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Listen on the go! Subscribe to The Cannabis Investing Podcast on Apple Podcasts or Spotify. Stephen Tobin on investing in psychedelic stocks while they’re still pre-revenue. Why he’s a big believer in Compass Pathways (NASDAQ:CMPS) and Atai Life Sciences (NASDAQ:ATAI) and not as much in Cybin (NYSE:CYBN) or MindMed (NASDAQ:MNMD). Will first-movers get the advantage? What will move share prices? Importance of patents and cash in the industry. Transcript Rena Sherbill: Okay. Alright. Steve, welcome to the Cannabis Investing Podcast, Psychedelic edition, our Psychedelic Sundays. Thanks so much for taking the time and coming on the show. Stephen Tobin: You’re welcome, Rena. It’s really nice to meet you. Looking forward to being part of this quite exciting project that you’ve got going. RS: Absolutely. Absolutely. Thanks for coming on. Steve, so we were just talking about how you’re a bit of a nomad. And I’m curious if that’s part of what led you to the psychedelic scene in terms of looking at those stocks, but if you could catch listeners up, you write on Seeking Alpha. If you could catch listeners up on, kind of your investment philosophy and how you’ve gotten to the point where you’re at now where you’re looking at stocks and writing about them. ST: Yeah. Of course. I mean, I started investing a long time ago. I used to work for Bank of America in Central London, but way back in the 1980s. And that’s when I began investing in stocks really. And for a long time, all my investing was kind of DuPont analysis, looking at rates shares, looking for undervalued companies with their EPS and their balance sheets. And it performed quite well, always a little bit above the stock market’s main index. However, about sort of 10 or 12 years ago, when I started to become a full time investor, my strategy failed really when Tesla (TSLA) arrived, because everything about Tesla and the strategy I was having suggested it might fail. And all over the time, I wasn’t writing and seeking. I was reading a lot by a writer called Montana Skeptic. I don’t know if he writes anymore, but, he had a similar view that Tesla couldn’t possibly succeed because of its balance sheet yet he did. And so after that, I started to learn a little bit more and started to look at an investing disruptive technology wherever it is. And that’s what led me to Psychedelics really, because they’re attempting to disrupt a very large established pharmaceutical industry. And the main players are not following really. They’re not getting involved with Psychedelics at all. So, that’s how I came to psychedelics. I started by doing a few full courses on Coursera learning how to read Phase data trials and then how to make sense of all of this stuff they give out and then started to analyze the companies and looking for the one or two that I think are going to be successful and make a bit of money for investors. Well, that’s how I got here. RS: Nice. Nice. So, talk to us about that in terms of, you know, looking at the different stocks and some are worth looking at a little bit closer than others and, you know, the four stocks that we’ve been focused on at least in the first couple of episodes have been the four that I would say most analysts that I’m looking at or talking to are the four main ones that they’re focusing on, which is Compass Pathways (CMPS), MindMed (MNMD), Atai (ATAI), and Cybin (CYBN). And your coverage of all those four stocks, you have four different ratings on all of those stocks. So, I guess first of all, what are you looking at in the psychedelic space? What are the metrics that you’re using to, you know, analyze these companies or what should investors be looking at to analyze these companies? ST: It’s difficult, isn’t it? Because they’re all pre-revenue. They’re all looking at very similar things. They’re all looking at how psychedelics drugs can help people with mental health issues. Now, I’ve read some articles recently suggesting that all of these psychedelics might work in the same way. So, using the brains neuroplasticity, they may all replicate each other’s findings. And if you read the data that’s available on something like PubMed, which I spend a lot of time doing, you find that they virtually every single piece of research is positive. They – it seems to not matter which drug is looked at or how it’s looked at or what methods are used. They come out with positive impact. And I think that’s one of the things that I find a little bit worrying about all these companies because it may be that whoever gets there first kind of wins everything because if every subsequent drug has a similar impact for similar people, it’s going to be very hard to get those approved. I think that’s why I’m a big believer in Compass Pathways and Atai because they’re definitely leading the field. They’re further ahead than everybody. Compass Pathways has recently some quite interesting data suggesting that their AI approach can predict which patients are going to benefit most from their drugs. Now, if that’s the case that it’s predicting patients that will be affected by all of the psychedelics as opposed to just what Compass Pathways are suggesting, that’s quite worrying for everybody else, I think. The other issue I’ve got through Compass Pathways, they’re the first one to they give us – to begin a