Psychedelics just went mainstream. The world’s first psychedelics ETF (exchange traded fund) will began trading Wednesday. Horizons Psychedelic Stock Index ETF will trade on the Canadian NEO exchange under the ticker PSYK.
It will offer investors exposure to a basket of 17 publicly traded companies focused on using psychedelics like LSD to treat mental health issues such as depression, anxiety, obsessive-compulsive disorder, PTSD, and even eating disorders.
Among the companies included in that ETF is the New York-based biotech firm MindMed (MMEDF), which is backed by Shark Tank investor Kevin O’Leary. MindMed has seen its stock soar 250% in the past three months. The stock currently trades on Canada’s NEO Exchange as well as the over-the-counter market in the U.S. and has applied for an uplisting on the Nasdaq.
“The space is moving very, very quickly,” MindMed co-founder and co-CEO JR Rahn told Yahoo Finance Live. “What we're seeing now is, I believe, a demand from both retail investors and institutional investors on how to best index this space and how to gain the most exposure to the most amount of clinical trials and technologies. So it was just a natural progression that somebody was going to set up an ETF.”
The ETF launch is just the latest catalyst for the psychedelics industry. On Election Day, a handful of states including Oregon and Washington, D.C., voted to legalize the use of MDMA (also known as ecstasy) and other psychedelic substances at licensed facilities for mental health purposes.
Rahn believes the industry has an advocate in President Joe Biden.
“I really think that he's going to make treating the opioid crisis, and also greater mental health that's going to ultimately come out of COVID-19 here, a high priority for his administration,” said Rahn.
Biden has vowed to build on the Obama administration’s Affordable Care Act by doubling down on efforts to enforce existing mental health parity laws and expand funding for mental health.
“[Biden’s] own family has suffered from mental health and addiction,” Rahn said. “On the campaign trail you saw former President Trump chastise [Biden] in debates over his son, who had a cocaine addiction.”
Rahn, who admits he’s also a recovering cocaine addict, said 40% of Americans are struggling with mental health amid COVID-19.
“I think Biden’s going to come out and support mental health in ways that no other president has ever done, and we hope to have a dialogue with the administration about that,” he said.
Alexis Christoforous is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AlexisTVNews.