In the billion-dollar race to commercialize psychedelic medicine, psilocybin, a naturally occurring hallucinogen better known as magic mushrooms, or “shrooms,” has decisively pulled ahead of the pack.
The Food and Drug Administration in November said it would move up its review of a psilocybin treatment for severe depression by nine to 12 months, according to the applicant, Compass Pathways. It hopes to receive the agency’s approval for the therapy before the end of the year.
The news is among the first concrete signs that the Trump administration is recognizing psychedelic medicine as a potential therapy tool. The moves have injected a fresh dose of optimism into a nascent field, which was rattled by the F.D.A.’s rejection in 2024 of MDMA-assisted therapy, the first psychedelic to reach a formal review by federal regulators.
“Between research results and policy changes, it’s a watershed moment for psychedelic health care, and psilocybin is the star,” said Nate Howard, director of operations at InnerTrek, a psilocybin clinic in Portland, Ore. Mr. Howard was a driving force behind a successful ballot measure in 2023 that created Oregon’s psilocybin program.
State lawmakers, however, are not waiting for regulators in the nation’s capital.
Last year, New Mexico joined Colorado and Oregon in offering legal psilocybin therapy to adults. Lawmakers in a dozen states, including North Carolina, Maryland, Georgia and California, are considering easing restrictions on the drug using public funds to research the potential benefits of psilocybin therapy.
But the rollout of Oregon’s psilocybin program over the past two years has not gone as well as anticipated, highlighting the challenges that states and companies will most likely face as psychedelic medicine becomes more widely available. Costly licensing and staffing requirements have made the price of sessions unaffordable for many, leading to the closings of a third of Oregon’s 36 licensed service centers.
The $850 to $3,000 price for an individual session reflects annual licensing fees of about $10,000 and administrative rules and zoning restrictions that add to a center’s operating costs. Business owners face other obstacles tied to the fact that psilocybin remains illegal under federal law; credit card companies won’t process payments, and social media platforms like Meta prohibit psilocybin-related ads. Liability insurance, business owners say, can cost as much as three times what other medical and health-related practices pay.
“We’re very lean, and one of the more successful service centers in the state, but we’re just breaking even,” said Andreas Met, the director of Satya Therapeutics, a psilocybin service center in Ashland that treats about 50 clients a month.
A psilocybin experience with a licensed facilitator usually lasts five to six hours, and that does not include preparation and follow-up sessions that clients are required to attend before and after their treatment.
A growing number of studies suggests that psilocybin is effective in treating complex mental health conditions like obsessive-compulsive disorder, anorexia and alcohol use disorder. Other clinical trials are evaluating its efficacy for chronic back pain, depression and smoking cessation.
Chuck Lovett, 63, a sexual abuse survivor from Pennsylvania who traveled to Oregon in 2024 for a psilocybin session, said the treatment provided lasting relief from the depression and suicidal thoughts that have haunted him since he was assaulted by a Catholic priest as an adolescent. “Psilocybin gave me back my life,” he said.
As the first state to legalize psilocybin therapy, Oregon is emerging as a real-world proving ground for researchers, and a potential alternative to the costly clinical trials that are typically used to assess the safety and efficacy of new drugs.
“Oregon provides an unprecedented opportunity to examine how psychedelic therapy works in a diverse population,” said Matthew Hicks, a researcher at the National University of Natural Medicine in Portland. He recently completed a small feasibility study on low-income adults who underwent psilocybin therapy for depression, and most participants reported significant improvements in their symptoms.
More than 18,000 people have already gone through Oregon’s psilocybin program, and the early data on adverse events has been positive.
According to the Oregon Health Authority, there have been 23 incidents requiring emergency services, which experts consider low. Many of the calls involved clients in distress who sought to prematurely leave their session against the advice of a facilitator.
Angela Allbee, who oversees psilocybin services at the Oregon Health Authority, said that none of the incidents were serious.
“Statistically speaking, psilocybin therapy is safer than golfing,” said Ryan Reid, the operations director and co-founder of Bendable Therapy in Bend. “It’s safer than anyone thought it would be.”
That said, Oregon prohibits those with schizophrenia and active psychosis from participating in the program, because the drug can trigger or exacerbate manic and psychotic symptoms. For those without serious psychiatric diagnoses, the side effects can include headaches, nausea, anxiety and fluctuations in blood pressure.
Psilocybin’s therapeutic benefits are tied to the drug’s ability to temporarily rewire the brain, helping patients break the cycle of negative thinking that is the hallmark of many hard-to-treat mental health conditions. In a therapeutic setting, the drug can provide fresh insights into unresolved childhood trauma, or help a terminally ill patient find joy in daily life, experts say.
“What we see reliably through all of these studies is that psilocybin gives people a new perspective on mental health issues, oftentimes when they’ve been stuck for years,” said Heidi Pendergast, the Oregon director of the Healing Advocacy Fund, which promotes state-regulated psychedelic therapy programs around the country. “It’s not a panacea, but it does give people a renewed sense of hope.”
