Executive Summary/Intro

“What does it mean to sell a compound or a therapy that alters human consciousness?

Psychedelics are changing the course of how medical practitioners approach mental health illnesses, how patients heal their deepest traumas, and even how the world’s most successful engineers and entrepreneurs biohack to be more focused and productive. Dozens of scientific studies published since the 1960s along with a change in public perception have launched psychedelics into a “renaissance” period after years of hiatus and underground development. 

The recent boom in the psychedelic industry can be categorized by several recent major events: 

August 2017

The FDA grants the Multidisciplinary Association for Psychedelic Studies (MAPS) Breakthrough Therapy Designation for MDMA and its treatment of post-traumatic stress disorder (PTSD).

October 2018 

Compass Pathways is granted a “breakthrough therapy” designation from the FDA. COMP36, its major product, is aimed towards treatment resistant depression (TRD). 

March 2019

Johnson & Johnson Services, Inc. is approved by the U.S. Food and Drug Administration (FDA) for its esketamine based nasal spray, SPRAVATO, for treatment-resistant depression. 

September 2019 

A group of private philanthropists donate $17 million to start the Center for Psychedelic and Consciousness Research at Johns Hopkins Medicine, making it the first such research center in the U.S. and the largest research center of its kind in the world.

September 2019

Field Trip Ventures Inc. and the University of West Indies (Mona, Jamaica) enter a strategic partnership, to design and to create the world’s first legal facility dedicated to the research, development, and cultivation of psilocybin mushrooms.

November 2019

Usona Institute received Breakthrough Therapy Designation from the FDA for psilocybin in the treatment of major depressive disorder (MDD). 

Currently, psychedelics (i.e. Psilocybin, Ketamine, MDMA, LSD, DMT, etc.) are classified as Scheduled drugs by the United States Food and Drug Administration (FDA). Several are Schedule I, meaning they have high potential for abuse and no medical applications. Following this unjustified classification, many decriminalization and legalization initiatives are underway. Denver and Oakland recently became the first two American cities to decriminalize psilocybin mushrooms and all federally designated Schedule 1 psychedelics. Other cities are following the same lead: Berkeley, Chicago, Dallas, and Portland. Some U.S. states are also taking steps to decriminalize psilocybin and allow legal psychedelic-assisted therapy. Like cannabis, psychedelics are changing their social, political, and medical perception, drawing investors and hundreds of millions in funding, to shape the emerging industry.1

Controlled Substances

Fifty years ago President Richard Nixon signed the Controlled Substances Act (CSA). It is the federal U.S. drug policy under which the “manufacture, importation, possession, use and distribution of certain narcotics, stimulants, depressants, hallucinogens, anabolic steroids and other chemicals is regulated.” The  CSA classified LSD, MDMA and Psilocybin as schedule I drugs. These substances are considered to have a high potential for abuse, have no currently accepted medical treatment use in the United States and have a lack of accepted safety for use under medical supervision. Most importantly, no prescriptions may be written for Schedule I substance and they are not readily available for clinical use. 

The Controlled Substances Act was passed in regards to President Nixon’s effort on the “War on Drugs”, citing that drug abuse was “public enemy number one.” However, it is important to point out that there were no substantial indicators that linked general psychedelics to high abuse potential and lack of medical applications. On the contrary, a number of early psychiatric research studies in the 1950s and 1960s had shown great capacity for psychedelic medications to significantly alleviate mental illness disorders. 

Despite the overwhelming evidence of psychedelic’s therapeutic and medical applications from studies conducted in the 1960s and supportive voices from many advocates, to name a few, such as Timothy Leary of Harvard Medical School, and Humphry Osmod, political and cultural unrest in the years leading up to the 1970s  resulted in the CSA. Shortly after, most psychedelic research was halted and shut down. Psychedelic research then fell into hiatus until the 1990s.


Current Mental Health Market

Evidence of plant-based psychedelics use dates back to at-least 1000 A.D.2 Indigenous tribes in the Amazon basin used ayahuasca, which contains a psychoactive ingredient DMT, as traditional spiritual medicine.3

The first English language publication on LSD was published by Busch AK and Johnson WC in 1950 titled “ LSD 25 as an aid in psychotherapy; preliminary report of a new drug”, which demonstrated that psychedelics could “serve as new tools for shortening psychotherapy.”4 

Since then, numerous publications and research studies funded by private donors and governmental institutions such as the National Institute of Mental Health (NIMH) showed strong potential for psychedelics to ease depression and suffering among many those with not only depression and PTSD, but also those with suffering from addiction and even cancer patients with fears of death. A  meta-analysis published in 2016 reviewed 19 psychedelic research studies for major depressive disorder and dysthymia published between 1949 and 1973.. The study found that 79% of patients showed significant improvement post-treatment with no reported risk of dependence. More importantly, the publication suggests that there is overwhelming evidence that psychedelics should be re-examined in modern clinical trials for their use to combat mental health conditions.5 In addition, another meta-analysis conducted a similar study and discovered positive evidence for using LSD to treat alcoholism.6

In 1992, researchers in Germany began experimenting with psychedelics in 12 healthy normal men.7 In 1994, researchers in the United States published a similar study and concluded that DMT can be administered safely to experienced hallucinogen users.

Currently, there are many on-going clinical studies on psychedelic assisted treatment for a wide range of mental illnesses. Top educational institutions that are currently engaging in psychedelic research include: New York University, UCLA, Yale and Johns Hopkins. The table below illustrates some of the significant scientific research that has been conducted over the years. 


The Multidisciplinary Association for Psychedelic Studies (MAPS) also took part in pioneering MDMA assisted therapy for PTSD. Its previous phase 2 clinical trials showed that over 60% of participants no longer qualify for a PTSD diagnosis 1 year after 3 treatments and associated therapy.source Currently, FDA has given a breakthrough status therapy to this MDMA-assisted psychotherapy. In addition, MAPS has been approved by the FDA for phase 3 clinical trial, which will include 100 participants and is scheduled to complete its study by June of 2020.source

 All of the pilot programs, preliminary studies, online surveys and clinical trials point to the same conclusion  that psychedelics have a high potential and efficacy in treating mental health disorders. A study in 2010 conducted an assessment on the harms caused by the misuse of Schedule I class drugs in the UK. The study used MCDA modeling and assigned each drug a score out of 100. Their findings showed that Alcohol, heroin and crack cocaine were the top three most dangerous drugs scoring 72, 55 and 54, respectively. MDMA, LSD and mushrooms were ranked the lowest.10

Research into psychedelics is only increasing. In 2019, a group of private donors donated $17M to start the Center for Psychedelic and Consciousness Research at Johns Hopkins Medicine, the first and largest psychedelic research center of its kind. Roland Griffiths, the center’s director, stated “The Center’s establishment reflects a new era of research in therapeutics and the mind through studying this unique and remarkable class of pharmacological compounds.”11 Since the late 1990s, the psychedelic research group at Johns Hopkins has been investigating psychedelic compounds and their associated therapies. The research group was the first to achieve regulatory approval in the United States to begin research with psychedelics in healthy volunteers. Their groundbreaking publication in 2006 on the safety and positive effects of a single dose of psilocybin paved and sparked a renewal in psychedelic research around the world.12 Researchers at Johns Hopkins have published more than 60 peer-reviewed journal articles.source All of their publications have demonstrated therapeutic benefits of psychedelics for patients who suffer from nicotine addiction, depression and anxiety caused by life-threatening diseases. The research at Johns Hopkins has definitely paved the way and expanded the field of psychedelic research from publishing guidelines that have helped gain approval for psychedelic studies around the world to developing new methods in measuring “mystical, emotional and meditative” experiences under psychedelics. Moreover, their findings bring about promising hope for the reclassification from Schedule 1 drug to a more realistic level. 

