The movement to legalize psychedelics comes with high hopes, and even higher costs

As more and more states legalize recreational marijuana, fresh questions have begun to pop up on state ballots about another mind altering drug: magic mushrooms. 

Voters in two states – Oregon and Colorado – have in recent years passed referendums legalizing psilocybin, the hallucinogenic compound that’s found in some fungi. 

Massachusetts could soon become the third state to take the leap if voters there approve a November ballot measure permitting adults over 21 to use five types of plant-based psychedelics – psilocybin, psilocin, dimethyltryptamine, ibogaine and mescaline. 

In many ways, the psychedelics movement is following in the footsteps of cannabis efforts before it. They’re both Schedule I drugs that are illegal at the federal level – though marijuana is poised to be reclassified as a Schedule III drug and some, including Vice President Kamala Harris, have proposed legalizing it on the national level.

Many of the same advocacy groups are also behind both initiatives, and much like with cannabis, they have hailed the medical benefits of psychedelic drugs as a key reason for their decriminalization. They’re following the same slow, state-by-state political playbook to legalization, too.

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But as the psychedelics industry begins to take shape, it’s running into roadblocks that cannabis never did. People who follow this industry say the psychedelics movement is a far cry from weed efforts 2.0. 

One of the biggest differences? Money. 

The way people access psychedelics in state’s where they’re legal is worlds different from simply buying cannabis at a dispensary – and it’s thousands of dollars more expensive, too. Unlike cannabis, psychedelics aren’t likely to turn into a billion dollar industry anytime soon. 

$2,500 for a psychedelic trip

Because psychedelics tend to be more potent than marijuana, state’s have so far opted to only allow commercial access to them through a service-center model, where customers take the drugs under the supervision of a licensed guide.

Research shows that psychedelics like psilocybin may help treat serious mental health conditions, including anxiety, depression and post-traumatic stress disorder. The designated therapeutic spaces are designed to help people process the at-times extreme experiences they can have while under the influence of the hallucinogens.

But some critics have argued that the strict regulatory approach has made accessing psychedelics unaffordable. In Oregon, a single trip − the 1960s-era word used to describe a dosing of psychedelics − can cost anywhere between $700 and $3000; a gram of weed at a dispensary costs around $11. 

Most of that price tag comes from the costs associated with running a service center. 

Cathy Rosewell Jonas, a clinical social worker and therapist, opened Epic Healing Eugene in Oregon last year to help people find deeper relief from mental health conditions. It was the first licensed center in the country. She runs the service center as well as Radiant Heart Consulting, which offers facilitation services for Epic Healing's customers.

Jonas' training to become a facilitator cost $11,000. Other expenses racked up quickly. She had to pay a $500 application fee to open the service center, $10,000 for the annual license, about $18,000 for insurance, more than $5,000 for security equipment, and thousands for lawyers to make sure the businesses were up to code. 

Among the biggest costs, however, was staff, Jonas said. Under one of Radiant Heart's popular packages, a trained specialist will meet with a client for more than 10 hours to help them through their experience, including three hours of remote preparation before they trip and up to two hours of integration session after they trip. In addition to wages, it costs the business $2,000 a year to maintain the licenses for each of its facilitators.

The legal psychedelics they buy are far more expensive than ones people get illegally. The growers have to conform to specific state’s rules and regulations, and the drugs must be tested by licensed labs. Jesse Koenig, chief operations officer at Epic Healing said a dose of mushrooms that costs $50 in the underground market typically runs three to eight times that from the legal Oregon system, roughly $150 to $400.

Those prices are passed on to the customer. For a roughly 13-hour private package, Jonas charges between $2,200 and $2,800. She said the company donates a portion of its revenue to assist people who can not afford psychedelic therapy.

Koenig described the company’s revenue stream as enough to cover the bills, but far from a lucrative venture.

“Nobody's getting rich, but we're not losing money,” he said.

Less demand

Those costs alone may be enough to stymie the psychedelic market from ballooning in the same way that the cannabis industry has since the flower became legal in half of U.S. states.

