Easily one of the biggest and most painful ironies in our modern society is the rise of mental health issues. According to data from Mental Health America, in 2020, “9.7% of youth in the U.S. have severe major depression, compared to 9.2% in last year’s dataset.” By logical deduction, traditional methodologies to address this concern have not been effective, setting the stage for alternative therapies. Which publicly traded companies are at the forefront of these therapies — and consequently, which stocks to buy — is valuable knowledge.
Certainly, the Covid-19 pandemic and the associated crackdown on non-essential activities placed a major burden on youth. Suddenly, their social activities and networks — obviously vital to healthy development — vanished, leading many to dark places. However, the Covid-19 crisis is an accelerant, not a cause. Mental Health America further pointed out that namesake cases were already rising before the pandemic, which invariably bolsters the relevance for alternative health stocks.
Aside from the apparent ineffectiveness of traditional methodologies, investors will want to focus on alternative therapies based on the extraordinary prevalence of opioid use. A Centers for Disease Control and Prevention report indicated that in 2020, “more than 92,00 Americans died from drug overdoses, a nearly 30% increase over 2019.” Declared a public health emergency on Oct. 27, 2017, alternative health-related stocks will probably increase in value due to this fundamental backdrop.
However, the narrative for which stocks to buy on the surface isn’t an easy one. Alternative health in this case usually takes the form of non-psychoactive cannabis products and tightly controlled research and development on psychedelics-based medicine. Still, as Nature revealed, when pharmaceutical companies introduced new opioid-based products — in particular, OxyContin — in the mid-1990s, prescriptions quickly soared thereafter, eventually spiraling into the crisis we have today.
Admittedly, sector evangelism for alternative health therapies may need to be robust and longstanding to make society comfortable with the underlying products. Nevertheless, one ace up the sleeve is that “trusted” pharmaceuticals had their chance and badly failed. Perhaps it’s time to give natural alternative therapies a shot?
If so, these are the stocks to buy (or at least consider) for the risk-on side of your portfolio:
- Cresco Labs (OTCMKTS:CRLBF)
- Green Thumb Industries (OTCMKTS:GTBIF)
- Columbia Care (OTCMKTS:CCHWF)
- Mind Medicine (NASDAQ:MNMD)
- Compass Pathways (NASDAQ:CMPS)
- HAVN Life Sciences (OTCMKTS:HAVLF)
- Neuronetics (NASDAQ:STIM)
While an exciting market with plenty of upside potential, you must realize that there’s also plenty of risk. Since humans are creatures of habit, transitioning from one treatment paradigm to another is a gargantuan challenge. Because of the volatile nature of this investment subcategory, only direct funds here that you can afford to lose.
Alternative Therapy Stocks to Buy: Cresco Labs (CRLBF)
Although claims of its medicinal benefits, particularly in the realm of mental health, are controversial, cannabis also remains one of the more promising alternative therapies. For instance, Psychiatric Times states that “many patients with psychiatric disorders use cannabis and report improvement in their symptoms. Patients use cannabis for symptoms of PTSD, anxiety disorders, depression, ADHD, bipolar disorder, chronic pain, insomnia, opiate dependence, and even schizophrenia.”
Should more research confirm this observation, it would bode very well for alternative therapy stocks like Cresco Labs. A vertically integrated cannabis and medical marijuana company based in Chicago, Cresco Labs removes the often gaudy and prurient discussion of the green plant and focuses entirely on its holistic benefits. With products ranging from various lifestyle concerns (such as sleep aids and edibles) to organic therapeutics, CRLBF stock is an intriguing play in the botanical sector.
Over the trailing year, shares are up around 90%, confirming strong bullishness. Still, investors should note that CRLBF — especially as an equity unit traded in the over-the-counter market — is prone to volatility. Over the trailing month, shares are down 5%. However, it’s also true that this could represent discounted opportunity.
Green Thumb Industries (GTBIF)
In addition to alleviating symptoms associated with mental health concerns, cannabis offers a pick-me-up, particularly for those suffering from serious difficulties. Psychiatric Times states that patients “use cannabis to reduce the nausea and anorexia of cancer chemotherapies and to improve their mood and outlook-frequently with their oncologist’s approval.”
Moving forward, alternative therapy stocks might not just swing higher based on their potential capacity to address specific conditions or disorders. Rather, the entire country — heck, the international community — could use a pick-me up from the devastating toll of the Covid-19 crisis. Therefore, cannabis use from prior non-users could possibly rise, which augurs well for Green Thumb Industries.
As with Cresco Labs, Green Thumb shifts away from the tawdry elements of cannabis use and focuses instead on everyday life needs. This includes edibles that can help take the edge off a rough day at the office — or a teleconference gone wrong.
In addition, Green Thumb products feature fun but conservative product packaging, perfect for those attempting to evangelize botanical solutions or are curious about non-psychoactive cannabinoids.
Alternative Therapy Stocks to Buy: Columbia Care (CCHWF)
One of the newer stocks to buy in the sector — well, at least new to me — Columbia Care features a portfolio of high-quality cannabis products, along with a national network of patient-oriented dispensaries. While many botanical firms are geared toward the therapeutic benefit angle, in my view, Columbia Care takes it to the next level.