The closing of so many centers, however, highlights flaws in Oregon’s program. Zoning restrictions that limit where service centers can operate have led to soaring rents. Another factor is an opt-out provision that allowed two-thirds of the state’s counties to prohibit psilocybin centers entirely. And because psilocybin sessions can heighten a patient’s vulnerability, Oregon requires two staff members be on-site at all times, increasing operating costs.
A proposal to raise licensing fees, operators say, could force more service centers out of business.
Ms. Allbee of the Oregon Health Authority said some of the speed bumps had been unavoidable given the pioneering nature of the program.
The high licensing fees, she said, are dictated by a statutory requirement that Oregon’s psilocybin program be funded entirely by user fees. When service centers close, the state’s administrative costs must be borne by the businesses that remain.
For now, the high price of a session is driving people to seek treatment at underground clinics, many of them operated by a legion of newly licensed facilitators who find themselves priced out of the state-run system.
Many licensed healing centers have begun offering group sessions, which cost about half that of a private session. Operators like EPIC Healing in Eugene offer sliding-scale rates and pay-it-forward subsidies, or they connect patients to grant programs for low-income residents.
“We’re just trying to weather the ups and downs of the market and hope people see value in what we offer,” said Cathy R. Jonas, the owner of Epic Healing.
Still, the lack of affordability has confirmed what many experts have long feared: that government-regulated psychedelic therapies will only be available to the affluent.
Emma Willie, a senior analyst who focuses on psychedelics for the consultancy firm Citeline, said the prospect of insurance companies covering the new therapies was unlikely any time soon, though F.D.A. approval of psychedelic compounds could change that.
“If we can’t get insurance to cover them, it will feed the perception that this is an elite experience rather than a medicine,” she said.
Colorado has sought to address some of the affordability issues by setting licensing fees that are about 20 percent lower than Oregon’s, and by providing more flexibility to operators and consumers.
In contrast to Oregon, Colorado decriminalized psilocybin for personal use in 2022. The statute does not allow counties to ban psilocybin businesses.
There are other differences: Unlike Oregon, Colorado allows clients to consume the drug at home, making it easier for those in palliative care to access the program. Microdosing small amounts, an increasingly popular approach, is also easier and less expensive to do in Colorado.
Allison Robinette, director of policy and regulatory affairs at the Natural Medicine Division in Colorado, said the state had already approved 30 healing center licenses, with another 20 applications pending.
“We’ve learned a lot from Oregon’s experience,” she said, noting that officials from both states compare notes during monthly video calls.
New Mexico is taking a different approach. The state’s psilocybin program, signed into law by the state’s governor last year, uses a medical model that limits access to those with qualifying mental health conditions. For now, this includes treatment-resistant depression, post-traumatic stress disorder and end-of-life anxiety. The state’s first clinics are expected to open late this year.
Despite the high costs, the expanding options for legal psilocybin therapy have been embraced by those seeking alternatives to conventional mental health treatments.
Anne Hamilton, the founder of the Survivorship Collective, a nonprofit that organizes psychedelic retreats for cancer patients, said having access to psychedelic therapy on U.S. soil was especially important for the organization’s clients, many of whom are too medically fragile to travel overseas for sessions. She said that the organization had so far arranged for 20 patients to go to Oregon, and that there were another 150 on a waiting list.
“I can’t overstate how profoundly life-changing it’s been for these women,” she said. “For some, it has restored a sense of safety in their bodies and intimate lives. For others, it has brought real peace around dying.”
Alyssa Tsagong, who recently returned from one of Survivorship Collective’s psilocybin retreats in Oregon, said the effects were still unfolding. A former public media executive from Wisconsin, Ms. Tsagong retired three years ago, at age 41, after being diagnosed with metastatic breast cancer.
She said the emotional aspects of living with cancer were at times more difficult than the physical symptoms, and the chemotherapy and radiation that aim to slow its progression.
That means grappling with her own mortality while tending to the emotional well-being of her family. It also means watching fellow members of a metastatic breast cancer support group, many of them in their 30s and 40s, disappear one by one.
The group psilocybin session she joined in November, Ms. Tsagong said, had giving her a sense of safety in a body that at times feels as if it has betrayed her. Psilocybin has also given her a sense of optimism, not about beating her cancer, but rather living purposefully with the time she has left.
“It’s hard to describe, but there is a feeling of connection to everything, especially nature, and about being part of something bigger than an individual,” she said.
Psilocybin, she added, is not a miraculous cure-all.
When friends insist they sense a newfound calm, Ms. Tsagong smiles and shakes her head. “I haven’t exactly found peace living with cancer, but since I experienced psilocybin therapy, I’ve been able to find some peace each day,” she said. “Some days I find it more than others.”
Andrew Jacobs is a Times reporter focused on how healthcare policy, politics and corporate interests affect people’s lives.
The post ’Shrooms Lead the Pack in Psychedelic Medicine, but Rollout Is Bumpy appeared first on New York Times.