There are only 31 psilocybin service centers currently licensed in Oregon, compared to the more than 800 cannabis shops that now dot the state.

And the consumer demand for psychedelics is far less than for cannabis. 

A report published earlier this year by the RAND corporation, a libertarian-leaning think tank, found that most of the psychedelic market is composed of infrequent users. 

Almost 50% of people who use cannabis consume it on a daily or near-daily basis, compared to just 2% of people who take psychedelics at the same rate. In a one month span, people used cannabis a total of 650 million days. They used hallucinogens a mere 7 million times.  

Among people who reported using psychedelics in the last year, a whopping 50% said they microdosed the last time they used it, meaning they took a small dose that minimized the trippy effects. That type of use isn’t satisfied by the service center model states have created. 

Decriminalizing dilemma 

Colorado has decriminalized some natural psychedelics, removing the criminal penalties around growing, possessing and using the drugs. If passed, the Massachusetts proposal would similarly allow people to grow, use, and share psychedelics – but they wouldn’t be allowed to sell the drugs. 

In theory, the decriminalization path would solve concerns about the high costs of psychedelics by allowing people to grow and take the drugs themselves for less money. But some critics have argued that the dual model of decriminalization and regulated centers has additional problems.

The Massachusetts legislature, in reviewing the ballot measure up for a vote, argued that the two goals “undercut each other by creating two separate systems for the use of psychedelic substances.” 

It suggested that a gray market could pop up, where people who grow mushrooms give them as “gifts” but then charge for alternative services. The legislative committee described it as a “loophole” that would “subvert the safety regulations imposed on licensed facilitators. 

Unlike cannabis, psychedelics are also unlikely to create a tax boon for states and municipalities who legalize them, said Evan Horowitz, executive director at Tufts University’s Center for State Policy Analysis.

The promise of increased tax revenues was among the major motivations that helped mainstream the recreational marijuana movement. Communities across the country have used the money to improve schools and infrastructure. 

But Massachusetts' psychedelic ballot measure provides no way for the state to collect any money from people who grow their own mushrooms.

Horowitz said he also doesn’t expect the state to make much tax revenue off the legal centers. Legal psychedelics are likely to only bring in enough money to “cover the operations of the industry, the regulatory scheme, and more or less, nothing else,” Horowitz said.

An uncertain future 

James Davis is among the biggest proponents of psychedelic therapy in Massachusetts. He co-founded the group Bay Staters for Natural Medicines in 2020, to educate people about the benefits of psilocybin mushrooms. 

In the last four years, the group has worked to decriminalize psychedelics in more than 10 communities across Massachusetts, Maine and California. Despite supporting psychedelic therapy, however, the group has launched a campaign urging people to vote against the Massachusetts ballot question. 

The main reason? 

Davis said he believes Oregon’s regulatory approach has failed, and created a system that's “too expensive for most people to access.” He, and others in the Bay Stater’s group, say they would rather wait to pass a law that decriminalizes use of the drug, and that increases education around its uses, than have the service center model implemented in Massachusetts. 

Taylor West, executive director of the Healing Advocacy Fund and a key architect behind the Oregon and Colorado psychedelic initiatives, told USA TODAY that she understands the price concerns. But she argued that there are cost trade-offs that may offset the upfront expense of psychedelics under the model.

“These are treatments that, for many people, allow them to make significant progress on their mental health in ways that allow them to cut back on other things that they've been doing,” like talk therapy and use of medications, she suggested. 

“The argument in favor of this type of program is that we have a mental health crisis, we don't have enough tools to to treat it, and the things that we do have work for some people, but for some people, they don't,” she added.

Though West and Davis have different beliefs about the best approach to legalizing psychedelics, they agree on one thing: the industry isn’t a money maker. 

“This is one of those Y2K, dot-com bubble moments where people are just exuberant about a new thing that they see helping people, and they think it's going to be profitable,” Davis said. “Maybe it'll just help people. Maybe it's not going to become a billion dollar industry like cannabis.”