In the lead up to 2018, many investors’ portfolios were green – in more ways than one. Let’s rewind to 2015 – that year, Justin Trudeau, leader of Canada’s Liberal Party, won a majority in a federal election. By 2018, it was official – Canada became the 2nd country on Earth and the first G7 country to legalize cannabis.
At the same time, a green tide was washing over America. By 2018, states like California, Maine, and Massachusetts joined Colorado, Washington, and Alaska as places where cannabis consumption was legal.
Amidst all this, marijuana stocks were going crazy. For example, Tilray (NASDAQ: TLRY) started on NASDAQ at 29.77. By October 2018, its price per share had soared to 148.30. Canopy Growth (TSE: WEED) went from 2.59 in April 2016 to a high of 67.14 in April 2019.
But today, the landscape is much different. Today, Tilray sits at 25.35 – an improvement from its dismal 2020 lows, but it’s hardly thriving. Meanwhile, Canopy is doing alright at 43.00 per share – but with oversupply fears still lingering, betting on a bull run seems risky.
Marijuana madness seems to be over. But as one door closes, another is opening. Get ready for mushroom mania…
Cannabis Paved the Way for Psilocybin Acceptance
Also known as magic mushrooms, attitudes toward psilocybin have shifted dramatically over the past few years. In 2019, Denver became the first jurisdiction in America to decriminalize the substance. A year later, the state of Oregon one-upped them, becoming the first place in America to legalize the psychedelic fungi.
Unlike cannabis – which took decades of activism to legalize – the shift in attitude toward psilocybin has been sudden. What on Earth is going on?
The story of cannabis and psilocybin have many overlaps. Both substances had been schedule I drugs since the 1960s. In other words, the Feds had considered them to be highly addictive, with no redeeming qualities.
But over the past few decades, research disproved these qualities. These studies showed that cannabis and psilocybin were NOT addictive. On top of this, they also demonstrated that both substances had therapeutic properties.
Initially, the conservative politics of the late 20th century delayed progress. But as younger generations became a larger proportion of the voting public, things began to change. In 2012, the first breakthrough took place, as Washington and Colorado fully legalized cannabis.
The old guard and police officials predicted disaster – instead, both states ended up with overflowing coffers. By June 2019, Colorado had collected over $1 billion in cannabis taxes, while Washington has added $883 million in taxes and $2 billion in cannabis-related economic activity.
Authorities are Trusting the Science on Psilocybin
Cannabis legalization has shown itself to be a resounding success. Because of this, authorities have been thrower up fewer roadblocks to psilocybin decriminalization/legalization. Most of all, politicians are hesitant to appear “out of touch” with increasingly progressive voters.
Spurred on by encouraging findings, psilocybin activism has increased in recent years. This organizing has led to electoral victories in places like Denver and Oregon. In turn, this has spurred governments across America to action.
In Oakland, California, the city council has effectively decriminalized psilocybin. Iowa State Representative Jeff Shipley has tabled a bill that would do the same. And in the US House of Representatives, Congresswoman Alexandria Ocasio-Cortez has brought legislation to the floor that would make psilocybin research much easier.
Which Psilocybin Stocks Have Ground Floor Potential?
So it’s clear – momentum is moving heavily in the direction of psilocybin decriminalization/legalization. So, if you missed out on the 2016-2018 weed gains, it’s understandable if you’re feeling some serious psilocybin FOMO.
But before you start investing, realize that startup phase companies are incredibly volatile. All it takes is a handful of bad press to sink a once-promising firm. So never buy shares with money you cannot afford to lose.
That said, here are three psilocybin stocks that may have ground floor potential.
1) MindMed (OTCMKTS: MMEDF)
Long before anyone had heard of COVID-19, we were (and are still) in the midst of another pandemic. Thanks to the over-prescription of opioids, millions of Canadians and Americans are addicted to these drugs. Every year, countless thousands die needlessly from fentanyl and other toxic street drugs. In some places, more people have died from these overdoses than from COVID.
Many addicts want to break free of opioids, but they can’t overcome the withdrawal symptoms. That’s where MindMed comes in – by using psilocybin, they’re aiming to exceed the effectiveness of existing treatments.
While initial trial results have been promising, lack of revenue has concerned some investors. However, they have the financial backing of former Canopy Growth CEO Bruce Linton and Shark Tank guru Kevin O’Leary.
Hype after their OTC IPO died down fast. However, with a favorable change in the political climate and concrete financial banking, there is considerable support for its current run. Right now, their price per share stands at 2.79. If trial results continue to be positive, their pending NASDAQ IPO could be epic.
2) Compass Pathways (NASDAQ: CMPS)
Past scientific evidence has suggested psilocybin mushrooms could play a role in treating clinical depression. Of the firms developing treatments, Compass Pathways is crafting one of the most promising ones.
Three aspects put CMPS above their competitors. One, their treatment regimen has advanced to Phase 2 investigation status in the UK. Two, they own a patent on their treatment. And three, they have the backing of PayPal co-founder Peter Thiel.
Since their NASDAQ listing in September 2020, their share price has jumped 26% to 39.25. Given their A-list backers, patents, and their progress to date, it appears CMPS may be a wise bet.
3) Numinus Wellness (OTCMKTS: LKYSF)
Like Compass Pathways, Numinus Pathways is developing psilocybin treatments for mental illnesses. In particular, they plan on delivering ketamine-assisted psychotherapy to treat PTSD, depression, and other conditions.
After years spent wandering the penny stock desert, Health Canada awarded Numinus a license that permits them to import/export, create and test psilocybin. That caused their price to slowly increase until November. Then, they announced the start of clinical trials. Shortly after, they struck financing deals with several backers.
That caused the stock to spike to 1.81 before settling around the 0.90-1.20 range. To be honest, their long-term success depends greatly on the outcomes of their clinical trials. But for now, it’s as good a gamble as you can get.
Looking for more suggestions? Check out some more mushroom penny stocks over on InsiderFinancial.com.
The Magic Mushroom Wave is Starting to Build
Psilocybin is an entirely new sector. As such, you have an opportunity to get in on a ground-floor opportunity. So do your homework, find some capital you can afford to lose, and make your wager.