Startups and top tier investors are also taking interest in psychedelic research. Just in March of 2020, MindMed became the first psychedelic based startup to be listed on the NEO Exchange in Toronto. Previously, it had already secured $24.1M in funding before its historic IPO. MindMed aims to become the “antibiotic for addiction” by using a derivative of Ibogaine to combat opioid dependency.

Current Mental Health Market

The past decade introduced a global mental health medications market worth $88.3 billion1. Depression is the leading cause of disability worldwide, with 340-million people across the globe suffering from Major Depressive Disorder (MDD)13 and 100-million with Treatment-Resistant Depression (TRD).14 The major unmet need for new therapies and medication, demands novelty and innovation in treatment options.

Around 10%-30% of mental disorder patients do not improve upon treatment with traditional antidepressants.15 Furthermore, a Sequenced Treatment Alternatives to Relieve Depression (STAR*D) study found out that 50%-60% of patients with depression do not recover fully on antidepressant medication and one-third of patients do have a remission of their depressive symptoms.15 Traditional antidepressants are shown to have low efficacy in treating mental health disorders.

Currently, the Global Depression Drug Market is poised to surge from $13.69B in 2014 to $15.88B by 2020, with a CAGR of 2.15% between 2015 and 2020.16 The key factors in driving this growth are growing geriatric population and rising efficacy and declining side effects of drugs in numerous classes.

The Addressable Market

Current Mental Health Market

Psychedelics are often labeled the next “Cannabis”. While there are many differences between these two medicinal categories as well as their markets, the main difference is that psychedelics are composed of a long list of different synthetic compounds, extracts, and botanicals, while Cannabis is a single plant genus.


  • Ketamine
  • LSD
  • MDMA
  • Psilocybin
  • DMT
  • 5-MeO-DMT
  • Peyote
  • San Pedro
  • Ibogaine  
  • 18-MC
  • Ayahuasca

Variance in dosage, method of consumption, duration of use, type of therapy, set, and setting all play a major role in the effects of each compound. This geometric growth in the possible effects of each substance creates an arsenal of tools against many different ailments.

Psychedelics are capable of treating dozens of mental health and physiological conditions.


  • PTSD
  • Depression
  • OCD
  • Anxiety
  • Panic Disorder
  • Social Anxiety Disorder
  • ADHD
  • Addiction
  • End of Life Anxiety
  • Alzheimers
  • Inflammation
  • Eating disorders
  • Cluster Headaches

PTSD (treatment resistant, vs. not)

In the United States, 7-8% of the population will have PTSD at some point in their lives. About 8 million adults have PTSD during a given year in the U.S., with an estimated 354 million worldwide.source About 10% of women develop PTSD at some point in their lives compared with about 4% of men.

The total post-traumatic stress disorder market was estimated to be worth US$211.4m across the seven major markets (7MM) (7MM includes US, France, Germany, Italy, Spain, UK, and Japan) in 2018. This is expected to grow at a CAGR of 18.7% to reach US$1.2bn by 2028, according to GlobalData.source Presently, Zoloft and Paxil are the only two approved products in the 7MM. Both are SSRI antidepressants, functioning through the same biochemical mechanisms. As warned on their product packaging, Zoloft and Paxil both have the same problematic side effects for impulsiveness and suicidal behaviors. MDMA, on the other hand, is a stimulant and late-stage pipeline product that was granted breakthrough designation by the FDA. Its demonstrated superior efficacy and efficiency are viewed favorably by physicians, patients and the market. 

Major Depressive Disorder (treatment resistant vs not) | market size, etc.

The Global Anxiety Disorder and Depression Treatment Market is expected to be USD 18.90 billion by 2026, according to a new report by Reports and Data. There has been a consistent rise in depression on a global scale. In the year 2018, more than 300 million individuals worldwide, across all age groups, were reported to be suffering from depression. There is a vast range of contributing factors to the incidences of depression and mental health issues, a continuously increasing elderly population being one. The elderly population is prone to mental health issues like dementia, phobia and anxiety disorders. This increase in older populations is contributing to the rise of demand for antidepressants and therapies to treat different  mental health conditions.source

There is an ongoing need for new, effective depression medications and therapies every year. Treatment-resistant depression (TRD) is classified as major depressive disorder (MDD) in adults who have not responded well to at least two different antidepressant treatments. Treatment resistance occurs commonly in up to 30% of the treated MDD patient population, or roughly 100 million people worldwide. TRD patients face higher overall healthcare costs in treatment, medication, and hospitalization.source  

In contrast to traditional antidepressants, psychedelic psychotherapy tackles the root cause of these mental health disorders and with just relatively few administrations. Traditional antidepressants aimed to reduce symptoms and are meant to be taken on a daily basis.

Numerous neuroscience research has demonstrated that psychedelics reduce activity in the default mode network (DMN) of the brain. DMN has been found to be involved in various domains of cognitive and social processing. It filters incoming information according to our personal needs and priority and is considered as an equivalent to our “ego.” . Individuals with mental health disorders have higher connective variability than healthy individuals. With psychedelics, the activity within the DMN is reduced, triggering a shift in ego and triggering a larger field of awareness.source 

Not all psychedelics work through the same mechanisms. MDMA reduces activity on the hyperactive amygdala, where fear is processed, and increases activity in the prefrontal cortex, where logic is processed.source Researchers at Johns Hopkins demonstrated that MDMA releases oxytocin, colloquially known as “love and nurturing” hormones. This combination of medicinal action lowers the barriers to confronting and addressing deep rooted trauma during PAT sessions.


Biohacking offers a new market and frontier for drug development,  therapeutics, and treatments. Biohacking technology ranges from wearables, chips inserted in the body to monitor internal and external activities, and nootropics. Nootropics are mixtures of natural and synthetic, used to enhance cognitive function and performance. These substances are expected to improve focus, mental clarity, improve emotional stability, and provide more energy. 

Nootropics have been available as multivitamins and caffeine - supplements long-approved by the FDA. Over past years there has been a surge in market size and traction. This is largely a result of nootropics being rebranded and repackaged, targeting academic overachievers and young professionals to augment their brain function for enhanced energy and focus. Nootropics are enticing to students and executives, who are promised benefits of memory enhancement, anti-aging properties, better sleep, emotional stability, and cognitive efficiency. Memory enhancement nootropic supplements alone were valued at USD 391.6 Mn in 2015.source  The global nootropics market size is expected to reach USD 4.94 billion by 2025.source

Recently, microdosing has been researched and explored for biohacking purposes as well. Startups are studying the behaviour of drugs administered in low doses that are unlikely to produce “whole-body effects”, but are just high enough to be observed in the brain. Microdosing can include a wide variety of psychedelics substances:

  • Lysergic acid diethylamide (LSD) – The most widely-known substance, believed to yield greater focus and productivity
  • Psilocybin (“magic” mushrooms) – Studied to treat depression, users report greater empathy and emotional elevation
  • Dimethyltryptamine (DMT) – Studied to relieve anxiety
  • Ayahuasca – Contains DMT and has similar properties


Market Research Future (MRFR) reports an expected valuation of USD 25.1 billion by 2023 for biohacking treatments. Biohacking is climbing an incredible CAGR of 19.42% during the forecast period (2017-2023).source

Cannabis vs. Psychedelics

 Eventhough marijuana and psychedelic compounds are scheduled by the FDA as class I drug, the two industries are very different in its approach, treatment and purpose. The marijuana industry is product focused. Consumers have access to cannabis based prodcuts through their local dispensaries. In contrast, the psychedelic industry is service based. These compounds are offered through psychedelic-assisted retreat centers or certified treatment clinics.