substantial Phase 3 trial. And we’re not going to get any data from that till at the earliest, at the end of 2024. And perhaps mid-2025. So, we’re looking at quite a long-term, you know, a long-term investment if you’re going to take it really. Everybody else is further behind those two. So, that’s kind of where I am. I think Atai and Compass Pathways are leading the field. Atai have one great drug that looks like it might be the first one that could be approved for at home use and that again will be a game changer. All of the psychedelic drugs, they seem to require quite a lot of clinical time. So, patients would go along for the clinic, but virtually the entire day they need to be therapist, virtually entire system. We are very expensive drug to get approved if the data from Compass Pathways where they can predict who it’s going to help most is correct, then I think they’ll, you know, that will help them a lot to get insurance companies to pay for these treatments. And it will help, of course, with the regulatory approval. RS: What are your thoughts about the regulatory approval? Kind of looking at it from an investing angle or do you feel like, you know, it’s kind of like similar to the pharma and the healthcare space in terms of waiting for the regulations to come out or does it seem to work differently in the psychedelic space? ST: I’m not sure it will work differently, but I think we can have some safety that if one of these drug companies comes up with a safe drug that helps people with serious conditions, then the regulatory framework will move to allow those people to get that drug. I don’t think anywhere in the world, a regulator will stop people having a safe drugs that helps their need. Of course, there’ll be issues with it, but I just have real confidence that all of our politicians, regulators, will help people who need it. RS: And what are your thoughts in terms of, you said that Compass Pathways isn’t going to see, kind of the realized clinical data coming out yet, but also speaking to the first mover advantage. Something that I feel like I’ve noticed covering the cannabis space is thinking at the beginning of covering it that the first mover advantage was in fact an advantage. And as the years have gone on, I’m wondering how much of that is true because part of me sees, well not part of me, but you can see that some companies did a lot of the legwork and invested a lot of the capital. And then other companies came in and kind of mimic that strategy and we’re able to do it better. But I also understand that the psychedelic space is slightly different in terms of timelines and the regulations are different and how things are rolled out is completely different. Even though they’re in the same schedule, it seems to be just treated very differently in that sense. ST: I think there’s also the patent issue, isn’t there, in terms of their advantage. I mean, Compass Pathways have – they’ve already had their patents challenged in court, and it was found in Compass’ favor. And I think that makes a big difference. I’m not, you know, I’m not absolutely convinced they should be able to pay to these drugs, but apparently they are. And I think that makes an enormous difference. If you have a patented drug that’s approved for use, I think that’s a great deal of protection for these companies. I don’t think it will be like the cannabis space where, you know, investing cannabis is hard work, isn’t it? Because they’re effectively growing a commodity, and, you know, there are other countries. Thailand is a great example. A country that has decided to grow cannabis in volume. It has far better environmental help. You know, it’s got loads of sun, it’s got loads of rain, it’s got really warm conditions. And the government’s made a positive step that it’s going to dominate that space. And it’s very difficult for the North American companies to compete. I think that’s not going to be the case. I don’t think with psychedelics because these drugs are not – it’s not [more psilocybin] [ph]. It it’s [deuterated] [ph]. So, it has to go through a chemical process, which is patented. And I don’t think it will be as easy for competition to sidestep that. RS: I’d like to ask you a question that might be more on the esoteric side, and you can kind of say, no, I can pass on this question, but I’m curious if you have thoughts just, kind of hearing about your background before we started recording. I’m curious, like, your thoughts about psychedelics, you know, the capital investment in psychedelics and the investment opportunity in psychedelics? A lot of discussion around psychedelics is about, you know, this notion of how do we patent psychedelics? They’ve lived in indigenous communities for many years. How does incorporating that for indigenous communities have to do with, you know, these new regulations? All of these discussions about what was once old is new again. What are your thoughts, kind of maybe, you know, less about investing and more about just how you think of investing in that space and investing capital in that space? Do you have thoughts about that? ST: I do have thoughts about that. One of the difficulties here is that if we have a compound that’s been used for thousands of years or hundreds of years at least, should it be patented? Well, the argument against it being patent is quite obvious. It already