A new survey suggests investors are interested in psychedelic stocks, but that isn’t translating into growing investment just yet.
The study, conducted by Quantum Research Group LLC on behalf of Incannex Healthcare Inc. (Nasdaq: IXHL), found that 66% of stock investors are “psychedelic-friendly,” meaning they have either invested in psychedelic stocks or are considering doing so. However, only 6% currently hold positions in one or more psychedelic stocks.
“The psychedelic market was estimated to be worth $2.7 billion in 2024 and is expected to surpass $7.35 billion by 2031,” Quantum CEO Ari Zoldan said in a statement, citing market research from Data Bridge.
The survey, which polled 541 stock investors in April, revealed that two-thirds of psychedelic-friendly investors plan to increase their investments in the sector over the next 12 months.
Growth potential is the strongest draw for these investors, with 73% citing it as their top reason for interest. Expected high financial returns followed closely at 70%.
“The only way to build patient, provider, payer and investor confidence in the potential of psychedelics is to devote substantial resources to studying and reporting on its safety and efficacy,” Incannex CEO and President Joel Latham.
Hurdles abound
Despite growing interest, several factors are holding investors back. Regulatory uncertainties topped the list of concerns, cited by 47% of investors, followed by worries about market volatility.
The survey also noted knowledge gaps among investors regarding the medical applications of psychedelics. More than half of respondents admitted to lacking understanding of how psychedelics can be used in various treatments, including chronic pain management and addiction therapy; 54% were unfamiliar with their use in palliative care.
Regarding the regulatory outlook, investor opinions were split: 38% believe regulations should remain at current levels, 34% favor decreased regulation, and 28% support increased oversight.
Optimism is there, according to the report, with 71% of psychedelic-friendly investors predicting improved financial performance for the sector over the next five years. Additionally, 67% believe advancements in psychedelic research will positively impact the pharmaceutical industry as a whole.
Ethical considerations also play a role in investment decisions, with 19% of psychedelic-friendly investors citing ethical production and business practices as a factor in their interest.
Demographic data showed a generational spread among respondents, with Millennials making up the largest group at 56%, followed by Gen X at 25%, Gen Z at 12%, and Baby Boomers at 7%.
Support from cannabis
A separate study by New Frontier Data found that half of cannabis consumers support access to psychedelic substances like LSD, psilocybin, MDMA and ketamine for therapeutic use.
Most of those supportive respondents (60%) have never tried these substances themselves, challenging stereotypes about cannabis users and other drugs.
“This mirrors the earlier phases of the medical cannabis legalization movement, where both patients and non-patients united in the belief that people should have access to medical cannabis if their doctor believes it could provide relief,” New Frontier Data said in a statement.
The firm noted that the support indicates “a growing recognition of the medical potential of these substances and a desire for progressive, informed drug policies.”