Magic mushroom stocks to buy in 2022

While psychedelics were once decidedly relegated to the counterculture, they have a long, traditional history and have recently gained recognition for their medicinal potential. One notable psychedelic drug is psilocybin, also known as “magic mushrooms.” This hallucinogen is touted for its ability to alter users’ consciousness, leading to mind-altering or mystical experiences. 

Psilocybin has been used for thousands of years in medical or spiritual rituals. But recent medical studies have proven its efficacy in treating depression, anxiety, post-traumatic stress disorder, and other mental health conditions1. What is the history of psilocybin as a psychedelic drug, and what are the investment implications of its burgeoning acceptance?

Mythical mushrooms

In the 1950s, American banker R. Gordon Wasson and his pediatrician wife Valentina took several expeditions to the southern region of Mexico. They sought to learn about the ritual use of mushrooms by the native Mazatec community. A local healer named Maria Sabina allowed the Wassons to participate in a Mazatec mushroom ritual. The Wassons are considered the first Westerners to experience the effects of magic mushrooms. 

Wasson brought a sample of psilocybin back for Swiss chemist Albert Hofmann, who is credited with isolating psilocybin from the mushrooms and creating a synthetic form of their hallucinogenic compound. In the late 1950s, a photo essay of Wassons’ experiences called “Seeking the Magic Mushroom” was published in Life magazine2, along with a written account published in the magazine This Week3. It’s unclear whether the Wassons intended for their documentation to be seen by a broad audience, but as a result, many hippies traveled to Mexico seeking similar experiences.

In the two decades that followed the Wassons’ landmark visit to Mexico, US-based researchers administered thousands of doses of psilocybin in clinical experiments that explored their use in treating psychiatric conditions such as schizophrenia, depression, and obsessive-compulsive disorder. Psilocybin and other psychedelic substances were being considered for their use in mental and emotional exploration, spiritual practice, and as a means to enhance wellness and creativity4.

Beating a Bad Rap

Studies regarding the medical potential of psychedelics came to an abrupt halt with the start of the US War on Drugs and the Just Say No! Campaign, aimed at curtailing the damaging effects of drug use on the population. Media coverage focused on the risks of psilocybin and other psychedelics. Suicides or accidental deaths were attributed to their use, earning them a bad reputation and leading to their classification as Schedule 1 illegal substances with a high potential for abuse and no accepted medical use. 

While medical studies indicated that there was still much to learn about the use of psilocybin to treat psychiatric disorders, once psychedelics were banned in 1970, research on them stopped. In the late 1990s and early 2000s, in the context of growing mental ill health and pharma’s lack of innovation, attitudes began to change, and a renewed interest developed in psychedelics’ potential to treat patients’ modern-day mental health woes.  

Psilocybin has very low toxicity rates and is not considered an addictive substance. It is not believed to cause compulsive use and is considered by some to be a safer alternative to common drugs such as opiates and benzodiazepines. As Matthew W. Johnson from the research team at Johns Hopkins stated, “There’s a very good case that psilocybin can treat the psychology of addiction, not just alleviate the withdrawal symptoms and reduce cravings.5

Many research studies are being undertaken today to evaluate the use of psychedelics. Where they are still classified as illegal substances, research is funded by non-profit organizations rather than by academic or government bodies. Elsewhere, research is legal and government-funded. While magic mushroom research is still a relatively disruptive space, experts say there is significant medical potential in the field.

Powerful Possibilities 

Psychedelics may hold the key to helping patients for whom traditional treatment options are not helpful. Proponents of psychedelic medicines say they are preferable to conventional antidepressants and other drugs used to treat mental illness. Psychedelics impact perception and emotions in a way that those who have used them have called “life-altering”, helping people overcome life-disrupting and difficult-to-treat conditions6.

Magic mushrooms have highly variable effects, depending on factors such as a patient’s age, weight, personality, emotional state, environment, and history of mental illness. Psilocybin is thought to influence serotonin levels in the brain for up to six hours, leading to states of altered perception.

In 2018, a team of researchers studying psilocybin at Johns Hopkins University recommended that psilocybin be reclassified to allow for medical use7.  They found that it was effective for treating depression and nicotine, alcohol, and other substance addictions. Further research indicated that magic mushrooms could potentially treat the emotional distress of terminal cancer patients. A 2016 study in the Journal of Psychopharmacology found that psilocybin improved mood and reduced anxiety in 80% of people with advanced-stage cancer six months after the treatment8. Yet another study suggested that patients could relieve cluster headaches using psilocybin9.

The Center for Psychedelic and Consciousness Research at Johns Hopkins is looking into the potential of psychedelics to treat PTSD, Alzheimer’s disease, anorexia nervosa, opioid addiction, and more. Opioid abuse is a dangerous, widespread epidemic, and psychedelics represent the potential for non-opioid-based pain relief and mental health treatment. Since 2019, several cities across the United States have begun to decriminalize magic mushrooms for medical use, including Denver, Ann Arbor, Santa Cruz, and Oakland. In 2020, Oregon became the first state to legalize psilocybin-assisted therapy10.

