The shifting fortunes of corporate psychedelia
Finance and Society September 8, 2025 Sandy Brian Hager
A boom in for-profit psychedelic medicine from 2016 to late 2021 was followed by a bust continuing through late 2024. The cycle is explained by capitalization, where present valuations depend on investor expectations of future earnings. Psychedelic companies face intensified volatility due to the unruliness of these substances as capitalized assets: murky intellectual property, unpredictable subjective experiences, and cultural stigma. During the boom, venture capital flowed in on promises of mental health breakthroughs, raising valuations. Disappointing clinical trials, regulatory setbacks, and doubts about standardizing therapies then sharply reduced investor confidence. The analysis highlights tensions in subjecting these substances to capitalist logic.