Top Canadian Psychedelic Stocks of 2023

The top psychedelic stocks in Canada include Numinus Wellness, Psyched Wellness, Psybio, Compass Pathways, and Minded.

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Psychedelic companies use psychedelic compounds to treat mental health disorders like depression, anxiety, schizophrenia, post-traumatic stress, and obsessive compulsions.

Though psychedelics have been around for years, their use in mental health treatments is a new area of research. As such, very few companies are developing medicines from psychedelics, and even fewer are trading publicly on popular stock exchanges.

But times are changing. As healthcare providers continue to look for new remedies to treat those for whom traditional mental health remedies are inefficacious, psychedelics have emerged as a powerful solution. And while we’re far from seeing psychedelics sold as widely as marijuana, new legislation from the government is allowing more Canadians with mental health disorders to access these treatments.

Below we’ll look at some top psychedelic stocks in Canada and see if they have a place in your portfolio.

What are psychedelic stocks?

Psychedelic producers use psychedelic compounds – either synthetic or from psilocybin mushrooms – to develop treatments for medical and therapeutic purposes.

Many of these biotech companies are small- or micro-cap stocks with future potential but little to show in current profits and revenue. Most are developing and researching treatments, but only a few have a government-approved psychedelic product that they can administer widely across Canada.

Legislation is, however, moving in their favour. In October 2022, Alberta became the first province to regulate psychedelics for healthcare purposes. (1) And at the beginning of 2022, Canada revised its Special Access Program to allow patients emergency access to psychedelics in life-threatening situations when conventional medicines fail.(2)

It’s important to note that the government does not allow healthcare providers to use psychedelic products without a particular reason. So until treatments are approved for widespread use – which could take years – these stocks will remain highly speculative.  

Are psychedelic stocks legal?

Yes, psychedelic stocks are legal. You can invest in psychedelic companies even if your province or territory hasn’t legalized them for medicinal use. Consuming psychedelics, however, is illegal in Canada.

Top psychedelic stocks in Canada

The top psychedelic stocks in Canada are micro- and small-cap companies with the potential to grow but no products to generate immense profits. Larger psychedelic stocks can be found trading on the Nasdaq in the U.S., such as Atai Life Sciences and Compass Pathways.

The following three are some top Canadian companies researching psychedelics.

Psychedelic stock Description
Numinus Wellness (TSE:NUMI)  Develops mental health treatments from psilocybin
Psyched Wellness (CSE:PSYC.CN)Sells mushroom-based products
Psybio Therapeutics (TSXV:PSYB.V)Develops synthetic psychoactive compounds for use in mental health treatments

1. Numinus Wellness

Founded in 1964, Numinus Wellness develops psychedelic treatments from psilocybin – the primary psychoactive compound that gives many mushrooms their “magic” effect.

In 2020, Numinus was the first Canadian company to be granted a license by Canada Health to legally possess psilocybin for research purposes. Later, in 2022, Health Canada permitted Numinus to administer psychedelic therapy to Canadians who had exhausted all other treatments for mental health.

The company now has two “compassionate access trials,” which allows it to use new, unapproved drugs on seriously ill patients. The first is MDMA-assisted therapy for PTSD and the second is psilocybin-based treatment for substance use disorders.

Numinus already has 12 wellness clinics and research centres, which have helped the company grow its revenues by 618% between the first quarters of 2022 and 2023.(3)

2. Psyched Wellness

Toronto-based, Psyched Wellness is a wellness company specializing in one mushroom type – the Amanita Muscaria.

This mushroom grows in clusters – or “fairy rings” – around trees in North America, Asia, and Europe and has historically been used during ceremonies and rituals. For Psyched’s purposes, the mushroom has shown immense promise in healing people with certain psychiatric disorders, such as depression and addiction.

The company has a leg-up on other psychedelic stocks in that it already has several Amanita Muscaria products, such as teas and extracts, which it sells in 49 U.S. states. It does not, however, have medicine or treatments that are available in Canada.

3. Psybio Therapeutics

Founded in 2020 and headquartered in Vancouver, Psybio Therapeutics develops synthetic compounds to treat mental health disorders.

The company doesn’t extract psilocybin from mushrooms. Rather it engineers novel psychoactive compounds from bacteria, which can recreate the effects of psychedelics. By engineering its psychedelic experiences, Psybio Therapeutics can hit specific receptors in the brain – such as the serotonin 5-HT2A receptor, which plays a crucial role in mood regulation.

Psybio has 88 individual molecules in its pipeline but no products yet for sale.

Pros of psychedelic stocks

  • Clinical trials look promising. Psychedelic companies have released impressive clinical trial results. So long as psychedelics continue to show their effectiveness in treating mental health, these products could become commercially available.
  • Government legislation is shifting. The Canadian government remains open to psychedelic medicines. If psychedelic companies release promising results from clinical studies, it will only be a matter of time before the government allows them to sell products widely.  

Cons of psychedelic stocks

  • Psychedelics are illegal. The Canadian government has not legalized mushrooms for medicinal or recreational use. So it’s difficult for a psychedelic company to profit when its product is still widely illegal.
  • Borrowing rates are high. Many psychedelic companies are in their growth phase and may need to borrow money to fund research and development. With the prime rate still relatively high, these companies could face higher operational costs if they need to secure more capital. 
  • Therapies might fail. While clinical testing has shown promising results, we don’t have conclusive evidence that psychedelics are safe and effective at treating mental illness. Until that’s indisputably the case, these companies will not get regulatory approval from the Canadian government.

Are psychedelic stocks right for you?

Psychedelic stocks are highly speculative. If you’re a growth-stock investor who can wait several years before seeing immense positive returns, these mushroom stocks might be worth considering.

However, if you are uncomfortable with risk, consider safer stocks with more certainty, like blue-chips or large-caps.

For those who want to dip their feet in the mushroom market, look for companies that already have treatments in clinical testing. You could also invest in companies with clinical labs in Canada and the U.S., which would give them a double boost if both countries were to approve psychedelic treatments.

If you don’t want to handpick mushroom stocks yourself, you could also invest in a psychedelic exchange-traded fund (ETF), such as Horizons Psychedelic Stock Index (PSYK).

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