With a growing number of states moving to legalize recreational marijuana, new discussions have emerged regarding another mind-altering substance: magic mushrooms.

Recently, voters in Oregon and Colorado approved measures to legalize psilocybin, the hallucinogenic chemical in certain fungi.

Massachusetts may soon join this trend if voters agree to a measure in November that would allow adults over 21 to use five different plant-derived psychedelics: psilocybin, psilocin, dimethyltryptamine, ibogaine, and mescaline.

In several ways, the push for psychedelics mirrors earlier cannabis movements. Both are classified as Schedule I substances, making them illegal federally—although marijuana is on track for reclassification to Schedule III, with some, including Vice President Kamala Harris, advocating for national legalization.

Numerous advocacy groups supporting both movements highlight the potential medical benefits of psychedelics as a major justification for their decriminalization. Their strategy for legalization also follows a gradual, state-by-state approach.

However, as the psychedelics sector starts to take form, it faces obstacles that the cannabis industry did not encounter. Insiders claim that the psychedelics movement differs significantly from the cannabis efforts of the past.

A primary distinction? The financial aspect.

The methods of accessing psychedelics in states where they are legalized diverge greatly from simply purchasing cannabis at a dispensary—and the costs are much higher. Unlike cannabis, psychedelics are unlikely to evolve into a billion-dollar market in the near future.

$2,500 for a psychedelic experience

Due to the higher potency of psychedelics compared to marijuana, states have so far chosen to regulate their commercial distribution through a service-center model, where clients consume the drugs under the guidance of authorized facilitators.

Studies indicate that substances like psilocybin could aid in treating severe mental health issues such as anxiety, depression, and PTSD. The designated therapeutic environments are meant to assist individuals in navigating potentially intense experiences while using these hallucinogens.

Yet, some critics contend that the stringent regulatory framework has made accessing these psychedelics prohibitively expensive. In Oregon, a single psychedelic experience—what was commonly referred to back in the ’60s—can cost between $700 and $3000; in contrast, a gram of marijuana typically costs around $11.

Much of this price difference stems from the operational costs of running a service center.

Cathy Rosewell Jonas, a clinical social worker and therapist, established Epic Healing Eugene in Oregon last year to aid individuals in addressing their mental health struggles. It holds the distinction of being the first licensed center of its kind in the nation. She manages the service center and also runs Radiant Heart Consulting, which provides facilitation services for clients at Epic Healing.

Jonas incurred $11,000 in training costs to become a facilitator. Additional expenses accumulated quickly, including a $500 application fee to launch the service center, $10,000 for the annual license, about $18,000 for insurance, over $5,000 for security systems, and substantial legal fees to guarantee compliance with regulations.

However, Jonas pointed out that staffing emerged as one of the largest expenses. Under one of Radiant Heart’s popular packages, a trained specialist will spend over 10 hours with a client to facilitate their experience, which includes three hours of remote preparation before the session and up to two hours of follow-up integration. Beyond salaries, it costs the business $2,000 annually to keep licenses for each facilitator.

Moreover, the legal psychedelics they procure are significantly costlier than those available illegally. Growers must adhere to specific state regulations and undergo testing by licensed laboratories. Jesse Koenig, chief operations officer at Epic Healing, stated that a dose of mushrooms that might cost $50 on the black market could range from $150 to $400 within the legal Oregon system.

These higher costs are ultimately passed on to clients. For an approximate 13-hour private session, Jonas charges between $2,200 and $2,800. She mentioned that her business allocates a portion of its profits to help those who cannot afford psychedelic therapy.

Koenig mentioned that the company’s earnings are adequate to meet their expenses, yet it’s not a profitable enterprise.

“No one is getting wealthy, but we aren’t operating at a loss,” he stated.

Decreased interest

The expenses alone could hinder the growth of the psychedelic market, preventing it from expanding like the cannabis industry did after legalization in numerous U.S. states.

Currently, only 31 licensed psilocybin service centers exist in Oregon, whereas the state boasts over 800 cannabis dispensaries.

