Canadian Investors in Psychedelic Stocks Looking to Tap Into the Potential Market

ByDan Kent Published On:

Key takeaways

Psychedelics are gaining mainstream acceptance: Growing research and regulatory momentum are pushing psychedelic therapies closer to becoming approved treatments for mental health conditions like depression, anxiety, and PTSD.

Different business models offer unique opportunities: Companies like MindMed focus on drug development, Numinus Wellness provides therapy services, and Compass Pathways leads in clinical trials—offering investors a range of ways to gain exposure to the sector.

High risk, high reward industry: While the potential for groundbreaking treatments is massive, regulatory hurdles, clinical trial outcomes, and funding challenges make psychedelic stocks highly speculative investments, and should not be invested in without exceptionally high tolerance for risk.

3 stocks I like better than the ones on this list.

In 2021, psychedelic stocks in Canada shot up, much like the buzz around cannabis stocks before. They popped into the Canadian market late in 2020 and even got their own exchange-traded fund (ETF).

Sadly, not enough folks were interested, so this ETF had to close shop. Still, folks are super curious about mushroom stocks and that excitement keeps growing.

We will look into some of the top Canadian mushroom and psychedelic stocks you can look at today for potential outsized gains. It’s essential to remember that psychedelic companies are in the early stages of their business cycle. Many companies are not even at the clinical stage of testing.

If you want to invest, do so with only a tiny portion of your portfolio if it fits your risk tolerance. As you can see by the pricing action on most of these stocks, the volatility is something that most people simply cannot handle.

Keep in mind that these psychedelic stocks are not in any particular order. I don’t personally own any because of the overall risks of the industry. However, for those who do want to dabble in them, there are some options here.

What are the top Canadian psychedelic stocks today?

Psychedelic drug developer for mental health

Mind Medicine (NEO:MNMD)

Mind Medicine, or MindMed, is a biotech company focused on developing psychedelic-based treatments for mental health disorders. It works on LSD, psilocybin, and other psychedelics for conditions like anxiety, depression, and addiction. MindMed is leveraging clinical trials and digital therapeutics to create regulated, evidence-based psychedelic medicines.

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  • Pipeline includes multiple psychedelic-based drugs targeting high-demand areas like addiction and anxiety.
  • Strong backing from institutional investors and partnerships with top research institutions.
  • Developing a proprietary LSD-based therapy (MM-120) that has shown promise in early trials.
  • Expanding digital health solutions to enhance psychedelic-assisted therapy.
  • Regulatory momentum toward psychedelics in North America and Europe could accelerate approval timelines.
  • Positioned to benefit from growing public and medical acceptance of psychedelic treatments.
  • Clinical Trial Results: Updates on MM-120 and other pipeline drugs will be key to its success.
  • Regulatory Developments: FDA or Health Canada approvals could be game-changing catalysts.
  • Competition in Psychedelics: More companies entering the space could impact MindMed’s market position.
  • Investor Sentiment: Biotech stocks can be volatile, and public interest in psychedelics may drive share price movements.
  • Regulatory Uncertainty: Psychedelic drugs still face legal and regulatory hurdles.
  • Clinical Trial Failures: If key trials don’t show positive results, it could significantly impact the company.
  • Cash Burn Rate: As a pre-revenue biotech, it relies on funding to continue operations.
  • Market Adoption Challenges: Even if approved, psychedelic treatments may take time to gain widespread acceptance.

Psychedelic-assisted therapy provider

Numinus Wellness (TSXV:NUMI)

Numinus Wellness operates clinics that offer psychedelic-assisted therapy and mental health treatment. Unlike pure biotech plays, Numinus focuses on integrating psychedelic treatments into mainstream healthcare by offering therapy services and conducting research. It has clinics across North America and is expanding its footprint as regulations evolve.

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  • Early mover in providing legal psychedelic-assisted therapy services.
  • Growing network of clinics and partnerships with medical professionals.
  • Revenue-generating business model, reducing dependence on external funding.
  • Actively involved in clinical research, supporting the safe integration of psychedelics.
  • Expanding partnerships with academic institutions and pharmaceutical companies.
  • Strong positioning as psychedelics become more accepted in mental healthcare.
  • Clinic Expansion: Growth in treatment centers will determine revenue potential.
  • Insurance Coverage: Widespread insurance adoption for psychedelic therapy would be a major catalyst.
  • Regulatory Approvals: Changes in government policies could speed up growth opportunities.
  • Therapist Training Programs: Increased demand for psychedelic-assisted therapy requires more trained professionals.
  • Regulatory Delays: Slow government approval for psychedelics could impact clinic growth.
  • Competition from Big Pharma: Larger healthcare companies may enter the space with more resources.
  • High Operating Costs: Running clinics and therapy centers can be expensive.
  • Adoption Uncertainty: Patients and doctors may take time to fully embrace psychedelics as a treatment.

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Leader in psilocybin-based depression treatments

Compass Pathways (NASDAQ:CMPS)

Compass Pathways is a biotech company developing psilocybin-based therapies for treatment-resistant depression. It is one of the most advanced companies in the psychedelic space, with its COMP360 psilocybin therapy in Phase 3 clinical trials, making it a frontrunner in getting FDA approval for a commercial psychedelic drug.

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  • First-mover advantage with its COMP360 psilocybin therapy in late-stage trials.
  • Strong institutional backing, including high-profile investors like Peter Thiel.
  • Potential to be the first company to bring a commercial psilocybin-based treatment to market.
  • Large addressable market in depression treatment, where current options often fall short.
  • Partnering with mental health providers to develop an ecosystem for psychedelic-assisted therapy.
  • Progress in Europe and North America broadens regulatory and market potential.
  • Phase 3 Trial Updates: Positive results would be a major boost for the stock.
  • Regulatory Pathway: If the FDA grants approval, it could set a precedent for the industry.
  • Mental Health Market Growth: Demand for new depression treatments continues to rise.
  • Reimbursement Policies: If insurers cover psilocybin therapy, adoption could skyrocket.
  • Clinical Trial Outcomes: Failure to show significant benefits could derail the stock.
  • Regulatory Barriers: FDA delays or rejections could push commercialization timelines back.
  • Cash Burn & Dilution: High R&D costs may require additional funding, diluting shareholders.
  • Competition from New Players: Other companies are also developing psilocybin-based therapies.

Overall, these psychedelic stocks will be high-risk, high-reward

The pandemic was a challenging time for mental health as people struggled with anxiety, depression, and PTSD. Psychedelics could play a key role in potentially helping millions of people cope with mental health issues and addiction.

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As they become more accepted in the medical industry, this space has tremendous business opportunities. Investors who get in before legalization could really benefit. 

Just know that there will be extensive risk, and invest only with money you’re willing to lose. We witnessed this with weed stocks in Canada not too long ago, and investors who bought in with large amounts of capital unfortunately paid heavy prices.

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