exists. People are already using it. However, the argument for patenting is that if it’s not patented, then these companies aren’t not going to invest the money to get it trialed, to turn it into a usual drug, to work out exactly what therapy needs to go with it, to make it safe. But, you know, if there’s no profit at the end of the track, that’s simply not going to do it. And because of that, because of the potential help it offers to millions of sufferers, I think it should be patented, just to ensure that the money is available to get this medicine to people who need it. RS: Yeah. I mean, I think that’s a – it’s a winnable argument to me, the notion of access, while also understanding the people that have been using before it and hopefully making regulations that make sense for everybody. But also, I mean, it’s the same thing I feel about cannabis when people are, like, get big business out of cannabis. And I was, like, well it wouldn’t be legal without big business. And without it being legal, it wouldn’t be regulated in x, y, and z. So, yeah, I appreciate you answering that with thoughtfulness. So, what have you kind of gleaned from the psychedelic space since you started focusing on that? Like, are there – it says in your bio on seeking alpha that you have like a two year time horizon in terms of investing. And a lot of these clinical trials would speak to that, do you feel like when these trials are released if they’re in, kind of positive, how the companies want them to go? Do you see that as being a catalyst for share prices to rise? Or how are you looking at the share prices and when to invest and when to get in? ST: When I first looked at this, I thought that every positive trial result was going to result in a significant share increase. That doesn’t seem to be happening, does it? I mean, we’ve had some really good Phase 2 data coming out. Compass Pathways, very recently released peer-reviewed data, which was more positive than the top line data, yet share price did not react at all. MAPS’ has had several, you know, positive data releases. And yet, the companies who produce the stuff that’s been trialed had very little movement. So, it doesn’t seem to be following the path I was expecting. I thought it would mimic what happens in the normal pharmaceutical industry, but it isn’t doing. Perhaps that’s something to do with increased regulatory control. It may also have something to do with the cost of administering these drugs, but they may be prohibitively expensive. If it stays at this whole day in a clinic with therapy, I don’t know. So, I am a little bit worried about that. However, if a Phase 3 trial comes along, at the end of 2024, which offers unequivocal proof that this Compass 360 is going to work, then I expect a significant share price increase, and in the hundreds of percent, I would suspect. RS: And do you feel like there’s something else that would come that that might cause a change or do you feel like that’s pretty much the play? ST: I think it’s the play. I think if, you know, if it works, it works, and it works for a very large amount of money. It’s difficult to see it not working though. I can’t find anywhere in all the research I’ve done a negative psychedelic piece of phase data or test of any scale. And so I think the chance of it working is far greater than it normally is. And so, I guess some of that may be baked into the price already. Perhaps that’s why we’re not seeing the jump every time some data is released because that’s kind of only baked in. There’s already a positive expectation here, which often doesn’t have in the pharmaceutical industry. The only other thing is Compass is AI data. That’s really interesting. If they can really hone in on that, that may cause a change. If they can predict in advance who’s going to benefit from psychedelics. That’s possibly very, very important, I think. So, well, the Phase 2 data suggested about 30% of TRD patients would benefit – benefited for more than 12 weeks. Reason data – it’s talking about 189 days being the median time before another depressive event. They released that quite recently from follow-up on their [2B data] [ph]. So 30% of people having a positive impact from COMP360, but that still means that 70% of people not having a positive impact. Now, if this is a very expensive drug and I suspect it will be, that’s going to be prohibitive for the insurance companies. However, if Compass can predict, which of those people are in the 30%, that’s kind of game changing, I think. I think that would make all of the difference to the affordability of this drug. RS: Have you covered the pharma space and the biotech space in in-depth at all? ST: I certainly have though I’ve never written about it because I would, because I’ve only recently started writing on Seeking Alpha, you know, prior to that, I was just doing my own research in investing, but I did look at it quite a lot. Trying again to pick out disruptive technologies going back to the thing I’ve said about tests. They’re trying to pick out drugs that might be disruptive. It’s far more difficult in the pharma. I lost quite a lot of money in the pharma, I must say, because there was such an unpredictability to the results, you know, you’d have a positive Phase 2 and a Phase 3 flop. No matter how big the company is, Phase 3 flops are common in the pharmaceutical