A panel of advisors to the Food and Drug Administration (FDA) rejected MDMA as a treatment for post-traumatic stress disorder (PTSD) on Tuesday, citing a lack of evidence that the benefits would outweigh the risks of introducing the psychedelic treatment to patients. Most stocks in the psychedelic space took a hit on Wednesday as a result of the ruling.

The panel voted 9-2 that MDMA, when combined with talk therapy, is not effective in treating PTSD. The panel also voted 10-1 that the current benefits do not outweigh the potential risks of using the drug to treat mental issues.

Some members of the panel, like sociologist Elizabeth Joniak-Grant, pointed to allegations of misconduct in trials that could have skewed results as a reason for voting against the use of MDMA in PTSD patients, according to NPR.

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Market Movers: Many stocks in the psychedelic space traded lower Wednesday following the ruling. Cybin Inc ( CYBN ) , which develops drugs and treatments derived from psychedelic substances like psilocybin, was down by more than 10% Wednesday afternoon.

Mind Medicine , another biotech using psychedelic substances as a derivative for its treatments, traded lower by more than 8% Wednesday. ATAI Life Sciences ( ATAI ) opened Wednesday's trading session down more than 14% from its closing price Tuesday, but was able to recover some of its losses throughout Wednesday's session, and last traded down around 6%.

The AdvisorShares Psychedelics ETF ( PSIL ) , a fund that tracks many publicly traded psych stocks, traded around 6% lower Wednesday afternoon. 

What's Next: While the FDA does not have to follow that advisory board's recommendation, the ruling was seen throughout the industry as a blow to the progress made in approving and regulating treatments that utilize psychedelics. Proponents of psych drugs argue that many show more effectiveness than mental health treatments currently available on the market. 

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