A new Trump executive order, signed in April 2026, directs the FDA to dramatically shorten review timelines for psychedelic medicines, triggering a sharp rally in the sector. Compass Pathways jumped about 55 percent and atai Life Sciences rose roughly 25 percent. Texas also allocated $50 million for ibogaine research aimed at addiction and PTSD.
The market is now watching two milestones by year-end, a first FDA filing for psilocybin and a resubmission for MDMA after an earlier 2024 application was rejected for lack of readiness and missing data. The article says the renewed government support and investor enthusiasm are driven less by humanitarian motives and more by cold macroeconomic logic: psychedelics are increasingly seen as a way to reduce the costs of depression and post-traumatic stress.
The piece cites White House data showing more than 14 million American adults have severe mental illness. It says veterans face suicide rates twice the general population, and that Israel records 400 to 500 suicides a year plus about 7,000 attempted suicides reaching emergency rooms. Since the war, more than 3,770 soldiers have been recognized with PTSD, and the total economic damage to the Israeli economy is estimated at 2.5 billion shekels a year.
Dr. Itamar Cohen of Tel Aviv University’s psychedelic research institute says investor excitement comes from trial results showing psychedelic-assisted therapy can match standard antidepressants such as Cipralex and Nostril, but with far fewer side effects and no daily dosing. He says a single guided session, with preparation and follow-up, may achieve the same effect, which is why drug companies are interested. He adds that psilocybin, LSD and DMT are being studied mainly for depression, while MDMA is being studied for PTSD, all only in clinical research settings in Israel.
Cohen says the stigma faded because psychedelics were once banned after widespread, uncontrolled use in the 1960s and 2000s lab research later showed a strong safety profile when use is medically supervised. He warns that unregulated retreats in Israel, which generate millions of shekels, can still leave people with severe psychological distress, including what he calls an "ontological shock." He expects public funding to eventually cover these treatments for severe depression and anxiety, though he says the timing is still unclear.
