This year, investors are watching for big spikes in biotech companies working with psychedelics, especially as the once-controversial compounds return to the spotlight touting mental health benefits — and uniting lawmakers at the United States Capitol across party lines.
The category’s future could make big legal gains in 2023, but due to the American government’s built-in checks and balances, even a Congress in agreement can’t shape drug policy alone.
In May 2022, New Jersey Democratic Senator Cory Booker and Hawaii Democratic Senator Brian Schatz co-published a letter imploring the National Institutes of Health and the Food and Drug Administration (FDA) to study the therapeutic use of psychedelics. By the end of the summer, Republican Representatives Matt Gaetz of Florida and Dan Crenshaw of Texas had also committed their support to the study of psychedelics.
By 2012, the FDA had already created the “Breakthrough Therapy Designation” (BTD), enabling researchers to administer trials of otherwise illegal drugs suspected to offer unexplored medical benefits. MDMA received its first BTD designation in 2017 and psilocybin in 2018. Oregon now allows psychotherapists to treat patients with psilocybin.
As lawmakers on either side of the aisle argue about psychedelics on the federal level — using their power to earmark funds for research — the persistent, unlikely bipartisan union is inspiring increasingly bullish sentiments among psychedelics firms and their investors.
Psychedelics in Congress
Don’t chalk it up to the “Age of Aquarius,” though. Aside from the potential healing benefits, it is support for veterans that drives cooperation around these drugs.
In July 2022, Representative Alexandria Ocasio-Cortez offered an amendment to the 2023 National Defense Authorization Act (NDAA) that would require the Department of Defense to study psilocybin and MDMA, alongside cannabis, as alternatives for combat who have post-traumatic stress disorder, at least 6,000 of whom took their own lives in 2022 alone.
Navy veteran and House Representative Dan Crenshaw offered a nearly identical amendment to the NDAA, with his focus on the psychedelics ibogaine and 5-MeO-DMT instead. “They are, I would argue, kind of collaborative amendments in a way,” Ocasio-Cortez told Bloomberg, confirming her office had communicated with Crenshaw’s.
Crenshaw had previously voiced support for MDMA research at an August 2021 panel with Rick Doblin, the executive director at Multidisciplinary Association for Psychedelic Studies (MAPS), and Jon Lubecky, a veteran who’s benefitted from MDMA therapy.
MAPS was the first drug company to secure a BTD for MDMA, with the Bitcoin (BTC)-rich Pineapple Fund donating $5 million and helping raise $4 million more to support MAPS’ $26 million push. Meanwhile, Crenshaw voted against the psychedelics bills proposed by Ocasio-Cortez in 2019 and four days after his 2021 panel appearance.
When Crenshaw and Ocasio-Cortez joined forces for their collaborative amendments last summer, both amendments were passed by voice vote shortly after being presented. Lubecky said, “If AOC [Ocasio-Cortez] and Crenshaw can agree, it’s hard to fight against it.” The NDAA has passed the house and is at the debate stage in the Senate.
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Representative Matt Gaetz, who was serving on the House Armed Services Committee at the time, also presented an NDAA amendment identical to Ocasio-Cortez’s, which was silently shot down.
In November 2022, California Representative Lou Correa and Michigan Representative Jack Bergman upped the ante by forming the Congressional Psychedelics Advancing Clinical Treatments (PACT) caucus. PACT is a bipartisan think tank that will explore “how we as Congress can support further research into clinical applications,” Correa told Cointelegraph. PACT will not advocate for decriminalization.
“During my time in Sacramento, I met veterans who were calling for access to cannabis instead of being prescribed opioids to treat their visible and invisible wounds from the battlefield,” Correa recalled, adding:
“In my time working on cannabis, I’ve seen public opinion change dramatically as there is more and more research. With the promising, but still extremely limited research into clinical applications for psychedelics, this feels like a natural next step.”
That same month, Senators Booker and Rand Paul filed the Breakthrough Therapies Act, which would amend Nixon’s Controlled Substances Act for the first time since it was passed in 1970 by asking the Drug Enforcement Administration (DEA) to reclassify current and future drugs the FDA has endowed with Breakthrough Therapy Designation from Schedule I to Schedule II.
The move intends to “streamline the registration process for breakthrough therapies currently restricted by outdated drug…
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