The Size of the Psychedelic Market

Psychedelics as medicine are continuing to go from strength to strength. Researchers worldwide are continuing to bring drugs like MDMA and psilocybin through the clinical trial process to turn these substances into viable therapy options.

With this success, you don’t have to look too far to find psychedelics in the headlines of many of the world’s leading news outlets.  

While many may argue that the so-called “hype” around psychedelics is affecting research – it is also attracting investors seeking to capitalise on what is poised to be a paradigm shift in how we view and treat mental health disorders.

Despite psychedelics remaining highly controlled substances in most parts of the world – it hasn’t deterred companies and investors from getting in on the action.

The current market

As little as ten years ago, you would have been hard pushed to find someone hedging their bets on psychedelic medicine – never mind public limited companies listed on stock exchanges like the Nasdaq or the CSE in Canada.

There are now roughly 50 publicly traded businesses in the sector, each trying to make a name for themselves in this rapidly growing market. Perhaps the most notable of these are Compass Pathways and atai Life Sciences – the latter of which was valued at over $2.6 billion at its public offering last year.

Together, medical psychedelic companies have been valued at over $10 billion. A recent Data Bridge Market Research analysis revealed that the psychedelic drug market at $2.83 billion in 2021 – with this number expected to rise to over $9 billion by 2029.

Biotech and pharmaceutical companies continue to dominate businesses within the sector, though there is a growing base – and appetite for – research clinics, therapy providers and software infrastructure.

Looking toward the future

The future may look bright for psychedelic medicine, although many are advising to tread with caution.

Towards the end of 2021, many who had rushed to invest in psychedelic stocks witnessed first-hand just how turbulent the market is as many stocks decreased in value.

Various reasons have been put forward – one relates to the lack of development in the space. Given that nearly all psychedelics are yet to complete the clinical trial process necessary to prove that these drugs are safe and effective – investing in psychedelics might not be the easiest way to see a quick return.

Psychedelics are also controlled substances, making working with them difficult and costly – even for companies with the most capital.