Three Trends That May Shape the Psychedelics Industry Next Year

January 3, 2023 15:46:21

The psychedelics industry has grown significantly these past few years. However, before it can deliver on its potential, the sector will need to achieve various milestones and overcome certain challenges. Below, we look at some of the trends that may shape this burgeoning industry in 2023.

Drug approvals

Companies such as Mind Medicine Inc. (NASDAQ: MNMD) (NEO: MMED) (DE: MMQ) and Compass Pathways have been conducting clinical trials on psychedelic drugs for the treatment of a range of conditions. These trials may make or break the psychedelic industry’s viability, which further highlights the huge role they can play in the industry’s progress. If successful, they could generate huge momentum for publicly traded psychedelic firms.

At the moment, however, companies have to receive approvals for their formulations so they can advance past trials and begin drug development, which brings the drugs closer to being commercially available. Many expect psychedelic drug rollout to be the industry’s biggest challenge, especially since most parties in the psychedelic space haven’t worked in big pharma or even launched a drug before.

Increased advocacy in the psychedelic space

Parties involved in the psychedelic industry having one voice by building a coalition that would unify them will enable the responsible laying of groundwork for the market’s regulatory framework. This is in addition to creating representation for the sector and developing a cohesive relationship between government and regulators.

Continued widespread decriminalization and legalization of psychedelics

Various states in the United States have decriminalized and/or legalized psychedelics in some form, with Colorado becoming the latest state to decriminalize the use of magic mushrooms in drug centers for individuals aged 21 and above. Colorado follows the lead of the state of Oregon, which also permits the medical use of psychedelic drugs.

Canada has also made recent legal changes regarding the use of psychedelics, with Alberta becoming the first province in the country to allow the use of psychedelics in therapy. In addition, federal agencies such as the U.S. Food and Drug Administration have been examining the uses of various psychedelic substances.

However, for change to be adopted at the federal level, the federal policies will need to back the state-by-state approach to psychedelics currently being employed at the state level.

This year’s broad financial downturn may have disheartened some investors in the psychedelics space. However, with light on the horizon and players in the market desperate for new capital, long-term investors may reap great benefits if they choose to venture into this space in the short-term.

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