In case you don’t have any tech bro friends who’ve told you this already: the “psychedelic renaissance” is in full swing. From mushroom-derived psilocybin to LSD, mescaline — Hunter S. Thompson’s favourite — and ayahuasca-compound DMT, mind-altering substances are back, baby.

But this time around, the people involved are not just wittering on about free love and world peace. The new generation of enthusiasts will tell you that psychedelics offer two big opportunities: solving the western world’s “mental health crisis” and also making you — and them — some serious money.

For proof of how delicately the altruism and profit motives can be brought together, consider the co-founder and former chief executive of New York-based psychedelics start-up MindMed, JR Rahn, on the day the company — he called it “the Tesla of mental health” — listed on the Nasdaq last year. “Forty per cent of the country is suffering [mental ill health],” Rahn said. “That’s a big, big market.”

And for evidence of how profound the psychedelic experience can be, look no further than the epiphany achieved by billionaire financier Christian Angermayer, whose psychedelics start-up Atai Life Sciences is backed by tech billionaire Peter Thiel and crypto investor Mike Novogratz. Taking magic mushrooms, Angermayer says he experienced a quieting of the ego that led to a breakthrough: finally he understood the world-changing potential of bitcoin and the blockchain. Ain’t that a trip.

Like the crypto and cannabis industries before it — both of which Angermayer and Thiel also invest in — psychedelics attract a certain breed of libertarian, hype-driven investor keen to prove their edgy and subversive credentials. Investment has poured in: most of these drugs are still illegal but more than $3 billion has been raised on the promise that psychedelics could be a magic cure for conditions from depression to PTSD and even drug addiction.

Yet there is something of a clash of cultures between the new entrants who deal in hype, and the industry’s pioneers, who have been working on getting these drugs taken seriously for decades — not to make money, but because they believe passionately in their healing potential.

One of those pioneers is Rick Doblin, the 68-year-old founder of the Multidisciplinary Association for Psychedelic Studies, or MAPS. Doblin says he welcomes the attention and investment that the new entrants bring, but is worried by the incentives that derive from the profit motive.

“Once you switch from donors to investors, everything changes — even if they’re mission-aligned investors,” Doblin tells me. The $135 million MAPS has raised in its 36 years, through grants and donations, is dwarfed by the billions raised by for-profit start-ups over the past three years alone. “How do we prevent it from becoming classic pharma, and keep the public mission going? Well, the answer is it’s very, very hard, and it’s not clear.”

Of course the drugs driving this industry, which are being touted as a mental health cure-all, already exist. But an estimated $2.9 billion of the $3.26 billion in capital raised by the 73 biggest psychedelics companies has been spent on drug development. Hundreds of psychedelics patents have been filed with the US patents office; one company claimed exclusivity because its therapy room used “muted colours” and cosy furniture.

During this race to gain financial advantage over competitors, there seems to be a degree of naïveté around the potential of psychedelic drugs. While the industry draws in similar investors and is often compared to cannabis (use is becoming destigmatised and the decriminalisation of various compounds is possible), it is in fact quite different.

Cannabis, used by millions of people every day, is effectively a consumer product, while the psychedelic renaissance is about the use of drugs in a very limited, therapeutic context. Scientific research suggests long-term breakthroughs in reducing anxiety and depression with even a single dose.

Not only is it hard to see a consistent revenue stream coming from psychedelics; consistent results are also far from guaranteed, promising as some research might be. “Psychedelics are really unpredictable,” says Zoe Cormier, author of Sex, Drugs, and Rock ’n’ Roll. “They have a variety of effects depending on . . . what you’re going through and your personality and your genetics.”

Investors might be starting to sober up. Psychedelics stocks have fallen sharply in recent months. Angermayer’s Atai Life Sciences, valued at more than $3 billion when it listed in 2021, has since collapsed by more than 85 per cent. That might just quieten the ego a little, too.

Jemima Kelly is a columnist for the Financial Times, covering a range of subjects from culture wars to crypto. She previously wrote for Alphaville, the FT’s markets and finance blog.

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