We’re in the middle of the psychedelic renaissance, and psychedelics companies are booming. From venture-backed startups to major companies investing in psychedelics, investors are riding the wave of emerging research about the therapeutic potential of psychedelic drugs. But what do these companies actually do?
Publicly traded psychedelic companies operate in drug discovery and development, drug delivery systems, and even consumer packaged goods. Their capital flows come from pharmaceutical investment firms, venture capitalists, private donors, and other sources.
This momentum isn’t just about finding new ways to make you trip. Instead, many psychedelics companies seek to create new treatment options for conditions like addiction, depression, and PTSD. Here’s a high-level overview of key things to know about the psychedelic industry and some of the players in the space.
What to Know About the Psychedelic Industry
The psychedelic industry is a multibillion-dollar endeavor. According to Psilocybin Alpha, nearly $2 billion was invested in the psychedelics sector in 2021. That same year, Business Insider reported that 11 venture capital firms invested about $140 million in psychedelics. By some estimates, the industry is expected to climb to $10.75 billion by 2027. 1
There are approximately 50 publicly traded psychedelics companies, predominantly located in North America. These companies are working with compounds like DMT, psilocybin, LSD, and MDMA, which are Schedule I controlled drugs in the United States. These substances are still illegal, but they’re available for research (with approval from the DEA first, of course).
It’s not just sunshine and visual hallucinations. Bloomberg opinion columnist Chris Bryant writes that dozens of companies are still a long way from gaining regulatory approval and having a marketable product. 2 Rising interest rates, scalability questions, and prickly intellectual property laws might make potential investors shy away.
Additionally, the hype about psychedelic capitalism is problematic when access and Indigenous reciprocity aren’t considered.
In terms of access, psychedelic-assisted therapies won’t be cheap. Psilocybin service centers can legally operate in Oregon in 2023, but insurance will not likely cover the cost. For example, ketamine clinics are growing across the United States—but most patients pay out of pocket, sometimes in the thousands.
What about the Indigenous roots of plant-based psychedelics? On Psychedelics Today, Rebecca Martinez writes about sacred reciprocity: “a call for those who consume plant medicines to give back meaningfully to the communities and lineages who have preserved these medicines for generations.” 3
Indigenous peoples used psychedelics for thousands of years before Westerners ever tripped on LSD. As the psychedelics industry evolves, people must recognize the importance of giving back to the cultures that have preserved these traditional medicines.
Financially supporting Indigenous-led organizations is a start. Some psychedelics companies have embraced this level of reciprocity: Panacea Plant Sciences and Woven Science have dedicated percentages of their equity to Indigenous groups.
What Is the Main Goal of Psychedelics Companies?
The main goal of most psychedelics companies is to turn psychedelic drugs into marketable products and services that can be prescribed and sold to the public.
We anticipate that more companies will enter the industry as psychedelic drugs continue to move mainstream. It’s too short-sighted to say that all of these companies want to revolutionize medicine—some will simply want to take advantage of the hype and bring products to market.
However, the United States faces a mental health crisis, and psychedelic-assisted therapies offer new treatment options. Since 2011, the percentage of adults with a mental illness who report unmet treatment needs has increased every year. In 2019, nearly 50 million Americans experienced a mental illness. 4 And clinical trials have found that MDMA helps treat PTSD, psilocybin improves symptoms of depression, and LSD can reduce anxiety, among other promising results. 5 6 7
The opportunity to develop mental health solutions fuels part of the enthusiasm around psychedelics companies. The other part is investment capital, which makes a lot of the research and development possible. By studying psychedelics, researchers can better understand how these compounds work in the brain and potentially introduce new medicines that improve the quality of life of people struggling with mental health disorders. That’s a win.
In February 2022, Mindstate founder and CEO Dillan DiNardo told Fast Company that there’s currently a 3-to-1 ratio between how much mental health disorders cost societies and healthcare spending on the problem. The balance should be 1-to-1. “What that tells us is if we actually do develop medicines that are curative, that market could very quickly expand,” DiNardo said. 8
The Mission of Psychedelics Companies
According to Psilocybin Alpha, there are five primary psychedelic industry segments. 9
Here’s a quick guide to these spaces and their respective missions:
These companies seek to develop telehealth platforms, software, and other technologies for clinicians and patients seeking psychedelic-assisted therapy.