In recent years, marijuana has seen a dramatic increase in consumption, whether recreationally or medically.201 However, there has been a troubling lack of publiclysource funded scientific and  medical research on its therapeutic benefitssource. The NIH reported that only $46M was allocated towards therapeutic cannabinoids research in 2019.source Despite its early legalization in different states, there is only one medication, Epidiolex, that has been approved by the FDA that contains an active ingredient derived from marijuanasource to combat a rare form of epilepsy. In addition, claims that marijuana are effective in treating mental health illnesses are still an open question till today.source, source A stark contrast to cannabis industry, there are numerous scientific studies published since the 1960s and 2000s that demonstrated the therapeutic benefits of psychedelics. Currently, there are many on going clinical trials conducted at Johns Hopkins Center for Psychedelic and Consciousness Researchsource, Yale Universitysource, UCLAsource and New York Universitysource, to name a few. Results from New York Univeristy have been promising, with 80% percent of the 29 patients experiencing significant and eduring relief from previously crushing anxiety and depression.source Moreover, non-profit organizations such as the Usona Institute and MAPS have been funding their own research. Both Usona Institute and MAPS have been awarded a breakthrough therapy status of its treatment of psilocybin for MDD and treatment of MDMA for PTSD, respectively. 

Currently, recreational marijuana is legal in 11 states and Washinton D.C. and medical marijuana is legal in 34 states. The legalization process of marijuana is focused on a state level. In 2012, over 7M people voted in Colorado to pass Amendment 64 to legalize the use of marijuana and set up the same legal framework as alcohol and tobacco. On the other hand, the legalization of psychedelic compounds is dependent upon drug discovery and the FDA. SPRAVATO, an esketamine based drug, developed by Johnson & Johnson has been approved by the FDA and is currently being prescribed in certified treatment centers for patients with depression. 

The Current Market 

Another block quote

The slowed growth of the cannabis sector and the “high” that is starting to wear-off is paving way to the rise of a similar industry: psychedelics. The legalization of cannabis has brought immense wealth to the state’s economy, enriched consumer’s lives and given rise to new technologies and products. Similarly, the psychedelic industry has a lot more to offer. 

Psychedelics are on the rise and are being recommended by health professionals as potential treatments for a variety of mental health ailments.  According to Alied Market Research, the global antidepressant drug market alone was valued at $13.69B in 2016 and is projected to grow to $15.88B in 2025, with a CAGR of 2.15% (these figures include treatments for major depressive disorder, OCD and anxiety).source WHO reported that there are 100M of those diagnosed with major depressive disorder (MDD) are said to suffer from treatment resistant depression (TRD).source Furthermore, according to a study published in the Journal of Clinical Psychiatry, TRD costs employers at least $48B and $249B due to alcohol's associated cost to society, annually in the United States. As a result, psychedelic startups and big pharmaceutical companies are racing to develop psychedelic products of their own to meet the growing demand. 

Johnson and Johnson was recently approved by the FDA for its one of a kind ketamine based nasal spray, Spravato. High profile investors such as Peter Thiel, Michael Novogratz, and Christian Angermayer have taken immense interest in psychedelics compounds and their associated therapies. Peter Thiel raised $25M for Compass Pathway, a psychedelic startup that aims to study how psychedelics can be used to treat depression. Christian Angermayer, along with two others, co-founded ATAI Life Sciences, a biotech company focusing on psychedelic research. ATAI Life Sciences owns 25% of Compass Pathway. Tim Ferriss, alongside other top donors, has donated $17M to John Hopkins to create the first John Hopkins Center for Psychedelic and Consciousness Research. Compass Pathways is undergoing its stage IIb clinical trials. The company is also mulling over its option of IPO. Its largest investor, ATAI Life Sciences, is reported to seek $800M in capitalization for Compass’s public debut.source Field Trip Ventures is a Canadia venture capital fund that funds research into psychedelics. 

Aside from startups and big pharma making waves across the psychedelic market, large cannabis companies are also stepping into the game to expand their portfolio. Ehave Inc, a healthcare provider of cannabis, just announced plans to enter the $88B mental health market with plans to acquire PsychedeliTech.source The partnership between Ehave Inc and PsychedeliTech intends to create an ecosystem to nurture the development of therapies using psychedelics. Wuhan General Group Inc announced that its subsidiary MJ MedTech Inc established a new division to explore opportunities in the psychedelics space. Revival Therapeutic recently announced its acquisition of Psilocin Pharma Corporation, which developed product solutions for the active compound psilocybin. 

Investment opportunities in the psychedelic span across the entire value chain. Startups such as Synthesis Retreat, Atman Retreats and MycoMeditations are psilocybin assisted retreat centers. MindMed, Compass Pathways and Universal Ibogaine are startups that are pioneering research and development in psychedelic products. As of October 2019, there are considerably more “psychedelic” companies developing psychedelic and “psychedelic-based” technologies. LinkedIn reports 317 “psychedelic” companies, ranging from for-profit businesses to discussion or political groups. Orthogonal, or Orthogonal Thinker, reported over 600 investors during their seed round. 

Various pharmaceutical, medical, and seasoned cannabis-based experts (i.e., from Merck, Johnson & Johnson, CGC, etc.)  are shifting their attention towards psychedelic drugs. In 2017, The Global Burden of Disease study reported that globally, 10.7% of people live with a mental health disorder.source These 792 million people require effective alternatives to the treatments presently offered; interventions potentially offered through platforms, like Synthesis Retreat or Compass Pathways. 

The market bears opportunities all throughout the value chain: technology, IP, cultivation, clinics, insurance platforms, and beyond. The psychedelics market is emerging while highly coupled to clinical/regulatory events and is split between recreational (non-prescribed) and medical psychedelic markets. In 2019, the United States spent $225 billion on mental health services, according to Statista.source Depression alone is projected to cost $150 billion in the United States, while only taking direct medical costs such as therapy, drugs and hospitalizations, into consideration.source 

Breakdown of opportunities tech/drug development/etc.  -

Due to the sheer size of the potential market and the absence of available, public data, it is quite challenging to predict the true size of the psychedelic market. However, any company that is able to address the ongoing social, medical, and corporate issues that are costing employees $193.2B annually, has the potential to make a significant impact in the $400B marketplace. WHY PSYCHEDELICS LOOK LIKE NEXT BILLION DOLLAR BUSINESS

More data here:


  • US Total
  • Global Total
  • Product - SSRI replacements, Stimulant replacements
  • Service - therapeutic, tech, health management/delivery
  • Prescriptions (# of prescriptions filled? Spending on drugs?)
  • Between 1996 and 2010, prescription mental health medication fills rose from 150.3 million to 396.7 million. More than half of these prescriptions (207.9 million) were for antidepressants. In fact, between 2008 and 2010, prescriptions for antidepressants rose by more than 20 million.source


  • Brain Health Supplements Market Size is Predictable to Reach USD 10.7 Billion By 2025: Grandsource
  • US Total
  • Global Total
  • Product - SSRI replacements, Stimulant replacements
  • Service - therapeutic, tech, health management/delivery

Market Layout

Micro/Sub Sectors

With the psychedelic space growing, many sub-sectors have emerged, ranging from specialized retreat centers to media companies. Fractal analyzed that there are 8 distinct micro sectors that exist within this space: 

Drug Development: Characterised by traditional R&D focused companies developing psychedelic compounds and their analogues

Cultivation: Companies that harvest, product, and grow the raw plants necessary for the synthesis of GMP approved compounds. 

Technology and Data: Technology that aids in the delivery or analysis of Psychedelic Assisted Therapy

IP: Intellectual Property plays to protect the inventors of compelling analogues within the psychedelic arena 

Retreat Centers: Focused on the delivery of psychedelic experiences for individuals personal growth or self-healing

Media Companies: Media outlets that provide information regarding harm reduction, industry insights, and psychedelic news. 

