EXCLUSIVE: Investing In The Unique Growth Market Of Psychedelics

The global psychedelics market of drugs such as psilocybin, ketamine and LSD is booming and there are plenty of ways to get involved in the space.

Several esteemed professionals in the space talked about ways to get exposure Thursday (April 13) at Benzinga's Psychedelics Capital Conference in Miami Beach.

Psyched For Psychedelics: The global psychedelics drugs space is expected to grow at a 13.3% CAGR through 2029. The market is still in its infancy, but with promising potential to help various mental health issues, long-term investors could be handsomely rewarded. 

Maria Velkova, managing partner of Tabula Rasa Ventures, takes a holistic approach to investing in psychedelics. She reminded the crowd that drug development requires the collection of clinical data and the development of infrastructure, which takes time, but there is a well-defined path to market, she said.

One of her favorite investments in the space is psychedelics insurance company Enthea. 

"It's a really incredible company and a really key company in the space because one of the biggest hurdles we are going to face is insurance," Velkova said. 

Andrew Chomer, managing partner of Integrated, said his firm is focused on investing in groups that are using rapid-acting shorter duration products, including Beckley Psytech and Transcend Therapeutics. 

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It's going to take a lot of money for these companies to be successful, but it's also going to require patterns that fit, he said, adding that's what Integrated is focused on. 

The firm wants to make sure that a handful of select companies have the funds to be successful before spreading out its investments. You don't really see that in other sectors, Chomer said: "It's a beautiful thing."

Dan Ahrens, portfolio manager of AdvisorShares, agreed with the other panelists. 

"We're talking about companies that are pre-revenue," he said.

Advisor Shares differs from the others because the firm is only investing in public companies, although it is still very into small micro caps.

Advisor Shares makes it easy for anyone to get a slice of the psychedelics space through the AdvisorShares Psychedelics ETF PSIL.

Some of its top holdings include COMPASS Pathways Plc CMPS, Cybin Inc CYBN, FSD Pharma Inc HUGE and Mind Medicine Inc MNMD. 

David Traylor, senior managing director of Golden Eagle Partners, pointed out that one of the key things for the growth of the space will be the adoption in nonprescription-based psychedelics. 

Mental health is a serious problem in the U.S. and getting people to realize they have alternative options with psychedelics will be a key growth driver for the future of the industry, he said. 

Looking for companies with a strong patent portfolio can be one way to get solid exposure to the space, but Traylor also recommended looking for companies with unique approaches to method of use who are experimenting with new applications. 

It's a long-term play and the market is always going to be feast or famine, but the opportunity is there, he said. 

"Stick it out, be smart about your money and just live to fight another day," Traylor said. 

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Photo: Kelsey Wilkerson for Benzinga's Psychedelics Capital Conference.