My new investments in psychedelic companies
In 2015 I wrote about buying $WEED stock and deduced that the marijuana industry was going to the moon. $WEED is up 800% since then. 🙂 Today I believe investing in psychedelics may be the next smart move. The industry is still small – worth about $3 billion this year. But reports say it could be worth $6.8 billion by 2027.
I first heard famous author Tim Ferris speak about psilocybin mushrooms and the medicinal applications they can have. If you’re normally a dull person, mushrooms can turn you into a fungi. 😅 So I decided to learn more about this niche market and ultimately began to invest in it.
In today’s post I’ll disclose which stocks I’ve bought since the start of the year, with a focus on psychedelic companies.
How to invest in psychedelic stocks
The easiest way to purchase a diversified basket of psychedelic stocks is through the Horizons Psychedelic Stock Index ETF (PSYK). But the management fee is 0.85%, which is kind of high. So I built my own basket of psychedelic stocks instead. 😉 Here they are.
- COMPASS pathways PLC. (CMPS – Nasdaq.)
I bought 10 shares in February at $41.50/share ($415 total.)
Founded in 2016 in the U.K. this is a medical care company that develops psilocybin formulas to treat patients with depression. Moreover, with a $1.2 billion market cap it makes up about 40% of the entire publicly traded psychedelics market.
. - Catalyst Pharmaceuticals Enterprise (CPRX – Nasdaq.)
I bought 100 shares in March at $3.88/share ($388 total.)
This biopharmaceutical company has 3 drugs in development. It has a cheap P/E ratio of just 6.3x. The 12 month target price of this stock is $7.50. So that’s about 2x from today’s price. A lot will depend on how future clinical trials go. But it has potential.
. - Numinus Wellness Inc (NUMI – TSX.)
I bought 300 shares in March at $1.18/share (354 total.)
Canadian based health care company providing psychedelic therapies. It has the license to test, buy, and sell MDMA, psilocybin, psilocin, DMT, and mescaline. It’s a micro cap stock at just $190 million.
. - Mind Medicine Inc (MMED)
I bought 100 shares in March at $3.58/share (358 total.)
This is a leading clinical-stage psychedelic medicine biotech company. It has plenty of cash, about $200 million CAD, to support its drug development pipeline and tech platform.
. - Cybin Inc (CYBN)
I bought 50 shares on April 6th at $1.65/share (82.50 total.)
Based out of Toronto, Cybin develops psychedelic pharmaceutical and non-psychedelic nutraceutical-based products, including medicinal mushroom products. 🍄
High risk – high reward
The best time to get into a new industry is during it’s nascent stage. But investing in psychedelics is highly speculative right now. There’s a chance I could lose all my money in all of these companies. I’m lucky enough to be in a position where I can make risky bets like this, but these stocks aren’t suitable for everyone. 🙂
If you do decide to invest in psychedelic stocks, make sure to limit your risk by controlling the position sizing so they don’t take up too mushroom in your portfolio. 😬
Right now technology is driving the healthcare industry to discover better medical solutions. New drugs are able to reach a group of patients with anxiety and depression that never had an opportunity to be treated before. 🙂 Times change. However, people don’t. When it comes to human behavior I have learned to bet on innovation.
I plan to buy more of these psychedelic focused companies during future market dips and corrections. 🙂
Other stocks I’ve bought
Additionally I have been purchasing other types of stocks as well listed below.
Currency works (CWRK) TSX
bought 50 shares at 2.80/share.
DMG blockchain solutions (DMGI NYSE)
bought 120 at 2.63/share.
Lundin Mining Corp (LUN TSX)
bought 50 shares at 14.55/share.
Open Text Corp (OTEX TSX)
bought 20 at 56.87/share.
Supreme Cannabis Co Inc (FIRE TSX)
Bought 500 shares at 0.33/share.
Autodesk Inc (ADSK)
Bought 3 shares at $269.15/share.
AbbVie Inc (ABBV)
Bought 5 shares at $104.31/share.
Bristol Meyers Squibb (BMY)
Bought 10 shares at $62.30/share.
Domino’s Pizza Inc (DPZ)
Bought 2 shares at $395.84/share.
