Psychedelic market growth to $3.3 billion by 2031

Not long ago, psychedelics were relegated to the cultural and scientific sidelines – associated with 1960s counterculture or underground therapy. Today, they’re at the forefront of a new medical industry boom. Analysts project the psychedelic therapeutics market will grow to $3.3 billion by 2031 – just the market for psilocybin “magic mushroom” therapies alone.

That’s more than double its current size, reflecting a major shift from niche to mainstream. In this blog, we’ll analyze what’s driving this explosive market growth:

• A global mental health crisis fueling demand for novel treatments
• Loosening regulations
• Surging investor interest

We’ll also spotlight key players in the industry, emerging business trends, and how public perception is evolving.

The message is clear – the shroom boom is coming, and it’s backed by serious science and money.

Just a few years ago, suggesting that psilocybin or LSD could be billion-dollar medicines might have drawn skepticism. Today, multiple factors have aligned to create a perfect storm for growth in the psychedelic sector:

Mental health crisis

Rates of depression, anxiety, PTSD, and addiction are at all-time highs globally. Existing treatments (like SSRIs or opioids) often fall short, leaving a huge unmet need. Psychedelic therapies are emerging as potential game-changers.

• Clinical trials of psilocybin for depression found it can be as effective as leading antidepressants.
• Both patients and healthcare providers are increasingly open to psychedelics.

Scientific validation

Prestigious institutions (e.g., Johns Hopkins, Imperial College London) have published compelling research showing long-lasting symptom relief from a single dose. The FDA has even granted “Breakthrough Therapy” designations to psilocybin and MDMA programs.

Every successful trial pushes the market projection upward.

Regulatory shifts

Laws are slowly but surely changing:

• FDA expected to evaluate MDMA for PTSD soon
• Australia legalized MDMA and psilocybin for certain medical uses (July 2023)
• Canada has special access programs
• Oregon and Colorado have legalized psilocybin therapy locally

These reforms signal a coming legal market.

Public perception and demand

Society’s view of psychedelics has swung from fear to curiosity:

• 61% of American voters support legal, regulated therapeutic access
• 78% support easier research access
• Popular media and recovery stories are reducing stigma

As public sentiment warms, the addressable market expands.

Wellness and microdosing trends

Outside of formal medical channels:

• Microdosing is popular for mood and productivity
• Legal analogs, mushroom supplements, and psychedelic retreats are booming

The wellness market further fuels consumer interest and primes demand.

By the numbers

• The psilocybin market projected to grow from $1.5 billion (2024) to $3.3 billion (2031)
• CAGR of ~10.3%
• Broader psychedelic drug market estimates:
  • ~$8 billion by 2032
  • ~$8.8 billion by 2032 (Vantage)

The trendline is clear and steeply upward.

Investor trends

Venture capital and IPOs have surged:

• Compass Pathways (NASDAQ: CMPS): UK-based, raised $128 million IPO in 2020, Phase 3 trial in progress
• Atai Life Sciences (NASDAQ: ATAI): Germany-based, backed by Peter Thiel, IPO’d in 2021, market cap of $3.19B
• MindMed (NASDAQ: MNMD): Focused on LSD and novel compounds, volatile but active
• Field Trip / Reunion: Split to focus on drug development and clinics, respectively

Despite early excitement, 2022–2023 saw stock dips due to long clinical timelines. Market cap of major companies: ~$2.2B by end of 2024. Still small compared to traditional pharma, but poised for growth pending regulatory catalysts.

Big Pharma interest

• AbbVie signed a $2B partnership with Gilgamesh Pharmaceuticals (2024)
• Otsuka invested in Mindset Pharma
• Lundbeck’s $2.6B acquisition of a 5-HT2A-related drug stirred market optimism

Big Pharma participation is a powerful validation of the field.

