Psychedelic medicine attracts investors with legalisation of banned drugs in prospect in the United States
- Investors are eyeing psychedelics as health care’s next big business, with substances until now illegal nearing regulatory approval for use in treatments
- There’s no shortage of investment interest from companies looking to benefit in the future
Investors may be eyeing psychedelics as the next big trend in health care. That is according to leaders in the medical psychedelics field, who say there’s a serious growing interest from established backers who have traditionally stayed away from companies that deal with substances that are illegal in the US.
Once that interest manifests into investment – and a few asset managers begin to put money into medical psychedelic companies – Shlomi Raz, founder and CEO of medical psychedelic company Eleusis, said at The Economics of Psychedelic Investing conference last week that he expects the rest to quickly follow. “Once the lead steer moves into this space, you’ll see the whole herd moving in,” he says.
JR Rahn, founder of MindMed – a company that develops psychedelic-based medication – says that the barriers to entry for medical psychedelics are even higher than they are for cannabis. That is because medical psychedelic companies are looking to have their products approved by the US Food and Drug Administration.
In MindMed’s case, the company is pushing to get FDA approval for a compound called 18-MC, which would effectively remove the hallucinogenic properties from ibogaine, a psychedelic West African drug, while preserving its medical properties. 18-MC must undergo a series of clinical trials before being approved by the FDA to address opioid abuse disorder.
“It’s a very different industry [from cannabis],” Rahn says, noting the strenuous clinical testing. Beyond addressing the opioid crisis, Rahn says that he thinks he would want to look into addressing the teen vaping crisis as well.