Magic mushroom legalization: Psychedelics may have magical health benefits

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  Quantumrun Foresight
• December 17, 2021

Insight summary

Magic mushroom legalization could offer alternative treatments for mental health conditions, while commercialization opportunities could create a multi-billion dollar industry by 2027. Continued research into psilocybin and positive results could change public opinion, leading to decriminalization and even legalization of psychedelics by the 2030s, similar to cannabis. The implications include improved mental health awareness, policy reevaluation, technological advancements in therapy, and sustainable cultivation practices.

Magic mushroom legalization context 

Magic mushrooms (or shrooms) have a psychoactive ingredient called psilocybin that the US federal government currently classifies as a Schedule I drug, labeling it as a much higher risk for abuse than any perceived benefits. This classification has been difficult to reverse because experts still don’t understand the complex nature of psilocybin compared to other drugs like marijuana. That’s why many scientists believe that decriminalization could help them conduct more thorough research into the substance’s potential medical applications. Ideally, most experts would prefer to classify psilocybin as a Schedule IV drug, alongside anti-anxiety medications like Xanax that have a low risk for abuse. 

In 2019, the US states of Colorado and Oregon made a significant push toward the decriminalization of magic mushrooms. However, Denver, Colorado became the first city to pass an initiative to decriminalize magic mushrooms. In Oregon, advocates want shorter sentences for illegal possession of magic mushrooms. They also want to legalize shrooms for residents over 21 under conditions supervised by trained professionals. 

Moreover, research has prompted the US Food and Drug Administration (FDA) to change its stance on psilocybin, relabeling it a “breakthrough therapy” in 2019. This reclassification enables researchers to legally test the drug’s various potential applications and expedite the review process associated with approving future psilocybin therapies. As of 2021, psilocybin research has reported positive results in its use for treating select mental health disorders like PTSD and for addiction therapy. Psilocybin has already successfully treated anxiety in end-stage cancer patients. 

Disruptive impact

In the near term, the decriminalization of magic mushrooms could open up commercialization opportunities within the healthcare sector. For example, in 2020, new psilocybin-focused companies, such as Compass Pathways and HAVN Life, entered the US market specializing in the research and advancement of psychedelic medicines. The legal psychedelic market will likely rise to an almost $7 billion dollar business by 2027, according to Data Bridge Market Research. 

As the FDA continues to permit research into psilocybin, it will be possible to conclude long-term trials over larger sample populations by the mid- to late-2020s. Should the results of these studies prove positive, the stigma attached to the usage of magic mushrooms (and psychedelics in general) may begin to wane across the general public. The eventual shift in public opinion could ultimately lead to the decriminalization and even legalization of select psychedelics like psilocybin by the 2030s.

Longer-term, the commercialization of magic mushrooms by late the 2030s could take a similar approach to the process of decriminalization, legalization, and commercialization that cannabis went through in Canada. Licensed shop owners will be able to sell cannabis and psychedelic products to customers in safe, heavily regulated environment. (A relaxing preview of this scenario can currently be experienced during a visit to Amsterdam.)

Implications of magic mushroom legalization

Wider implications of magic mushroom legalization may include: 

• Allowing doctors to offer alternative treatments to an increasing number of patients suffering from mental health conditions, including Major Depressive Disorder and suicidal ideation. 
• Researchers developing detailed conclusions on the safety, efficacy, and dosage of psilocybin in various delivery mediums (e.g., pills, vapes, gummies, drinks) to encourage safe consumption in users and the safe commercialization by CPG companies.
• Decreasing the blackmarket sale of psychedelics and improving the safety of purchasing psychedelic drugs.
• Permitting the sale of psychedelics to the public by government-licensed shop owners, whose revenue would also support the creation of a variety of tertiary jobs and services, such as accountants, drug delivery drivers, and marketing experts. 
• An increased acceptance and understanding of alternative forms of therapy, promoting mental health awareness and reducing the stigma associated with mental illnesses.
• A reevaluation of drug policy and the broader approach to substance regulation, leading to discussions on decriminalization or regulation of other currently illegal substances.
• Diversifying the demographic profile of tourists and visitors in certain regions.
• New technologies and delivery methods for psychedelic therapy, such as advancements in remote therapy sessions or the use of virtual reality for guided experiences.
• A demand for skilled professionals in the mental health and psychedelic therapy fields, leading to the development of specialized training programs and educational opportunities.
• Sustainable cultivation practices for magic mushrooms, reducing the environmental impact associated with illegal and unregulated cultivation methods.

Questions to consider

• Do you think psilocybin will take the same trajectory as cannabis when it comes to legalization?
• Do you think psilocybin can replace conventional antidepressants that have a host of side effects?