Leading companies

• COMPASS Pathways: Synthetic psilocybin (COMP360), advanced trials, strong IP
• MAPS Public Benefit Corp: Leading MDMA-assisted PTSD therapy, aiming for FDA approval
• Atai Life Sciences: Portfolio model with wide investment reach
• MindMed: Working on LSD therapy, ADHD microdosing, and addiction treatments
• Field Trip / Reunion: Testing new compounds, running clinics in North America and Europe
• Cybin Inc.: Psilocybin and DMT analogs, novel delivery methods
• GH Research: Inhaled 5-MeO-DMT with rapid effects

Academic institutions

Institutions like Johns Hopkins, NYU, UCLA, and Cleveland Clinic run clinical trials and train therapists. They often partner with companies or spin out ventures.

Clinic networks

• Numinus, Novamind, Awakn Life Sciences: Infrastructure to deliver therapy
• Expected growth in services revenue (therapy sessions, not just drug sales)

Innovation in formulations, delivery methods, and patient experience is a key competitive edge.

Mental health crisis

• Depression is a global disability leader
• COVID-19 worsened mental health conditions
• Traditional meds fail many; psychedelics offer rapid, profound alternatives

Examples:

• Psilocybin helping treatment-resistant patients
• Ketamine (Spravato) generated $780M in 9 months (2024), proving demand

Public perception

• Media portrayals shifting toward success stories
• Dinner-table conversation around psilocybin is becoming normal
• Cities like Seattle and Denver decriminalizing personal use helps reduce stigma
• Younger doctors more open to psychedelic therapies

Regulatory hurdles

• Psychedelics remain Schedule I in many countries
• FDA requires extensive safety and efficacy data
• Policy progress may be slow or cautious

Clinical and safety issues

• Requires guided sessions, careful screening, and follow-up
• Rare but possible adverse effects
• Not all patients are suitable (e.g., with certain health conditions)

Public misconceptions

• Risk of overhype
• Need for realistic expectations and responsible use

Intellectual property and competition

• Many classic psychedelics are unpatentable
• Companies rely on formulations and analogs
• Differentiation will be key: digital tools, better therapies, new compounds

Insurance and cost

• Psychedelic sessions can cost thousands
• Reimbursement is needed to scale
• Positive movement exists (e.g., Spravato coverage, CPT codes in development)

• 2–3 FDA-approved psychedelic therapies in major markets
• Hundreds of legal clinics treating tens of thousands annually
• New indications: OCD, eating disorders, anxiety
• Global expansion beyond North America and Europe
• Consolidation with Big Pharma presence
• Growth in ancillary services (training, digital support, microdosing adjuncts)

From illness to wellness: psychedelics may enter mental wellness programs.

The journey from counterculture to boardroom is well underway.

A projected $3.3 billion market by 2031 signals that what was once taboo is now poised to be big business – with a therapeutic heart.

For users and experimenters, this means:

• More access to safe, legal, guided experiences
• Normalized, data-driven conversations around psychedelics

Each billion in sales likely reflects hundreds of thousands of lives improved. With over 60% of U.S. voters favoring therapeutic legalization, this movement is becoming unstoppable.

The next decade will determine whether psychedelics become a mainstream mental health pillar. If trends continue, we may soon be able to book a psilocybin therapy session as easily as a regular doctor’s appointment.

The psychedelic renaissance is no longer just cultural or scientific – it’s economic. And it’s rooted in a deep need for healing.

Sources:

• Persistence Market Research (2024). Psychedelic Mushrooms Market Poised For $3.3 Billion Surge By 2031​ sahmcapital.com
• UC Berkeley Center for the Science of Psychedelics (2023). Berkeley Psychedelics Survey – Public Support Poll​ psychedelics.berkeley.edu
  
• Reuters (2021). Thiel-backed psychedelics startup Atai valued at $3.19 bln in Nasdaq debut​ reuters.com
  
• Philadelphia Integrative Psychiatry (2024). Esketamine for Postpartum Depression – Clinical Trial Insight​ phillyintegrative.com
• PharmaVoice (2024). J&J’s Spravato heads for blockbuster status​ pharmavoice.com
• Psychedelic Alpha (2024). Year in Review: Public Markets psychedelicalpha.com