The Trump administration's April 2026 executive order in support of psychedelic drugs may have flown under the radar for many investors in the midst of the Iran war and numerous other high-profile domestic political news stories, but the implications for this small but growing industry are tremendous. Indeed, within days, the FDA began to make moves, awarding national priority vouchers to select companies developing drugs in this category, thereby reducing drug review times considerably.
Single-session wins were to be expected for some of the bigger players in the psychedelics industry, and sure enough, share prices for several of these companies skyrocketed. As time goes on, though, it will be up to these drug developers to prove that they have the medicines to back up the newfound hype. These are some companies that may be worth watching.
A Promising Candidate Could Make It to Market Sooner, Preempting Financial Challenges
One of the biggest beneficiaries of the executive order was biotech firm Compass Pathways (NASDAQ: CMPS), which has seen its share price surge by nearly 80% in the last month. Specifically, the enthusiasm centers on its COMP360, a drug candidate for treatment-resistant depression and a recipient of a priority voucher.
For Compass, one challenge has been maintaining operational viability while developing a drug that appears to be quite promising. The company has faced mounting net losses in recent years, and losses per share have widened even as the weighted average basic shares outstanding have more than doubled in the last several years.
A shorter runway to commercialization for COMP360 could significantly help Compass overcome these hurdles. While the firm was already flagged as a Buy by several analysts, it received a wave of new bullish ratings and price targets immediately following the executive order. It heads into late April with eight out of 10 ratings as a Buy and over 100% in upside potential, even after its recent rally.
Another Speculative Penny Stock With a Promising Candidate
Another clinical-stage biotech with a potential psychedelic-based treatment for certain types of depression, AtaiBeckley (NASDAQ: ATAI) also saw a stock surge in mid-April. Though Phase 3 trials of its BPL-003 won't begin until later in 2026, AtaiBeckley reported positive results from an earlier phase in April.
For its current sales—just $4 million annually—AtaiBeckley has a sky-high price-to-sales (P/S) ratio in the 400s, which would typically indicate that ATAI's shares are massively overvalued. And in addition to being a pre-profit biotech name, the firm is also a penny stock, with shares priced below $5 even after the latest boost. That's all to say that AtaiBeckley is a speculative investment, likely subject to volatility.
Still, the momentum behind psychedelic treatments for mental health disorders may help the company to bring BPL-003 to market sooner than initially expected, potentially. Ten out of 12 analysts across Wall Street view the stock positively, and its consensus price target of $14.63 suggests more than 200% in upside, significantly higher than CMPS.
A Potential Generalized Anxiety Disorder Treatment and Strong Analyst Support
Definium Therapeutics Inc. (NASDAQ: DFTX), previously known as Mind Medicine, has also faced significant net losses in recent years, although the fact that it ended 2025 with $258 million in cash and equivalents does buy it some much-needed time to move ahead with its MM120, a drug candidate for generalized anxiety disorder. Like both of the drugs above, MM120 has a potential addressable market that is colossal, and successfully commercializing the treatment could turn Definium from a speculative play into a dominant player in the biopharma field.
DFTX shares have only risen by about a quarter in the last month amid the news about the executive order, but analysts are more optimistic about this stock than either of the others above. It has 14 Buy ratings and only a single Sell, with forecasts of about 70% upside potential.
If all of the companies above seem too much of a risk, even after the recent push to accelerate the approval timeline for psychedelic drugs, investors might want to build diversified exposure to the industry with a niche exchange-traded fund like the AdvisorShares Psychedelics ETF (NYSEARCA: PSIL). This fund is actively managed, which likely contributes to its high expense ratio of 1%, but it provides ready-made access to about two dozen companies in the space. This can position investors to benefit when any of those firms experiences a big breakthrough—and can insulate when trial results don't turn out as hoped. PSIL also offers a compelling dividend yield around 8.5% to further sweeten the deal.
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The article "These 3 Psychedelic Stocks Activated After Trump's Executive Order" first appeared on MarketBeat.
