What are Magic Mushrooms?
First, let’s go over the basics. Magic mushrooms, or shrooms, are a fungus that contains the natural psychedelic alkaloids psilocybin and psilocin.
As you may know from health class in high school or watching “Fear & Loathing in Las Vegas,” ingesting these mushrooms induces a hallucination-type effect. Other names associated with this type of mushroom include hallucinogenic mushrooms, shrooms, and more.
What are Magic Mushrooms Good for?
While more research is being allocated towards mushroom drug development, some research and anecdotal evidence suggests magic mushrooms are good for more than just hallucinogenic trips.
As clinical trials for mushroom drug development have been ongoing, study results indicate hallucinogenic mushrooms may be good for mental health-related illnesses. Psychedelic mushrooms and other psychedelics may be effective as depression treatment, addiction treatment, and Post Traumatic Stress Disorder treatment.
Shrooms are even showing promising results to treat cancer patients with anxiety.
Moreover, research has shown that it’s possible for a natural psychedelic can help people quit smoking. But these psychedelics may also have their place in the addiction treatment industry, as well.
All of these potential benefits are poised to lead the psychedelic industry towards legitimacy.
Magic Mushrooms Legal States
While not federally legal nor even legal at the state level just yet, several states and cities have decriminalized magic shrooms and allowed for possession and transportation.
These are significant strides in the right direction, especially when considering the fact that many areas have made it easier for researchers to get ahold of and conduct research on psychedelic drugs. This is opening more doors than ever before, allowing legitimate studies to be conducted on a wide assortment of topics, like psychedelic mushrooms for mental health conditions like Post Traumatic Stress Disorder (PTSD), Major Depressive Disorder (MDD), treatment-resistant depression, alcohol use disorder, and more.
As more research uncovers what psychedelic mushrooms can do for society in terms of mental health treatment, other studies highlight more applications that could eventually result in psychedelic companies becoming commonplace. Despite the current taboo nature of this space, we already see more than one publicly-traded company delving into psychedelic compounds and psychedelic mushroom stocks receiving more attention than in previous years.
While distributing psychedelics is still illegal in every state, psilocybin-assisted therapy has been decriminalized in some areas. And the Food and Drug Administration even granted psilocybin “breakthrough” therapy designation.
Washington State Magic Mushroom Legality
Some believe that legalization is on the verge of happening in Washington state.
But Oregon already legalized the supervised therapeutic use of psilocybin in 2020.
Oregon Psilocybin Therapy: A Burgeoning Industry
Oregon’s psilocybin program is already beginning to take shape. With Measure 109 focused on creating the framework for legal, controlled psilocybin therapy within the state’s borders by 2023, there’s a lot to look forward to for people suffering from mental health disorders in Oregon.
The Oregon advisory board has even been quoted saying that there’s promise in using psilocybin for mental health therapy. This statement alone has a chance to pave the way for more psychedelics companies to conduct research that will ultimately lead to drug development and a legal psilocybin marketplace framework.
While the state has conducted its own clinical trials, drug development among psychedelic companies in Oregon is underway. These drugs stand to benefit people suffering from various mental health issues, including but not limited to PTSD and mild traumatic brain injury.
Pennsylvania Working Towards Psilocybin Regulatory Approval
Pennsylvania now has introduced House Bill 1959, also known as the Public Health Benefits of Psilocybin Act. This stands to permit psilocybin research in PA to determine whether it’s effective for treating various mental health diagnoses.
If HB 1959 passes, the state plans to give research with veterans and retired first responders priority.
Will Psychedelics Become Legal in California?
Many wonder if psychedelics will become legal in California. The state has already decriminalized psilocybin in order to conduct research into therapeutic uses for psychedelic drugs.
So decriminalization is already underway, but will legalization be next? Not so fast. But there has been plenty of action in the realm of lessening the punishments for psychedelic-related crimes.
California could pass more psychedelic-related measures in 2022 and beyond after an overwhelming amount of support for the legalization of recreational marijuana passed last year. However, 2022 isn’t guaranteed to bring another vote on psychedelics legalization.
