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Psychedelics, Economic Costs and Future Potential


Psychedelics may offer an unique solution to the growing concerns of a mental health crisis. Not only benefiting the individual, but society as a whole.

The term psychedelic is derived from the Greek root words psyche (“soul”) and delos (“clear”, “manifest”) which translates to “mind manifesting”.

A psychedelic is any hallucinogenic drug which has the capability of expanding consciousness, such as psilocybin mushrooms.


Psychedelics Through Time

For millennia humans have consumed psychedelics, in the aim of entering the realm of deities to debate the uncertainties of existence.

A common theme among psychedelic use through time is its association with rituals. Which provide users with a sense of meaning and connection with the divine and community. 

“The shaman is not merely a sick man, or a madman; he is a sick man who has healed himself”-Terrence McKenna

References of psychedelic use are documented across cultural groups, some notable accounts include:

  • In the Hindu scripture Rig Veda, hymns describe a psychedelic concoction soma which allows users to connect to the divine and harness immortality.
  • In the African Congo, flesh of the Iboga plant is given to young tribe members in a rite-of-passage ritual
  • Indigenous Americans eulogize psilocybin mushrooms for their healing properties and spiritual guidance

Scientists of the modern period were interested in these and reported transformative experiences and began researching the potential therapeutic qualities of these drugs.

Though, it wasn’t until Albert Hoffman’s synthesis of LSD in 1938 and the rise of the counterculture movement in the 1960’s, a response to a turbulent socio-political environment, that psychedelics became prominent in American culture.

LSD was initially distributed in the US by Sandoz, under the trade name Dispensyl for research purposes. 

Psychiatrists who provided LSD to patients in conjunction with psychotherapy, noticed remarkable improvement in their patient’s condition. 

The drug was touted as a potential agent to treat a variety of mental health disorders which include: anxiety, depression, schizophrenia, war time stress reactions, alcoholism and other substance use disorders.

The drug’s safety profile, potency and ability to produce, sometimes enduring, beneficial psychological effects painted LSD as a breakthrough therapy, for many areas of mental illness. 

The promise of LSD led researchers to pursue other psychedelics, as potential treatments for mental ailments. 

Though research was halted by the passing of Kefauver-Harris Drug Amendments of 1962, which required Sandoz to gain regulatory approval with the FDA for their LSD product.

To add further insult to injury, the Controlled Substance Act of 1970 placed LSD and like psychedelics in Schedule I confinements because of their “high abuse potential and lack of medical efficacy and safety”.

Current research tells us this is far from the truth.

The passing of the Controlled Substance Act may have been a way, for then President Nixon, to gain control over the sociopolitical movements which threatened America’s governance and most importantly his candidacy. 

The regulations surrounding psychedelics are today’s greatest hurdles for psychedelic implementation in mental ailment therapy. This poses challenges for patients who’ve failed to address their mental illness with conventional approaches, such as psychotropic drugs coupled with psychotherapy. 


Benefits of Psychedelics

The recent mainstream resurgence of psychedelic research highlights its many potentialities in relieving, or in some cases curing, mental ailments. Compared to traditional psychotropic drugs, psychedelics have been noted to procure greater and sustaining improvement in mental illness without severe adverse effects.

Two risks associated with psychedelic use are “bad trips” and accidents, both of which can be mitigated under medical supervision. Psychedelics with therapeutic potentiality include:



  • N,N-Dimethyltryptamine is a hallucinogenic tryptamine drug that occurs naturally in many plants and animals. It is also referred to as the “spirit molecule” due to the intense psychedelic experience.
  • Individuals who have “encounters (experience breakthroughs) under the drug’s influence, report radical optimistic shifts in their worldview perceptions.
  • A single inhalation of DMT vapour provides users with a sustained increase in life satisfaction, mindfulness and a decrease in neurotic symptoms associated with depressive and anxiety conditions.
  • DMT clinics are available for individuals who wish to seek treatment. Mike Tyson, World Champion Heavyweight Boxer, reported that DMT allowed him to overcome his past traumas.




  • 3,4-methylenedioxy-N-methylamphetamine is a synthetic stimulant drug known commonly as ecstasy. Although not technically a psychedelic drug, MDMA has psychoactive effects that may hold medical and personal benefit.
  • MDMA has been given breakthrough therapy status by  the FDA for its ability to treat PTSD in conjunction with psychotherapy,
  • Certain therapists provide MDMA assisted psychotherapy under compassionate use.



  • Lysergic acid diethylamide is a powerful psychedelic drug derived from a chemical found in rye fungus. This discovery was made in 1938 by Swiss Scientist Albert Hoffman.
  • The psychedelic has been noted to have anti-inflammatory properties which may aid in preventing and treating Alzhemiers diseases, as well as a host of mental illnesses which entail neuro-inflammation.
  • Individuals who’ve experienced LSD have reported sustained lower levels of anxiety and depression after use.


