Election Day 2020 was a lot of things, particularly at the national level, but on a state-by-state basis, Tuesday, Nov. 3 will go down as a great day for vices and sin equities, including psychedelic stocks.
Voters in several states signed off on cannabis-related measures. Proving that it’s an increasingly bipartisan issue, deep red South Dakota approved medicinal and recreational marijuana in a single day, Mississippi voted gave the green light to medicinal cannabis while purple Arizona gave the go ahead for recreational cannabis.
Onto gambling, voters in six states OK’d related initiatives. On Election Day, sports betting went undefeated – gain approval in Louisiana, Maryland and South Dakota while Virginia became the 26th state to allow commercial casinos. Bet limits on table games at Colorado casinos are being scrapped and voters there also signed off on new games while the stage is set in Nebraska for casinos at racetracks.
That’s all impressive, but when it comes to sin votes, Oregon may just take the cake. The Pacific Northwest state became the first in the country to decriminalize possession of small amounts of drugs. All drugs. Even cocaine and heroin. And there was enthusiasm for the move as nearly 56% of voters were in favor of Measure 110.
Oregon’s progressive views on drug possession could pave the way for significant upside with psychedelic stocks, Here are a few to consider:
- Champignon Brands (OTCMKTS:SHRMF)
- Mydecine Innovations Group Inc. (OTCMKTS:MYCOF)
- Numinus Wellness (OTCMKTS:LKYSF)
Psychedelic Stocks: Champignon Brands (SHRMF)
Champignon Brands is arguably one of the most well-know psychedelic stocks and that’s a direct commentary on this nascent industry because SHRMF stock has a market capitalization of just $38.04 million. The company’s current area of focus is mushroom-infused beverages, which could jibe well in the Oregon market, assuming such products will be permitted for sale there at some point.
Beyond leisure pursuits, Champignon is looking to leverage its competencies in dissociative psychedelics like ketamine, psilocybin and MDMA to develop treatments for post-traumatic stress disorder (PTSD).
Investors interested in SHRMF stock should monitor those developments because the company is essentially taking a page out of the cannabis industry playbook and that’s actually a positive. What that means is that in the earlier days of the industry, many marijuana purveyors pursued medicinal markets because those opened prior to recreational.
However, Champignon isn’t a risk-free bet. It recently scrapped a branding overhaul and opted against an acquisition of Wellness Clinic of Orange County. Still, there’s growth potential here as Data Bridge Market Research forecasts the psychedelic pharmaceuticals market could grow to almost $7 billion in 2027 from $2.07 billion this year.
Mydecine Innovations Group (MYCOF)
Mydecine Innovations Group is another psychedelic company leveraging psychedelic medicinal fungi to improve mental health. The company’s brands include Mydecine Health Science, Mindleap Healt, and NeuroPharm.
The exposure of MYCOF stock to the situation in Oregon isn’t so much about that state decriminalizing psychedelics, but rather about broader acceptance. Today, it’s not a stretch to say psychedelics are in a place resembling where cannabis was 40 years ago. Maybe longer. Meaning that many folks outside of Oregon look at psychedelics, medicinal or recreational, as illicit drugs on par with heroin or meth.
That puts some burden on companies like Mydecine to win hearts and minds, but the good news for this firm is that it’s focusing on the medicinal market with an emphasis on treating PTSD and related disorders among Canadian and U.S. veterans.
There’s big opportunity for MYCOF stock investors because U.S. expenditures on addiction, depression and PTSD total a staggering $300 billion and most of those efforts are ineffective.
Numinus Wellness (LKYSF)
Numinus Wellness, like many psychedelic stocks, is highly speculative and that much is proven by the fact that the company doesn’t have revenue – yet. As a result of that, it loses money. Like many of its Canadian marijuana counterparts, Numinus currently only does business in its home country, making its exposure to Oregon trends nil for now.
“Numinus has received Health Canada approval to amend the Company’s existing licence under the Controlled Drug and Substances Act to allow Numinus researchers to conduct research to standardize the extraction of psilocybin from mushrooms,” according to the company. “The amendment means Numinus is the first publicly traded company in Canada to be granted a licence by Health Canada to conduct research of this kind.”
The company is just two months removed from debuting its initial psychedelic mushroom crop, so it remains to be seen if Numinus reaches its goal of reaching the forefront of analytical testing for psychedelic substances.
The upside here is that Numinus has an export license so if the U.S. psychedelics market starts to liberalize, LKYSF stock could be responsive to that opportunity. Bottom line: There’s a lot of moving parts here and significant risk/reward.
On the date of publication, Todd Shriber did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Todd Shriber has been an InvestorPlace contributor since 2014.