Additionally, demand for psychedelics is significantly lower in comparison to cannabis.

A report released earlier this year by the RAND Corporation, which has a libertarian stance, indicated that the majority of the psychedelic market is made up of occasional users.

Nearly 50% of cannabis users consume it either daily or as often as every day, while merely 2% of psychedelic users do the same. Over a month, cannabis was consumed for 650 million days compared to only 7 million days for hallucinogens.

Among those who used psychedelics in the past year, an impressive 50% reported microdosing during their last experience, meaning they ingested a small amount that reduced the hallucinogenic effects. Such usage is not accommodated by the service center model that has been established by states.

Challenges of decriminalization

Colorado has decriminalized several natural psychedelics, lifting the criminal consequences for growing, possessing, and using these substances. If the Massachusetts proposal is approved, it would similarly permit individuals to cultivate, use, and share psychedelics, though selling these substances would not be allowed.

In theory, decriminalization could alleviate concerns about the high costs of psychedelics by enabling individuals to grow and use them independently at a lower cost. However, some critics believe that having both a regulated market and decriminalized substances presents additional complications.

As the Massachusetts legislature reviews the ballot measure, they contend that the two objectives could “undermine each other by establishing two different systems for using psychedelic substances.”

They warned of a potential gray market emerging, where individuals who cultivate mushrooms might offer them as “gifts,” while charging for supplementary services. The legislative committee referred to this as a “loophole” that could “undermine the safety standards set for licensed facilitators.”

Unlike cannabis, it is also doubtful that psychedelics would generate significant tax revenue for states and local governments that choose to legalize them, according to Evan Horowitz, executive director of Tufts University’s Center for State Policy Analysis.

The potential for added tax income was a key factor that propelled the recreational marijuana movement into the mainstream. Numerous communities across the nation have utilized these funds to enhance educational systems and infrastructure.

However, Massachusetts’ psychedelic ballot measure lacks a mechanism for the state to collect any revenue from individuals who cultivate their own mushrooms.

Horowitz also predicted that the state is unlikely to see substantial tax returns from the legalized centers, asserting that legal psychedelics would only generate enough funds to “support the industry’s operations, the regulatory framework, and basically nothing further,” Horowitz noted.

An unpredictable future

James Davis is a prominent advocate for psychedelic therapy in Massachusetts. He co-founded Bay Staters for Natural Medicines in 2020 to inform the public about the advantages of psilocybin mushrooms.

Over the past four years, the organization has worked towards decriminalizing psychedelics in over ten communities in Massachusetts, Maine, and California. Even though they support psychedelic therapy, the group has initiated a campaign to encourage voters to oppose the Massachusetts ballot proposal.

What’s the main reason?

Davis states that he believes Oregon’s regulatory model has fallen short, leading to a system that is “too costly for most people to access.” He, along with others in the Bay Staters group, prefer to wait for legislation that decriminalizes drug use and promotes education about its benefits rather than adopting the service center model in Massachusetts.

Taylor West, executive director of the Healing Advocacy Fund and a key planner behind the Oregon and Colorado psychedelic initiatives, acknowledged the concerns about pricing. However, she argued that there are cost benefits that might balance out the initial costs tied to psychedelics under such a framework.

“These treatments can enable individuals to make considerable progress in their mental health, allowing them to reduce reliance on other strategies they’ve been employing,” such as traditional therapy and medication use, she proposed.

“The rationale supporting this type of program is rooted in the mental health crisis we are facing, coupled with a lack of sufficient resources to address it; while existing treatments are effective for some, they fall short for others,” she added.

Despite the differing views on the ideal approach, West and Davis are united in their efforts.

When it comes to the topic of legalizing psychedelics, there’s a common understanding that the sector may not generate substantial profits.

“This situation feels reminiscent of the Y2K or dot-com bubble eras where everyone is overly enthusiastic about a new concept that appears to benefit individuals, leading them to believe it will be lucrative,” Davis remarked. “Perhaps its true purpose is to assist people, and it may not evolve into a billion-dollar market like cannabis.”