Consumer Packaged Goods (CPG) and Adult Use
These companies are working on products that are more recreational or functional than therapeutic, such as Red Light Holland’s truffle microdosing kit (available only for adult residents of the Netherlands). In the psychedelics space, this market is in its early stages because the recreational use of most psychedelics remains very illegal in most parts of the world.
Drug Discovery and Development
Also called research and development (R&D), drug discovery and development companies identify psychedelic molecules with therapeutic potential, test those compounds, and develop those drugs to bring them to market.
Manufacturing and Synthesis
This segment includes psychedelics companies that manufacture drugs, either synthetically (in a lab) or through cultivation facilities (natural extraction).
Treatment Clinics and Wellness Centers
Ayahuasca retreats, ketamine clinics, and psilocybin service centers fall under this category because they provide psychedelic-assisted therapies.
Currently, the legality of treatment clinics and wellness centers varies widely. For example, ayahuasca retreats are legal or unregulated in some countries, while ketamine clinics are growing throughout the United States. Additionally, psilocybin service centers will be permitted in Oregon in 2023. If other states follow Oregon’s example, we expect this segment to boom in the future.
What Are Some Examples of Psychedelics Companies and What Do They Do?
This is by no means an exhaustive list of psychedelics companies. Instead, we’ve compiled nine examples of publicly traded psychedelic companies involved in a range of sectors, plus any relevant info about current clinical trials.
ATAI Life Sciences (NASDAQ: ATAI)
Atai Life Sciences is a biopharmaceutical company that aims to transform the treatment of mental health disorders. Based in Germany, the company acquires and develops technologies and drug treatment programs across various compounds, such as ketamine, ibogaine, and DMT.
Atai’s portfolio includes several pre-clinical, Phase I, and Phase II trials for treatment-resistant depression (TRD), cognitive impairment associated with schizophrenia, and opioid use disorder.
Cybin Inc. (NYSE: CYBN)
Cybin is a Canadian biopharmaceutical company focused on engineering drug discovery platforms, drug delivery systems, and novel formulations and treatment regimens for mental health disorders. In addition, the company works with a network of partners and scientists to identify and develop psychedelic molecules.
Cybin has completed over 140 pre-clinical studies and developed 50 novel compounds. Currently, this psychedelics company has three active drug programs targeting major depressive disorder (MDD), alcohol use disorder, anxiety disorders, and neuroinflammation.
Field Trip Health Ltd. (NASDAQ: FTRP)
Field Trip is a Canadian psychedelic therapy development company that focuses on novel psychedelic drug development, psychedelic-assisted therapy, and digital tools for clinicians. The company’s first molecule in development, FT-104, is a synthetic psychedelic molecule similar to psilocybin, with a shorter duration.
Previously, Field Trip’s corporate structure included Field Trip Health (psychotherapy centers), Field Trip Discovery (development and delivery of psychedelic therapies), and Field Trip Digital (digital tools).
In April 2022, Field Trip Health Ltd. announced its intent to split the company into two independent public companies: Field Trip Discovery will become Reunion Neuroscience Inc, and Field Trip Health and Wellness Ltd. will inherit the company’s 12 psychedelic therapy clinics. The reorganization is expected to be finalized in July 2022.
GH Research PLC (NASDAQ: GHRS)
GH Research is an Irish biopharmaceutical company that aims to transform the treatment of psychiatric and neurological disorders. Based in Ireland, GH Research is focused on developing novel and proprietary 5-MeO-DMT therapies for TRD.
The company’s lead product candidate, GH001, has completed two Phase I clinical trials and a Phase I/II clinical trial in patients with TRD.
Compass Pathways PLC (NASDAQ: CMPS)
Based in the United Kingdom, Compass Pathways is a mental health care company that develops psilocybin-based therapies for TRD and post-traumatic stress disorder (PTSD) and provides therapist training programs. In 2022, Compass expects to initiate its Phase III trial for COMP360, a proprietary psilocybin formulation.
