The world of investment is a big place with a ton of offerings. In the last few years, a new genre of company has been added to the list of possible corporations to invest in. Yup, there are now a plethora of publicly traded psychedelics companies, and they’re all just getting started.
The world of publicly traded companies is always expanding, and now includes psychedelics companies. This was unheard of just a few years ago! We’re a news platform specializing in the psychedelics and cannabis industries, and the important stories within. Keep up with us by signing up for The Cannadelics Weekly Newsletter, and also be first in line for all product promotions, as they come out in the upcoming months.
What is an IPO?
There are different kinds of businesses. Some are small and operated by one person. Some are massive and span several continents, with thousands of employees. The latter, though it could be a private company, is most likely publicly traded.
A publicly traded company is one that sells its shares on a stock exchange, like the New York Stock Exchange, or the London Stock Exchange. The stocks reach the exchange via an initial public offering, or IPO, which is the opening sail of a company’s shares. Through the IPO, anyone in the general public can purchase a portion of the company, meaning that it’s not owned by a single person or group, but by whoever owns its shares. One of the benefits of doing this, is the ability to get capital together for expansion. One of the deficits, is losing control of a private company to a group of shareholders.
Public companies generally have a CEO and board of directors, as well as shareholders. Who holds the most power can vary between organizations. Decisions can be made by the board, which is generally made up of high level executives, or the shareholders by way of voting. All public companies are regulated by the Securities and Exchange Commission, under the eye of the PCAOB (Public Company Accounting Oversight Board).
If a company does not go public, its control is retained by the smaller number of owners or investors that it has, and decisions are made at the behest of this smaller group. In some cases it’s a single person making these decisions. In some cases, a private company can be very large, like Cargill, the largest privately held company in the US, which boasts a staff of 113,000.
Anyone legally able with enough money can purchase shares of a publicly traded company on whatever exchange it exists on. For example, the biggest exchange for stocks in America is the New York Stock Exchange. But there are also other exchanges like the Nasdaq for buying and selling securities, and exchanges in other countries like Euronext, the EU’s biggest exchange.
One aspect of publicly traded companies is that they must report certain financial information to both the government and investors. This is not the same for private companies, which don’t have to release as much information, and can be more secretive about overall earnings. For some industries that hover mainly in the black or gray markets, there isn’t always much data released, and its through the reporting of public companies that we get any sales information at all. The cannabinoid market is a great example of this.
Since publicly traded companies are more closely regulated by federal agencies, they must be tax-paying companies, operating above-board. They might employ shady tactics, but they can’t be black market companies. As such, in order for publicly traded psychedelics companies to exist, they must not sell products or services that are federally illegal.
Publicly traded psychedelics companies
Psychedelics are making a huge comeback in light of study after study showing their benefits for both a myriad of psychological issues, as well as pain. In fact, psychedelic medications are now repeatedly showing up standard pharmaceutical remedies in both avenues, with the drug ketamine (and its legalized counterpart esketamine) taking the lead, highlighting the ability for better depression and pain management. This is especially important because of the ongoing and increasingly bad opioid epidemic which claims tens of thousands of lives a year.
Other compounds like psilocybin and MDMA are getting close to legalizations as well on a federal level. In fact, the FDA has helped structure trials with more than one company studying these compounds, to ensure trial results meet all regulation. The FDA also issued ‘Breakthrough Therapy’ status to three companies studying MDMA and psilocybin, in order to get their drugs to market faster.
One organization that received such treatment is MAPS – (Multidisciplinary Association of Psychedelic Studies) which is currently in Phase III trials into MDMA for PTSD. MAPS, however is not a corporation, but a non-profit group. Another organization that received this help from the FDA is COMPASS Pathways (CMPS) which is researching psilocybin for treatment resistant depression. COMPASS Pathways is a publicly traded psychedelics company on the Nasdaq and New York Stock Exchanges.
Other companies that join COMPASS on these two exchanges, include Field Trip Health, Inc. (TSE), one of the biggest operators of ketamine clinics; MindMed (MMED), a Swiss biotech company investigating how LSD and MDMA can be used in combination; and Atai Life Sciences (BMV), a company that acquires business in the psychedelics space, and which is one of the psychedelics company with the greatest market capital in 2022, topping $860 million. As of October 2021, there were at least nine publicly traded psychedelics companies on both the Nasdaq and NYSE.
However, some publicly traded psychedelics companies are traded elsewhere. In fact, the majority reside on the OTC Markets Group, which includes the OTCQX (highest tier), and OTCQB (mid-tier). Companies that show up here include Pharma Ther (PHRM) which is developing microneedle psilocybin skin patches for medical purposes. Mindset Pharma (MSET) which is working on psilocybin analogues, which are stronger than the standard compound. Delic Holdings Corp (DELC), another chain of ketamine clinics that just bought out Ketamine Wellness Centers Arizona LLC, with major expansion plans.
Then there’s Wesana Health Holdings (WESA), a developer of neurological health therapies, which announced in summer 2021 its acquisition of Psychedelitech, Inc. And Nova Mentis (NOVA), a company in the psilocybin skin patches space, working in conjunction with Mycrodose. All together, as of October 2021, there were at least 27 publicly traded psychedelics companies on the two top tiers of this exchange.
The lowest tier of the OTC exchange is called the Pink Open Market, and several more psychedelics companies reside here. One such company is Levitee Labs (LVT), which joined the Exchange in 2021, and is a producer of mushrooms and associated products. Another is Small Pharma (DMT), which is currently conducting the world’s first official DMT trials into depression along with Imperial College London. Another is Red Light Holland (TRIP), a Netherlands company that sells truffles in the legal market in the Netherlands. And Numinous (NUMI), a wellness company specializing in holistic treatments with psychedelic medicines. Altogether, as of late 2021, at least 14 companies were on this tier of the exchange.
On the international stage, one of the biggest publicly traded psychedelics companies is Jazz Pharmaceuticals (JAZZ) out of Ireland, a Nasdaq company which announced its acquisition of GW Pharma in 2021. GW is a British pharmaceutical company and the maker of leading pharma medicines epidiolex and Sativex, the reason that the UK is one of the biggest cannabis exporters in the world.
Other companies not necessarily based around the US exchanges include Clarify Pharma (PSYC), a British company which is an investment platform that promotes psychedelic medicines, and which can be found on the Aquis Growth Market for equity and debt securities. Neon Mind (NEON) a Vancouver-based company working on psilocybin weight loss treatments, which resides on the Canadian Securities Exchange. And Graph Blockchain (GBLC), a blockchain company out of British Columbia, which recently acquired mushroom company Shroom Streets, making for a marriage between tech and treatment. This company can also be found on the Canadian Securities Exchange.
For those interested in private and public psychedelic investments, this list contains both companies in their respective spaces. For those interested in investing in private companies, and have the ability to do so, its best to contact the individual companies to speak with their management as shares are not open to the general public. For the right investors, private companies are great opportunities, though they won’t apply to most of the investing world.
If the idea is investment, interested investors should go through the publicly traded psychedelics companies to find the ones that best suit their investment needs. As a dynamic industry with many moving pieces, the landscape is sure to change soon enough, and those getting in on the action, would be wise to keep their eye on daily changes to promote safe and profitable investments. If you’re still unsure about investing in this marketplace, give it more time, and see if its any more appealing in a few months, or a year, from now.
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