Health Systems: Health Insurance and other infrastructure for health systems that wish to provide citizens with access to PAT. 

Many companies within the psychedelic space fall in or overlap these micro sectors. Drug Development remains the heart and soul of the psychedelic space. However, Retreat Centers and Health Systems are also playing pivotal roles in shaping the psychedelic industry. 

Drug Development 

The Global Depression Drug Market is poised to surge from $13.69B in 2014 to $15.88B by 2020, with a CAGR of 2.15% between 2015 and 2020.16. With many psychedelic therapies in development, there lies a huge potential of growth within the sector. It is important to note that In the last couple of years, there has been a growing acceptance of psychedelic drugs for treating depression and other mental health illnesses.

The National Alliance on Mental Illness reported that 1 in 6 of U.S. youth aged 6-17 experience a mental health disorder annually and 1 in 25 U.S. adults experience severe mental health issues. In 2017, the World Health Organization (WHO) reported that 1 in 13 globally suffer from anxiety. Around 75% of people with mental disorders remain untreated in developing countries with an estimated 1 million people ending their lives annually. In 2017, 35% of adults who suffer from MDD, age 18 or older, received treatment. A study published in the Medscape Psychiatry & Mental Health surveyed 400 psychiatrists who prescribed patients with SSRI treatments. The study found out that 119 (89%) psychiatrists observed re-emergence of depressive symptoms in their patients.source They also found out that depressive symptoms typically recurred in up to 25% of cases, usually within 6 months of remission.

In addition, a study published by Kirsch in 2008 found alarming evidence of the inefficacy of antidepressants versus placebo effect on depression. Over 75% of the patients given dummy pills with no active ingredient found significant improvement in their conditions.sourceThe researchers further analyzed data sets from the FDA submitted by big pharmaceutical companies and found that only 43% of the trials showed “statistically significant benefit of the drug over placebo.” Consumers, big pharmaceutical companies and startups are therefore constantly seeking new alternatives to combat these health issues. 

Psychedelic drugs have repetitively proven their high efficacy for treating patients with mental health disorders, ranging from PTSD, nicotine dependence to OCD and depression from life threatening diseases. And the amount of individuals who’ve experimented with psychedelics isn’t small.

Data published by Teri S Krebs and Pai-Orjan Johansen in 2013 estimated that there were approximately 32 million lifetime psychedelic users in the US in 2010.source The study concluded that psychedelics will continue to be used widely in the United States. In recent years, research and development activities in psychedelic drugs are increasing. The Global drug discovery market was valued at $35.2B in 2016. In 2025, it is expected to grow to an estimated $71B. While, the Global Depression Drug Market is poised to surge from $14.51B in 2014 to $16.8B by 2020, with a CAGR of 2.5% between 2015 and 2020.source Growth in both sectors represent that new opportunities are emerging and big pharmaceutical companies are following the trend by launching new products, which only help to accelerate the U.S. psychedelic market.  North America  leads the global market for the drug industry due to its presence of manufacturing and research facilities. Countries like the United States and Canada have formulated policies that help encourage investors and big pharmaceutical companies for drug development and discovery.

Psychedelics aim to offer consumers a better alternative to combat mental health illnesses. In recent years, there has been a significant shift in public perception towards the effectiveness of antidepressants, along with the accusation that these traditional antidepressants are overprescribed by doctors.source It is important to note that psychedelics’ potential extend beyond its fierce competition with anti-depressants drugs. Psilocybin has demonstrated therapeutic benefits in alleviating other symptoms such as existential anxiety and those with terminal diseases and severe alcoholism. In a study in 2010, alcohol dependence ranked third in the list of preventable deaths in the United States, costing $249B each year. 

Health Systems 

The statistics and facts that were here before are important, but they're continuously brought up throughout the report. A section like this should get right into the meat of things. Describe the need for health insurance for psychedelic therapies, provide a description + diagram of how a health insurance system works, and provide a market sizing for how large the health insurance market size should be specifically for PAT (psychedelic-assisted therapy)

As a larger percentage of the population seek mental health services, hospitals have needed support from the government and insurance companies. Poor federal and insurer reimbursement are resulting in significant losses for hospitals across the country, causing facility and service closure for patients. Loss of these services play a significant role in the rising present and future cost of care across all departments of the hospitals, due to higher health risks associated with comorbidity. For example, depression and higher blood pressure, result in cardiac complications, and thus higher cost of care for cases that could have been treated through simpler, preventative measures. Hospitals and health systems are facing the fact that they must provide quality, affordable, effective treatment options for patients within their existing mental health services. Working with psychedelic manufacturers and researchers, hospital systems will revisit their formularies, or internal pharmaceutical listings, to make millions of dollars worth of adjustments upon negotiation with manufacturers and pharmacies. Formularies provide stronger financial incentives for patients and their physicians to choose drugs preferred by specific plans or organizations, as well as affect the volume of prescriptions.

With only one-third of people seeking treatment, there exists a major, unaddressed market and untreated population. Hospitals and health systems will play a major role in marketing and expanding their treatment offerings to the millions of people within their respective cities and communities. With hospitals, health systems, and employers working with insurances and expanding coverage policy options, all parties can support a healthier patient population and workforce. According to a report released by the National Alliance of Healthcare Purchaser Coalitions (NAHPC) in August 2018, there are direct financial consequences for these shortfalls… Nationally, employers are losing out on $225.5 billion a year due to reductions in productivity related to employee anxiety, stress, depression, and substance use disorder (SUD).”source Additionally, a corporation that aggressively reduced mental health service use cut their costs by one third, but triggered a 37 percent increase in medical care use and sick leave (Rosenheck, 1999). 

In 1997, the Veterans Health Administration (VHA) implemented its closed formulary and was effective in shifting the market towards select drugs. With the National Formulary implemented, the VHA was able to centralize itself across the country, consolidating its position to negotiate for lower prices and reduce spending for treating a huge American population. Of the military service members, 30% of active duty and reserve personnel deployed in Iraq and Afghanistan have a mental health condition requiring treatment for PTSD and MDD. Less than 50% of returning veterans in need receive any mental health treatment. Formularies within health systems and federal organizations will play a major role in the succession of market share, across mental health treatment. (Needs further review)

Costs of treatment for people with mental health disorders 

[graphs] -

Retreat Centers

Searching for an opportunity to withdraw and to regroup from stressful, everyday life, people are inspired to explore retreat centers and the benefits they offer. Stress is widespread, affecting all ages, cultures, genders, sexes, and religions. About 33% of people report extreme stress; 77% percent of people experience stress that affects their physical health; 73% of people have stress that impacts their mental health; 48% of people have trouble sleeping due to stress, contributing further stress and wellness issues.source Billions of people are looking to improve their wellness mentally, physically, and spiritually. Retreat centers can offer these remedies to mental and physical stress, secure facilities to detox, as well as explore spirituality. The “wellness tourism” market, focusing on self-care, wellness, and spirituality, grew from a $563 billion market in 2015 to $639 billion in 2017, or 6.5% annually, more than twice as fast as tourism overall (3.2%). The market is expected to grow even faster through 2022 (7.5% yearly) to reach $919 billion. The wellness-tourism industry is expected to grow to $919 billion by 2022, as travelers and wellness practitioners are spending an average of $1,528 per trip to  these facilities.source
Psychedelic retreats provide an environment where people can immerse themselves in a comfortable, supported, safe space. Guests are involved in activities and matters that provide healing, vulnerability, and self-reflection, supported by psychedelics. Psilocybin retreats are legal options offered, currently outside of the United States. In Jamaica, psilocybin therapy centers such as Atman Retreat offer safe, catered, psychedelics experience. In the Netherlands, one can explore the Synthesis retreat center, known for its highly individualized approach for integrative care. Research has shown the benefits of using psilocybin to bolster the retreat and healing experiences. During a 6 month study, high-dose groups showed large significant positive changes on longitudinal measures of interpersonal closeness, gratitude, life meaning/purpose, forgiveness, death transcendence, daily spiritual experiences, religious faith and coping, and community observer ratings of the aforementioned effects. The study demonstrates psilocybin’s successful treatment potential for long-lasting wellness.source


Should have a paragraph long introduction here to policy. Something short, but that covers all the different types of ways decrim is happening.