For instance, under Columbia’s corporate umbrella is Ceed Science, a brand of precisely formulated and pharmaceutical quality line of medical cannabis products. Ranging in various formats from tablets, liquid tinctures and vaporizer oils, Ceed Science provides patients with an alternative to whatever ails them, such as chronic pain, anxiety, post-traumatic stress disorder and other issues.
As with other speculative alternative therapy stocks to buy, there are concerns with CCHWF that you should be aware of. For instance, profitability potential is always a concern in this space no matter what entity you’re talking about. Nevertheless, it’s also fair to point out that Columbia Care has posted strong revenue growth throughout the Covid-19 crisis, demonstrating the potential for alternative therapies.
Additionally, the year-to-date fallout of nearly 20% in the market could be a discounted opportunity for CCHWF stock. If you like to gamble, this might be your ticket.
Mind Medicine (MNMD)
For Mind Medicine, I’m going to get my personal bias out of the way. For one thing, I was the first person at InvestorPlace to direct readers to this opportunity (back then, the company had the ticker symbol “MMEDF”). Second, while an incredibly speculative new issue, I decided to take a gamble with my own money.
To loosely paraphrase one the many iconic lines from The Wolf of Wall Street, the only regret that I have is that I didn’t buy more.
Of course, that’s not to encourage problem gambling — MNMD stock is a high-risk, high-reward venture. At the same time, it’s one of the few psychedelic-based medicinal stocks to buy listed on major U.S. exchanges. As an aside, OTC securities like the ones we’ve been discussing are not traded via exchanges but usually through broker-dealer networks. Therefore, Mind Medicine has garnered significant credibility, which could be a forward-looking catalyst.
To be sure, psychedelic medicine is a controversial topic and will likely be for some time. Nevertheless, researchers published by the Canadian Medical Association Journal wrote that in “clinical research settings around the world, renewed investigations are taking place on the use of psychedelic substances for treating illnesses such as addiction, depression, anxiety and posttraumatic stress disorder (PTSD).”
Though extremely risky, MNMD stock represents a credible platform to speculate on the growth of psychedelic therapies.
Alternative Therapy Stocks to Buy: Compass Pathways (CMPS)
A mental healthcare firm focused on delivering patient access to evidence-based innovation in mental health treatments and solutions, Compass Pathways specializes in psilocybin therapy. According to Compass’ website, “Psilocybin therapy is an approach being investigated for the treatment of mental health challenges. It combines the pharmacological effects of psilocybin, a psychoactive substance, with psychological support.”
While it might take some time for psychedelic-based medicines — where the underlying compounds are often abused as narcotics — to gain mainstream support, it’s critical to understand that government agencies are supporting research into this topic.
For instance, the Usona Institute sponsored a study on the effectiveness of psychedelic medicines to treat certain mental health conditions based on the following thesis: “Data suggest that psilocybin may have behavioral effects relevant to the treatment of depression and recent studies also suggest that psilocybin may possess antidepressant properties.”
Buying alternative health stocks does not necessarily mean you’re throwing your money at medicinal quackery. True, this sector is treacherous from an investment perspective because of underlying volatility risks. Still, perform your due diligence, as plenty of potential exists for companies like Compass Pathways, one of the few psychedelic-based stocks to buy listed on a major U.S. exchange.
HAVN Life Sciences (HAVLF)
One of the riskiest stocks to buy no matter what the industry, as of the start of August 2, the price for Canada-based HAVN Life Sciences shares is 34 cents. On a YTD basis, HAVLF stock is down more than 55%. In some cases, speculators might look at such a downfall as a buy-the-dips moment. However, there has to be a point when a discount is too steep. Is this one such example?
When you’re assessing over the counter penny stocks, you should be aware that the probability of failure is higher than the chances for success. That said, investors interested in alternative health solutions should give HAVN a fair shake. Another specialist in psychedelic medicine, HAVN’s management team claims that it will only take 60 days to develop a product once it receives a regulatory green light from Health Canada.
Interestingly, “the Canadian vitamins and minerals market is valued at $471 million, with 74% of adults taking at least one supplement per year. The same market in the U.S. is valued at over $7.4 billion.” If HAVN can get even a modest foothold, it would represent a massive surge from where it is now.
As I said, though, this is speculation of the highest order so only invest what you can comfortably afford losing.
Alternative Therapy Stocks to Buy: Neuronetics (STIM)
While the vast majority of stocks to buy on this list focused on cannabis or psychedelic-based approaches for addressing mental health issues, not every alternative therapy in this space has to involve controversial compounds. Instead, alternative could mean companies like Neuronetics, a medical device company that helps improve quality of life for patients of psychiatric disorders.
Neuronetics’ claim to fame is its NeuroStar Advanced Therapy System, a transcranial magnetic stimulation system. A non-invasive alternative therapy platform, NeuroStar provides psychiatric patients several benefits, which include clinically demonstrated response and remission results, a strong safety profile with limited treatment-related side effects and favorable patient feedback.
Among alternative therapy stocks to buy, STIM has an incredible track record recently. Over the trailing year, shares are up over 400%. And on a YTD basis, the equity unit has managed to pull in 21%, a very solid performance considering that highflyers have a tendency of correcting their exceptional gains.
Still, one factor to keep in mind is the financials. Profitability is always a concern with smaller organizations, and Covid-19 hurt revenue growth in 2020. However, the company’s first quarter of 2021 sales were up 7%, which may encourage gamblers to take a shot.
On the date of publication, Josh Enomoto held a LONG position in MNMD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.