Psychedelic Drugs Market to reach USD 8.50 Billion by 2032

The global psychedelic drugs market size is expected to be worth USD 3.12 billion in 2025. It is anticipated to touch a valuation of USD 8.50 billion by 2032. The market is anticipated to display a CAGR of 15.4% during the forecast period (2025-2032).  

The use of psychedelic drugs for treating mental disorders and rising awareness of mental health are expected to drive the market growth over the forecast period. Increasing research into substances such as ketamine, psilocybin, and 3,4-Methylenedioxymethamphetamine (MDMA) may lead to new growth opportunities for the market.

But, hurdles from denials of production approval by regulatory agencies and the negative public perception of the use of psychedelic drugs for recreational purposes can impede the market growth.

The psychedelic drugs market is expected to skyrocket owing to increased funding by venture capital firms and efficacy of the drugs in clinical trials.

The efficacy of drugs such as psilocybin and their potential to improve mental health can drive the demand for psychedelic drugs. Efforts to control the doses of the drugs and test their effectiveness in controlled clinical trials can drive the market growth significantly. The lack of efficacy selective serotonin reuptake inhibitor (SSRI) drugs in treating depression and anxiety can drive the demand for alternative treatments. Moreover, the strong support by regulatory agencies like the U.S. FDA and the Office of Drug Control (ODC), Australia, for the development of psychedelic drugs can bolster market hopes.

Psychedelics have recently gained a comeback after being banned by various countries. The potential of the drug in treating depression and cancer patients is expected to drive the demand for the market over the forecast period.

For instance, Decriminalize Nature, an organization from Oklahoma, U.S., created a legal template for cities to conduct clinical trials and observe its efficacy. Its activism succeeded in decriminalizing psilocybin and ibogaine in nearly 100 cities in the U.S. Initiative 81 became a law in the District of Columbia, allowing researchers to study their effects without being persecuted.

The grassroots movements persuaded the cities of Minnesota, Colorado, and Oregon to change their stance on psychedelics and dedicate state-authorized centers to study their effects.

Regulatory hurdles by drug regulation agencies may limit the psychedelic drugs market growth. The lack of data on the impact of the drugs in blind clinical trials and the abuse of the drugs by candidates may hamper the market growth. The safety of candidates and management of psychedelic drugs can increase the duration of the investigation and increase expenses.

Beckley Psytech Limited and atai Life Sciences announced plan to combine to form a new company, atai Beckley, on June 02, 2025. They are expected to share their research and development efforts to launch drug-resistant treatments, including sharing the success of BPL-003 (mebufotenin (5-MeO-DMT) benzoate).