Psychedelic drug stocks are surging after Trump's order to fast-track development for medical use

• Trump's order on psychedelics sent stocks in the space soaring on Monday.
• Trump signed an executive order to loosen restrictions in order to hasten the development for medical use.
• The news boosted shares of Compass Pathways, GH Research, and others.

Psychedelic drug stocks are spiking on Monday on a new order from the White House.

The sector, often lumped in by investors with other speculative drug plays like cannabis, is surging after President Donald Trump signed an executive order on April 18 that eases the federal restrictions on several popular mind-altering drugs, including Ecstasy, LSD, and psilocybin. The president cited the need for psychedelics in the treatment of mental conditions.

"It is the policy of my Administration to accelerate innovative research models and appropriate drug approvals to increase access to psychedelic drugs that could save lives and reverse the crisis of serious mental illness in America," he noted in a statement released by the White House.

This news jump-started momentum for psychedelic drug stock as markets opened on Monday. Here are the top movers:

• COMPASS Pathways: +50%
• AtaiBeckley: +33%
• GH Research PLC: +30%
• AdvisorShares Psychedelics ETF: +12%

Trump signed the executive order at a ceremony that included well-known proponents of the responsible psychedelic drug movement, including podcast host Joe Rogan and Secretary of Health and Human Services Robert F. Kennedy Jr. The list of people behind the movement also includes a wide-ranging group of tech CEOs who have touted the therapeutic benefits of psychedelic drug use.

The executive order is meant to ease restrictions on how the drugs are studied and developed for medical use. A growing body of research has emerged in recent years on the benefits of drugs such as MDMA, ketamine, and psilocybin to help patients with treatment-resistant mental health conditions, such as depression and PTSD.

This shift in policy boosted many companies with exposure to the psychedelic drug space. However, some finance pros remain cautious in their outlook, maintaining that it will likely take time for the producers to reap the benefits from psychedelic commercialization.

"This is going to rekindle investor interest in the psychedelic space, but the road to commercialization isn't a short one," said Chris Versace, lead portfolio manager TheStreet Pro.

"In addition to watching the outcome of various trials as part of that path, understanding the nature of a company's molecules and how this all fits into a treatment environment are critical."