When it comes to the biotech market, perception is fuel.

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And right now, perception around psychedelics is shifting in a way you should not ignore.

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According to a new RAND Corporation report, Public Opinion on Legalizing Psychedelics, support for legal psilocybin sits at 23%, while LSD and MDMA hover near 10%. Cannabis, by comparison, enjoys 65% support.

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At first glance, those numbers don’t scream “breakout sector.” But here’s the part that should grab your attention: psilocybin’s support today mirrors where cannabis stood in the mid-1990s, just before medical legalization began rolling out state by state.

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If you were investing in the cannabis space back then, like I was, you know how that story unfolded.

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Just to be clear, however, this isn’t about recreational drug use. 

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When respondents were asked why psychedelics should be legal, the most endorsed reason wasn’t recreation; it was treatment for mental or physical health conditions.

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Even more telling: 49% of respondents who support legalization believe psilocybin should be administered in a medical facility under supervision.  So we’re not really talking about a strictly countercultural narrative anymore.  We’re now talking about a healthcare framework.  And for us, as investors, that distinction matters enormously.  Because once an asset class moves from “social issue” to “medical solution,” three powerful forces begin to align:

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  1. Political Risk Begins to Decline

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Lawmakers rarely lead cultural change. They respond to it.  And as psychedelics are increasingly framed around treatment-resistant depression, PTSD, addiction, and end-of-life anxiety, the political cost of supporting clinical research drops.

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That opens the door to expanded research permissions, breakthrough therapy designations, state-level pilot programs, and discussions on rescheduling.

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In heavily regulated industries, regulatory friction is one of the biggest valuation suppressors. As stigma declines, however, friction eases, and multiples can expand.

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  1. Institutional Capital Becomes Available

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For years, large institutions avoided psychedelics entirely. Not because the science lacked promise, but because the reputational risk was high.

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But that calculus began to change when major universities started publishing peer-reviewed trials, patients began to speak publicly about treatment success, and public opinion began shifting from “dangerous drug” to “potential therapy.” 

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Now, clinical development isn’t cheap. Phase 3 trials require serious capital. Manufacturing scale-up requires infrastructure. Therapist training requires ecosystem buildout. But reduced stigma lowers the barrier for pension funds, healthcare-focused VCs, and crossover investors to participate. And when capital availability increases, development timelines compress.

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  1. The Medical Community Feels Safer Engaging

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For decades, even associating with psychedelic research carried a career risk. As public framing shifts from moral to medical, however, that hesitation weakens.

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When physicians feel safer engaging with psychedelics, you see:

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  • More trial participation
  • More institutional partnerships
  • More data generation
  • More standardized protocols

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That’s how experimental therapies evolve into reimbursable treatments.

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There are a number of publicly traded psychedelics companies that are likely to benefit from this overall shift in public perception.  These include, but are not limited to:

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  • Compass Pathways (NASDAQ: CMPS)
  • AtaiBeckley (NASDAQ: ATAI)
  • Helus Pharma (NASDAQ: HELP)
  • Definium Therapeutics (NASDAQ: DFTX)
  • GH Research (NASDAQ: GHRS)

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There are also some major players in the Big Pharma space that are actively researching, producing, and even selling psychedelics-based medicines.  These include:

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  • Johnson & Johnson (NYSE: JNJ)
  • Otsuka (OTCBB: OTSKF)
  • AbbVie (NYSE: ABBV)

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To be sure, public opinion alone doesn’t approve drugs. The science still has to hold up. Clinical endpoints still matter. Safety data still rules. But in highly regulated sectors, cultural momentum often precedes policy momentum. And policy momentum precedes revenue.

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Right now, psychedelics appear to be in that early middle phase, where stigma is declining, medical framing is strengthening, and regulatory pathways are becoming less politically radioactive.

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That doesn’t mean you back up the truck indiscriminately. But it does mean you start doing the work. Because when public opinion moves from 23% to 35%… and then 45%… the market won’t wait for you to catch up. And in emerging therapeutic categories, the biggest returns tend to accrue for those who recognize the inflection point before it becomes obvious.

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