industry. And it could be, you know, it would destroy share price value. If a Phase slot came out, you invest in [indiscernible] worth 10% of what it was the previous day. And so, that’s not really an investment I like. RS: So is that is that, I mean, I assume part of, a big part of what’s tempting is the reliability of these positive results from psychedelics? ST: That’s certainly what tempts me and really is. And the fact that they’ve been used for so many hundreds of years. We have extensive knowledge already, and we know they’re quite safe. We know they do affect the brain already. We know it, you know, this neuroplasticity. We know that they’re hallucinogenic. What we don’t know is whether they can that can be used to treat mental health illnesses, but all of the evidence suggests it can. So, I feel that we’re much further down the process than in normal pharma. RS: And your sense of pharma coming in, is that a lot predicated on these patents that these companies have. So, it precludes pharma from just, kind of swooping in and being like, we’re pharma, we’re here, but it’s the fact that these companies have these patents that will prevent that? ST: I think it will. It also, you know, the pharma are very good at buying these drugs. You know, they’re not necessarily psychedelic ones, but the big pharma companies that got a very lot of money and it’s not unusual for them to buy a pipeline happens all the time. And I would not be surprised to see these pipelines being bought at some stage. I remember the first, in fact, my only successful cannabis investment came from the first companies to get a cannabis derived drug approved, and they would take an overly quite well out of that. And you know, a similar process could well happen, couldn’t it? RS: Was that GW Pharma (JAZZ)? Is that what you’re talking about? ST: Yeah. GW Pharma, yeah. Probably my only successful cannabis investment, I think. RS: Did you get out in time? ST: I did. Yeah. I did. RS: That’s awesome. I guess that’s what makes it successful. Well, yeah. Yeah. So, in terms of, like, KPIs or metrics that investors can look at, what would your advice to investors looking at the space be in terms of those starting out or, you know, those that have more experience, I guess? Is it mostly paying attention to these trials? Like, what else can they look at? ST: The other issue, of course, is cash, isn’t it? It’s going to be an expensive business getting these jobs approved. And on one of the articles I put out recently. I looked at the entire space and looked at how many of those companies are almost going on fumes now. There are not that many that have got enough cash. I mean, in fact, I think about 7 or 8 companies have probably got enough cash to actually get to approval. So, the other company is going to have to raise cash, which, you know, which generally is negative for shareholders, isn’t it? My company needs to raise money, often they can do it, but it’s never positive for shareholders. So that would be the thing I’d worry about most. I wouldn’t like to see a large scale dilution if these companies take on large debts and that’s an extra expense. And so, we’re quite limited. The other issue, of course, is how close are they to getting a drug out. If they are, let’s take Compass Pathways again. If you have, you know, they’re two years away we think. If there is another company that’s looking at psilocybin to treat the same issues, what is five years behind, I can’t see how that will ever develop value. I really can’t. RS: I have a question for you. I asked this on a recent episode, and I asked this to Emily Paxhia and she wasn’t sure of the answer. I’m curious if you know the answer. It’s been, it’s been noteworthy to me that psychedelic stocks which are in most cases, the same schedule as cannabis, yet those stocks are traded on the major exchanges, whereas cannabis stocks are not, do you know the reason for that or would you hazard a guess? ST: I don’t know the reason for that. The only thing I can think of is perhaps the companies themselves have made that decision for whatever reason. It’s interesting, well, one of the brokers I use extensively is, IG markets. And they have limitations on me buying cannabis stocks and cannabis ETFs, but don’t have any limitations on me buying psychedelics. And the other has got an interesting, they’re UK based when I when I trade with them. And they’ve never really given me a reason for that. And so, no, I’m not sure what the reason is. RS: I’m just going to keep accumulating questions around this question because it’s super curious to me. ST: It may well come down to recreational use as well. I don’t know if any psychedelics stock that’s suggesting any kind of recreational drug use. However, almost all of the cannabis stocks are focused on recreational drug use. It’s, that I think that’s going to be the difference. In many parts of the world it’s still illegal. So, in the IG markets, they’re a UK based company, it’s illegal to use recreational drugs. It’s not illegal to use psychedelics for mental health problems. It’s not able to be prescribed because there’s no authorized drug. A regular drug. However, Compass Pathways have a number of sites working on their Phase 3 trial with them. And it’s certainly getting used in those trial sites as it is in the U.S. as well. RS: So, in terms of looking at