Psychedelics stocks were buoyed on Thursday morning by the news that Colorado voters had approved a midterm election ballot measure that would legalize the possession and use of certain psychedelic plants and fungi.
The possession, use, cultivation and sharing of psilocybin, ibogaine, mescaline (not derived from peyote), DMT and psilocin will be legalized for adults 21 and older, without an explicit possession limit. Under the measure, the state will also create new regulations for the distribution and administration of these substances.
With 88% of the vote counted at mid-morning on Thursday, 51.4% were in support of the measure while 48.6% were against it.
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US-based psychedelics exchange-traded funds (ETFs) rose during Thursday morning's trading session on the news, with the AdvisorShares Psychedelics ETF up 3.1% and the PSYK ETF up 4%.
In terms of individual major movers, Lobe Sciences Ltd (CSE:LOBE, OTCQB:LOBED) shares jumped 12%, Revive Therapeutics Ltd (CSE:RVV, OTCQB:RVVTF) had added 7%, Numinus Wellness Inc. (TSX:NUMI, OTC:LKYSF) jumped about 5.2%, Braxia Scientific Corp. (CSE:BRAX, OTC:BRAXF) was up 6.5%, and Mindset Pharma Inc (CSE:MSET, OTCQB:MSSTF) 1.8%.
Field Trip Health & Wellness Ltd soared 103% to US$0.08 per share, atai Life Sciences (NASDAQ:ATAI) added 5.5%, Compass Pathways (NASDAQ:CMPS) plc gained 7%, and MindMed (NASDAQ:MNMD, NEO:MMED) was up 4.1%.
Improved sentiment around psychedelics stocks also spilled over into the Canadian market, with Love Pharma Inc (CSE:LUV) skyrocketing 100% to C$0.10 per share, Lobe Sciences Ltd (CSE:LOBE, OTCQB:LOBED)'s Toronto-listed shares soaring 14.3%, and the NEO exchange-listed Horizons Psychedelic Stock Index ETF gaining 1.9%.
Psychedelic industry 'an ideal opportunity' says Stifel GMP analysts
Earlier this week following the conclusion of the psychedelics networking conference Wonderland in Miami, analysts at Stifel GMP wrote in a note to clients that they had come away from the conference with a renewed conviction in the psychedelic industry.
Key themes they noted were the large unmet need for psychedelic-assisted psychotherapy clinics both now and in the future and that the realm of addiction seems to be an attractive field for psychedelic therapies, offering multiple distinct opportunities outside of popular depression and anxiety indications.
Further, the analysts wrote that early-stage companies have a material second mover advantage given multiple unknowns in trial design given psychedelics are a greenfield opportunity.
“Overall, it seems progress continues despite depressed valuations, resulting in an ideal opportunity for investors that can navigate through the cycle,” they wrote.
Contact the author at emily.jarvie@proactiveinvestors.com
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