Why The Future of The Psychedelic Industry Could Be In The Hands of Retail Investors

Despite a challenging 2020, massive amounts of capital continues to pour into psychedelic medicine. While it seems clear the world is ready to embrace this radically effective new form of mental healthcare, it is worth exploring where the source of this capital is coming from. What type of investor, retail or institutional, is in fact the driving force behind the modern psychedelic renaissance? It turns out, the people, the retail investors are fueling the modern psychedelic movement and are playing an important role in doing so.

 

Read: The Reddit Revolution Riles up Retail Investors: How Short Selling Gamestop (GME) Will Impact the Psychedelic Market

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Why Are Retail Investors Important to the Psychedelic Renaissance

Retail investors are crucial to the psychedelic movement because of how speculative early industries like the psychedelic space is right now. Most psychedelic drugs are illegal across the globe, making most institutional investors wary of getting involved. Serious changes to global drug policy must take place before these drugs can go mainstream. Nevertheless, many psychedelic companies are already going public because investors are demanding this of them. The use of these compounds is legal for research in places like the United States, which means their production and use in clinical trials is an important consideration. Since lots of institutional money is shying away from buying into psychedelics at this point given how speculative and uncertain the space is, retail money is critical to the successful emergence of this industry.

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Cannabis Investors Are Now Shifting Their Focus Towards Psychedelic Drugs

We can learn more about the similarities and parallels of current psychedelic investors by looking at cannabis investors and how the early days of cannabis investing unfolded. Additionally, if we observe the FOMO phenomenon observed by retail investors during the “green rush”, we can see that psychedelic investors are experiencing something very similar. In fact, much of the early money coming into the psychedelic market is coming from notable former cannabis investors, such as Peter Thiel. These investors are crucial to an early nascent space, and many retail investors are exhibiting similar behaviors they did during the early days of cannabis.

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The Regulatory Landscape is Shifting Fast Across the Globe

While institutional investors may be wary of the illegality of psychedelic drugs, retail investors are highly confident in their medicalization and the profits to come. In fact, just last year, Canadan psychedelic advocacy group, Therapsil, helped palliative care patients gain access to psilocybin, the active ingredient in magic mushrooms, to treat their end of life distress. Just last year, the state of Oregon legalized the use of magic mushrooms in a therapeutic setting. As we move closer to the full legalization or rather, medicalization, of these drugs, it is likely more retail investors that are psychedelic enthusiasts are sure to pour more money into this space.

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The Investment Banks Fueling the Psychedelic Renaissance  

While most investment banks are shying away from getting involved with psychedelic stocks, some notable banks are helping the fuel this renaissance. For instance, Cannaccord famously built out an extremely sophisticated network of retail investors to fill their deals. Due to the biotech focused drug development pathway psychedelics are taking, their momentum is more powerful than ever. : Canaccord Genuity Group, Eight Capital, Gravitas Securities Inc., and Mackie Research Capital Corporation are all involved in the psychedelic renaissance and have developed a robust and complex group of retail investors that are helping fuel the psychedelic renaissance.

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Retail Investors Will Help Fund the Early Days of Psychedelic Medicine

Just like with cannabis, retail investors are crucial to the psychedelic movement because of how speculative the psychedelic space is right now (e.g. most are Schedule I). Since lots of institutional money is shying away from buying into psychedelics at this point, given how speculative, early and uncertain the industry is, retail investors are critical to the successful emergence of this industry. Indeed, we the people play a powerful role, especially in the early days of this powerful movement. Between Compass Pathways debuting on the NASDAQ and the growth of companies going public, it’s clear psychedelics are on their way to becoming mainstream medicine. Thankfully, despite regulatory barriers and other challenges, retail investors are helping fuel this important renaissance in its early days.

Microdose Psychedelic Insights

Microdose Psychedelic Insights

Your Guide to the Business of Psychedelics. Our mission is to shift the world's perception of psychedelic medicine.