Years of advocacy and the success of the cannabis market spurred recent changes in the U.S. psychedelics space. These changes began in May 2019 when Denver decriminalized psilocybin, and Oakland followed suit in June. In Oakland’s case, decriminalization included mushrooms and other entheogenic plants. Now a minor swell of cities may do the same. Portland, Oregon has taken up the charge. Dallas and Chicago are currently considering similar measures, as have California’s notorious drug-friendly cities like Berkeley and Santa Cruz. Even more, California may become the first state to decriminalize psilocybin altogether.
On the national level, Congresswoman Alexandria Ocasio-Cortez, a supporter of decriminalization efforts, announced in December that she’d soon introduce legislation to further research psychedelics. With such activity, some believe an adult-use marketplace could become a reality one day. Those in the space share differing views on what it may look like, or if it should ever come to fruition.
Uncertain Outlook for Dispensaries and Stores
Experts appeared torn on the prospect of a psychedelics dispensary. Shelby Hartman, Editor-in-Chief and Co-Founder of the psychedelics publication DoubleBlind, remains unsure: “It’s difficult to say right now whether there will be psilocybin dispensaries in the U.S., operating in a legal grey area, like cannabis did in states such as California and Colorado prior to recreational legalization.”
Jackee Stang is the founder of Delic Corp., a psychedelic media venture. Stang believes it is unlikely shoppers could soon purchase psilocybin at a corner store. Noting that services do exist in some parts of the globe, like Holland and Canada, Stang added, “But then again, that’s the case in Amsterdam, so anything’s possible.”
A lack of federal legislation leaves states to decide the matter. However, allowing each state to determine its own laws can result in a fragmented market. In theory, psychedelics could end up like cannabis, where one state allows medical or adult use sales while neighboring states still prohibit it.
Scores of Laws, Regulations and Taxes to be Determined
A possible adult use psychedelics market would be highly regulated, whether on the state or national level. “[The market] will require special licenses to grow, process, retail,” explained Brandon Van Asten, CPA for cannabis and hemp accounting firm Bridge West LLC. Van Asten elaborated, “Spore to sale tracking will be required, and each state will likely have their own special rules around how it is sold and used, much like cannabis.”
Excise taxes and regulatory costs could hinder profitability, according to the CPA. “I expect it will be very difficult to make a profit in this marketplace due to the high taxes, expense of regulation, and low sales volume.”
Such examples can be found in legal cannabis states like California. There, reportedly high taxes have been cited as a critical reason why its illicit market continues to thrive.
Others in the space mentioned likely strict regulations for producers regarding product packaging, labeling and dosage amounts. For consumers, home growing is a key concern. However, if made illegal, home cultivation could serve as a push back to the market, according to DoubleBlind’s Hartman.
Steph Smith is the founder of Industrial Partners Group, a Los Angeles-based real estate development and investment group working in the cannabis space. Smith said the devil is in the details when it comes to regulating.
Smith stated that laws must address all aspects of the supply chain or risk the consequences. “Just like cannabis, mushrooms don’t magically drop from the sky. They are grown in buildings, harvested and packaged by people, and distributed in networks.” The founder elaborated, “Citizens and businesses deserve clear laws that safeguard personal and property rights.”
Retreats and Religious Journeys Could be on Tap
The same religious connection resides within certain psychedelics. Ayahuasca, for example, is administered under the guidance of a shaman who incorporates tribal practices into the consumption process and any subsequent healing practices.
Hartman stated that such inclusion of religious leaders could lead to broader licensing regulations that allow shamans to administer psychedelic ceremonies legally.
The connection between psychedelics and religion could run deeper. Noting similar instances in the Netherlands, Mexico and Jamaica, Hartman said, “There’s also the possibility for psilocybin retreats or churches in the U.S. that are operating via religious exemption.”
Unlike cannabis, many advocates for psychedelic reform do not want to see an adult use marketplace.
“It’s important to note, though, that a lot of folks are resisting a psilocybin marketplace by teaching people how to grow their own mushrooms,” Hartman said. She touched on the effect learning home cultivation has on a person and business. “This will create a marketplace for auxiliary products for growing as well as spores, rather than the mushrooms themselves.”
The success of any auxiliary market will not signify a desire for a larger market, according to some.
“One of the major fears as we hurtle into a legal paradigm for psychedelics is that they’ll be regulated like cannabis, and the industry will be lost to corporate interests—also like cannabis,” DoubleBlind Co-Founder and Managing Editor Madison Margolin pointed out. “The hope among many psilocybin decriminalization activists… is that rather than treat psilocybin mushrooms like a unique food or agricultural product that needs special regulations… instead treat it like other mushrooms or herbs.”
Learning from Cannabis Reform Efforts
Several experts who spoke on this topic for this article believe psychedelics have the power to disrupt the mental health wellness space. Through consuming psychedelics and the likely innovations to follow, they think these drugs may have just as much, if not greater, beneficial impact than cannabis can on a person’s mental well being.
Saul Kaye, the founder of Israel’s iCan cannabis summit, believes the resurgence of psychedelic interest can be directly attributed to cannabis efforts. He expanded this, saying, “Cannabis has provided the world with the pathway for the legitimization and destigmatization of psychedelics which suffered from the same prohibition block on research that cannabis had.”
DoubleBlind’s Hartman did not touch on any possible parallels to the cannabis industry, but did highlight advocacy groups that may help usher in psychedelics reform. While noting “quite a bit of disagreement about the best way forward,” the co-founder highlighted groups like Compass Pathways, a U.K. pharma non-profit, and the Wisconsin-based non-profit Usona Institute, as leaders.
Hartman explained that each is focused on developing psilocybin treatments that address major depressive disorders and treatment-resistant depression. As such, the co-founder labeled both organizations as “the two companies most likely to get psilocybin through the FDA approval process in the next five years.”
Main photo by Timothy Dykes.