The Psychedelics Industry Hit Major Highs and Lows in 2024

The psychedelics industry witnessed notable milestones and setbacks at both the state and federal levels in 2024. Here’s a detailed look at some of the most significant events of the year.

In a landmark move, the Department of Veterans Affairs (VA) announced a $1.5 million investment to fund research on MDMA-assisted therapy for treating alcohol use disorder and post-traumatic stress disorder (PTSD).

This marks the first federally funded psychedelic study since the 1960s. The research will be conducted at West Haven VA Medical Center and Providence VA Medical Center by VA researchers affiliated with Yale University and Brown University. Participant enrollment is expected to begin this year, reflecting growing federal interest in alternative mental health treatments.

The Drug Enforcement Administration (DEA) proposed classifying 2,5-dimethoxy-4-chloroamphetamine (DOC) and 2,5-dimethoxy-4-iodoamphetamine (DOI) as Schedule I substances under the Controlled Substances Act.

This sparked opposition from researchers who fear the classification could hinder scientific exploration into the therapeutic potential of these compounds. Many experts argue that restricting access to these psychedelics could slow progress in understanding their efficacy in treating mental health disorders.

In a setback for the psychedelics industry, an FDA advisory panel rejected Lykos Therapeutics’ application for MDMA-assisted therapy to treat PTSD.

The rejection was attributed to issues with the company’s phase III clinical trials, with the panel recommending additional studies to address concerns regarding safety and effectiveness.

Despite bipartisan letters from Congress urging regulatory agencies to approve the treatment, Lykos faced financial strain and laid off 75% of its workforce to focus on refining its research and trial process.

In a progressive step, the Governor of Utah approved a measure to implement a pilot program allowing hospitals to administer MDMA and psilocybin as alternative therapy options.

This initiative aims to explore the potential of psychedelic treatments in controlled, clinical environments, offering patients innovative options for mental health care.

Colorado took further steps in implementing its psychedelics legalization law, which was approved by voters. State departments of revenue and regulatory agencies adopted a comprehensive set of regulations covering:

These regulations are designed to ensure the safe and effective rollout of legal psychedelic treatments across the state.

In contrast to other states, Massachusetts voters rejected a ballot initiative that sought to legalize the cultivation, possession, and sharing of psychedelics for adults aged 21 and over.

The measure proposed possession limits of:

Despite growing interest in psychedelic therapies, the initiative failed to gain sufficient public support.

In Nevada, a government task force issued a report urging state legislators to:

The task force highlighted scientific findings showing that psychedelics like psilocybin, ibogaine, and DMT can be effective in improving mental health conditions such as depression, anxiety, and PTSD.

The recommendation signals a shift toward harm reduction and broader therapeutic access in the state.

These key developments are just a snapshot of the progress and challenges faced by the psychedelics industry in 2024. Major companies such as Mind Medicine Inc. (NASDAQ: MNMD) and leading academic institutions continue to expand research into the benefits of psychedelics.

As more clinical studies emerge, researchers and advocates remain optimistic that psychedelics could redefine mental health care and offer hope to millions of patients worldwide.