Proceed With Caution 

Are there any concerns about using psilocybin? While not considered addictive, the amount of psilocybin in any given magic mushroom is unknown, causing its potential impact to vary. Psilocybin mushrooms can be contaminated, which could cause mushroom poisoning. Medically developed, synthetic forms of psilocybin are therefore considered safer, more consistent versions of the drug. There are risks involved when psychedelics are used unsupervised, including possible feelings of panic or paranoia.

Harvard psychologist Timothy Leary, a pioneer in the 1960s who advocated for the acceptance and use of psychedelic drugs, popularized the concept of set and setting as the determinant for the impact of psychedelics. Set refers to the user’s mindset, including his character, expectations, and intentions, while setting refers to the social and physical environment in which the drug experience occurs11. The safety and integrity of psychedelic use’s set and setting determine the outcome of their use, say proponents. Using psychedelics in a designated treatment space and carefully thought-out situations could lead to more conducive, favorable experiences12.

Investing in Psilocybin

Magic mushrooms stocks have captured the attention of investors, and the FDA has put psychedelics on the fast track to approval13, with some saying psilocybin is likely to be approved as early as 2023. Recent research studies indicate that psilocybin and other psychedelic drugs may be instrumental in treating depression and other mental ailments. One such clinical-stage company is UK-based Compass Pathways, which found promising results using its patented form of psilocybin. Compass Pathways’ double-blind study results are said to exceed expectations and are considered groundbreaking in treating patients who have tried other medicines without success14.

Another leader in psychedelics-based mental health treatment research is Numinus Wellness Inc, the first public company in Canada to receive a cultivation license for psilocybin. Numinus is actively conducting clinical trials on its proprietary naturally-derived psilocybin product. Numinus seeks to advance healing for depression, anxiety, trauma, pain, and substance use through safe, evidence-based psychedelic-assisted therapies15

Other companies to watch in the ‘shroom stocks space are Cybin Inc, a biopharmaceutical company that seeks to advance the therapeutic applications of psychedelic medications, and MindMed, a Canadian psychedelics company that announced a $50M IPO in December 202016. Cybin has partnered with Kernel, a neurotechnology company that seeks to quantify psychedelic experiences by learning how psychedelic molecules affect the brain.

Considering that the FDA granted psilocybin “breakthrough” therapy designation17, it seems that the acceptance of its medical use is not a matter of “if” but of “when.” As cultural and legal attitudes evolve, research companies continue to study and develop medical treatments that harness the power of psilocybin and other psychedelics as a possible means of altering our approach to mental and physical well-being. 

The wellness community is at the threshold of discovery regarding the potential benefits of psychedelic drugs. Those wishing to join the psychedelic revolution may want to consider investing in an ETF like Defiance’s PSY. which includes a range of psychedelic drug stocks, including magic mushroom stocks. With a deep-rooted history of powerful healing and a colorful recent past, psilocybin stocks are ones to watch in 2022. 

For current performance and holdings, please visit defianceetfs.com/PSY


1 PSY Investment Case, Defiance ETFs, https://www.defianceetfs.com/investment-case-for-psy-defiances-psychedelic-etf/ 

2 https://books.google.com/books?id=Jj8EAAAAMBAJ&lpg=PA100&ots=biwwlEN8c4&pg=PA100#v=onepage&q&f=false

3 Wasson, Valentina Pavlovna. 1957. I Ate the Sacred Mushroom. This Week. (May 19): 8–10, 36.

4 https://drugpolicy.org/drug-facts/history-psychoactive-mushrooms

5 https://www.psycom.net/psilocybin-magic-mushrooms

6 https://www.psycom.net/psilocybin-magic-mushrooms

7 https://www.verywellmind.com/what-are-magic-mushrooms-22085

8 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5367557/

9 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5584001/#:~:text=Primarily%2C%20psilocybin%2C%20lysergic%20acid%20diethylamide,of%20cluster%20headache%20and%20migraines

10 https://www.cnbc.com/2020/11/04/oregon-becomes-first-state-to-legalize-magic-mushrooms-as-more-states-ease-drug-laws.html

11 https://maps.org/news-letters/v23n1/v23n1_p6-9.pdf

12 https://en.wikipedia.org/wiki/Set_and_setting

13 https://www.scientificamerican.com/article/a-strategy-for-rescheduling-psilocybin/

14 https://www.forbes.com/sites/willyakowicz/2021/11/11/psilocybin-found-to-rapidly-improve-depressive-symptoms-in-patients-during-groundbreaking-clinical-trial/?sh=49cd06dd778a

15 https://www.newswire.ca/news-releases/numinus-advances-phase-1-trial-on-proprietary-psilocybin-product-811260752.html

16 https://www.bloomberg.com/press-releases/2020-12-15/mindmed-announces-50-million-bought-deal-public-offering

17 https://www.livescience.com/psilocybin-depression-breakthrough-therapy.html