Chris’ note: Markets have been choppy lately as investors fret over Fed rate hikes. But as I’ve been showing you, volatility is a feature, not a bug, of the stock market. So we’re riding it out and focusing on what really matters – helping you profit from megatrends ahead of the crowd.

Today, you’ll hear from one of the newest members of the Legacy Research team, Mike “Zappy” Zapolin. He’s a multimillionaire investor and former Wall Street vice president. And he’s spent the last 15 years researching one of the biggest profit opportunities on our radar: psychedelic medicines and their therapeutic powers.

He says these therapies will solve the $3 trillion global mental health crisis. Below, I talk with Zappy about how to profit as these once controversial therapies go mainstream.

Q&A With Zappy Zapolin, Co-Editor, Palm Beach Special Opportunities

Chris Lowe: Over at our Palm Beach Special Opportunities advisory, you’ve been writing about the profit potential of psychedelics. For folks new to this, why are you so excited about them?

Zappy: For 50 years, the U.S. government has banned the use of plant-based therapeutic compounds isolated from psychedelic drugs.

Psilocybin from “magic mushrooms”… ibogaine from the root of a West African shrub… and popular party drug MDMA, aka ecstasy, to name a few.

But recent scientific research shows these compounds can treat a wide range of mental disorders… including addiction, depression, and post-traumatic stress disorder (PTSD).

And as your readers are no doubt aware, the coronavirus pandemic has worsened the mental health crisis.

We’ve been treating mental disorders with talk therapy and antidepressants.

This hasn’t worked… In fact, it’s probably made things worse.

Psychedelic medicine is a real mental health solution. And because of some developments I’ll get to in a moment, research can now focus on things that have been taboo for decades.

Chris: Psychedelics aren’t exactly mainstream. As you say, they’ve been illegal for decades. What do you say to folks who still associate them with underground culture?

Zappy: I get that. It’s natural to feel that way. Governments have demonized these compounds for decades. But times have changed. Psychedelics are going mainstream – fast.

In Britain, Prime Minister Boris Johnson is talking about legalizing psilocybin to deal with the mental health crisis there.

And here in the U.S., cities are starting to legalize these compounds. Denver, Colorado, was the first city to decriminalize psilocybin in 2019. Then Oakland and Santa Cruz in California followed suit. So has Detroit, Michigan, among other cities. In 2020, Colorado legalized the compound statewide.

Also, the psychedelic medicine sector recently received major funding.

For the first time in 50 years, folks are investing in psychedelics research for the treatment of mental health disorders.

That’s the renaissance. Public opinion of the medical potential here is rising much faster than the potential concerns. The old paradigm is fading away.

Inventor and architect Buckminster Fuller said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

I think that’s what’s happening here.

Chris: You wrote about a study from the peer-reviewed Nature magazine. It looked at microdosing psilocybin to treat anxiety and depression. That’s one example of how the scientific community is starting to embrace these compounds.

[Microdosing involves taking very low, sub-perceptual doses of a psychedelic substance.]

Could you talk about some other studies?

Zappy: New peer-reviewed scientific studies come out every week.

Compass Pathways (CMPS) is a biotech company focused on psychedelic medicine. It recently published research showing that taking two microdoses of psilocybin is more effective than taking antidepressants every single day.

And MindMed (MNMD), a company co-editor Teeka Tiwari and I follow at Palm Beach Special Opportunities, just finished Phase 1 clinical trials on 18-MC. It’s an ibogaine derivative.

Ibogaine can break addictions to heroin, meth, and crack. It’s powerful. As I showed in my documentary Lamar Odom Reborn, it’s what helped former NBA start Lamar Odom break his addictions.

Chris: What’s happening with the legal status of these substances? Will we see more legalization as we find out more about their breakthrough therapeutic benefits?

Zappy: Great things are happening on this front, too. When the government classifies a compound as Schedule I, it means there’s no medical benefit and a high propensity for addiction.

That’s how the government has classified psychedelics. Psilocybin mushrooms are safe and effective to use in a therapeutic setting. But the government still classifies them along with cocaine, heroin, and crack. Obviously, that’s wrong.

But if the government reclassifies these mushrooms as either Schedule II or III, researchers can study them at a much larger scale.

Chris: Do you see that happening soon?

Zappy: Rescheduling could happen at any moment. And it’ll be a massive catalyst for the industry. I predict psilocybin will be one of the first of the compounds the government reschedules.

Its safety and efficacy are overwhelming. And even in a small dose, there’s benefit. It’s impossible to keep it underground much longer. We just need science to figure out what’s best for everybody.

Chris: That’s exciting, especially for the folks who may benefit from these compounds. What does it mean for investors?

Zappy: It means now is a great time to get some exposure to psychedelic medicine stocks. Teeka says once rescheduling happens, you could see 100 years of stock market gains in the next 18 months.

I think that’s probable. Based on what’s happening both in society and medically, this looks like the year the government reschedules some – or all – of these compounds.

Chris: Where can folks who don’t already subscribe to Palm Beach Special Opportunities start?

Zappy: There are a couple ETFs (exchange-traded funds). They’re a great place to start.

A good choice is the Defiance Next Gen Altered Experience ETF (PSY).

It holds a basket of 22 companies working on psychedelic and cannabis-based therapeutics. So you’re diversifying your risk.

Not all these companies will be winners. But when rescheduling… legalization… and more medical breakthroughs happen… some will be home runs.

Chris: Great, Zappy. Thanks so much for taking the time to talk with me.

Zappy: You’re welcome. Anytime.