Shark Tank star Kevin O'Leary has invested in hundreds of businesses over the years, some on-screen and some off. But few have attracted as much attention as his investment in psychedelic drug company Mind Medicine (NASDAQ:MNMD), also known as MindMed. In this Dec. 21, 2020, Fool Live video clip, Mr. Wonderful himself tells us why he was so excited to invest in the company, and why he thinks it could have a massive opportunity ahead of it. 

Kevin O'Leary: I never participated in cannabis because when I wanted to and I was shown so many marijuana steals, all kinds of them, my compliance department, because I'm the chairman of O'Shares, I'm chairman of Beanstox and I have other investments in Fintech. I have a pretty big compliance department because we're regulated. They were never comfortable with the fact that it was a schedule one narcotic and not all states have made it legal. Then you're subject to the RICO statute it's a complicated legal concept, but there was a lot of hope that the House would approve cannabis. It's not going to happen. There's too many lobby groups and in states like Texas and Florida, it's just not going to be legalized, so I never participated in that. A couple of years ago, this is a good example of venture investing, there is a really interesting crypto community in Miami, and they generally meet on Saturdays for lunch at the Soho club, the back table. Some of the smartest guys in crypto, and if you want to get hip to what's going on in crypto, you attend one of these lunches. I attended many of them. There was one deal that I really wanted to invest in. It was going to be a crypto REIT, where we set it up in Iceland and our energy costs to mine were going to be next to nothing because we didn't have to air condition NVIDIA chips, which really heat up and you've got to spend a lot of money air conditioning. I took it back to my compliance department and she said to me, "Are you out of your (beep) mind? We can't touch Bitcoin. It is not a regulated asset."

That one went away, but at that lunch, and this is the serendipitous nature of investment, this guy called JR Rahn, he was a crypto guy at the time, said, "Look, if you think that's nuts, I have something I want to talk to you about. I want you to fund me to bring LSD, MDA, psilocybin mushrooms as medicine." I said, "Are you crazy? That stuff is illegal." He said, "Yes, it is. But in the 50s and 60s they were researching it as medicine in microdosing and having really interesting outcomes. I want to go to the FDA and create a company that goes through clinical trials." I thought that was brilliant, because I'm a kid with dyslexia. So all those medicines, we haven't had new medicines for mental illness in 37 years. I've heard the stories of microdosing in Silicon Valley. I said, "You know what?", I went back to my compliance people and I said, "Listen, if you thought Bitcoin was crazy, listen to this." All she said me was, "Is this FDA approved?" I said, "Not yet, but they're going to the FDA for trials." She said," I have no problem. Go nuts."

I became a very early investor in MindMed, I became an advocate for the whole sector. I'm a spokesperson for it, I'm a big believer in these medicines, and lo and behold, JR's company is now a $2 billion market cap. I'm one of the early seed investors. It's the best investment I've made in decades. I think it's just the beginning of the game. When you invest in biotech, you want the largest number of molecules and the most trials because you don't know the outcome in any of it. Either it's binary, either it's a loser, it's a zero, or it's a spectacular outcome. That's the nature of biotech investment. But if you're only betting on one molecule, you have huge risk. JR has got multiple molecules, multiple trials, multiple countries. That's his plan. He's quickly become the leader in this space. He is the guy. I'm a huge fan of that. By the way, on that one, I remember Alex, remember the guy who said rips flesh like a weasel in due diligence, I sent Alex after JR. I said, "Alex, tell me if this is for real." He came back and he said, "Not only am I borrowing Mike the dough you owe on this deal, I'm going to put my own dough in." That to me was like, whoa, what's going on here? Alex was also a big participant in the seeding of MindMed.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.