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Wednesday, January 25, 2023

After crypto and cannabis: are psychedelics the latest trend?

After cryptocurrencies and then cannabis stocks have risen significantly in recent years, investors are still on the lookout for the next trend that represents a promising investment opportunity. Could psychedelics be this new hype?

• Magic mushrooms gain more investor interest
• Hope for a similar legalisation development as with cannabis
• Focus on medical use
Psychedelics have recently received increased attention again after their heyday in the 1960s. It seems that the ongoing legalisation of cannabis also affects the area of ​​so-called magic mushrooms. As the news agency Bloomberg reports, there are more and more startups that are researching the healing effects of psychedelic active ingredients and want to open up a new market with their primarily medical products.
The latest example of this young new trend is the German biotech company atai Life Sciences , which recently announced its intention to raise several hundred million US dollars with an IPO in the USA and aim for a valuation of more than two billion US dollars. The business of the Berlin start-up consists in the treatment of depression, anxiety, schizophrenia or drug addiction with the help of magic mushrooms. Atai receives support from a prominent source with venture capitalist Peter Thiel.

Psychedelics used to treat mental illness

While there were already numerous scientific studies and reports on various active ingredients from mushrooms, cacti and certain bushes in the 50s and 60s and their mind-expanding effects were investigated, research largely came to a standstill within the framework of stricter laws and bans on psychedelics. In recent years, however, the interest has found new nourishment, particularly in connection with the treatment of mental illnesses such as depression, anxiety or post-traumatic stress experiences.
Although most psychedelics are still banned, there are exceptions for medical use, similar to what is already the case with cannabis. Here, the increasing decriminalisation of the use of marijuana in general is likely to have led more investors to pay more attention to this new branch.

Different business models

In addition to companies that specialise in medicinal products with the psychedelic active ingredients, others focus on offering guided psychedelic trips, as is the case in the Netherlands, for example.

Clarify Pharma with a successful IPO

The investor duo Jonathan Bixby and Mike Edwards, who had a hand in the IPOs of various crypto and cannabis companies, have also discovered the psychedelics market, reports Bloomberg. With Clarify Pharma, the two companies recently successfully led the life sciences startup to its IPO on the small British stock exchange Aquis Stock Exchange. As stated on the company’s website, Clarify is committed to “driving the scientific advancement of mental, emotional, psychological and physical health by investing in alternative therapies, modalities and sciences to optimise the human experience as such”.

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A few years ago, the duo dared to take the plunge into the trading floor with the Bitcoin mining company Argo Blockchain . In the meantime, however, both investors have left the startup they co-founded. Now that Bixby and Edwards are betting on the psychedelics market, further IPOs in the areas of gaming, fintech and health are planned for the future, as Bloomberg quotes Bixby: “Investors want to invest their money in big stories and bold visions” . So it now remains to be seen whether the duo has bet on the right growth market with Clarify Pharma.

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