Medical/FDA Approval

Major legalizations that are coming - MDMA for TR PTSD, Psilocybin for TR Depression.

Post decriminalization and legalization of Cannabis across the United States, legislators and city health officials have begun to review other currently scheduled substances. Policy around the use and applications of marijuana have made great headway since 2012. In 2017, a publication in Nature demonstrated that 47% of patients treated with psilocybin for severe depression improved after five weeks.source Consequently, academic and medical researchers are making efforts and headway to reevaluate the use of substances like psilocybin and MDMA. Both Usona Institute’s psilocybin for MDD and MAP’s MDMA for PTSD have been granted a breakthrough therapy status from the FDA. Seeking evidence-based acknowledgement of not only the risks, but also the benefits of these substances, researchers and up-and-coming companies will have access to a vast new market through production of quality, effective treatment plans. 

Decrim Movement 

Currently, decriminalization efforts are mostly focused on city-level policy change. Many advocates and activists around the United States have moved to implement decriminalization of personal use, possession and cultivation of naturally-occurring psychedelics such as psilocybin mushrooms, ayahuasca, ibogaine and peyote. Statewide efforts to decriminalize psychedelics are also underway. Political representatives such as Andrew Yang and Alexandria Ocasio-Cortez have called for decriminalization of use and research on psychedelics as well as more comprehensive marijuana legislation.source

City-wide Initiatives

Denver, Colorado

In May of 2019, Denver was the first city to decriminalize psilocybin mushrooms. Its ballot measure I-301 decriminalizes personal use and possession for psilocybin mushrooms for people aged 21 or older.  In addition, it prohibits the City and County of Denver from imposing any criminal penalties and led to the creation of the Psilocybin Mushroom Policy Review Panel. 

The group behind the decriminalization of psilocybin in Denver, Decriminalize Denver, has since changed its name to SPORE. Since then, the group has been working on expanding psychedelic decriminalization to other cities and even to Congress. 

Oakland, California

In June of 2019, the City Council of Oakland voted unanimously to support a resolution to decriminalize psychedelics. The resolution is effective immediately and decriminalizes cultivation, use and possession of the naturally occurring psilocybin mushrooms, ayahuasca, biota and peyote. The decision came as a result from the decriminalization of psychedelics after Denver voted on a similar resolution.

The resolution in Oakland was drafted by the Decriminalize Nature Oakland (DNO). The core of DNO’s resolution centered around the potential for these substances to cure mental health disorders and substance disorders and well-established spiritual traditions. DNO also details how Oakland will expand on the reform by lobbying State Assembly representatives and senators to introduce a similar legislation across California. However, it is important to point out that the City Council has added an amendment urging people with PTSD or major depression to seek medical professional’s help first before using psychedelic substances.  

Berkeley, California 

The Community Health Commission of the Berkeley City Council has a plan to vote on a resolution to decriminalize psychedelics in November of 2020. If passed, the resolution will be voted in the City Council. Alexander Williams, one of the pioneers, hopes that Berkeley will follow a similar footstep as its neighbor, Oakland. Bay Area activists are building public support for the resolution and raising awareness around the issue. They have hosted information and educational rallies at the University of California, Berkeley. 

Chicago, Illinois

The city of Chicago is in the process of preparation for its resolution to decriminalize psychedelics. While there are conflicting reports that the City Council has unanimously supported the resolution and is ready to proceed to a full vote, it has been found that it was an error. In reality, the resolution has only been referred to a committee, where it will proceed through a regular legislative process. 

Columbia, Missouri

Bharani Kumar, cofounder of the Crossing Paths PAC, has been the central voice to support progressive drug policy in Missouri. The movement has been lobbying the city Council to draft a decriminalization resolution. However, Bharabi believed that there is a very low chance that the resolution will pass through the council since the majority of the members are conservative towards the drug policy reform. Bharani hoped that the resolution will pass through a ballot. 

Dallas, Texas

Although no resolution has been drafted yet, Decriminalize Nature Dallas (DND) has announced to local media their plans to decriminalize psychedelics and cannabis reforms.

Portland, Oregon

In October of 2019, Decriminalize Nature Portland (DNP), the group behind the decriminalization effort in Portland, filed a ballot measure, Psilocybin Service Initiative. The ballot will be voted in November of 2020. If passed, the resolution will decriminalize the use of psilocybin. 

Port Townsend, Washington

Rebecca Ramsey and the Port Townsend Psychedelic Society proposed a decriminalize nature resolution in July 2019. However, the initiative has been stalled. Rebecca said that the stall was due to a mayoral election, city budgeting process and a newly hired city manager. She also added the propel will not be considered until early 2020 at the earliest. 

Santa Cruz, California

Santa Cruz Vice Mayor Justin Cummings has introduced a decriminalization resolution, modeled after the Oakland reform. In February, the city council decriminalized psilocybin mushrooms. 

State initiatives are underway. Oregon and California, after a previously failed attempt, are also taking steps towards decriminalizing psilocybin again. In November of 2018, Oregon’s secretary of state approved the language for a ballot initiative that would decriminalize psilocybin. 

Religious Exceptions

Ayahuasca, Peyote? -> good article to summarize about 

Psychedelics have been enjoyed by ancient cultures as sacramental and spiritual tools for thousands of years. Sanskrit texts showed that “Soma'' people used hallucinogenic amanita Muscaria (the fly Agaric mushroom).source In ancient Greek, the Eleusinian Mystery Rites gave initiates a drink made from wheat that was most likely infected with Ergot fungus, which contains the active component of synthetic LSD.source The Amazonian use Ayahuasca, a plant containing DMT, in their ceremonies. The North American Indian use Peyote cactus, containing Mescaline. Ancient cultures used these substances to alter the minds to induce a dreamlike state to help participants communicate with the “spiritual world”. These ceremonial practices have a beneficial and cohesive effect on their communities. They help them to resist the “mono-cultural invasion of the Western way of life” and they are largely associated with lower levels of mental illness than those communities who are more heavily influenced by alcohol use.source 

Many advocates believe that psychedelics and mystical experiences should be protected under the Free Exercise Clause of the First Amendment, in which no law respecting an establishment of religion or prohibiting the free exercise should be passed.source The Free Exercise Clause and Religious Freedom Restoration Act (RFRA) implicates that if psychedelic mysticism constitutes the exercise of religion, the spiritual use of psychedelics should perhaps be considered an extension of the principle of religious freedom that already is recognized as to certain religious groups to use ayahuasca and mescaline. In the supreme court case, Gonzalez v. O Centro Expirita Beneficente Uniao de Vegetal, the Supreme Court allowed religious exemption to the CSA for purposes of a Brazilian Church’s use of ayahuasca based on RFRA.source In another interesting case, the Church of the Holy Light of the Queen v. Mukasey, a district court in Oregon applied the same logic and allowed members of the Brazilian Santo Daime religion to import and drink ayahuasca for religious ceremonies.source 

In 1991, a court case related to peyote, prompted the U.S. District Chief Judge Juan Burciaga to comment that “The government’s war on drugs has become a wildfire…today, the war targets one of the most deeply held fundamental rights - the first Amendment right to freely exercise one’s religion.”source Presently, there are many churches in the United States that use peyote and Ayahuasca: Native American Church (NAC) and Church of the Awakening which use peyote in their ceremonies, The Church of Gnostic Luminism and other assorted hermetic sects that use ayahuasca.source 

Legal Jurisdictions

The laws that are currently governing the legality of psilocybin and other psychedelics are based on outdated policy stemming from prejudice and fear. Most countries have decided to treat psychedelics as a schedule I drug due to pressure from the U.S. throughout the 1970s and early 1980s and impose harsh punishment for possession, distribution, and sales. The Vienna Convention of 1971 from the United Nations suggested a scheduling system for all agreeing countries to adhere to, classifying psychedelics into categories of harm. As a result, 183 countries have agreed to the policies led at the convention, which led to the creation of certain laws such as the US Psychotropic Substances Act and the UK’s Misuse of Drugs Act. 

