Psychedelics Investors Rejoiced After Horizons ETFs Released a New Preliminary Prospectus on Christmas Eve Announcing the Firm’s Plans to Launch the World’s First Psychedelic Stock ETF
For Those Looking to Invest Now in the New Psychedelic ETF’s Likely Future Constituents, Here Are 4 Psychedelic Stocks That Will Almost Certainly Be at the Top of the ETF’s Portfolio
Horizons ETFs Management (Canada), the same ETF financial services company that brought cannabis investors Horizons Marijuana Life Sciences Index ETF (TSX: HMMJ) (OTC: HMLSF) and Horizons U.S. Marijuana Index ETF (NEO: HMUS) (NEO: HMUS.U), appears set to enter the psychedelics arena in a big way. On December 24, 2020, Horizons released a preliminary prospectus, effectively announcing its plans to launch the first-ever psychedelics ETF.
Horizons says it may also offer its Psychedelic Stock ETF in a USD option under the ticker PSYK.U. If the firm decides to move forward with a USD listing, it will notify investors via a press release. U.S. investors should lookout for a potential future announcement.
According to the preliminary prospectus, the Psychedelic Stock Index ETF is an open-end mutual fund trust established under the laws of Ontario and will seek to:
“Replicate, to the extent possible and net of expenses, the performance of a market index that is designed to provide exposure to the performance of a basket of North American publicly-listed life sciences companies having significant business activities in, or significant exposure to, the psychedelics industry. Currently, the ETF seeks to replicate the performance of the North American Psychedelic Stock Index, net of expenses.”
The main purpose of the ETF’s underlying index, The North American Psychedelic Stock Index, is to:
“Provide exposure to the performance of North American publicly-listed life sciences companies focussed on psychedelic medicines, and other companies with business activities in the psychedelics industry. The underlying index is designed to provide diversified exposure to the psychedelics industry, at weights that can easily and cost-effectively be replicated, while at the same time reflecting the evolution of the industry in a timely fashion.”
The preliminary prospectus goes on to state that, to generally be deemed as eligible for inclusion as a constituent of the underlying index, the company must meet the following criteria:
- Be a producer and/or a supplier of psychedelic medicines; or
- Be a biotechnology company that is engaged in research and development of psychedelic medicines; or
- Be a company that is part of the supply chain for, or a distributor of, psychedelics.
The ETF will rebalance quarterly, and the underlying index universe will be comprised of eligible publicly traded North American securities trading on the following exchanges:
- Toronto Stock Exchange (TSX) and TSX Venture (TSXV)
- New York Stock Exchange (NYSE) and NASDAQ
- Canadian Securities Exchange (CSE) and NEO Exchange (NEO)
- Over the counter (OTC) markets are not eligible for inclusion.
- Common equity securities and ADRs are eligible for inclusion.
The underlying index will be weighted using a float-adjusted market capitalization formula with individual companies capped 10% of the total index. Additionally, to qualify for inclusion, a company must also meet the underlying index’s market capitalization and average dollar value traded liquidity criteria.
German index engineering firm Solactive AG will be The North American Psychedelic Stock Index’s calculation agent and is not in any way affiliated with the Horizons Psychedelic Stock Index ETF or its fund manager.
The Psychedelic Stock ETF will have a management fee of 0.85% of the ETF’s net asset value with a potential 15% performance fee payable to the ETF manager if a 3%+ annualized return is achieved.
5 Sure Bet Psychedelic Stocks Likely to Be Included in the New Horizons Psychedelic Stock ETF
For those eager investors looking to get a jump on things and take a position in the Psychedelic Stocks that will ultimately be included in the Horizons Psychedelic Stock ETF, here are five sure bets that will almost certainly make the top of the ETF’s portfolio list.
- Share Price: $45.30
- 52 Week High/Low: $22.51 | $61.69
- 52 Week Potential Gain: +174.06%
- Shares Outstanding: 35.93 Million
- Market Cap: $1.68 Billion
Compass Pathways is a UK-based mental health care company dedicated to improving the lives of those suffering from mental health challenges not helped by current treatments. Compass has pioneered the development of a new model of psilocybin therapy. The company’s proprietary formulation of synthetic psilocybin, COMP360, is administered in conjunction with psychological support.
