Understanding and predicting the journeys of both alternative investment verticals is paramount to what we do. By connecting the dots between emerging and established industries, we gain invaluable insights into the challenges our clients might encounter and how to align investors with opportunities.

It’s important to note that there are other psychedelics with unique characteristics and investment potential. However, for the purpose of this discussion, we have chosen to primarily focus on psilocybin due to its emerging prominence in the alternative investment landscape.

✅  Similarities:

• Regulatory Challenges: Both Psilocybin and Cannabis have faced deeply entrenched regulatory landscapes riddled with historical prejudices. We’re now witnessing a shift, gradually clearing the path for progress.
• Mental Health Benefits: The therapeutic potential of both substances has been underestimated, but as science delves deeper into their healing properties, new avenues for health and well-being emerge.
• State-Level Regulation: The decentralized approach to state-level regulation creates a unique environment for experimentation and adaptation in both industries, paving the way for future growth.

❌ Differences:

• Administration and Infrastructure: The contrast in how these substances are administered sets them apart. Cannabis can be recommended by a doctor and used at home, while Psilocybin has been shown to be most useful in combination with therapy in a clinic setting.
• Capitalization: The Psilocybin sector benefits from well-funded pharmaceutical companies, while cannabis entities, especially those directly involved with the plant, often face funding limitations.
• FDA Validation: Psilocybin already has granted Breakthrough Therapy Designation by the FDA, which presents opportunities for widespread product validation, unlike cannabis products treated more as agricultural commodities.

When considering the choice between investing in the cannabis or psilocybin industry, investors are presented with unique opportunities and challenges in each space. The decision ultimately hinges on a range of factors, including the investor’s risk tolerance, investment horizon, and strategic objectives.

🌱Cannabis Investment:

• Market Maturity: Investors have the advantage of investing in proven operators, and the potential to acquire distressed assets at attractive price points.
• more established markets and predictable returns may find cannabis appealing.
• Diverse Investment Avenues: There are endless ways to invest in the cannabis space, including in companies involved in cultivation, retail, medical products, manufacturing, tech, distribution, and ancillary services.
• Wider Legalization: As cannabis gains legal recognition in various regions, investors may see opportunities for growth and expansion into new markets.
• Steady and Consistent Demand: Cannabis enjoys a well-established and consistent demand due to its popularity for both recreational and medicinal use. Investors looking for an industry with a stable customer base and relatively steady sales may find cannabis an attractive option.

🍄Psilocybin Investment:

• Early-Stage Opportunities: Psilocybin is still in its early stages of development, offering investors opportunity for a VC-like return profile.
• Pharmaceutical Potential: The psilocybin sector has strong ties to pharmaceutical companies, making it attractive to investors seeking involvement in the pharmaceutical industry. There are already capitalized pharmaceutical companies willing to invest in medical solutions.
• Low Competition: The psychedelic space has fewer established players compared to the cannabis industry, which may present opportunities for investors to get in on the ground floor.
• Molecule Isolation: Psychedelic research benefits from clear effects through molecule isolation, while cannabis grapples with entourage effects and patent complexities. Because Psilocybin operates on a single pathway, it is easier to create a testable FDA trial opportunity and/or secure IP around the productization of that molecule.

In summary, the choice between the cannabis and psilocybin industries depends on an investor’s preferences and objectives. Cannabis offers a market with diverse opportunities, while psilocybin provides a promising landscape for early-stage investments and potential pharmaceutical breakthroughs. Both industries offer unique avenues for growth and diversification, making them compelling options for astute investors.