However, over the years, some countries have managed to decriminalize the use, possession and sale of psilocybin. 


Psilocybin is considered illegal in Brazil; however, the mushrooms containing psilocybin are not illegal to possess, consume, or sell. In Brazil, there are no cases of arrests related to psilocybin. In addition, sacramental use of ayahuasca or psilocybin mushrooms is legal. 

British Virgin Islands 

In the British Virgin Islands, sale and transport of psilocybin mushrooms are illegal; however, possession and consumption are not prohibited. There are reports that many vendors are willing to sell mushrooms to tourists, without any consequences. 



Even though there is no clear law governing the use of mushrooms in Jamaica, psilocybin appears to be totally legal. There are many psychedelic assisted retreats in Jamaica such as Atman Retreats and MycoMeditions.


There is a law designed to prohibit the use of psilocybin containing mushrooms in the Netherlands; however, a loophole allows for truffles, the bottom part of the mushroom to be purchased and consumed. In the Netherlands, Synthesis Retreats offers psychedelic assisted retreat for customers. 


In January of 2016, Austria passed a law to decriminalize the use of psilocybin. Like the Netherlands, mushroom spores and growing kits are legal to purchase.


Dried mushrooms are illegal to possess in Canada; however, there are no legal restrictions on the possession and consumption of fresh mushrooms. It is important to note that psilocybin is a schedule III drug in Canada, which means that possession and manufacturing are punishable with prison terms.

Costa Rica 

The legal status of psilocybin is uncertain; however, magic mushrooms are grown in abundance in Costa Rica. 

Czech Republic 

The cultivation of magic mushrooms has been decriminalized. 


Even though psilocybin is officially illegal to possess, cultivate and sell in Mexico, sacramental use of psychedelics is allowed, as currently lined out in the UNODC. 


Psilocybin has been decriminalized in Portugal. 


Personal use of psilocybin mushrooms has been decriminalized in Spain; however, there is still a lot of ambiguity surrounding the regulation. 

United States 

Psilocybin and other psychedelics are scheduled class I drugs in the United States; however, many cities and states are taking initiatives to decriminalize psilocybin and allow for psychedelic assisted therapies for people with mental health disorders. 

Opportunity Profiles

3 investable opportunities that are explained and evaluated

  1. Compass Pathway 

Investment Summary 

Compass Pathway is dedicated to transform mental health through the use of psychedelic therapies. The company has been developing psilocybin therapy for treatment resistant depression and received a “breakthrough therapy” status from the FDA in October of 2018. Its psilocybin therapy has promising clinical evidence, low harm for abuse and no significant adverse side effects. Compass Pathway is currently seeking  Series B funding of $16M in convertible loan notes to finance pre-clinical programs for psilocybin, completely pre-phase III study and indicate build-out first COMPASS Center of Excellence. 

Investment Objective 

Compass Pathway is the brain child of George Goldsmith and Ekaterina Malievskaia. It all began in 2015 when the two founders created COMPASS, a non-profit organization, to support a research project into psilocybin for psychological distress in hospice on the Isle of Man. In the very beginning, COMPASS was funded entirely by the two founders. They were able to secure the support from the government and received permission to train the first group of psychedelic therapists with psilocybin. However, psilocybin was not yet readily available from the Usona Institute. The government gave the two founders a permission to produce their own batch of psilocybin. It soon became clear, however, that synthesizing these chemical compounds were difficult and costly. They realized that it would be nearly impossible to raise multi-million dollar donations, since at the time, clinical research was still in an early stage. Moreover, they realized that if their venture was successful, they wanted psilocybin to be affordable, scalable and sustainable. After careful deliberations, the two founders founded a for profit Compass Pathways Life Sciences in 2017. 

Ever since 2017, Compass Pathways has set out to transform the mental health industry with its psilocybin therapy. An important point to highlight is that in October 2018, Compass Pathways received a “breakthrough therapy” recognition from the FDA. Breakthrough status is only granted to investigative therapy with strong evidence demonstrating substantial improvement in serious or life-threatening conditions, with the intention of accelerating approval and availability to patients. In recent years, psychiatry breakthrough therapy   status was granted in 2013 and 2016 for esketamine, the basis for Johnson & Johnson’s nasal spray SPRAVATO.  Currently, Compass Pathways is in its Phase IIb clinical trial of psilocybin therapy. Phase III and marketing authorization are poised to be initiated around 2021-2020 and 2023, respectively. 

Compass Pathways represents another promising chapter in the history of psychedelic industry. Many independent clinical trials conducted by Research Institutions such as at the University of California, Los Angeles in 2011, New York University in 2016, John Hopkins in 2016 and Imperial College London in 2016 point to the same conclusion that psilocybin therapy is associated with immediate, significant and sustained reduction in treatment resistant depression and other illnesses. There is a lot of potential for Compass Pathways to grow as its therapy will be able to improve mental capability across other disorders. A scientific paper published in 2017 on the Lancet, Global Burden of Diseases Study, reported that 631 million people suffer from mental health issues with anxiety disorders (284.4M people), alcohol dependence (107.1M people) and dysthymia (106.9) coming in the top three. 

Investment Sector/Industry 

It is clear that there is unmet medical need in depression. Around 322M people worldwide are suffering from major depressive disorder and 100M of 322M have treatment resistant depression. It is reported in “Modulation of the brain’s monoamine neurotransmitter levels” that there are only 29 active substances approved by the FDA since 1959. Moreover, common antidepressants have significant adverse side effects and delayed onset of action.  

In the United States, Europe and Japan alone, 20M patients suffer from treatment resistant depression and is costing the healthcare system up to $388B annually. The average healthcare cost of treatment resistant therapy patients per year is around $13k-$19k. Similar psychedelic based drug, esketamine, is showing a strong revenue stream with an estimated total of $1.94B.  There is a wealth of opportunity for Compass Pathways to disrupt the current antidepressant drug market. The company has good track records of achieving their goals and in the upcoming years, we should be able to see significant growth in the company as well as in psychedelics. 

  1. Eleusis 

Investment Summary

  Eleusis aims to use the vast therapeutic potential of serotonin 2A agonists to combat mental health illnesses. The challenge that Eleusis tries to overcome is chronic inflammation in all age-related diseases. Chronic inflammatory diseases hinder the development of innovative and cost effective treatment alternatives. The company is currently developing treatment response algorithm discovery for enhancing safety of psychedelic drug therapies and drug discovery proof of concept. Eleusis is currently seeking a Series A funding raising of $35M. 