Psilocybin Mushrooms:

  • Commonly known as “magic mushrooms” or “shrooms” are fungi that contain the psychoactive compound psilocybin, a naturally occurring psychedelic compound capable of producing powerful hallucinations and mystical-type experiences, along with other effects.
  • A single dose of psilocybin mushrooms has been reported to increase lifetime mindfulness.
  • Cancer patients who have taken psilocybin mushrooms reported significant decreases in dread related to their illness.
  • Psilocybin has been reported to eliminate pessimism bias found in depression and furthermore alleviate individuals of depressive and anxious states.
  • Granted breakthrough therapy status for major depressive disorder by the FDA.



  • (±)-2-(2-Chlorophenyl)-2-(methylamino)cyclohexanone (don’t even try to pronounce) is a general anesthetic with powerful dissociative and psychedelic effects.
  • Users reported a decrease in problematic alcohol use after experiencing Ketamine.
  • Potential treatment for depression by promoting neurogenesis.
  • Certain clinics provide users with Ketamine under medical supervision, in the aims of treating mood disorders and substance abuse under the guise of compassionate use.

psychedelics-internet-bull-reportMental Illness and Costs to Society

Approximately 26%, or 1 in 4, Americans suffer from a diagnosable mental illness. Many of these illnesses are associated with comorbidities, such as depression sufferers who also experience anxiety and substance abuse, which further complicate the condition.

The most common mental illnesses are anxiety disorders, which constitute up to 18% of Americans, and depressive illness, which make up 9.5% of Americans.

Mental ailments cost the US economy an aggregate $1,000,000,000,000 annually, including disabilities and loss of production due to mental illness.

One poor mental health day is associated with an average 1.84% decrease in per capita real income growth rate. The loss in per capita real income growth rate is worse for rural countries, 2.3%, than urban countries, .87%, which feeds into the never-ending cycle of poverty. 

This translates to an annual $53B loss in total income per country or $16T globally.

Current medical interventions fail to address the complex nature of these mental illnesses, which often account for a large majority of adult disabilities.

It is no wonder therapists suffer from severe burnout, as patients become increasingly challenging to treat.

Typical treatment for mental illnesses include psychotropic drugs in conjunction with psychotherapy

In 2018, Zoloft (Generic: Sertaline) was the most prescribed psychotropic drug with prescriptions toppling 48,999,022

Zoloft is a Selective Serotonin Reuptake Inhibitors (SSRIs) aims to treat:

  • depression,
  • panic attacks,
  • obsessive compulsive disorder,
  • post-traumatic stress disorder,
  • social anxiety disorder (social phobia), and
  • premenstrual dysphoric disorder.

All by increasing the amount of serotonin, “feel good” hormone, in the brain. 

An annual supply of 50 mg Zoloft tablets costs patients $1668.12 annually. Coupled with a weekly 45-minute-psychotherapy session accumulates to an annual cost of $3200.

This brings a patient’s total cost of treatment at $4868.12 annually or $405.68 monthly. 

The most troubling side effects associated with long term SSRIs use are sexual dysfunction, weight gain and sleep disturbance. These conditions may in the end require their own individual treatments – further adding to the costs of treatment.  

According to the US Bureau of Labor Statistics, the median income for full-time wage and salary employees was $48,672. Considering income taxes and all the necessities of life, spending money on treatment may pose financially challenging for individuals.

This problem is further prevalent in low income and minority groups which are among the most at-risk groups for mental illness.

This further widens the wealth gap in America. 



Though, it has been determined that every $1 invested in mental health relief, including research on alternative therapies, returns $4 in terms of ability to work and thus contribute to a country’s total income. 

The implementation of psychedelics in treatment of mental illness will be cost effective, as treatments require less frequency and effects can be enduring. This will allow individuals across all income and ethnic groups to access treatment.


Where Psychedelics are Now

History, culture and now science teaches us that psychedelics are a viable treatment for mental ailments. The pursuit of psychedelic therapies may provide us with the necessary stimulus to move to greater heights as a nation, by providing both individual and economic benefits. As Terrence McKenna puts it:

“Life lived in the absence of the psychedelic experience that primordial shamanism is based on is life trivialized, life denied, life enslaved to the ego.”

There are many ways to get involved and positioned for success within the new and rapid developing industry. Read more about where smart money is going within the psychedelic medicine space.


Harmanveer Randhawa

Equity Research Analyst

Student of Financial Modelling and Applied Mathematics at the University of Western Ontario. Applying analytical skills in search of valuable opportunities. Cool headed, logical, not afraid to capitalize on risk and go against the crowd.

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