Mind Medicine Inc. (NASDAQ: MNMD)
Also known as MindMed, Mind Medicine is a Canadian psychedelic medicine and technology company that focuses on treatments for anxiety, substance abuse disorder, and ADHD. MindMed’s Project Lucy, which uses LSD to treat anxiety, is set to enter a Phase IIb human efficiency trial. MindMed collaborators presented positive results of the Phase IIa trial in May 2022.
Pasithea Therapeutics Corp. (NASDAQ: KTTA)
Pasithea Therapeutics is a U.S.-based biotechnology company focused on researching and discovering treatments for psychiatric and neurological disorders. The company also focuses on ketamine clinic partnerships and provides business support services in the U.K. and U.S.
Seelos Therapeutics Inc. (NASDAQ: SEEL)
Based in the U.S., Seelos Therapeutics is a biopharmaceutical company that focuses on developing treatments for neurological diseases and disorders.
The company’s drug pipeline includes SLS-002, an intranasal ketamine drug for acute suicidal ideation and behavior (ASIB) in major depressive disorder (MDD) and PTSD. In addition, SLS-003 is a sublingual ketamine drug that will be evaluated for pain management and psychiatric disorders.
Small Pharma (TSXV: DMT)
Small Pharma is a U.K.-based drug development firm that focuses on DMT for depression and psychedelic-assisted talk therapy. The company’s injectable DMT drug, SPL026, is Phase IIA. This clinical trial explores the safety, tolerability, and efficacy of DMT-assisted talk therapy.
Things to Know
The psychedelics industry is booming
Psychedelics have become a multibillion-dollar industry. In 2021, nearly $2 billion was invested in the sector, and about $140 million came from 11 venture capital firms. The industry is expected to grow to $10.75 billion by 2027.
Psychedelics companies have different goals
- Broadly, psychedelics companies want to turn psychedelic drugs into marketable products that can be sold, prescribed, and administered to the public.
- However, those goals can vary depending on the company’s sector.
- Some companies are developing new drugs and treatment options for mental health disorders.
- Several psychedelic companies operate in more than one sector, like ketamine clinics and drug development.
- Others have set the stage for future recreational products, like consumer packaged goods.
- Conversations about access and Indigenous reciprocity are essential as companies receive capital.
There are five major segments in the psychedelics industry
- Adjunct technologies: Digital services and software
- Consumer packaged goods and adult use: Recreational and functional products
- Drug discovery and development: Identifying and developing new psychedelic molecules
- Manufacturing and synthesis: The actual making of psychedelic drugs, either in a lab or extracted from natural compounds
- Treatment clinics and wellness sectors: Retreats and service clinics that focus on a range of psychedelics
- These sectors are expected to grow and evolve as psychedelics go mainstream
Companies are still developing new drugs and treatment options
We’re still in the early days of psychedelic research and drug development. Most companies are in pre-clinical, Phase I, or Phase I trials. That means we’re far from finding psychedelic drugs prescribed at the doctor’s office.
Startups and IPOs have replaced the counterculture days of psychedelics. But it’s essential to separate facts from the hype as companies identify and develop new drugs and treatments.
As of this writing, there are no approved therapies on the market. Additionally, there’s always the risk that these drugs won’t pan out in clinical studies and earn the FDA’s stamp of approval.
However, early studies are promising. And at a time when mental health conditions remain a significant problem at home and abroad, we’re holding out hope that ongoing research will usher in new therapies that positively impact people’s lives.
1. Psychedelic Drugs Market Size Is Projected To Reach $10.75 Billion By 2027. Accessed April 26, 2022. https://www.prnewswire.com/news-releases/psychedelic-drugs-market-size-is-projected-to-reach-10-75-billion-by-2027–301273405.html
5. Mitchell JM, Bogenschutz M, Lilienstein A, et al. MDMA-assisted therapy for severe PTSD: a randomized, double-blind, placebo-controlled phase 3 study. Nat Med. 2021;27(6):1025-1033. doi:10.1038/s41591-021-01336-3