On the myths of the psychedelics industry

Keeping things real

Every emerging sector is accompanied by hype, myths and downright lies. Psychedelics (an industry as sexy as they come) is no stranger to bullshit.  If you are an investor, operator or even just an aspiring psychonaut, there are a few of the misconceptions you need to be mindful of:

1. Psychedelics are legal
No, they are not.  Psychedelics remain illegal virtually everywhere (save Oregon and in limited cases, Canada for medical treatment) and will remain so for the foreseeable future. Various forms of psychedelics-styled mushrooms are available ‘over the counter’ but they do not deliver true psychoactive effects nor are their product claims (e.g., memory enhancement, cognitive boosting) backed by credible research.

2. An IP gold mine
Maybe, but there is a lot of debate about whether naturally occurring substances and treatment ‘set and setting’ can be patentable not to mention what constitutes molecular uniqueness.   Many strategic and investment decisions have been made based on attainable IP.  However, little consideration was paid to what can be legally defended.  Fact is, we won’t know how real and defensible psychedelics patents are until they are awarded and challenged.

3. Peace be with you
There is an assumption that all psychedelics users are peaceful, chill individuals.  That would be wrong.  There have been many disconcerting stories around therapist abuse. Certain extremist groups have been known to be heavy users.  Finally, plenty of scientific research that shows that hallucinogenic experiences can be far from peaceful or enlightened.

4. Psychedelics are just MDMA and Psilocybin
These compounds consume the lion share of scientific, investor and media attention. Yes, they are promising and well known but they were also the first out of the investment and research gate. It doesn’t mean they will win the psychedelics race in many therapeutic areas. Other compounds such as 2C-B, DMT, Ayahuasca, and Peyote are attracting their share of interest and look promising in early study.

Terminology can also be overly simplistic and misleading.  To wit, there are 100 different types of psychedelic mushrooms (the source of psilocybin), not to mention many different psychedelic flora and flowers. Not every mushroom is medicinal or even safe.

5. A trillion-dollar baby
In history, the bigger the lie the bigger the supporting statistic.  Psychedelics is no different.  Consider the sector’s Total Addressable Market. I have seen business plans and investment banks promote this trillion-dollar market opportunity.  This number is Impossible, especially when you consider the learnings from other emerging sectors like cannabis and e-commerce where it took twice as long to reach 50% of the TAM.  

And don’t even get me going on licking Sonoran Desert toads.

#psychedelics #strategy #psilocybin #legalization #marketsize #mdma