Psychedelics -- A new dawn upon us?
RFK Jr. goes "all in" with a sense of urgency on Psychedelics.
RFK Jr. Gives Congressional Testimony - 6/24/25
RFK Jr. gave testimony to a congressional hearing yesterday, June 24th. The hearing received little attention from most of the public but a certain topic really caught my attention. I’ll let RFK Jr. explain it here:
RFK Jr. Speaks about Psychedelic therapy promise.
Hear are a few key excerpts, emphasis mine, from the testimony, as well as recent summary of activities at the NIH, FDA, and VA:
"Robert F. Kennedy Jr. says his agency is “absolutely committed” to expanding research on the benefits of psychedelic therapy and, alongside of the head of the Food and Drug Administration (FDA), is aiming to provide legal access to such substances for military veterans “within 12 months.”
“We are launching clinical trials now on that at FDA,” Kennedy said, adding that there are currently “11 clinical trials at the VA going on at this point—particularly for our service members and retired service members.”
“the preliminary results are very, very encouraging and it’s something that we want to pursue,” he said, adding that he’s spoke with FDA Commissioner Marty Makary, who told him “we don’t want to wait two years to get this done.”
“This line of therapeutics has tremendous advantage, if given in a clinical setting, and we are working very hard to make sure that that happens within 12 months.”
To that end, Collins also disclosed in April that he had an “eye-opening” talk with Kennedy about the therapeutic potential of psychedelic medicine. And he said he’s open to the idea of having the government provide vouchers to cover the costs of psychedelic therapy for veterans who receive services outside of VA as Congress considers pathways for access.
Collins also briefly raised the issue in a Cabinet meeting with President Donald Trump in April.
I strongly recommend every reader watch the testimony (link under video) and read the Marijuana Moment article in full, however, I will break down the above a little to see what exactly it means:
Intent/Commitment: RFK Jr., Makary, and others seem to be strongly opinioned that this is a viable treatment for vets and the research is “very promising”. Discussions have already been happening at the VA, with the President, inside the FDA, and more!
Follow the money: RFK Jr.’s comments make it clear there is a financial support behind this idea to provide treatment for Vets in excess of $30M. This doesn’t even factor in the general public, etc.
Urgency: My favorite part, “we are working very hard to make sure that happens within 12 months”. Bang! That’s what I like. A short-term catalyst/event to drive attention, flows, etc. rather than waiting “will this ever happen”.
So we have an admin that is confident, committed, has financial backing, and a sense of urgency.
Company/Opportunity Landscape
Furthermore, these stocks aren’t at “all time highs” or riding on a wave of speculative mania. In fact, psychedelic stocks are about where they were 6 months ago!
Psych Basket (Equal Weighted) ATAI 0.00%↑ CMPS 0.00%↑ MNMD 0.00%↑ CYBN 0.00%↑ GHRS 0.00%↑
What is the market opportunity for this? A quick look at various potential markets:
Mental Health Market (US): $120 Billion
Telepsychiatry (US): $13 Billion
JNJ 0.00%↑ Spravato (S-Ketamine Therapy): $1.6 Billion and growing!
So we have at least a billion dollar addressable market, if not larger as we expand beyond depression and look into alternative use cases like PTSD, Social Anxiety, General Anxiety, etc.
Trade Expression
ATAI 0.00%↑ UNDERLYING 18%
ATAI 0.00%↑ NOVEMBER $5C 2%
CMPS 0.00%↑ UNDERLYING 18%
CMPS 0.00%↑ NOVEMBER $5C 2%
GHRS 0.00%↑ UNDERLYING 20%
CYBN 0.00%↑ UNDERLYING 18%
CYBN 0.00%↑ NOVEMBER $10C 2%
MNMD 0.00%↑ UNDERLYING 18%
MNMD 0.00%↑ DECEMBER $10C 2%
A brief overview of each name, with links to their investor presentations:
ATAI: Broad portfolio of psychedelic substances for treatments (Psilocybin, DMT, etc.)
CMPS: Psilocybin substance for treatment.
GHRS: 5-MeO-DMT (Mebufotenin).
CYBN: Psilocybin, DMT.
MNMD: LSD, MDMA
As is standard with this Substack, I’m looking for a few factors before publishing:
High Confidence: From RFK Jr’s own lips (NIH, FDA!), the results from the studies, and more, sentiment is positive to support the vets!
Timing: While I generally look for a very short-term catalyst (< 2 weeks), I’m comfortable waiting a little longer on this, if needed, as RFK Jr. makes it clear it is a priority to move approval and process forward within 12 months instead of an uncertain time frame.
Asymmetry: Psych stocks are relatively flat and have a favorable R/R profile given the lack of attention and speculation currently.
Minimal Loss: This rule is broken as they are controversial substances, active Clinical Trials which could produce negative results, etc. All that being said, I think the asymmetry is favorable.
Conclusion
I always aim to do short-term thematic investing where a narrative has a chance to “meme” and take off quickly, offering a great R/R with a signal conveying the idea is working, and quickly. This trade has a slightyl longer-time frame but is still < 1 year.
I am very confident the congressional hearing received minimal attention this week, but that going forward we will start to hear more and more about the NIH/FDA interest in approving these medicines for PTSD, Depression, and more, especially for Veterans.
🍄
“Robert F. Kennedy Jr., the head of the U.S. Department of Health and Human Services (HHS), says he had a “wonderful experience” with LSD at 15 years old, which he took because he thought he’d be able to see dinosaurs, as portrayed in a comic book he was a fan of.”
🍄