3 Top Canadian Psychedelic Stocks for the Second Half of 2021

Posted on July 19, 2021 by Dan Kent

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Canadian psychedelic stocks are the cannabis stocks of 2021. They exploded on to the scene late in 2020 popping up among Canadian stocks, and already have their own ETF (exchange-traded fund): Horizons Psychedelic Stock Index ETF.

2020 was a challenging year for mental health as people struggled with anxiety, depression, and PTSD. Psychedelics could play a key role in potentially helping millions of people cope with mental health issues. There is a tremendous business opportunity in this space.

It’s no surprise that investors like Peter Thiel, of PayPal and Facebook fame, have invested into psychedelic firms. This CNBC article said, “ATAI Life Sciences, a biopharmaceutical company aiming to make psychedelic drugs to treat mental health disorders, announced that it is planning to raise $100 million in an initial public offering.

The Berlin-headquartered company, which counts billionaire investor Peter Thiel as one of its main backers, submitted an S-1 filing to the Securities and Exchange Commission on Tuesday [April 20].”

While all of us might not have the kind of money that Thiel has, that shouldn’t be a reason to not invest into this space.

We're going to look into some of the top Canadian mushroom stocks and Canadian psychedelic stocks you can look at today for potential outsized gains.

Keep in mind that these psychedelic stocks are NOT in any particular order.

What are the top Canadian psychedelic stocks today?

Mind Medicine (MMED.NE)

MindMed (MMED.NE) says on the company's website that it helps “patients unlock the healing power of the mind through Psychedelic Inspired Medicines”.

The company has raised $204 million since inception, and when the company reported its numbers for the first quarter of 2021, it had assets in excess of $201 million, including $160 millions in cash.

Why is this important? The company is unprofitable and it is expected to burn through cash at a pretty rapid clip. A shortfall of cash will likely lead to a share offering.

Total cash burn for the quarter was $10 million. MindMed posted a net loss of $14 million for the same period.

MindMed also acquired HealthMode, a leading machine learning digital medicine company, adding Bradford Cross as Chief Technology Officer to lead Albert, its digital medicine division, and Dr. Daniel R Karlin as Chief Medical Officer.

The company has also closed several partnerships with experts in the field. The company is collaborating with leading psychedelic researchers, including the University Hospital Basel’s Liechti Lab and Maastricht University.

In early 2021, it began the first ever clinical trial combining MDMA and LSD in collaboration with UHB Liechti Lab. The partnership has already yielded results with the first publication of the first pharmacogenetic data on LSD to help personalize dosing.

MindMed and Nextage Therapeutics, an Israeli innovative drug development company, announced the execution of a Memorandum of Understanding regarding the launch of an exclusive collaborative development program to optimize the delivery of certain psychedelic drug candidates.

MindMed has marquee names like Bruce Linton, founder and former Chairman and CEO of Canopy Growth Corporation on its Board of Directors. Kevin O’Leary, Mr. Wonderful from Shark Tank also invested in MindMed during its $24.2 million funding round.

MindMed stock has gained 263% since November 2 when it was trading at $1.21. It is currently trading at $4.24.

Mind Medicine historical performance

Numinus Wellness (TSEV:NUMI)

Numinus (TSEV:NUMI) is an integrated mental health company that is trying to create an ecosystem of health solutions on three fronts.

Numinus Bioscience is a Health Canada-licensed lab for psychedelic substance research, developing IP while offering analytics services for revenue generation.

Numinus R&D is developing psychedelic-assisted therapeutic protocols to embed in mainstream healthcare, led by medical leadership with global research and policy reform experience.

And finally, Numinus Health offers centralized, Numinus-owned training facilities and other operational resources.

Numinus is the first public company in Canada to receive a license to produce and extract psilocybin from mushrooms, and the first to complete a legal harvest of psilocybin mushrooms using this license.

Numinus also possesses a dealer's license from Health Canada to import, export, possess, test, and distribute MDMA, psilocybin, psilocin, DMT, mescaline, LSD, and Ketamine. Numinus holds a cannabis testing license from Health Canada, allowing them to provide third-party analytics and testing services for revenue generation.

The company has planned a 7,500 square foot lab expansion and multi-million dollar investment by end of 2021. Numinus also acquired Mindspace, bringing more than 40 practitioners, 1,400 clients, psychotherapy, psychoeducation, and group mindfulness programming into the company.

Numinus is clear that it will not stop with the acquisitions as long as clinics are growing and profitable.

The company has $63.2M cash on hand to drive growth strategy. It had raised $40 million via a financing round in March 2021. The stock is trading at $1.07.

Numinus historical performance

Compass Pathways (NASDAQ:CMPS)

Compass Pathways (NASDAQ:CMPS) is based out the UK and the US and develops COMP360, a psilocybin formulation that is in Phase IIb clinical trial to treat patients with treatment-resistant depression.

The biggest USP for Compass is that it has been proven to be a good treatment option for depression, specifically treatment-resistant depression. However, this also means that Compass drugs will come into play only once other treatments have been tried and failed.

This could be seen as a risky bet, even in the volatile psychedelic space, for newer investors to get into. That said, the global depression drugs market was valued at $18.9 billion in 2019 and is projected to expand at a CAGR (compounded annual growth rate) of ~2% from 2020 to 2030.

The company plans to release the results of the phase 2 study on COMP360 by the end of the year. If approved, it can receive around 5-11 years of exclusivity in US markets.

The company had cash and equivalents to the tune of $179.5 million at the end of March 31, 2021. It also raised $165 million in April 2021. The company debuted in September 2020 at $29 a share, and then raced up to $58 in December before crashing to its current levels of $38.

Analysts have given the stock a target price of $68.5, which is a significant upside from current levels. This could be a bet with massive payouts.

Mental health disorders cost the world $16 trillion in damages every year. According to this article in The Washington Post, drug overdoses in the US in May 2020 jumped 42%.

Compass Pathways historical performance

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Dan Kent

About the author

An active dividend and growth investor, Dan has been involved with the website since its inception. He is primarily a researcher and writer here at Stocktrades.ca, and his pieces have numerous mentions on the Globe and Mail, Forbes, Winnipeg Free Press, and other high authority financial websites. He has become an authority figure in the Canadian finance niche, primarily due to his attention to detail and overall dedication to achieving the highest returns on his investments. Investing on his own since he was 19 years old, Dan has compiled the experience and knowledge needed to be successful in the world of self-directed investing, and is always happy to bring that knowledge to Stocktrades.ca readers and any other publications that give him the opportunity to write. He has completed the Canadian Securities Course, manages his TFSA, RRSPs and a LIRA at Qtrade, and has compiled a real estate portfolio of his primary residence and 2 rental properties, all before his 30th birthday.