Investment Objective 

Serotonin 5-HT2A receptors are widely distributed in the central nervous system, which controls most bodily function, movement, awareness, sensations, thoughts, speech and memory. Studies show that serotonin 5-HT2AR antagonists have antipsychotic and antidepressant properties. It is also found that abnormal 5-HT2AR is associated with psychiatric disorders and conditions such as schizophrenia, depression, anxiety and drug addiction.source Psychedelics, which are widely known to have antidepressant and therapeutic effects, work by targeting these receptors. They act as agonists for the 5-HT2AR receptors.source 

Eleusis realizes the vast potential of drug development through the use of serotonin 5-HTRAR agonist. Its current focus is in ophthalmology and psychiatry. In ophthalmology, there is an unmet need for steroid-sparing “back of the eye” inflammatories for diabetic macular edema. It is estimated that there are 346M people affected by diabetes and the number of diabetic patients is expected to double from 2005 to 2030.source Currently, argon laser photocoagulation has been the “go-to” treatment for diabetic macular edema, which showed an estimated 50% reduction in the rate of moderate vision loss at 3 years following laser photocoagulation compared to no treatment. However, patients still have a 15% chance of vision loss after 3 years. Another popular treatment is the use of steroids. However, extensive use of steroids pose adverse side effects such as cataract formation and intraocular pressure. Steroids that are given intravenously can also cause retinal detachment, vitreous hemorrhage, bacterial endophthalmitis and sterile endophthalmitis.source Eleusis is currently developing a safe and better alternative to existing treatments for diabetic macular edema. Their treatment is anti-inflammatory, not immunosuppressive, provides retinal protection and reduces intraocular pressure and inhibits neovascularization. Preclinical trials have shown promising results and the company aims, by 2021, to initiate their phase I clinical trial. 

Eleusis is also developing an unmet need in effective therapy for anorexia. According to the National Association of Anorexia Nervosa, at least 30M people of all ages and genders suffer from an eating disorder. Every 62 minute, at least one person dies as a direct result from an eating disorder. 0.9% of American women suffer from anorexia in their life time and 1 in 5 anorexia deaths is by suicide.source Like other mental health illnesses, anorexia is a serious psychiatric illness.  Current treatment of TCA class antidepressants appears to be ineffective in treating anorexia, with some medication, amitriptyline, yielding adverse side effects. SSRIs antidepressants seem to be well tolerated and result in mild side effects. However, they are ineffective in treating symptoms or preventing relapse.source Eleusis’s approach revolves around how 2A agonists exert significant treatment effects in obsession and addiction, anxiety and stress and cognitive rigidity and learning. 2A agonists have shown acute reduction in OCD symptoms, and significant treatment effect in alcoholism, smoking cessation and opiate addiction. Moreover, 2A agonists have shown acute and persisting reductions in depression and anxiety related to life threatening diseases, treatment in resistant depression and anecdotal evidence of symptom relief and behavior changes in anorexia patients. Currently, Eluesis anorexia treatment is in its preclinical and study period. It aims to get clinical facility initiation and IND approval by 2021. 

Eleusis is also developing a Digital Health Solution platform that allows for patient screening and monitoring, patient/provider portal, REMS compliance suite, treatment optimization and response prediction, “turn-key” care delivery solutions and clinician training and certification. 

Investment Sector/Industry 

Diabetic Retinopathy afflicts up to 35% of diabetic patients and its severity is associated with the incidence of DME.source  Furthermore, diabetic macular edema is the leading cause of adult visual loss, afflicting 5-25% of diabetic patients. Anti-VEGF medication (i.e. Eylea, Lucentis, and Avastin) ,which is the first line of defense, is expensive and invasive and 50%-60% of patients do not show adequate response. The second line of defense, which is the use of corticosteroids medication (i.e. Ozurdex, Iluvien, triamcinolone), is also expensive and invasive. Extensive use of steroids is associated with elevated IOP and cataract development as well.  

The company estimated that Eleusis’s medication will have a market share of 20% in both markets, with an annual revenue of $1.2B in the U.S. and $500M in Europe. These forecasts are highly achievable, given that there are around 30.3M people in the United States who are suffering from diabetes. The Diabetic Retinopathy market is valued at $966M in 2015 and is expected to reach $2.5B by 2022, with a CAGR of 14.4%.source There lies a huge potential for Eleusis to disrupt the market with its therapy. 

Similarly, the eating disorder drug market also shows signs of growth and potential. Currently, there are only 3 drugs, Edgemont’s fluoxetine tablets, Eli Lilly’s Prozac and Takeda’s Vyvanse, that are proved by the FDA for treating eating disorders. In 2017, there were an estimated 35.6M cases of eating disorders in females aged 10-19 years worldwide.source 3M cases are anorexia; 11.6M cases are bulimia nervosa; 14.3M cases are binge eating. It is forecasted by 2026, there will be 38.1M cases of eating disorders.  Currently, the only drug in the global pipeline and awaiting for a PDUFA date for treating eating disorders is dasotraline, developed by Sunovion. 

  1. Synthesis Retreat  

Investment Summary 

Synthesis is a legal and medically supervised psilocybin retreat based in the Netherlands. Its model is based around using high doses of legal psilocybin truffles to catalyze transformation of growth and self development. Since 2018, over 500 individuals have joined the Synthesis Retreat community.  The company has strategically partnered with top higher education institutions such as the Psychedelic Research Group of Imperial College London and the California Institute of Integral Studies to further contribute to the emergence of psychedelics science and to ensure the safety and effectiveness of the Synthesis Retreat program. Synthesis Retreat is currently seeking Series A funding of $2.86M. 

Investment Objective 

Synthesis Retreat is pioneering and developing an interdisciplinary approach to offer legal, medically supervised psilocybin retreats in the Netherlands, the first of its kind. In 2018, the company has completed its proof of concept, with their pilot group of 50 customers via 5 different groups. They have partnered with Imperial College of London to collect data from participants to examine how psilocybin can bring about positive changes in personalities and wellbeing. Between April 2018 and December 2018, Imperial College of London collected datas from participants and found promising results. On average, one month after going through the program, participants experienced 10% increased in wellbeing. In addition, the participants showed 42.4% reduction in depressive symptoms. Synthesis claims that these positive changes are attributed to the carefully crafted program Synthesis Retreat has rolled out, with personalized and expert guidance to help participants throughout the program. The Imperial College London also did an independent study on people who had had unguided psilocybin experiences. They concluded that creating a comfortable physical and social environment and promoting intentions related to spiritual connection for psychedelic experience seemed to have a “direct positive effect on well being outcomes.”source 

Investment Sector/Industry 

The market of psychedelic retreats is still small, with little competition in the field. Similar to Synthesis Retreats, MindBloom, based in New York, is a startup that is pioneering ketamine assisted therapy. However, their business model revolves around providing drop-in clinical services at their facility. Atman Retreats is another company that provides similar services to what Synthesis Retreats is doing. Atman Retreats takes place in Jamaica and utilizes psilocybin mushrooms in their programs. 

The World Economic Forum has forecasted that mental issues would cost the world $16T by 2030. Traditional methods of healing depression and anxiety disorders are usually associated with the use of antidepressants. Use of synthetic medications usually yield severe side effects.  72% of 180 long term antidepressants users demonstrated withdrawal symptoms and addiction to the drugs.source

In a study published in 2012, the researchers reported the average cost to deliver care for patients suffering from different mental health illnesses.source They found that schizophrenia treatment costed a staggering, $8,509 for 11.1 days; Bipolar disorder treatment, $7,593 for 9.4 days; depression treatment $6,990 for 8.4 days; drug use disorder treatment, $4,591 for 5.2 days; and alcohol use disorder treatment, $5,908 for 6.2 days. These astronomical costs of traditional treatments of mental health issues do not go hand in hand with the post-treatment results. In contrast, Psychedelic retreats, such as the ones offered by Synthesis Retreats and Atman Retreats, cost significantly less than the traditional therapies and yet have been proven to be much more effective. 

  1. Enthea

Investment Summary 

Enthea is a research group that conducts studies in the realm of psychedelics. The company started out focusing on psilocybin but has since expanded to cover other psychedelics and the impact of the legalization of psychedelics. 