Texas Magic Mushroom Legality
Texas governor, Greg Abbott, has also seen the light, resulting in his signature on legislation that permits study on the use of psilocybin mushrooms to treat PTSD in combat veterans.
Virginia Psilocybin Legality
Virginia is on the verge of decriminalizing psilocybin and other psychedelics. Rather than sending violators to prison, any capital collected from psychedelics violations would be allocated towards the state’s Drug Offender Assessment and Treatment fund.
Utah Psilocybin Legality
A GOP Utah lawmaker also recently filed a bill to demand a task force study. The bill has the potential to create a Mental Illness Psychotherapy Drug Task Force that would focus on studying and making recommendations on drugs that have a chance to help with treating mental illness. This, of course, includes drugs that can be used in psychedelic therapies, like psilocybin.
New York Magic Mushroom Legality
Last month, a New York lawmaker filed a bill that would legalize medical psilocybin, as well. If it passes, this would yield positive results that it’s time to begin investing in psychedelics for therapeutic purposes in the state.
Business Ideas for Psychedelic Mushroom Legalization
Magic mushrooms aren’t the only consumer product we can expect to become part of the legal psychedelics marketplace. While the production of the psychoactive compounds will become a significant part of the space, we expect product manufacturers, distribution, ancillary services, and other businesses to play their own roles in developing this emerging industry.
Here’s a list of the shroompreneur opportunities we expect to see in the psychedelic shroom sector:
Psilocybin Mushroom Farming
Psilocybin mushroom farming is essential to the legal psychedelics industry. Functional mushrooms are becoming increasingly popular, and we can expect the same to happen for hallucinogenic shrooms once legalized.
While magic mushrooms can be grown at home, there’s a lot of overhead involved in running a lab, equipment, and even processing facilities. This will likely handcuff many shroompreneurs to wholesale operations instead of having their own cultivation labs.
Psilocybin mushroom cultivation will likely happen in-house for some of the major psychedelic companies. However, there’s also a strong chance for there to be a few large, global mushroom farms that supply small psychedelics companies, with functional mushrooms and psilocybin chemical compounds.
Magic Mushroom Lab Equipment Manufacturers
The production process for magic mushrooms is extremely scientific. This means that lab equipment manufacturers can have an exciting future in the space as well.
Who knows? Perhaps there will be a magic mushroom fractional crystallization lab equipment manufacturer that grows alongside the demand for psilocybin.
Psychedelic Shroom Sales & Distribution Companies
Sales and distribution are likely to become the most dynamic parts of the legal psychedelic industry. We can expect everything from niche businesses that cater to high-end consumers to companies with a global reach.
The demand for psychedelics will likely require niche businesses to produce and distribute products. On the other hand, major distribution companies should also play a role in this emerging industry.
We can expect there to be several distribution companies that specialize not just in psilocybin mushrooms but many different types of psychedelic compounds as well, all with unique benefits.
Psychedelic Mushroom-Focused Service Businesses
In addition to the entrepreneurs who grow, distribute, and sell psychedelics, ancillary businesses will likely spring up as well. These include everything from lawyers to industry experts.
With the shift in legality comes a change in public opinion as well. Psychedelics are arguably safer than alcohol, and we can expect the public to begin demanding that psychedelics be made available for therapeutic and recreational purposes.
Psilocybin Truffle Farming
Psilocybin truffles are also poised to be big business in the psychedelic space. These truffles may become more of a specialty product than magic mushrooms, and this makes it an attractive option for shroompreneurs.
Magic truffle cultivation will likely follow the same model as magic mushroom farming, with large-scale producers catering to smaller manufacturers and distributors.
Psychedelic Shroom Extract Makers
Psychedelic companies will need to extract psilocybin from magic mushrooms and truffles in order to make products for consumers. This makes it a great opportunity for extract manufacturing companies to get involved with the emerging industry.
We can expect many psychedelic companies–and even some smaller mushroom growers–to have in-house extraction labs to make these products.
Psychedelic Shroom Suppliers
Many mushroom growers are likely to have their own extraction labs so that they can extract psilocybin from magic mushrooms or truffles for use in other products. As a result, there will likely be many mushroom suppliers to the legal psychedelic industry.
