
2023 will see the publication of many major psychedelic medicine clinical trials. This is important, as in order for a new medicine to be approved for use in the USA and Canada (and in much of the rest of the world) it must pass through the clinical trial system. This means that the treatment must successfully complete a Phase 1 safety trial, a Phase 2 efficacy trial (often split into a Phase 2a and a Phase 2b trial), and two separate, larger, Phase 3 efficacy trials.
The most important trial being published in 2023 is the second Phase 3 trial for the treatment of PTSD using MDMA-assisted therapy. The MAPS-sponsored trial has been completed, and now we are waiting on the official release of the results, which should happen within the first half of 2023.
If this trial is even remotely as successful as the first Phase 3 trial using MDMA-assisted therapy to treat PTSD —which saw 88% of patients decrease their symptoms by 50% or more and 67% improve so much that they “no longer qualified for a PTSD diagnosis after three treatment sessions” — then we will likely see MDMA therapy for PTSD become legal in the USA in 2024.
Some other major trial results to keep an eye on in 2023 are: Compass Pathways’ (Nasdaq: CMPS) first Phase 3 trial using psilocybin-therapy to treat Treatment Resistant Depression; MindMed’s (Nasdaq: MNMD, NEO: MMED) Phase 2b trial using LSD to treat Generalized Anxiety Disorder; and Small Pharma’s Phase 2a trial using DMT-assisted therapy to treat Major Depressive Disorder.
Psychedelic Market Prices & Business Moves
If there was one disappointing aspect of the psychedelic renaissance in 2022, it was the cratering stock prices of publicly traded psychedelic research companies. And while many non-investors may not care, they should, as the decimation of the stock prices means more difficulty in raising money to fund clinical trials.
When it comes to psychedelics-as-medicines, our society won’t benefit from them unless they complete the clinical trial process — something that can cost tens or even hundreds of millions of dollars. And at the moment, the largest funder of such research is for-profit companies, but if their stocks keep falling, we may see the pace of research slow. Therefore, something I will be watching closely is whether companies like MindMed, Compass, and atai Life Sciences (Nasdaq: ATAI) can win back some of their lost market caps.
Barring a rapid rise in stock prices and market caps, companies will have to find other ways to sustain themselves. An obvious way is to join forces and pool resources. Therefore, I will be watching for mergers and acquisitions in the publicly traded psychedelics world. This is just an educated guess, but I personally expect to see at least a few of these moves in 2023.