2020年12月31日星期四

The Biggest Investing Trend of 2021: Psychedelics

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CASEY DAILY DISPATCH - Casey Research

The Biggest Investing Trend of 2021: Psychedelics

By Andrey Dashkov, CFA, analyst, Casey Research

Nick Giambruno

The COVID crisis is a mental health catastrophe. It’s taking an immense toll.

The Centers for Disease Control and Prevention reported that 2 in 5, or 40% of, U.S. residents said that they were struggling with mental health issues due to the pandemic.

Demand for mental health drugs soared. Prescriptions for anti-anxiety drugs increased by almost 38% in the first weeks of March.

But a new study from Johns Hopkins Medicine found surprising results about an alternative treatment. And I think it’s on track to be one of the biggest investing trends of 2021…

An Alternative Medicine That Works Fast

According to the study, just two doses of psilocybin (also called magic mushrooms), coupled with psychotherapy, can help people suffering from depression – and deliver the results fast.

We’ve written about magic mushrooms in the Dispatch before. To recap, magic mushrooms are a class of psychedelics that trigger thought, visual, and auditory changes, and an altered state of consciousness.

Last week, my colleague Nick Giambruno wrote about why he’s so bullish on psychedelics… and the legalization trend he sees ahead.

And studies like the ones at Johns Hopkins that prove the medicinal properties of psychedelics will only help boost that trend.

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The study said that the positive effect of the magic mushrooms on the treatment of major depression is four times greater than pharmaceutical medications.

And while antidepressants can take weeks or months to take effect… magic mushrooms work within hours.

If something works within hours, not months… and produces an effect that is four times stronger than the traditional drugs… it’s a win.

Of course, more research needs to be done on magic mushrooms. But the early studies show promising results.

And while the U.S. is leading on research, legalization in Canada is already underway.

The Wave of Psychedelic Decriminalization

Canada is showing what could soon be in store for the U.S. As of August, Canada’s federal government granted 11 exemptions for psilocybin-assisted psychotherapy treatments.

And Canada will soon make a decision on approving psilocybin use in therapy.

As with cannabis, Canada will likely legalize psilocybin and other psychedelics.

And some states in the U.S. are working on the legalization of psychedelics, too. Oregon legalized psilocybin, and Washington, D.C. decriminalized psilocybin and other psychedelics in November.

And I believe psychedelics will benefit further as we see a federal push toward the decriminalization of another drug: cannabis.

On December 4, the House passed a bill to decriminalize it. We’ll have to wait and see what happens in the Senate.

But decriminalization of cannabis was one of Joe Biden’s campaign promises. And it’s already decriminalized in 32 states, and fully legal in 16. So I think it’s only a matter of time before cannabis is decriminalized at the federal level.

Once that happens, I don’t think it will be long before psychedelics follow… as society begins to accept the medicinal benefits of these drugs.

The Biggest Investing Trend of 2021

That’s why I think psychedelics will emerge as a major investment trend in 2021.

But psychedelics are an “out-there” idea for a lot of investors. And there are very few psychedelics companies. In fact, there’s not even enough to launch an exchange-traded fund (ETF).

But our opportunity lies in this problem. That tells me now is exactly the time to start looking in this direction… before the trend really takes off. Just remember to do your due diligence before investing in any company.

And in the meantime, I recommend looking at the Horizons Marijuana Life Sciences Index ETF (HMMJ). It holds a basket of publicly listed North American companies that work in the cannabis industry. It should benefit as the decriminalization trend expands the market for psychedelics and cannabis.

Just don’t bet more than you can afford to lose.

My colleague, Nick Giambruno, also covers companies at the forefront of this trend in his Crisis Investing advisory. For all the details, along with his top picks to profit off the growing legalization of psychedelics and cannabis, go here.

Good investing,

signature

Andrey Dashkov, CFA
Analyst, Casey Research


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