Business Insider's Jeremy Berke talked to leaders in the medical-psychedelics field about who was investing in their companies, testing procedures, and the similarities and differences between this industry and the cannabis sector.

The investor base for companies creating psychedelic drugs can be categorized into three groups, Florian Brand of ATAI Life Sciences said: the visionaries, the "momentum investors," and more recently, pharmaceutical and biotech investors.

Companies such as MindMed, Eleusis, and ATAI Life Sciences are hoping that medical psychedelics will be able to tackle big issues like the opioid epidemic, the vaping crisis, adult ADHD, and chronic inflammation.

Business Insider sat down for an exclusive interview last year with MindMed to talk about how the company raised millions in funding from big names, such as "Shark Tank" host Kevin O'Leary and Canopy Growth's Bruce Linton. Read the article here.

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Investors may be eyeing psychedelics as the next big trend in healthcare.

That's according to leaders in the medical-psychedelics field. They say there's a serious growing interest from established backers who have traditionally stayed away from companies that deal with federally illegal substances.

Once that interest manifests into investment — and a few asset managers begin to put money into medical-psychedelic companies — Shlomi Raz, the founder and CEO of the medical-psychedelics company Eleusis, said on Friday at the Economics of Psychedelic Investing conference that he expected the rest to quickly follow.

"Once the lead steer moves into this space, you'll see the whole herd moving in," he said.

The Epidiolex of psychedelics

The barriers to entry for medical psychedelics are even higher than they are for cannabis, said JR Rahn, the founder of MindMed, a company that develops psychedelics-based medication. That's because medical-psychedelics companies are looking to have their products approved by the US Food and Drug Administration.

In MindMed's case, the company is pushing to get FDA approval for a compound called 18-MC, which would effectively remove the hallucinogenic properties from ibogaine, a West African psychedelic drug, while preserving its medical properties.

The compound must undergo a series of clinical trials before it can be approved by the FDA to address opioid use disorder.

"It's a very different industry," Rahn said, adding that the clinical testing is strenuous. Beyond addressing the opioid crisis, Rahn said on Friday he would want to look into addressing the teen-vaping crisis as well.

Raz told Business Insider's Jeremy Berke at the conference that he and his company were inspired by the example of GW Pharmaceuticals and its development of Epidiolex.

"That's where we're coming from — to take a stigmatized drug and make it a valuable medicine, develop it just like any other life-science company," Raz said.

Eleusis has clinically tested the effects of low doses of LSD on inflammation associated with aging, which would have deep implications for Alzheimer's.

Treatment versus policy

Magic mushrooms are seen at the Procare farm in Hazerswoude, central Netherlands, in August 2007. Peter Dejong/AP

Several cities have already decriminalized psychedelic mushrooms, and though the topic of adult use came up at the conference, the companies seemed more focused on treatment and testing rather than getting involved in policy changes.

Because psychedelics are such powerful compounds, Florian Brand, the cofounder and CEO of ATAI Life Sciences, a biotech company that develops psychedelic medicine for mental health purposes, said he was generally skeptical of legalization for adult use.

"We're focused on getting better treatment for patients, not so much what could be happening from a policy perspective in 12 years," Brand said.

But there seems to be a lot of interest in the psychedelics field from those coming from the cannabis industry, where there is a heavier focus on policy changes to allow for adult use.

Business Insider previously reported on Field Trip Ventures, a psychedelics-focused venture-capital firm founded by people from the cannabis sector.

"There's no shortage of investment interest in the psychedelic space right now," Ronan Levy, the cofounder of Field Trip Ventures, told Business Insider last year. "Almost everybody who's been participating in the cannabis industry is looking at it."

The kinds of investors

The investor base for companies creating psychedelic drugs, according to Brand, can generally be categorized into three groups for ATAI Life Sciences. There are the visionaries, those who "believe there is something there that deserves to be backed."

The second group is the "momentum investors," the group that is looking for the next big trend.

And finally, there is now serious interest from more traditional biotech and pharmaceutical investors who were so far staying far away from the psychedelics field. Interest from the third group is very recent, Brand said, seriously picking up only within the last month.

Raz said he put a lot of his own assets into establishing Eleusis, and other early investors in the company were either individual investors or family offices.

But Raz said he expected the opportunity for these kinds of backers — who are not traditional life-science investors — to play a crucial role in companies like his was closing very quickly as interest from more established financiers picks up.