Compass Pathways (CMPS): The McDonald’s of Psychedelics?

This week, we’re talking about my Big Three investing themes for the rest of the year (and beyond). You’ve probably heard me talk about each at one point or another. But I’m a big fan of repetition. And indeed, if you’re not invested in the Big Three, then you may as well not be investing at all.

Our first megatrend is derived from psilocybin. Yep, we’re talking about magic mushrooms – psychedelics. Favorable legislation has been setting the stage for psychedelics to do very well over the next couple of years.

And recent studies from Johns Hopkins and NYU found that psilocybin can significantly help with smoking cessation and reducing alcohol dependence. And it can relieve anxiety and depression levels four times better than traditional antidepressants.

That’s excellent news – and it’s exactly what we expected.

Now, some people wonder why I like psychedelics but don’t like pot stocks. Well, point blank, psychedelics have a bigger moat than marijuana.

Why? Well, they’re not direct-to-consumer. And what’s more, commoditization isn’t a concern with psychedelics. Indeed, with pot, as it turns out, there’s not going to be a big brand name in the space. People just don’t care enough about the different strains of weed or even where it came from. For the most part, people will buy whatever it is their connect is selling.

In the psychedelics space, I see one company in particular becoming the “McDonald’s of Psychedelics.” If it succeeds – and we’re confident it can – the stock could be Wall Street’s biggest winner of the 2020s.