Don’t Miss the Boom: 3 Psychedelic Stocks Set to Explode Higher

Stocks to buy

Psychedelic stocks are on the rise. Despite the stigma surrounding psychedelics for personal use, controlled medical experiments indicate their usefulness for treating a variety of conditions.

One great benefit about psychedelic stocks is their early growth stage. Although this implies added risk, it offers greater potential upside. The difficulty lies buying the right psychedelic stocks.

So, if you’re unafraid of high-risk, high-reward situations and up for a calculated gamble, let’s look into the best psychedelic stocks to consider buying.

Compass Pathways (CMPS)

compass with an arrow pointing toward growth to represent growth stocks

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Compass Pathways (NASDAQ:CMPS) is a U.K.-based biotech company focused on treating depression with a patented psilocybin formulation called COMP360.

Investors have supported reason to be bullish on CMPS stock. The company has secured $285 million in psychedelics research funding to treat mental health issues. The financial influx is expected to last through late 2025 and aims to secure FDA approval for psychedelic treatments.

Compass has already conducted the largest controlled study on psilocybin therapy. This research is a bonus, showing significant improvements in treatment-resistant depression They’re also exploring Phase 2 and 3 trials for various conditions such as PTSD and anorexia nervosa.

The funding and positive research developments form the basis for CMPS’s buy recommendation. The company’s stock price has fluctuated around its long-term averages for the past year, yet now it’s trading below them. This implies a likely reversion back to this inflection point soon.

Mind Med (MMEDF)

A handful of brightly colored pills in different shapes and sizes is scattered on a turquoise background.

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Mind Med (OTCMKTS:MMEDF) is a Canadian company that’s developing several non-hallucinogenic therapies for conditions like addiction and ADHD.

Analysts give it a buy rating, generally agreeing that the stock has room to grow. Also, big institutional investors are increasing their stakes, which could indicate strong future performance.

Further, Wall Street’s optimism about MMEDF stock is attributed to recent positive developments. The brand’s stock rose in April following positive results from a Phase 2 trial using LSD to treat major depressive disorder (MDD). Conducted by Mind Med collaborators at University Hospital Basel and University Hospital of Psychiatry, the trial showed significant improvements in depression symptoms, with the drug being well-tolerated by patients.

Additionally, MMEDF stock has shown some short-term weakness amid a broader fall in the major indices like the S&P 500. However, it continues to find support on a trend line, holding since April, making the stock one to buy.

Numinus Wellness (LKYSF)

Mushrooms next to various medical tools; mushrooms in a pill container to represent psychedelic treatments

Source: Shutterstock

Numinus Wellness (OTCMKTS:LKYSF) is the first Canadian public company to receive a cultivation license for psilocybin production.

Having expanded on this license, LKYSF stock secured two new Canadian clinics in 2021 for a study on MDMA-assisted psychotherapy for PTSD. The study, in collaboration with MAPS Public Benefit Corporation, aims to explore the safety and efficacy of MDMA in treating severe PTSD.

Also, investors will appreciate LKYSF’s efforts to reach break-even profitability as soon as possible. This month, it announced plans to shut down its non-revenue research lab, consolidate wellness clinics, and not renew leases for two research clinics. These actions are expected to reduce annual cash expenses by $1 million Canadian dollars and also improving margins.

Unfortunately, the biggest risk of investing in biotech and psychedelic stocks lies with a small number of trials and drugs actually achieve FDA approval. The above cost-cutting measures are essential to ensuring LKYSF has enough runway needed to develop new, successful drugs while ultimately delivering a return to investors. This helps make it one of those psychedelic stocks worthy of attention.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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