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Is Wall Street about to scupper the psychedelics industry?

Money is pouring into the burgeoning psychedelics industry and an influx of startups are racing to patent key ingredients found in ‘magic mushrooms.’ Wall Street is moving in to monopolise the sector.

It’s becoming increasingly clear that mushrooms are good for more than just ayahuasca trips on university graduates’ gap years.

Scientific studies are feeding hype about the effectiveness microdosing psilocybin may have in treating mental health disorders such as depression and PTSD.

Their recreational use remains illegal in the US, but research suggests that psychedelics could be on the cusp of unearthing (get it) a whole new stratum of modern medicine. It goes without saying, that such an explosion would be incredibly lucrative for biotech companies.

Laying the foundation for the hallucinogens revolution, advocates, non-profits, and philanthropists have long endeavoured to make low-cost treatments widely available for anyone to benefit. This ambition may now take a seismic hit, however, with news that Wall Street is muscling in on the sector.

Speaking on recent industry rumblings, an enthusiast and investor called Carey Turnbull explained: ‘All the air is getting sucked out of the room by these for-profit companies who say, “Wow, this stuff is awesome, if I could patent it I’d make a fortune.”’

Around 50 psychedelic startups – backed by venture capitalists and Silicon Valley players – now trade on public stock exchanges and the race is on to patent formulas.

A certain Peter Thiel, acting CEO of PayPal, is particularly keen to exploit the opportunity under Atai Life Sciences and biotech company Compass Pathways is reportedly being aggressive with trademark applications.

While there appears to be no immediate breakthrough in the offing, analyst projections that the industry could be worth over $10bn before 2030 continue to draw interest from commercial prospectors.

As development and research in the sector becomes more frenzied, long standing experts of the field like Jeffrey Lieberman of Colombia University worry that newcomers risk potentially spoiling the party for everyone.

‘Psychedelics could have tremendous benefit for treating a number of illnesses, but if we mess it up and rush the process, these drugs are going to get banned again and you lose that opportunity,’ he warns.

Despite the hype and buzz around medical mushrooms, the reality is that essential investment from insurers will only arrive if focused clinical studies can prove that the substances are completely safe and effective.

In laymen’s terms, standards probably need establishing to ensure that someone isn’t pushing a faulty product for review and upsetting the apple cart.

Well, you now have an influx of biotech companies taking creative approaches purely to get their own patent on ingredients that have been used for millennia.

While a decade ago, the sector had been unanimous in holding science above all else, the potential for profits is muddying the waters as the industry enters a pivotal time.

If FDA approval is the ultimate goal, a tidal wave of new psychedelic derivatives and combinations will only make passing regulatory checks harder to achieve – especially when primary motivations are split between love and money.

It’s been 53 years since the last federal ban on psychedelics and associated research. Could misplaced enthusiasm be about to scupper the sector once more?