Don’t laugh, but psychedelics could be legalized in America before cannabis
The demand for psychedelic substances has been growing gradually in recent years and is expected to accelerate exponentially over the next few years. The main factors driving market demand during this forecast period are increased incidence of mental depression and anxiety and access to off-label medications. However, the cannabis sector appears to be undergoing a reset and is currently not boasting any increased demand or special market action.
While both companies have their limitations, the psychedelics industry is moving toward widespread adoption faster than cannabis was in its early years. Emphasizing how much it can help treat mental disorders, psychedelics remain true to their medicinal roots. On the other hand, the focus of cannabis appears to be split between medical and recreational use, with just the desire for a high taking precedence.
America’s Psychedelic Industry
In the United States, other names for psychedelic drugs are Dots, Blotter, Acid, Sugar, Trips, and LSD (lysergic acid derivative). Psychedelic substances can alter or enhance sensory impressions, mental processes, energy levels, and have even been shown to enhance spiritual experiences. Empathogenic, dissociative (like PCP), and serotonergic (classic hallucinogens) like LSD are all examples of psychedelics. In general, there are two types of psychedelics: natural and synthetic. Major depression, post-traumatic stress disorder, anxiety, treatment-resistant depression, and opiate addiction are just a few of the conditions treated with these drugs. SIGA Technologies Inc., Intercept Pharmaceuticals, SciSparc Ltd., Cassava Sciences, Inc., AbbVie, Jazz Pharmaceuticals, Inc., COMPASS, Hoffmann-La Roche Ltd, Hikma Pharmaceuticals PLC, NeuroRx, Inc., PharmaTher Inc., Mind Medicine, Inc., Cybin Corp., GABA Therapeutics, Inc., EmpathBio, DemeRx are active companies in the market today.
As efforts to decriminalize psychedelics continue in the US and major psychedelics legalization movements accelerate, the psychedelics sector continues to attract entrepreneurs with significant capital.
Setbacks in the cannabis industry
The cannabis sector faces some of the same challenges as any developing, maturing company, including hostile takeovers, unclear legislation, particularly crucial political issues related to who controls and regulates the market, and a growing body of litigation. It’s been over a decade since Colorado and Washington were the first states to establish legal marketplaces for people 21 and older. Still, most cannabis companies are still bleeding hard cash. The major publicly traded US operators lost more than $550 million in total in the first half of 2022, while generating around $4.5 billion in revenue, according to a review of their financial reports.
According to Politico’s reports, cannabis companies invested heavily in capacity expansion in 2020 and 2021 because of false optimism that the likelihood of federal marijuana laws increasing after Democrats took control of Congress and the White House would be relaxed, was optimistic. Several of the largest state marketplaces, including California, Colorado, Massachusetts, and Michigan, have had product surpluses, causing prices to fall.
It must be emphasized that the cannabis black market remains a major impediment to the success of the cannabis industry, particularly in California. The illicit cannabis industry alone is estimated to have generated over $8.7 billion in revenue in this state in 2019, while the legal cannabis business, at about $3.1 billion, generated less than 50 percent of that, according to Statista.
As psychedelics decriminalization campaigns continue in the US and efforts to legalize psychedelics in states like Colorado accelerate. Several states, including Colorado, added cannabis reform measures to the ballots in the just-concluded midterm elections. This could give the US cannabis market even faster growth as the psychedelics industry continues to attract investors with similar bankrolls.
Support for Psychedelics
From 2006 to 2020, the National Institutes of Health largely ignored psychedelics, but as of October 2021, the US government appears to be fully behind psychedelics development as the National Department of Health stepped in by awarding a $4 million grant to Johns Hopkins ( funded by the NIH’s National Institute on Drug Abuse) to study psilocybin and tobacco addiction. Other cases of governments and corporations focusing on developing the psychedelics sector while the cannabis sector is struggling can be found. Still, many of these issues will be resolved in the next two years as a series of advancing clinical trials on psychedelics could quickly lead to FDA approval and drug development by the end of 2024.
Another credible example is when the University of North Carolina and Dr. Bryan L. Roth (with the UNC Eshelman School of Pharmacy) received a nearly $27 million grant from the US Defense Advanced Research Project Agency (DARPA) to develop better drugs to treat mental illness using psychedelics and other psychoactive molecules. The project will build on ongoing research at UNC to provide new methods to fully understand how drugs can alter cellular signaling pathways and produce more potent drugs.
Recent developments and forecasts for the psychedelics market
The Center for Research and Innovation in Mental Health (“the Centre”) was established by COMPASS Pathways plc in March 2022 to advance psychedelic research and develop new methods of treating mental illness. The center’s mission can foster the development of psychedelic therapies, advance therapist education and certification, assess empirical data, and develop digital tools to support tailored, authoritarian, and preventative models of care. In addition, an exclusive license agreement was signed by iX Biopharma Ltd. in November 2021. and Seelos Therapeutics, Inc.
During the forecast period 2022-2029, the Psychedelic Drugs Market is anticipated to grow. According to Data Bridge Market Research analysis, the market is expected to grow by 13.3% between 2022 and 2029, from $2.4 billion in 2021 to $6.5 billion in 2029.
While the cannabis industry is shaky right now, it has undoubtedly established itself as one of the fastest growing industries in the world. Investors have been watching the same development in the psychedelics industry and are flocking to seize this opportunity. Thanks to the global need for effective mental health drugs, widespread public support, and looming legislation on psychedelics and cannabis, investors are hoping the industry can deliver on projections.
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