Why Mind Medicine Stock Vaulted More Than 8% Higher Today

Investors had a good mind to plow money into Mind Medicine (NASDAQ: MNMD) stock on Tuesday. Shares of the psychedelic-focused biotech, which also goes by the name of MindMed, provided a nice high by rising more than 8% in price on a legislative development. That performance contrasted well with the S&P 500 index's 0.4% drop on the day.

Connecticut takes a key step to decriminalization

Late on Monday, Connecticut's House of Representatives approved a bill to decriminalize psilocybin, the psychoactive compound found in so-called "magic" mushrooms. The vote was narrow, with 74 of the state's lawmakers in favor and 65 against. The proposed law will be put in front of the state Senate for review and an eventual vote.

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If it passes, the New England state's law on psilocybin would change drastically. Possession of up to a half-ounce of the compound would subject a violator to only a $150 fine, without any time in jail.

Speaking on the House floor, Democrat state representative Steve Stafstrom made statements that might have come from MindMed's public relations department.

"Psilocybin is a product which has been shown to be an effective therapeutic for various mental illnesses, including treating PTSD, addictions, depressions and anxiety disorders," he said, in advance of criticizing the state's currently punitive measures for violators of current law.

The time has come, many believe

Broadly speaking, the American public is in favor of decriminalizing drugs and psychoactive substances thought to be more beneficial than harmful.

The Connecticut House vote is yet another example of how the tide is turning in favor of de facto legalization, a process that is already well advanced in many jurisdictions throughout the country. This trend bodes well for MindMed and others involved in psychedelic medicine.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.