Ever tried mushrooms? The “magic” kind?
I haven’t.
But I’ve heard so much about psychedelic drugs recently that I’m getting curious. Especially because so many professional investors believe this might be the next gold rush.
So today, I’ll give you a quick overview about what psychedelics are…
Then I’ll show you a way to invest in this emerging sector for the biggest potential profits.
A Brief Overview of Psychedelics
Many of us have heard about “tripping” on psychedelic mushrooms. But what are psychedelics, and why do they make us “trip”?
Simply put, psychedelics are a type of drug that can change the way we hear, smell, or feel, and can also affect our moods and thoughts.
If we ingest enough psychedelics, our body can’t absorb them right away — and when that happens, it creates a backlog of perceptions that’s known as a “trip.” That’s why people who use such drugs say they’re tripping.
The thing is, scientific research has shown that these trips can provide more than just short-term euphoria; they can also provide long-term therapeutic and medical benefits. Furthermore, you don’t necessarily need to trip to enjoy these benefits.
Here are the main psychedelics:
- Psilocybin. Psilocybin occurs naturally in more than 200 species of mushroom. Cave paintings suggest humans used psilocybin 9,000 years ago.
- Mescaline. Mescaline has been used in the form of peyote for almost 6,000 years. It occurs naturally in cacti plants in Mexico and the southwestern U.S.
- DMT. South Americans have used DMT in the form of ayahuasca for 1,000 years. This is thought to be the strongest psychedelic.
- LSD. Developed in a lab in 1938, LSD is arguably the most well-known psychedelic.
- MDMA. MDMA, also known as Ecstasy, was developed by big pharma company Merck in 1912.
As you can see, use of these drugs goes back thousands of years.
But it’s only recently that a mainstream audience is starting to learn about and embrace them…
The Making of a Gold Rush: From Netflix to the FDA
Last summer, a mini-series called “How to Change Your Mind” was released on Netflix. It exposed millions of ordinary people to the benefits of psychedelics.
Meanwhile, Joe Rogan, a hugely popular and influential commentator, has routinely started to talk about psychedelics on his podcast.
But the thing that will turn psychedelics into a gold rush is their use for medical purposes — and that’s exactly what we’re on the cusp of today.
In 2017, the FDA granted Breakthrough Therapy designation to MDMA for the treatment of Post-Traumatic Stress Disorder (PTSD). And this past March, after completion of Phase 3 trials, researchers concluded that MDMA, in conjunction with therapy, led to 66% of PTSD patients being cured of their severe PTSD.
Based on this result, top universities including Yale and NYU started doing their own research. Companies then started licensing this research to develop psychedelic biotech products — and that’s when the gold rush started rushing.
In Search of Profits in an $8 Billion Market
There are currently more than 50 publicly-traded companies that focus on psychedelics. Essentially, these are biotech stocks that focus on the use of psychedelics to treat disease.
Such stocks include Atai Life Sciences (Nasdaq: ATAI), Compass Pathways (Nasdaq: CMPS), Mind Medicine (Nasdaq: MNDM), and Seelos Therapeutics (Nasdaq: SEEL).
But like most sectors of the market at the moment, these stocks have gotten crushed.
You might try your hand at investing in these stocks when they’re still beaten down. But if you’re seeking to maximize your profits in this potential gold rush, we’ve got a better idea:
Invest in a psychedelics startup.
Such startups have raised about $250 million over the past year or so from professional investors.
Why are investors so excited about this sector? Because if one hits, it could hit huge — just like some of the big cannabis startups hit it huge and made their early investors a fortune.
Keep in mind, as Bloomberg has reported, the psychedelics market is expected to reach $8.31 billion by 2028.
And now I’d like to introduce you to one such startup…
Introducing: Nucleus
Nucleus is a venture studio for the psychedelics industry.
That means it’s building many, many psychedelics-oriented startups — a portfolio of them. So far, these are “pick-and-shovel” companies (in other words, they provide the tools or services an industry uses to produce a product), rather than biotech companies developing a drug or therapy.
Nucleus’ companies include:
- Neuly — A subscription-based data, tools, and dashboard platform for the industry.
- Psychedelic Finder — A type of search engine that connects those looking for care with practitioners, facilitators, and experiences.
- Psyrise — An end-to-end marketing platform for mental-health brands.
- OPCS — A resource for the upcoming psilocybin-assisted therapy program slated to begin in 2023 in the state of Oregon.
- Particles — A web3 protocol for smart contracts built on the Bitcoin blockchain. With Particles, one can launch tokens or NFTs, and take advantage of decentralized data storage that can overcome today's inefficient healthcare systems.
Nucleus will continue to launch new companies. It believes it can make quick decisions about which companies to shut down, scale up, or, in the end, to sell — hopefully for big profits.
And now, to support its growth, it’s raising capital from investors like you.
Nucleus: The Raise
Nucleus is raising up to $3 million at a $12 million valuation. An investment grants you access to all of its existing startups, as well as every company it builds in the future.
Should you consider investing?
Well, this is certainly a risky bet. Risks include government regulation, the stigma around psychedelics, and competition from legitimate companies as well as the “black market.”
Furthermore, investing in a venture studio isn’t for everyone, especially if it’s focused on “pick-and-shovel” plays. Many investors might prefer to invest in a psychedelic company that’s 100% focused on a single idea, or one that’s developing a drug or therapy.
But if you believe in the potential for the psychedelics market, you can learn more about it here »
By the way, if you’re interested in learning about other high-potential startups focused on the psychedelics industry, leave a note or comment for me in the comments section below. If enough of you are interested, we’ll dig into this sector much more deeply for you!
Happy Investing.
Please note: Crowdability has no relationship with any of the startups we write about. We’re an independent provider of education and research on startups and alternative investments.
Best Regards,
Founder
Crowdability.com