these next couple of years well, actually, before I get to that, I wanted to ask you, so we’ve discussed Compass and Atai, and those are – one is a strong buy with Compass, and you have Atai as a buy. And then, Cybin, for you is a hold, and MindMed is a strong sell, would you speak to those two stocks and your thoughts on them and why you rate them that way? ST: Cybin, I would have rated Cybin as a [indiscernible] [Doug Drysdale] [ph] leading it. And he’s a proven pharma person. You know, he knows how to manufacture drugs. He knows how to sell drugs. He’s got great experience. I’m very successful at making pharma companies successful. He’s really very good. So that raises that company in my mind. My negatives about Cybin, they’re looking at psilocybin again, which means they’re following Compass Pathways. I think that’s going to be very difficult. And they have 50 molecules in total they’re looking at. That seems too many, really, for me, but they are looking at DMT, which has some politic sides. MindMed is focused on LSD. And as far as I could see, didn’t have any patentable versions. In fact, I watched an interview with their CEO who rightly said that they can’t patent LSD. And if they have no patents, I’m not sure where the value is. And we’re not. When I wrote the article, it’s in the midst of their kind of a meme stock surge. And it was, you know, it was obvious that that was never going to work really. And since it just regressed back to where it was. RS: Do you feel like – what do you feel like is the reason for them focusing on LSD if it’s not patentable and that would be such an advantage? Do you feel like they might pivot? ST: Well, all [patents] [ph] as the other companies have is they’ll try to [indiscernible] LSD come up with some kind of derivative version of LSD they can use. They may pivot, I’m not sure. I mean, they were looking extensively. I have a gain, and that seems to me to be a very positive thing to do, and they did have MCA, 18-MC, which was a, you know, a version, you know, an invented version of that, but now the patent has run out. Yeah [indiscernible] is interesting. Atai, have Deborah Mash , he’s a great scientist and has many patent to her name work [indiscernible]. And that’s another area I think Atai may well succeed. Because [indiscernible] particularly good for alcohol addiction and other addictions, which there’s no evidence yet that psilocybin works as well in that area. RS: Is there research or a particular psychedelic that you’re more interested or more excited about what’s coming out about that? ST: Yeah, it’s difficult, isn’t it? Because all of the evidence suggest they all work in a similar way. And so, I think and I still believe it might just be the first. Apart from [indiscernible] because that’s the only one that has a lot of alcohol addiction research behind it. RS: What are some risks aside from, you know, the clinical trials maybe not going well or been delayed for some reason. What are some risks that you look at or concerned about in the space? ST: My other risk is cost, you know the end cost of these treatments. If it’s prohibitively expensive, insurance companies are not going to and not going to work out to do it. And that will significantly reduce the market. The time is huge, but it’s only huge if people are prepared to pay for it. So, that’s a huge risk. The other thing I worry about is the percentage of people being helped, you know, Even the best data we have, Compass Pathways with [Atai] [ph], it’s only 30%. Something that needs to be done about that [indiscernible] really. You can’t have 70% of people not doing well [indiscernible]. Even though it’s such a difficult to treat condition. I still think that needs narrowing down. So, Compass Pathways are looking at treatment-resistant depression. So, that’s people, patients who have tried other methods of help first. So, they’ve perhaps been to counseling or they tried other drugs. They’ve tried everything that’s available. Three off, I mean, Compass Pathways say they tried four other things before getting to trying Compass360. And so, these are people who really need help. They’ve tried everything that is available and it’s not working yet only COMP360 only works for 30% of them. It’s going to be hard to sell, right? It’s only working for 30%, I think. RS: So, what do you think the play becomes? ST: So, the Compass Pathways have said in a recent post, I think I mentioned this already. They published a recent poster talking about their AI, which is trying to predict which patients will be affected. And the early data looks really good, although we have – it’s not peer-reviewed, so we can only go off this one poster, but they’re talking about very accurately predicting which patients will benefit. And if that’s true, that changes the whole game in my view. It means that this thing will get approved. It will be funded and that, you know, Compass Pathways is going to make a fortune. That’s what I think. If they can’t get that work, and if they can’t slim it down, I’m not sure it will work. RS: Are there any other stocks that you’re looking at that don’t feel worthy to write about or that you don’t have time to write about or other stocks that investors might do well to look at? ST: I’m quite interested in GH Research (NASDAQ:GHRS). They got a lot of money. They’re an Irish company. Well, they’re