Psychedelics have gone from a countercultural fad of the 1960s to mainstream medicine in the 2020s. Quite a few psychedelic pharmaceutical companies are developing drugs that follow the legal, regulatory pathway to approval. Hallucinogens, including psilocybin, are showing considerable promise in treating illnesses such as depression and schizophrenia.
Several of these drugmakers are publicly traded and are receiving increased attention from investors. We've seen a similar phenomenon with marijuana stocks over the past several years. Cannabis was once on the fringe but is now a significant and growing industry.
Whether you call them magic mushroom stocks, 'shroom stocks, or psilocybin stocks, psychedelic stocks are hot right now. Let's explore five of the best publicly traded psychedelic companies on the market today.
Best psychedelic stocks
Psychedelic stocks are simply healthcare stocks focused on the use of hallucinogens to treat diseases. Because the area is still fairly new, most of these companies have relatively low market capitalizations. However, many are growing rapidly. Here are five of the top psychedelic stocks:
1. AtaiBeckley
2. Compass Pathways
NASDAQ: CMPS
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3. Helus Pharma (formerly Cybin)
NASDAQ: HELP
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4. Definium Therapeutics (formerly Mind Medicine)
NASDAQ: DFTX
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5. GH Research
NASDAQ: GHRS
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Benefits and risks of investing in psychedelic stocks
None of the five psychedelic drugmakers has approved therapies on the market yet. There is a risk that pipeline candidates will be unsuccessful in clinical testing. Even if the drugs prove safe and effective in clinical studies and win regulatory approvals, it's still possible they won't achieve commercial success.
Also, none of the companies has reached profitability yet. They might need to raise additional capital through stock offerings that dilute the value of existing shares.
On the other hand, there are reasons to be optimistic about the potential for psychedelic substances in treating various neurological and psychological disorders. It's still early days, but any or all of these leading pharmaceutical stocks could become big winners over the next few years.
How to invest in psychedelic stocks
Follow these steps to invest in psychedelic stocks:
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Tips for investing in psychedelic stocks
If you want to invest in psychedelic stocks, consider taking these actions:
- Start with a small investment to reduce your risk.
- Make sure your portfolio is well diversified.
- Evaluate the psychedelic companies' financial positions.
- Research the psychedelic companies' pipelines.
- Stay abreast of regulatory changes that could impact psychedelic therapies.
FAQ
Investing in psychedelic stocks: FAQ
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