We can expect that the strongest suppliers in this space will provide both mushrooms and extracts, while also offering their own extraction services (where possible).
Psilocybin Drug Discovery Operation
As more psychedelic companies enter the space, there will be a greater need for research and development. This means that shroom scientists are likely to become an integral part of this emerging industry.
These shroom scientists will play a major role in drug discovery and the R&D of psilocybin extract compounds, which will likely be used to produce many psychedelic products. With so much evidence highlighting the efficacy of using psilocybin for Post Traumatic Stress Disorder, end of life treatment for anxiety, treatment-resistant depression, and more, functional mushrooms for medical use have their place in the mental health treatments niche.
Psilocybin Venture Capitalist Firms & Angel Investors
With the rapid expansion of psychedelic companies, there will be a need for venture capital. This means that we can expect to see VC firms and private equity groups enter this space and provide funding to entrepreneurs and researchers.
We can expect this market to attract many VC firms–and perhaps even some angel investors –that specialize in early-stage investment into the psychedelic industry.
As the space for psychedelic products expands, it will attract investors from a variety of backgrounds. In addition to VC firms and private equity groups, we can expect to see angel investors enter this industry as well.
In addition to looking for emerging companies with strong management teams and innovative ideas, many legal psychedelic investors will likely look for companies that offer them a diversified portfolio of products and services.
We expect even more investment firms to emerge over the next few years as they decide to focus on this emerging submarket within the industry.
Thus, it’s important for entrepreneurs who are looking to enter this niche to stay up-to-date with recent changes and developments by following leading researchers and their work in academic journals.
Psychedelic Shroom Co-Packers & Contract Manufacturing Firms
Another way for mushroom growers to expand their businesses is by entering into co-packing agreements with smaller manufacturers in order to make psychedelic products. There will be a big demand in this space for both mushroom growers and co-packers that can supply a variety of psilocybin products to market.
One advantage for smaller manufacturers entering this space is that they will be able to diversify their product mix by selling extracts along with dried mushrooms. This means that contract manufacturing companies could see significant growth in the near future as the psychedelic industry expands.
Financial institutions that are open to working with companies in the psychedelic industry will also be important for co-packers and manufacturers.
Psychedelic Shroom Exporters
As this market expands, it will likely start exporting products overseas to countries where psilocybin is still illegal. This means that there could be a need for shroom exporters that can legally export psilocybin products to sell in other countries.
We can expect the first exporters entering this market to be the larger companies with access to bigger budgets. Similar to the cannabis industry, these operations will need to invest heavily in legal representation and compliance to bypass costly infractions.
Psychedelic Shroom Distributors & Brokers
We expect there to be a big demand for distributors and brokers for this market as well. Shroom growers and manufacturers will look for ways to increase their distribution.
Thus, in the future, we could see a handful of very large distributors that control much of the flow of products into retail shops around the globe.
Psychedelic Startups & Marketplaces
As this market expands, we can expect to see the rise of many psychedelic startups and marketplaces. Similar to multilevel marketing companies such as Herbalife and Amway, it’s likely that small start-up companies will look for ways to monetize other businesses in this industry by selling products through a variety of different marketplaces.
Since this market is still in its infancy, we can expect to see a lot of smaller operators enter this industry and look for ways to monetize it by selling products over the internet through multiple marketplaces. This provides entrepreneurs with an opportunity to get involved with emerging psychedelic businesses and develop new distribution channels for their own mushroom growing operations.
Psychedelic Shroom Edible Manufacturing
We expect this market to develop a lot of smaller edible manufacturers that will be able to meet the growing demand for psychedelic products. Many of these companies will be co-packers and manufacturers, but we can also expect a number of start-up companies entering this space as well.
As the industry grows, we could see a few large edible manufacturers that specialize in making psilocybin products emerge.
Magic Mushroom Microdose Supplements
This market will likely see a lot of growth over the next few years, driven by both domestic and international demand. The big opportunity here is that many consumers will be looking for ways to consume psychedelic substances without having to eat dried mushrooms or deal with the negative side effects that come with them.