In 2018, COMP360 was designated as a Breakthrough Therapy by the FDA for treatment-resistant depression (TRD). Currently, Compass is conducting a randomized controlled phase 2B clinical trial of psilocybin therapy for TRD in 20 sites across Europe and North America. Compass Pathways is headquartered in London, England, and has offices in New York.
- Share Price: $4.07
- 52 Week Low/High: $0.24 | $6.47
- 52 Week Potential Gain: +2,595.83%
- Shares Outstanding: 395.11 Million
- Market Cap: $1.61 Billion
MindMed is a psychedelic medicine biotech company that discovers, develops and deploys psychedelic-inspired medicines and therapies to address addiction and mental illness. MindMed is assembling a compelling drug development pipeline of innovative treatments based on psychedelic substances, including psilocybin, LSD, MDMA, DMT and an ibogaine derivative, 18-MC. The company’s executive team brings extensive biopharmaceutical experience to the firm’s groundbreaking approach to developing the next-generation of psychedelic-inspired medicines and therapies. Also, MindMed has attracted investment dollars from several high-profile investors, including Shark Tank billionaire Kevin O’Leary and Bruce Linton, the founder and former CEO of cannabis industry titan Canopy Growth (TSX: WEED) (NASDAQ: CGC) (FRA: 11L1).
As a result of high investor demand, MindMed announced today that the company closed an upsized $92.1 million financing. MindMed says it intends to use the proceeds of the financing to invest in its:
- Digital medicine division.
- Project Lucy: LSD experiential therapy program for anxiety disorders.
- Project Layla: Development of a non-hallucinogenic version of the psychedelic substance ibogaine to address the opioid crisis.
- LSD micro-dosing trials for adult ADHD, as well as for general working capital and corporate purposes.
- Share Price: $3.67
- 52 Week Low/High: $2.25 | $7.00
- 52 Week Potential Gain: +211.11%
- Shares Outstanding: 42.17 Million
- Market Cap: $154.75 Million
Field Trip Health is a global leader in the development and delivery of psychedelic therapies. The company operates through its three separate divisions: Field Trip Health, Field Trip Discovery and Field Trip Digital. The Field Trip Health division is focused on the company’s mental health psychedelic therapy centers. Field Trip Health currently operates three revenue-generating clinics located in Toronto, New York and Los Angeles. The company has an ambitious expansion strategy, which includes an aggressive rollout of 75 clinics by 2023.
Field Trip Discovery is a leader in the development of the next generation of psychedelic molecules and is also conducting advanced research on plant-based psychedelics, including psilocybin-producing fungi. Field Trip Digital was created to develop new digital tools that make consciousness expansion therapy and resources available worldwide. The Digital division’s goal is to provide everyone with the same access to its healing and growth benefits.
On Tuesday, field Trip announced that the company closed its previously announced bought deal offering, which included the full exercise of the underwriters’ over-allotment option. Gross proceeds of the financing totalled $20.07 million, which Field Trip says will be used for drug development, R&D, clinic network buildout to September 2021, marketing expenditures, and other general and administrative costs.
- Share Price: $0.66
- 52 Week Low/High: $0.035 | $0.92
- 52 Week Potential Gain: +2,528.57%
- Shares Outstanding: 189.41 Million
- Market Cap: $125.01 Million
Revive Therapeutics is a life sciences company focused on researching and developing therapeutics for infectious diseases and rare disorders. The company is prioritizing its drug development efforts to take advantage of several regulatory incentives awarded by the FDA, such as Orphan Drug, Fast Track, Breakthrough Therapy and Rare Pediatric Disease designations. Currently, Revive is exploring the use of Bucillamine for the potential treatment of infectious diseases, with an initial focus on severe influenza and COVID-19.
With its recent acquisition of Psilocin Pharma Corp., Revive is advancing the development of psilocybin-based therapeutics in various diseases and disorders. Revive’s cannabinoid pharmaceutical portfolio focuses on rare inflammatory diseases. The company was granted orphan drug status designation by the FDA to use Cannabidiol (CBD) to treat autoimmune hepatitis (liver disease) and treat ischemia and reperfusion injury from organ transplantation.
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The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.