based in Ireland. I don’t know if they’re actually Irish or not, but they’re based in Ireland. Ireland has very low tax rate for Irish companies, which may have something to do with that. And they’ve done a Phase 1 trial, which gave 87% remission using DMT for post-traumatic stress disorder. Now, that’s when I’m actively researching at the moment. I think although they’re still, you know, they’re only in Phase 2, so they’re a long way from any kind of revenue generation, but they seem to be quite well managed. They seem to have some excellent scientists, quite a lot of money, and some good Phase 1 data behind them. So, that would be my next one to look, I think. RS: What do you feel like in terms of your investing background has best served you as you look to, you know, you’re interested in these disruptive industry sectors. What has served you kind of as [well-tried rules] [ph] that you stick to despite the disruptiveness. What’s something that’s honed and proven to be true? ST: I think when I’m – when you take on these industries, you have to choose somehow, one or two of the companies you think are going to be successful. So, it’s more about choosing the losers than it is about choosing the winners. And you can do that by just looking at, I’d say just, you can try to do this by looking really carefully at the end product that they will have. What will they have at the end of the day? Is it a product that’s going to be revolutionary that’s going to change things or is it just going to be a bit of a copy of one that’s already out there? You know, if you look at electric cars, I spoke a little bit about Tesla. You know, Tesla made it. They were first. None of the other car companies have really made it at all, but everything they’re producing is kind of just another slightly differently designed Tesla. Look at [Pollstar] [ph] and will learn it’s kind of so similar. It’s not enough to make a huge impact. And that’s really what I’m trying to do to pick the one or two companies most likely to have that huge impact. RS: So, is that something else, like, as you’re weeding out the losers from the winners, is that – what else are you looking at in terms of, like, aside from revenue and cash? And are there other metrics that you can point to that you immediately look at it. And if they don’t reach a certain threshold, they’re – it’s kind of a red line. ST: I don’t have those anymore. I used to. The whole Tesla experience because Tesla cost every red line it had and still was hugely successful. And so, then I focus on competitive strategy. You know, the competitive side of it, the products they make, the strategy they’ve got in place, the competition they’re facing, it seems almost to be the case that if you get sales, nothing else matters. And I think there’s some truth in that, really. In all of these companies, if they get their first and the product sales, it kind of almost doesn’t matter what that balance sheet’s like. It becomes secondary. RS: Yeah. So, in terms of, like, looking at the future of psychedelics, I mean, we can look to Colorado, which, you know, is one of the more major newsworthy pieces out of the space this year. And I think, you know, as we – as you mentioned, you know, there’s an obvious retail recreational commercialization of cannabis that’s readily apparent with psychedelics, it’s not like that, and it’s obviously, you know, an entirely different category, but still when people talk about microdosing and wellness and legalizing these substances, what do you – how do you see it playing out? Like, let’s say in Colorado, do you feel like it’s people growing their own and kind of through community building it like that or how do you look at the retail picture or the capitalist, kind of approach to the industry? ST: I don’t think there’s going to be a retail picture to psychedelics. I’m not convinced about microdosing, you know, if you read the research, it’s not all positive, a lot of it’s very negative. I don’t think it’s going to be legalized as recreational. I don’t think that’s going to happen. I think it’s going to be a – it’s going to be pharmacological. It’s going to be to help people in need through prescriptions. I don’t think there’s any other route for psychedelics. I don’t yeah. I’m no ex – you know, I’m no legal expert, but I don’t think that’s going to happen. RS: So, just based on that, I mean, it seems that the industry is, there’s, do you feel like it caps at a certain level or do you feel like the way that we’re going to understand health and wellness will be radically different. As different as it is now than 5, 10 years ago, it will be radically different than another 5 to 10 years and how we’re approaching it will be different. ST: I think psychedelics have the potential to transform our view of health and wellness, I really do. If it becomes proven that they can help people to get over depressive thoughts, to get over addictive thoughts, to get over compulsive thoughts. If that’s proven to work, then it could change our entire view of health and wellness. I think it could. RS: And how do you see that industry like shaking our, I mean, this is a crystal ball question to be sure, but do you have a sense of, like, that it’s going to be the top companies that have, you know, patented the, kind of best approaches to each psychedelic? Is that how you see it shaking