Thus, we can expect to see a huge demand for microdose supplements over the next few years as consumers look for ways to experience psychedelic drugs without having to take large doses. There will also be an increasing number of people entering this industry who are interested in exploring different psychedelics without undergoing intense trips.
Mushroom Grow Kits in the Psychedelic Industry
Mushroom grow kits are likely to be one of the fastest-growing submarkets in this industry. As more people become aware of this market and start looking for ways to grow their own psychedelic mushrooms, companies that offer grow kits are likely to experience a significant boost in sales over the next few years.
As shipments of these products continue to rise around the world, we could see the emergence of a handful of large companies that focus on selling grow kits to this consumer market. However, equally important to keep in mind is the fact that mushroom grow kits are already available. Thus, we can expect this niche of the mushroom industry to become quite saturated upon legalization.
Top Psychedelic Startups Focus on Growing Supplies
There are still so many unmet needs of shroompreneurs who want to start growing psilocybin mushrooms. Not only will there be a need for bulk mushroom spores, but also tools and supplies that cultivators need on an ongoing basis to maintain their cultivation efforts.
As this market develops over the next few years, we can expect to see a wide range of different supplies and tools being offered by multiple suppliers. Additionally, there will likely be a handful of companies that enter this space to offer consulting services for people who want to start growing psychedelic mushrooms.
Psychedelic Industry Art & Apparel
Psychedelic art and clothing are likely to be one of the most popular submarkets as more people become interested in this type of drug. This niche will likely feature a lot of artist-designed clothes and accessories which consumers can use to express their love for psychedelics.
The main opportunity here is that we could see a handful of new companies emerging if they choose to focus on this emerging market. In terms of the competition, there are a number of people who already sell psychedelic art and apparel to the local markets that we expect to enter this niche. And with no need for regulatory approval as with psychedelic products, this industry is likely to be filled with many producers.
Psychedelic Tourism & Travel
Psychedelic tourism is expected to be one of the fastest-growing submarkets of this industry. Not only will there be a need for guided psychedelic trips, but also outdoor activities that can take people off the beaten path to experience nature in a different way.
As the demand for psychedelic drugs continues to rise over the next few years, we could see more tour operators enter this niche as it becomes even more profitable. There’s also potential for unique tour operators to emerge as they look for ways to provide services that aren’t readily available elsewhere.
Thus, another opportunity here is for entrepreneurs who want to start their own venture by providing unique psychedelic experiences out in nature and other locales around the world.
Research into the therapeutic benefits of psychedelic drugs is increasing at an exponential rate. As more people become interested in these drugs, there will be a need for third-party investors who want to support this type of research with financial resources.
We expect psychotherapy services surrounding psilocybin mushrooms to become increasingly popular. Therefore, these investors will be looking for operations to propel forward with capital.
There are already some investment groups that exist today which provide financing for nearly any clinical trial involving psychedelics. Thus, it’s possible that we could see the emergence of new psychotherapy services focused on speaking with patients ahead of any psychedelic trip.
Psychotherapy Training & Certification
Psychedelic therapy is still a very young industry and the services provided by trained therapists could be in high demand ahead of legalization. New certification programs will likely emerge that look to train people on how to handle psychedelic trips.
Similarly, we could see an increased interest in required training courses for therapists who want to work with clients looking for treatment with psychedelics.
Given the general lack of understanding about psilocybin, we could see the psychotherapy training and certification industry grow larger in the future. As such, this creates an opportunity where entrepreneurs can step up to meet the demand with courses for therapists looking to work with psychedelic drugs.
Psilocybin Mushroom Software
Much like the cannabis industry, we can expect to see a number of new pieces of technological software aimed at helping growers, distributors, and retailers. For example, we could see an increased demand for inventory management software that helps with the tracking of psychedelic drugs from start to sale.
In addition, there will likely be a need for point-of-sale (POS) systems that dispensaries can use to manage customer sales. This could be useful for retailers operating out of the internet, but also brick-and-mortar businesses that want to update their customers on the latest deals and new products.
Another possibility here is for POS systems focused entirely around psilocybin mushrooms. While there are currently no POS systems available online, it’s possible that we could see trends like this emerge as the market for these drugs becomes more popular.
