Investing in the Building Blocks of Psychedelics

The psychedelic industry is growing. What exactly does that mean? It is easy to point out that more people are seeking out psychedelic treatment and more studies are being done on psychedelic compounds. However, the growth of an industry is much more complex than that. When a new product or service is introduced to the market, a whole ecosystem of supporting services is required to accommodate the growth. 

This is a novel industry, and the basic infrastructure to support investors, patients, and doctors is in the developmental stages. Infrastructure is a broad term– it refers to things like specialized investment funds, data tools, telehealth platforms, patient tracking systems, and anything else that helps set the stage for psychedelic compounds to thrive. 

There is a huge variety of tools that are needed to support the growth that is happening in the psychedelic drug development and therapy fields. The emerging industry has unique needs that can only be met with tools designed specifically for it. Right now the building of a new industry is underway, and there are lots of opportunities for anyone looking to get in on the ground floor. 

As part of the growth of the psychedelic industry, companies are beginning to design and build a spectrum of new tools. Several biotech companies are creating psychedelic clinics, therapy training programs, and technology platforms that will support their drugs once they go to market. 

Some biotech companies are utilizing clinics to start bringing in revenue long before any of their drugs are FDA-approved. This gives the companies a quick source of revenue and a platform to roll out their drugs once they make it through the pipeline. While some companies have found success (so far) with this model, others have struggled with it.

Drug research and development takes a significant amount of capital– something that has become increasingly hard to come by over the past year. Many biotech companies with a vertical framework have sold off assets and narrowed down their focus to survive the current economic climate. Mydecine, for example, sold its technology platform MindLeap in September to slim down its cash burn. The CEO, Josh Bartch, told Psychedelic Invest that they wanted a home for the platform that had the resources and time to bring it to its full potential. 

Bartch and the CEOs of other big psychedelic biotech companies have said that they will be looking to form strategic partnerships with companies that are developing supporting resources. This leaves room for other companies to start developing the infrastructure that is needed to scale psychedelic treatment to meet demand. 

The psychedelic industry is moving fast, and companies that are focused on building supporting infrastructure for the medical use of psychedelic compounds are crucial to keeping up with that growth. Technology platforms, marketing agencies, law firms, and community resources are just a few of the services that are a crucial part of rolling out psychedelic treatment. 

There is a lot of room for new companies in this space– and they’ve been popping up left and right. One great example is Psychedelic Invest’s parent company– Nucleus. The venture studio is developing an ecosystem of tools that will support the use of psychedelics to treat mental health conditions for years to come. The company has a multitude of assets which include a media platform, a marketing and client management system, a data and technology hub, and more. 

Some companies are operating with a more narrow focus and honing in on their specialty. All companies operating in this space will play a unique and important role in the psychedelic industry.

Companies that are building tools to support the growth of the psychedelic industry will see exponential growth as psychedelic therapy becomes more widespread over the next few years. Diversifying your portfolio by investing in companies that target different needs within the industry is important for several reasons. 

The psychedelic industry will not be able to grow without these different types of companies. The more businesses succeed, the more the industry as a whole will grow. Capital can be difficult to come by in the current economic state, which means that it is going to be difficult for new businesses to get off the ground and thrive. Investor support of these businesses is just as important as buying into the companies creating the drugs that will be used for treatment.

Legalization and/or FDA approval of psychedelic compounds is not enough to ensure that patients gain access to treatment. Clinics, qualified therapists, and the tools that they need to operate are crucial to the entire industry becoming successful. That is why investing in these smaller, non-biotech companies is so crucial.

Diversifying also gives investors more security. Investing in psychedelic biotech is extremely risky because of the amount of capital it takes to get a drug to market, the uncertainty of the compounds that are being developed, and the turbulent political climate around psychedelics. The companies that are opening up clinics, educational programs, creating data tools, etc., offer a much quicker return– many already have revenue-generating assets. Investing in the various sectors of the industry brings some stability to a psychedelic investment portfolio, which is why many of the institutional investors in the industry are doing just that. 

Psychedelic-focused investment funds, such as Palo Santo and Iter Investments, are investing in companies that are building clinics, educational programs, and technology platforms because they know that this new industry requires a lot more than some regulatory changes and the FDA stamp of approval.

Iter Investments has put money into companies that are addressing various needs of the industry. These companies include– Nucleus, Tripp, Fluence, and Beckley Retreats. This covers everything from Virtual Reality and data tools to therapist education and psilocybin retreats. Palo Santo has also invested in several of these companies. 

Many of the public psychedelic companies that you can buy public stock in are in the biotech field. However, there are a handful of opportunities to invest in the infrastructure that is building the backbone of the industry. 

Field Trip Health, for example, is building a network of clinics and telehealth tools to ensure patients have access to treatment. For more information on which companies fall under this category, a comprehensive report of all companies in the psychedelic index will be available to our Pro Members soon. The report covers information on the companies’ missions, assets, financials, and stocks to help investors build a strong portfolio. 

Another way to support psychedelic startups is through crowdfunding. Nucleus is leading the way in democratizing investing in the psychedelic space. Early funding rounds are usually limited to accredited investors. But, with crowdfunding, anyone can support the companies that they believe will provide value to the industry and those struggling with mental health conditions. Nucleus is currently holding a funding round through WeFunder and hopes that other companies will follow its lead. 

There are lots of opportunities to help grow the reach of psychedelic medicines while investing in an industry with promising returns. Investing in companies that target different needs is the best way to ensure that the industry– as a whole– is successful.