Picture yourself in a boat on a river
With tangerine trees and marmalade skies
Somebody calls you, you answer quite slowly
A girl with kaleidoscope eyes…

John Lennon always denied that the Beatles’ 1967 psychedelic anthem Lucy in the Sky with Diamonds was about lysergic acid diethylamide (LSD). Lennon claimed it referred to a nursery school drawing done by his son Julian. However, years after Lennon’s death, Paul McCartney acknowledged that the song is a “pretty obvious” reference to acid.

Regardless, LSD is rapidly losing its stigma with polite society. In fact, for Wall Street these days, the color evoked by LSD isn’t tangerine and marmalade. It’s the color of money.

Just as we witnessed a legalization wave for marijuana, we’re now witnessing one for LSD and other hallucinogens. It’s a nascent investment theme worth monitoring. Early investors stand to reap a windfall.

On October 6, yet another California city decriminalized a wide variety of psychedelics, with the Arcata City Council unanimously approving the reform.

The 5-0 city council vote last week decriminalized the possession, cultivation and distribution of psychedelics, including LSD, psilocybin mushrooms, ayahuasca, mescaline, and peyote buttons, among other substances.

Arcata became the third California city to lift restrictions on psychedelics, following Oakland and Santa Cruz (see the following tweet).

On a statewide level, currently under consideration in the California Assembly is a bill that would allow those 21 and older to possess psychedelics for personal use and “social sharing.” The proposed bill covers LSD, psilocybin, dimethyltryptamine (DMT), ibogaine, mescaline excluding peyote, and 3,4-methylenedioxymethamphetamine (MDMA, often called ecstasy).

Outside of California, the Massachusetts cities of Northampton, Somerville, and Cambridge have decriminalize psychedelics. Ann Arbor, Michigan and Washington, DC also have locally decriminalized possession of psychedelics. Oregon voters last year approved decriminalizing small amounts of psychedelics.

LSD isn’t just for recreational purposes. LSD has been studied since the 1950s as a way to convey therapeutic benefits. It has proven effective in clinical trials at alleviating anxiety, depression and post-traumatic stress disorder.

Big Pharma is sitting up and taking notice, by launching a flurry of research into LSD, with many promising results so far. Once (unfairly) demonized, LSD is no longer seen as a “far-out” act of rebellion.

That said, LSD remains a Schedule I substance, which means the U.S. Food and Drug Administration designates the drug as one of the most dangerous substances and it’s banned on the federal level. But efforts are underway in several states and localities to follow California’s lead in various capacities.

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A major motivation for lifting restrictions on psychedelics is to take the thriving illicit markets for these substances and bring them into the legal sunlight, with regulation to make them safer. It’s the same rationale behind marijuana reform. Politicians also are cognizant of the huge potential for reaping new tax revenue (which brings to mind another Beatles tune, Taxman).

Psychedelic Nation…

Psychedelics seem to be following the same path that marijuana embarked on 25 years ago. It’s instructive that the nationwide normalization of marijuana first began in 1996 in California, a state that often provides the first rough draft of American cultural history. So, too, is psychedelic decriminalization starting in the Golden State and spreading eastward.

As California Governor Gavin Newsom (D) once said: “As goes California, so goes the rest of the nation.”

The psychedelics industry could capture a significant chunk of the $28.6 billion global antidepressant market in coming years. Accordingly, an increasing number of psychedelic biotechs are going public. Venture capital firms and even exchange-traded funds are emerging to cater to the trend.

The major marijuana companies already are attempting to subsume the psychedelics movement through internal research and external mergers. Marijuana and psychedelics are establishing a symbiotic relationship; they’re becoming two sides of the same drug legalization coin.

Want to make some coin from these trends? For our latest report on the best investment opportunities in cannabis and its ancillary industries, click here.

John Persinos is the editorial director of Investing Daily. You can reach him at: mailbag@investingdaily.com. To subscribe to his video channel, follow this link.