First cannabis, and now psychedelics.

As these once-verboten substances increasingly gain wider medical and mainstream consumer acceptance for the treatment of various physical or mental ills (and recreational use regarding cannabis), it’s no surprise that the exchange-traded fund industry has zeroed in on these trends as potentially profitable thematic investment opportunities.

The latest product to hit the shelf is the AdvisorShares Psychedelics ETF (PSIL), an actively managed fund set to debut tomorrow. The fund is overseen by Dan Ahrens, whose credits include his current duties as portfolio manager of two AdvisorShares cannabis ETFs. These compete with seven other cannabis exchange-traded products (including two exchange-traded notes).

The PSIL fund is the second U.S.-listed ETF—and the third one in North America—that targets the growing industry involving psychedelics as therapies for mental disorders. But it’s the first one in this category that’s actively managed.

PSIL invests in biotechnology, pharmaceutical and mental health companies with a strong focus on psychedelic medicines and treatments. That means they must get at least half of their net revenue or dedicate 50% of their assets to medicinal psychedelics.

Psychedelic therapies can include a host of substances. The best known are LSD, psilocybin (the secret sauce in hallucinogenic mushrooms) and MDMA, otherwise known as ecstasy. But there are other substances being tested for conditions ranging from depression and post-traumatic stress disorder to anxiety and addiction disorders.

And the field is increasingly expanding with prestigious medical institutions, including Johns Hopkins University in Baltimore, Massachusetts General Hospital in Boston and Mount Sinai Health System in New York City, adding their imprimatur to this field through their research in medical psychedelics.

According to AdvisorShares, there are 43 human clinical trials involving psychedelic treatments, and 29 companies have psychedelic-based drugs either in the development process or in the preclinical phase.

Ahrens believes active management will enable the PSIL fund to be more nimble and opportunistic than its two index-tracking rivals in the nascent but growing medicinal psychedelics space.

Many psychedelic drugs—including LSD, psilocybin and MDMA—are classified as Schedule I drugs in the U.S. with no currently accepted medical use and a high potential for abuse. It’s illegal to possess or distribute Schedule I drugs.

“The important thing about psychedelics is we’re talking about legal biotech and pharmaceutical companies doing research and wanting to have future FDA-approved drug therapies that happen to involve psychedelics,” Ahrens said. “We’re talking about medical as opposed to recreational uses. These are legally operating companies; we’re not talking about the gray area of what may or may not be legal in different jurisdictions.”

His latter point refers to cannabis, which is also a Schedule I drug on the federal level but is legal in certain states. That makes it a sticky wicket for funds to invest in because U.S. banks and stock exchanges don’t want to violate federal laws by dealing with companies involved with cannabis. As such, some cannabis ETFs—including the AdvisorShares Pure US Cannabis ETF (MSOS) and AdvisorShares Pure Cannabis ETF (YOLO) that Ahrens manages—often have to go with Canadian-listed companies (cannabis is legal north of the border) or invest indirectly in companies not listed on major North American exchanges via swap options on those companies.

As part of their mandate, the MSOS and YOLO funds, along with the new PSIL fund, can invest directly only in the equities of companies listed on the NYSE and the Nasdaq in the U.S., and the Toronto Stock Exchange and the TSX Venture Exchange in Canada.

As described in fund literature, due to custody limitations, investment exposure to OTC and foreign-listed stocks may be via swap contracts, which means the PSIL fund at times could have a larger than normal cash position as some cash may be held as collateral for the swaps.

But the need for swaps should decrease as more companies doing medicinal psychedelic work list on the major exchanges. The majority of PSIL’s portfolio will comprise North American companies, along with some from the U.K. and Europe.

The fund charges an expense ratio of 0.68%. That’s less than the 0.75% fee on the Defiance Next Gen Altered Experience ETF (PSY), which launched in late May and trades on the NYSE, as well as the 0.85% charged by the Horizons Psychedelic Stock Index ETF (PSYK), a product that launched in January and trades on the NEO Exchange in Canada.

The Defiance fund has had a slow start with just $9 million in assets, while the Horizon product has garnered $60 million in assets. While the Horizon fund had a nice pop for a few weeks after it debuted in January, it has been downhill since then regarding price performance. And the share price of the Defiance fund has taken the down elevator since it launched.

The upshot is that while the world of investible psychedelics is fresh, edgy and loaded with upside potential, it’s such a ground-floor opportunity that investors will need to be patient before this psychedelic trip takes off.