The White House executive order aimed at accelerating psychedelic drug development has prompted a fresh round of interest from investors and executives in the sector, with some companies reporting immediate fundraising activity. Yet researchers working on psychedelics say the science and trials necessary to deliver approved medicines remain time-consuming and expensive, and that headline momentum does not change those realities.
Nine executives and investors interviewed said the directive could shorten administrative processes and enhance coordination between the U.S. Food and Drug Administration and the Drug Enforcement Administration. Several company leaders described a sharp uptick in investor outreach following the announcement, although they cautioned that additional funding is not guaranteed.
Joseph Tucker, chief executive of Enveric Biosciences, said the company raised $5 million after news of the order surfaced. Dane Stevens, chief executive of Optimi Health, reported that his firm received a flurry of calls almost immediately as potential backers sought to better understand the therapeutic and investment landscape. "When there’s things that happen from executive orders, the phone rings," Stevens said.
Despite that investor interest, seven researchers interviewed emphasized that bringing new psychedelic therapies to market will require significant, time-consuming work. The researchers noted many candidates are in preclinical or early clinical phases. Gül Dölen, a professor at the University of California, Berkeley whose work examines how psychedelics may reopen so-called critical periods of brain plasticity, described herself as cautiously optimistic. "I’m cautiously optimistic, but I’m not throwing a funding party yet," she said.
The FDA has previously pointed to slow development timelines and challenging trial designs when it declined in 2024 to approve Lykos Therapeutics’ MDMA-assisted therapy for PTSD. A potential sign of regulatory momentum came in April, when the FDA granted expedited review to three companies - Compass Pathways, Usona Institute and Transcend Therapeutics - all studying psychedelic-based treatments for mental health conditions.
Investors in the space say the executive order could reduce perceived regulatory risk and broaden the investor base. Sa’ad Shah, co-founder of Noetic Fund, which holds investments in Compass Pathways, Definium Therapeutics and AtaiBeckley, said the sector historically drew capital from family offices and high-net-worth individuals. Shah said he hopes clearer government signals and compressed uncertainty will attract institutional investors such as sovereign wealth funds and public pension plans.
Shah and Sri Teja Mullapudi, Noetic’s scientific lead, suggested that faster engagement from the FDA could materially lower costs for clinical-stage companies. They estimated that compressing some review steps that now take 10 to 12 months into a timeframe of one to two months could save companies "tens of millions of dollars."
However, several investors stressed that gains will not be uniform across the sector. Late-stage developers that hold breakthrough therapy designations or possess pivotal clinical data are likely to be the earliest beneficiaries of expedited reviews or priority mechanisms. For earlier-stage companies, the potential advantage is less concrete but still positive, as Matias Serebrinsky, co-founder of PsyMed Ventures, put it: greater investor acceptance of psychedelics as an investable category.
Company executives highlighted specific administrative changes in the order that could affect timelines. Robert Barrow, chief executive of Definium Therapeutics, which is developing an LSD-based therapy for generalized anxiety disorder, said the instruction for the Drug Enforcement Administration to begin scheduling work after late-stage data are available - rather than waiting until after FDA approval - could reduce inefficiencies. The DEA’s scheduling decisions determine how tightly substances are controlled and whether they can be prescribed, and changes in scheduling practice can affect the ease of research and eventual clinical use.
Srinivas Rao, chief executive of AtaiBeckley, said the order’s direction to improve FDA-DEA communication on clinical trial protocols and site approvals could shave "several quarters" off development timelines. AtaiBeckley is developing BPL-003, an intranasal formulation of 5-MeO-DMT intended for treatment-resistant depression.
Some researchers emphasized that funding has been difficult in part because of the government’s historical stance on psychedelics. They said removing regulatory barriers could open doors for more independent study. But important commercial questions remain unresolved. PsyMed’s Matias Serebrinsky pointed out that while reviews may be faster, the executive order does not clarify insurance reimbursement for psychedelic therapies. "Who’s going to pay for it?" Serebrinsky asked, noting the executive order does not provide full answers to coverage questions.
Clinical experts also warned about specific safety concerns. They highlighted ibogaine, a potent psychedelic derived from the African iboga plant that was prominent in the political push behind the order. Though ivogaine has been promoted by veterans’ groups and addiction advocates as a potential treatment for PTSD and substance-use disorders, clinical development remains distant. Most ibogaine-related studies remain in preclinical or early-stage development, and companies are far from delivering an approved ibogaine-based therapy.
Separately, U.S. authorities recently moved to reclassify cannabis to ease research and investment hurdles, a regulatory shift that industry participants referenced as context for possible changes to psychedelics policy. But the researchers and investors interviewed consistently stressed that regulatory direction alone will not substitute for the costly, methodical work required to establish safety, efficacy and viable payment pathways for new therapies.
Key points
- Executive order could shorten administrative timelines and improve FDA-DEA coordination, potentially reducing regulatory uncertainty for psychedelic drug developers - sectors impacted: biotech, pharmaceuticals, healthcare investment.
- Some companies reported immediate investor interest and at least one developer, Enveric Biosciences, said it raised $5 million after the order - sectors impacted: capital markets, venture funding, biotech.
- Regulatory expedited reviews previously granted to Compass Pathways, Usona Institute and Transcend Therapeutics indicate the FDA is already engaging more quickly on certain psychedelic therapies - sectors impacted: clinical research, mental health treatments.
Risks and uncertainties
- Most psychedelic candidates remain in early-stage or preclinical development, meaning approved treatments are still a long way off; this affects biotech and clinical research timelines.
- The executive order does not address insurance reimbursement or who will pay for psychedelic therapies, leaving commercial viability uncertain - affecting payers and healthcare delivery.
- Certain compounds such as ibogaine carry safety concerns and are far from market readiness, posing clinical and regulatory risks for developers targeting addiction and PTSD treatments.