Investment Objective 

The main research project from Enthea so far is its cost-effectiveness model of drug liberalization as a mental health intervention. The model explores the costs and benefits of legalizing and utilizing psychedelics in three scenarios: best-guess, pessimistic and optimistic. For instance, the total cost of ballot initiative campaign to decriminalize/legalize psychedelics as a form of treatment can cost between $6.1M to $38M. The report also does an analysis on mental health illnesses that can be treated from psychedelics such as: depression, alcoholism, tobacco addiction and PTSD. From its calculation, it is estimated that there are roughly around 7,106 to 58,832 patients, with psychedelic treatments, can be averted from depression, alcoholism, tobacco addiction and PTSD combined per year in the U.S. 

In addition to the cost-effective model, it published other articles to help educate the general public regarding the use of psychedelics. In an article published in March of 2019, Enthea summarized the Psilocybin Service Initiative of Oregon (PSI Oregon 2020) , which intends to legalize psilocybin treatments in Oregon. Enthea’s purpose in summarizing the initiative is purely exploratory. It also offers its own commentary on the initiative. Enthea hopes that this report will contribute to its own understanding of where psychedelic stands and the interest of stakeholders. Below is an excerpt from Enthea: 

Section 3: General Powers and Duties – Duties; rules.

  • Summary: Empowers the OHA to "adopt, amend, or repeal" rules as necessary to implement to the Psilocybin Services Program. Also empowers the OHA to specify "minimum criteria" for becoming a qualified client, and for being a psilocybin services center.

  • Our comment: This section introduces a pattern of having the OHA set the specific rules & requirements for many aspects of the new framework. Given this strategy, it seems like much of the on-the-ground change, in the world where PSI 2020 passes, would hinge on the stance of the OHA.

In a report published in October of 2019, Enthea introduced a series of studies into psychedelics as a treatment for addiction, focusing on ibogaine, ketamine and psilocybin. While the full report is confidential, here is an excerpt from the introduction of the report: 

So smoking, alcohol, and abuse of other drugs caused 16.8% of DALYs in the US in 2017. That’s one-sixth of the total health burden of the US.

Addictive disorders are a substantial portion of the global DALY burden, too. It’s hard to get a clear picture of the exact global DALY burden attributable to addictive disorders – developing-world health data is less reliable than US or European health data. Also, in the developing world a large portion of COPD is caused by cooking fires, not smoking, so attributing the entirety of developing-world COPD to addictive disorders would be inaccurate.

This review will focus on the US & Canada, as we have the most experience with & knowledge of those landscapes. There’s also a mimetic argument whereby many countries seem to follow the US in policy matters, either making direct use of US innovations or creating country-specific copies of them. So affecting the US situation may have knock-on effects in many other geographies.

Investment Sector 

There has yet to be a single company in the psychedelic industry that mirrors what Enthea is doing. Even though top non-profit organizations in psychedelics like the John Hopkins Center for Psychedelic and Consciousness Research and Multidisciplinary Association for Psychedelic Studies are publishing numerous findings and experiments with psychedelics, most of the research being done is scattered. There is no single platform that collects and analyzes these findings. The National Center for Biotechnology Information (NCBI) is a great resource for researchers and the general public to review scientific studies. However, these findings are written mostly in scientific jargons, which can be difficult for some to understand. In order to educate the public on the health benefits of psychedelics, readers must be able to comprehend these findings. The summarized analysis of psychedelic research that Enthea is rolling out is one of the many first steps the company hopes to shine light into the shadowy world of psychedelics. 

  1. Maya Health 

Investment Summary 

Maya Health is a platform collecting and analyzing psychedelic session data. Inspired by the global dependence on traditional antidepressants and rise of psychedelic assisted psychotherapy around the world, Maya Health aims to create an essential tool of resources for practitioners, clinics, therapists, facilitators and policy makers. Launching in Spring of 2020, the company is seeking $2.2M in seed fundraising. 

Investment Objective 

Maya Health platform is designed for medical practitioners, the community and for the industry itself. The platform allows for assessments, communications, integrations and insights. Medical practitioners can conduct multiple assessments on patients such as psychometric, sociometric, neuropsychiatric and psychedelic-specific. In addition, it provides a communication platform for relationship management between patient and practitioners, onboarding and integration forms, crafted custom protocols for each individual patient, scheduled and delivery of personalized assessments for patients and practitioners. The platform also provides insights into the health and outcome datas, which are delivered by its AI. Its integrations platform is built on an API system. Maya provides API integration with other companies and vice versa such as with fit-bit, TEMPUS, Compass Pathway, DocPlanner Group and TheraNest, to name a few. 

Maya Heath Platform revenue stream revolves around a subscription based model. The company offers three different subscriptions at varying prices. Practitioners can pay $96 per month and will have access to 8 clients and to all core functionality and integrations. For group facilitators, users can subscribe to the leader subscription for $2,500 per annum, which grants access to white label, customer branded dashboard options,  and personalized reporting and customer support. Universities, private researchers, publishers and producers can subscribe to the platform researcher subscription which will provide global insights tools for psychedelic therapy and composite data and custom analysis. 

Maya Health is poised to become the first company to provide such insightful data for practitioners and researchers around the world in psychedelics. It has a strong viable product, led by an amazing team who has track amazing track records in the psychedelic industry. In 2018, the team behind Maya Health founded Unlimited Sciences, a psychedelic research non-profit organization that educates the general public on psychedelics. In addition, the team worked at Baker, which built and developed CRM, POS systems and other digital tools to help cannabis operations. With a strong team and product, Maya Health is on its track to success. 

Investment Sector 

Currently, the market has a solid legal foundation that will pave the way for psychedelics, Since 2014, the U.S. Public Health Service, FDA, DEA and IRB approved the study of smoked botanical marijuana for veterans with PTSD. In 2016, the FDA granted a breakthrough therapy status to esketamine nasal spray, SPRAVATO, from Johnson&Johnson for depressive disorder with risk for suicide. In 2017, the FDA granted a breakthrough therapy for MDMA assisted psychotherapy for PTSD patients and the treatment is posted to be approved for clinical use by 2022. In late 2018, the FDA also granted breakthrough therapy for psilocybin for treatment-resistant depression. In 2019, Denver became the first city to decriminalize psilocybin. Then, Oakland followed suit to decriminalize all entheogen. Chicago is also undergoing the same initiative. In November of 2020, Oregon voters will be able to vote on the Oregon Psilocybin Program Initiative. The measure would be a program and client screening process for administering psilocybin services. The program would allow licensed service providers to administer psilocybin products to qualified individuals 21 years of age or older. If passed, the measure would set a precedent for other states to take a similar initiative. 

The psychedelic market is growing around the world, not only in the United States. Even though psychedelics are still illegal in the United States, there is such a huge underground market such as underground therapists and retreat centers to administer these psychedelics. Countries like Peru, Jamaica, Netherlands and Portugal have quite a large grey market where legislation is more relaxed, which allows for psychedelic tourism to grow. According to Maya Health, by 2020, there will be 5.6M psychedelic users in the underground market. By 2021, there will be 75,000 ketamine patients in the legal market. By 2022, there will be 8M PTSD patients in the US, all of which are treatable with MDMA-assisted psychotherapy. The number is expected to grow to 100M in 2024, where PTSD, DD, TRD, OCD, SUD or GAD patients are treatable with psychedelic assisted therapy. The U.S. Bureau of Labor and Statistics reports that in 2020, there are less than 1000 prescribing professionals in the psychedelic mental health space. The number is expected to jump to 105,000 in 2026. 

Like other psychedelic based startups, the future of the growth of the industry is dependent on regulations and stigma behind psychedelics. However, with so much potential in the industry, scientific research and initiatives being rolled out, Maya Health has a shot of making its mark in the psychedelic market.