Given the unique nature of these mushrooms and the lack of competition in the industry, there could be a great opportunity for entrepreneurs who want to start working on mushroom-themed POS software solutions.
Psychedelic Industry Legal Services
As the psychedelic industry continues to grow, more service providers will be needed for legal advice. This is especially true for businesses that are running afoul of current laws or facing charges due to conflicts with law enforcement.
Entrepreneurs looking to start their own business in the psychedelic space could potentially develop a consultancy offering legal services for potential clients within the industry. This will be especially helpful for dispensaries, which are currently engaging in illegal business practices across the United States.
For example, entrepreneurs could create a consultancy that helps with everything from obtaining permits to running background checks on employees to make sure they’re not facing prior convictions. These services will likely be expensive and we can expect individuals looking for help to pay a premium price.
Industries to Join in Preparation for Legal Psychedelic Marketplace
Here’s a list of the shroompreneur opportunities that could prepare operations to work with these psychoactive compounds:
Medicinal Mushroom Supplements Manufacturing & Distribution
Those manufacturing and distributing medicinal mushroom supplements have a unique opportunity to establish a customer base in preparation for psilocybin legalization. While these individuals are working with legal mushrooms for medical use, they’re serving the people who are most likely to turn to psilocybin once it becomes legal.
The functional mushroom industry is also experiencing impressive growth. This space’s rapid growth is expected to expand from $20 billion in 2018 to $34.3 billion by 2024.
Mycotextiles are another potentially lucrative business idea that will help businesses prepare for psychedelic regulation. For example, entrepreneurs could start up a textile manufacturing business that makes textiles using dried and molded mycelium. These materials can replace plastic parts, packaging material, and insulation.
Growing mushrooms for mycotextiles can offer experience working with these types of plants, which can be helpful in the future for those who are looking to grow psilocybin mushrooms.
Mycoremediation involves using mycelium to minimize toxins on Earth. Since waste issues are expanding, these types of solutions are essential to focus on.
In addition, mushroom cultivation can help with mycoremediation. This process uses fungi to break down contaminants in the environment and improve soil quality. In particular, entrepreneurs could use mushroom growing processes to clean up polluted land or waterways that have been affected by oil spills.
This can prepare shroompreneurs for a legal mushroom space as it offers hands-on experience working with mushrooms. Ultimately, this experience provides specialty mushroom cultivation experience that may translate to the legal psilocybin mushroom space.
Psychedelic Drugs for Mental Health
Psychedelics have been used for mental health therapies, including PTSD treatment. This is especially true for MDMA-assisted treatment protocols, which are currently being researched by various institutions across the globe.
Due to the rapid growth of psychedelic legal development, entrepreneurs with an eye toward mental health could look into creating private or government-funded clinics that work on psychedelic treatments.
It’s important to note that these clinics won’t just be limited to psilocybin and MDMA. Experiences such as Ayahuasca will also play a role in mental health treatments, either in the form of treatment centers or people using these substances on their own to self-medicate.
For example, entrepreneurs could look into creating retreat spaces where people can take psychedelics and explore their inner selves without the risk of legal repercussions. Individuals who are looking to take these substances without the guidance of medical professionals could also look toward creating experiences where they can be supervised.
A Legal Marketplace for Psychedelic Mushrooms
The world is already seeing a legal shift for psilocybin and other substances. As the landscape for a legal marketplace for psilocybin mushrooms becomes clearer, entrepreneurs who want to play a role in this industry need to start preparing.
Having access to dried and fresh mushrooms can help these businesses serve customers during the legal market launch. But keep in mind that there are ancillary businesses that will be essential for the mushroom industry to grow.
Also, having experience growing fungi is an asset in preparation for working with psychedelic mushrooms. For those interested in farming these mushrooms with federal legalization, begin practicing by growing medicinal mushrooms. This is a currently legal marketplace for medicinal fungi and can be profitable as you wait for psilocybin legalization.
Looking for assistance scaling your legal mushroom operation in preparation for psilocybin legalization? Northstar is here to help!
Contact us now to speak with one of our experts about how we’ll grow your business with the right insights and financial services.
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