Psychedelic Stocks Skyrocket as Trump Signs Broad Deregulation Order and Boosts Federal Funding

Shares of psychedelic drug developers rallied sharply Monday after President Donald Trump signed an executive order aimed at accelerating approvals and expanding access to psychedelic-based therapies.

Compass Pathways (CMPS) jumped as much as 50%, while AtaiBeckley (ATAI) surged more than 33%. Definium Therapeutics and GH Research also posted strong gains, reflecting a broad-based move across the sector.

The executive order directs the U.S. Food and Drug Administration (FDA) to prioritize psychedelic treatments that carry the Breakthrough Therapy designation, including issuing expedited review vouchers. These mechanisms could shorten approval timelines to as little as one to two months, compared with the typical six to ten months.

The order also commits $50 million in federal funding to support research into psychedelic therapies through the Department of Health and Human Services, while expanding "Right to Try" access pathways and coordinating efforts among the FDA, DEA, and Department of Veterans Affairs.

In addition, federal agencies are instructed to facilitate the potential rescheduling of currently restricted substances following successful Phase 3 trials—marking a meaningful step toward broader medical adoption.

For Wall Street, the move represents a long-awaited inflection point for an industry that has struggled with regulatory uncertainty. RBC Capital Markets analyst Brian Abrahams described the order as "a substantial step towards diminishing regulatory risk… enabling investor comfort," adding that it signals "a broad openness to psychedelics."

Jefferies analyst Andrew Tsai echoed the sentiment, calling the directive an "official stamp of validation to the class," underscoring that government backing is now tangible.

A key focus of the order is ibogaine, a psychedelic compound derived from an African shrub that is being studied for treating conditions such as depression, PTSD, and addiction—particularly among military veterans. While still classified as a Schedule I substance, the administration has urged regulators to move quickly toward reclassification if clinical data supports its use.

FDA Commissioner Marty Makary indicated that decisions on certain psychedelic therapies could come as early as this summer, further reinforcing the accelerated timeline.

The policy shift follows a setback in 2024, when the FDA rejected an MDMA-assisted therapy for PTSD developed by Lykos Therapeutics, citing concerns over trial design and data quality. However, the latest directive suggests regulators are now more willing to engage constructively with the space.

Meanwhile, lobbying efforts across the industry have steadily increased. Compass Pathways disclosed hundreds of thousands of dollars in recent filings tied to psychedelic policy and appropriations, while Mind Medicine has also engaged regulators on clinical trial guidance. Overall, public-company lobbying tied to psychedelic regulation has reached several million dollars over the past decade.

Taken together, the executive order signals a decisive pivot in U.S. policy—one that could accelerate commercialization timelines, reduce regulatory overhang, and unlock a new phase of growth for the psychedelic therapeutics industry.