Psychedelic drugs are all over the news. Not just general news but also business media. Big news. Big Business. The Psychedelics Revolution is EVERYWHERE

…and even the politicians are starting to notice

Roughly 50 years ago, psychedelic drugs like psilocybin, LSD and MDMA were heavily criminalized. These substances remain under the strictest regulatory prohibition in all major economies – at least at the national level.

So why is everyone talking about psychedelic drugs today?
 

That recent headline didn’t come from High Times, it came from The Financial Times, the prestigious (and very conservative) UK business publication.

Still ‘across the Pond’, the BBC produced this headline on psychedelics…

…with a URL:
 

what-if-everyone-took-psychedelics

Hyperbolic? Read on.
 

It began with a landmark study in 2006 at Johns Hopkins University, headed by Roland Griffiths…

“It is remarkable”, Griffiths wrote, “that 67% of the volunteers rated the experience with psilocybin to be either the single most meaningful experience of his or her life or among the top five most meaningful experiences of his or her life.”
[emphasis mine]

Two out of three people rated their psychedelic ‘journey’ to be (at least) among the top-five most meaningful experiences of their lives. Unless these people all led very dull lives, that’s a pretty significant statistic.

Transformative. Life-changing.

The economics of mental health

Why, after 50 years of Prohibition, are important media voices only now taking notice of the life-changing potential of these drugs?

For that answer, we can come back across the Atlantic and reference an article from The Wall Street Journal.
 

The Mental Health Crisis.

It was already a pandemic long before the Covid-19 pandemic even started. Now it is a global mental health catastrophe.

Roughly two billion people (1 in 4 globally) are currently coping with one or more treatable – but generally untreated – mental health disorders. These untreated, or poorly treated mental health disorders are the direct cause of 8+ million preventable deaths per year.

Suicide is now an “epidemic” in the United States. Drug overdose deaths are an “epidemic”.

Conventional medicine has proven to be nearly impotent in treating mental health – and saving lives. Conversely, formal clinical studies involving psychedelics show that these Miracle Drugs can effectively cure these mental health disorders.

A healthcare Revolution.

Rarely do more than a couple of days pass without some new article in the mainstream media extolling the virtues of psychedelic medicine.

Understandable. Next-generation therapies that can alleviate a global health pandemic affecting ~2 billion people is obviously a major news story.

But why are premier business publications like The Wall Street Journal and The Financial Times taking a strong interest in the Mental Health Crisis and promoting the virtues of psychedelic drugs – which continue to be illegal?

Because psychedelic drugs are now also Big Business.
 

  • Lost productivity due to mental health
    • $1+ trillion per year, and that was before a sudden and worsening labor shortage (see below) has caused a breakdown in goods production and distribution.
  • Treatment costs
    • Over $300 billion per year is spent on mental health in the U.S. alone, with practically nothing to show for it. Psychedelic medicine can maximize the bang-for-the-buck with this spending (see below).
  • Treatment savings
    • Because psychedelic medicine actually works, a recent economic study indicates enormous potential to dramatically reduce spending (per patient) while delivering better care
  • Enforcement costs
    • The War on Drugs is history’s greatest law enforcement failure – and the most costly one. Millions of people needlessly incarcerated for consuming safe psychedelics (and cannabis), while alcohol and nicotine (addictive drugs that kill millions of people each year) remain legal.
  • Labor shortages
    • Even before the Mental Health Crisis worsened dramatically (due to Covid), mental health disorders were already the leading cause of disability. (At least) 40 – 50 million otherwise employable Americans are currently grappling with one or more untreated mental health disorders.

Then there are the actual treatment markets themselves. Looking at just the treatment markets where human research is already underway, advanced research is already targeting treatment markets with a combined value of $330 billion.
 
Preclinical research is underway targeting countless, additional multi-billion-dollar treatment markets. This is because psychedelic drugs are more than merely mental health therapies. They literally “fix” broken brains.

At the moment, however, the greatest economic impact of psychedelic medicine is being felt due to the absence of these therapies.

A mental health labor crisis is strangling the U.S. economy

Many clueless business pundits boldly predicted that the record number of unfilled jobs in the United States (currently ~11 million) would be quickly filled once ‘generous’ Covid-19 support benefits from government ended.

They were totally wrong. Instead, a record 4.3 million American workers quit their jobs in August.
 

Psychedelic Medicine: The Only Hope In Solving The Mental Health LABOR CRISIS

Take a worker population that was already suffering from record levels of mental health disorders. Burn them out with too much stress.

Then pile on much more stress via a national “health” emergency. Then refuse to provide all these people with even adequate treatment options to cope with their mental health issues.

Voila! A “labor shortage” has become a labor crisis. Quelle surprise!

Mental health disorders were the leading cause of disability even before the Covid-19 pandemic. How long would it take for employers to find another 11 million workers if the 40 – 50 million otherwise employable Americans with existing mental health disorders (a very conservative number) were able to get access to effective treatment?

You do the math.

The mental health labor crisis is even worse within the healthcare system itself.
 

  1. Doctors already suffered from a suicide rate twice the national average before the Covid pandemic struck
  2. Since Covid, 66% of U.S. critical care nurses have considered leaving their jobs
  3. 88% of clinical support staff are “experiencing significant burnout”
  4. There is a “crippling labor shortage” among emergency response workers according to the president of the ambulance drivers union
  5. Nearly ¼ of all healthcare workers “showed probably signs of PTSD”

The shortage of workers itself becomes a huge, additional stress/burnout factor – accelerating this downward spiral.

Legalizing access to psychedelic medicine is more than merely “a good idea”. It is an absolute necessity to rescue our economy and prevent the collapse of our healthcare system.

Politicians begin to realize the importance of psychedelic medicine

Even the politicians, never the brightest bulbs on the tree, are starting to connect the dots here. Back to the UK.

Recently, a UK government official was quoted as saying he “will examine the latest advice on the legalization of psilocybin”. Was it a Tory back-bencher, or MHRA official?

No. It was Prime Minister Boris Johnson.

In North America, Canada’s federal government has been making baby steps in terms of opening up legal access to psilocybin-based therapies, via special “exemptions” issued by Health Canada. But the people want more. Already, ~80% of Canadians are in favor of legalized access to psilocybin for medicinal purposes.

The biggest health crisis in the world today is not Covid-19. For every active Covid infection in the world, there are ~100 people with a treatable mental health disorder.

Understand the magnitude of this health crisis. Even if governments legalized psychedelic medicine today and broadly mobilized resources to treat 2 billion mental health disorders, it would take decades just to take these numbers below “crisis” levels.

Put another way, psychedelic medicine is not just a multi-year investment opportunity. It is a multi-decade investment opportunity.

The biggest investment opportunity in life sciences of the 21st century

Miracle Drugs that can be used to revolutionize mental health care, in treating 2 billion mental health disorders – at high margins.

Sound interesting?

Many investment icons from Silicon Valley and Wall Street think so, including PayPal’s Peter Thiel, GoDaddy’s Bob Parsons, Wall Street tycoon Mike Novogratz, and Shark Tank investment guru Kevin O-Leary.

These heavyweights didn’t just jump on the psychedelics bandwagon recently. They were early investors in this space.

Now the cat is out of the bag. Three ETFs now target psychedelic drug stocks. Roughly 50 public companies are now trading.

However, as Psychedelic Stock Watch has been observing through most of 2021, valuations for these stocks are extremely compressed. Translation: the psychedelic drug sector is still a ground-floor opportunity for investors.
 

The biggest investment opportunity in life sciences in the 21st century is still a ground-floor opportunity. But it won’t be for much longer.
 

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