Medical use of psychedelics had a major breakthrough in 2020, as companies exploring psychedelic usage through clinical trials are going public. The November 2020 elections were also a major step for psychedelics for medicinal use as Oregon became the first state to decriminalize all drugs, prompting other states to leave the doors open for psychedelics. Although still a nascent market, investor anticipation for the first company to break through and hit the market has investors pouring in their capital in support. The projected sales for psychedelics for therapy is expected to reach $7BN by 2027. 

Background
Psychedelics have been demonstrated, through decades of research, as an effective treatment for depression, PTSD, anxiety, and other mental disorders. The Food and Drug Administration (FDA) has fast-tracked and even called clinical research trials “breakthrough therapy.” Unlike cannabis, however, all of these psychedelics companies focus on FDA-approved therapeutic psilocybin use and according to timelines projected for approval, we could start expecting psilocybin on the market in 5 years. 

Still, this timeline doesn’t mean psilocybins will be readily available. The stigma behind usage as well as substance abuse disorders mean a functional model to properly administer the medication as well as have it accepted by major insurers will take time. 

Major Players

• UK-based Compass Pathways IPOed on the NASDAQ in September 2020 and is backed by Paypal co-founder Peter Thiel as well as Atai Life Sciences. The company has received a breakthrough therapy designation by FDA for its research into the use of psilocybin for severe depression.
• Mind Medicine has a public company on the Canadian NEO Exchange since March 2020. Not long after Compass Pathways IPOed, the company announced it would uplist to the NASDAQ as well. The company is currently working on a psychedelics-derived medicine that targets the medical needs of treating substance addictions especially opioids. 
• The largest private startup Atai Life Sciences has received the most funding of all psychedelic treatment-focused companies. It has raised two rounds of funding, each at over $100MM and notably in November 2020 and March 2021 as well as made active investments and acquisitions in the past year. The company is rumored to be exploring an IPO for early this year. 
• CB Therapeutics is another startup in the early funding stages but has been engaged in the biosynthesis of psilocybin, psilocin, and related-tryptamine-based compounds. It is filing for a patent.