Enterprise Products (EPD)
Bought 50 shares at $21.59/share.
Freeport-McMoran Inc (FCX)
Bought 10 shares at $34.90/share.
Generac Holdings Inc (GNRC)
Bought 1 share at $314.87/share.
LVMH Moet Hennessy (LVMUY)
Bought 5 shares at $131.51/share.
The Estee Lauder Companies Inc (EL)
Bought 3 shares at $292.75/share.
Stitch Fix Inc (SFIX)
Bought 10 shares at $48/share.
Square Inc (SQ)
Bought 1 share at $253.
Shopify Inc (SHOP)
Bought 1 share at $1,495.
Tesla (TSLA)
Bought 1 share at $692.
As always you can always visit my portfolio page to see all the securities I hold.
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Random Useless Fact:
CAPTCHA tests are getting harder these days.
Good article – I like how you build your own basket of stocks instead of going with the ETF. Given the smaller size investments (i.e. < $500) how do you keep your trading fees low relative to your buys. i.e. at $10 per trade you are paying 2% on each transaction?
Unfortunately the fees are still high with TD. So the cost to buy stocks are relatively high with my small purchases. The way I justify the 2% transaction cost is to hold all the stocks long term. 🙂 If I end up getting a 500% return on one of the stocks, the total fees won’t be too bad.
Hi Liquid. O I noticed you also bought EPD. How do you handle the K-1 issue with that stock? Cheers and nice blog posting on shroom stocks!
Good question James. To be honest I’m going to do what I presume most Canadians will do, and ignore the K-1 form, lol.🙈 I know technically I have to file a U.S. tax return, but I doubt the IRS is going to go track down every Canadian that owns a tiny fraction of a master limited partnership.
I’ve held one of the Brookfield LPs for some time before, and didn’t do anything with the K-1 forms they sent me. I just report any earnings from a T-5 with the CRA. So far I haven’t received any calls from American tax collectors. But I’m not a tax expert, and this isn’t advice, haha.
Haha, it’s good non-advice. I am doing the same with CEQP- (Crestwood Preferred – weird symbol) but the UBTI was less than $1K. If it’s greater than $1K US that’s when there may be a concern. Cheers!
Interesting list of buys, Dominos has done very well.
They’re planning to use robots for deliveries. That would be a game changer lol.
Buddy, you are impressive. But must feel heavy to be down so much. High risk as you mentioned. Bio is risky always.
And seems you bought half the market. Haha
These more speculative companies will definitely be up and down a lot. I’m just nibbling at stocks here and there because the market is near all time highs lol.
Agree with you on this new and exciting sector. I decided to take a full position in my TFSA portfolio using the ETF as the 0.85% fee vs the expected return on something like this will be irrelevant to me and I like the ease of just having the asset allocation taken care of for me. Good luck to both of us, but I think success in this sector is just a matter when vs if…
Wow, you are going big on this industry. Yes I hope the entire sector booms over the next several years. Let’s see how it goes. Exciting times. 🙂
Liquid, curious to see where you’d purchase the PSYK ETF? I know the Neo is a Canadian exchange right? I have heard of it but very lightly… as well I do believe the shrooms can bloom if you will haha, it’s definitely not gonna overtake the weed industry that’s for sure since shrooms are still somewhat not publicly recognized. Good read as usual, I shall look into this some more although I do know some European countries are slowly opening up to these firms so this might be a good time to buy a few shares
Yes. You can buy it with Canadian dollars on the Neo exchange. I haven’t bought it but it appears in my TD webbroker account. Canada doesn’t have a big technology sector, but we seem to be more progressive than the U.S. when it comes to these types of stocks lol.
[…] like to send a shout out to my friend Liquid Independence for introducing me to this ETF via his blog post. Let’s see if Liquid’s predictions come true and we will reach FIWOOT (Financial […]
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[…] towards small companies in making or selling psychedelics. You can read about which stocks I chose in this previous post. So far I am down 20% in this space. This is a long term investment for me so I may add more to my […]
[…] like to send a shout out to my friend Liquid Independence for introducing me to this ETF via his blog post. Let’s see if Liquid’s predictions come true and we will reach FIWOOT (Financial Independence […]