out? How do you see, like, the companies that are, kind of left at the top of the food chain? ST: I think the top of the food chain is going to [read everything] [ph], really do. I think Compass360, if they get the first drug approved, I think it will be much easier for them to get approval for other conditions than to get for a new company to get a new drug approved. So, if COMP360 gets approved for treatment of resistant depression, it’s much easier for all the regulators to approve that drug for other conditions when they’re given the evidence. It’s different to then go with LSD, an entirely new drug and asking for approval for conditions that already exist. So, I think those at the top are going to win and they’re going to win really big. Those underneath, I’m not sure. RS: Do you see, like, consolidation happening in the near-term or in the mid-to-near term? ST: There is already some evidence of consolidation and the Cybin have taken the opportunity to buy pipelines from a couple of companies who are struggling for cash. And I think those companies in cash trouble do have assets worth money. And so, I can imagine them shuttering down and selling those assets either to the other psychedelic drug companies or perhaps some of the pharma companies that are interested. I think that’s almost an inevitability that will go down from the 25 or 30 that we currently have down to perhaps 5 or 6. RS: And do you see pharma coming in and kind of consolidating that further and becoming one of the bigger players? ST: I’m absolutely convinced that as soon as a drug is approved, Pharma will start to become interested. I’m sure they will. RS: Do you know who’s already kind of putting out [feelers] [ph] or do you have a sense of who’s at the top of that? ST: I have no inside knowledge at all, I’m afraid. Only have published data to go off. RS: Alright. Stephen, I appreciate you taking the time to kind of share all of your thoughts and catch all of us up on investing in the space. Anything else you think is, you know, salient enough to mention to investors looking at the space? ST: No, I think we’ve covered everything, haven’t we? I’ve enjoyed talking. It’s been really great. I think we’ve covered just about everything that’s important. But I would say to all people investing, trade carefully, this is going to be, you know, this is almost a gamble, isn’t it? Some of this companies is going to make it big. A lot of them are going to go bust. You got to trade really carefully. It would be a case I think I’d take a very small position and then perhaps a look when we get data to increase those positions. I don’t think I would bet the house on any of these companies. RS: Do you have any thoughts, curious in that vein about Psychedelic ETFs? ST: No. I’ve not an – I don’t look at ETFs. They’re not seen on my horizon at all. Again, I’m trying to pick out individual companies that will be successful and ETF is kind of the opposite approach to that isn’t it? It’s taken a little bit of all of these companies trying to make sure it gets some of the win, but then ETFs, I think, typically, will get NASDAQ type gains. I’ve always tried to beat NASDAQ. That’s my kind of primary goal. RS: What’s your return? What’s your ideal return when you set out to hit it every year? ST: Well, I try not to give, I try to look retrospectively if I can because if you say something, it’s difficult. I mean, unfortunately, I’ve managed to – in my investing career, I’ve got passed some really big events. I wasn’t taken out by the dot-com bubble. I wasn’t taken out by the credit crunch. This year, I’ve managed to return a nice profit thanks to a couple of really good investments. Ehang in the last few weeks has done really well. My investment in Electrovaya (OTCQB:EFLVF) did really well. Also, Archaea Energy (BP). So, three or four companies doing extremely well, making up for a larger number of losses. I’ve meant, it’s been a pretty good year, really. RS: So, that’s – in general, you would say you’re approach is kind of looking at the story and then making sure nothing hits your red line, while also leaving room for the Tesla, the Tesla’s that come through now and again. ST: That’s right. And then as the [indiscernible] comes along, trying to build into that company a much bigger position, but I’m quite happy to – as I did with Compass Pathway to take a position, it dropped 30%. I came out. A lot of my positions are [indiscernible] at the moment, but I’m very keen to get back in when I can. As soon as either from a technical viewpoint looking at the charts to [indiscernible], we get some more data, then I’ll be looking to invest again and perhaps for a bigger position. I mean, I think if you’re taking this kind of high risk approach, you have to be not too risk averse. You have to be able to take losses, but then pile into the winners when they arrive. RS: Good advice. Good advice. Steve, thanks so much for joining us. Listeners can find you on Seeking Alpha anywhere else they can find you? ST: No. No. Just Seeking Alpha. RS: Alright. Awesome. Well, I really enjoy talking to you and I hope to talk again and enjoy your travels in the meantime or enjoy your days in the meantime. ST: Thanks for your time, Rena. It was really great to speak to you, and I hope everybody in this space does really well.Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.