Oregon’s Legal Psilocybin Program Gets Taxpayer Funds Despite Promise to Pay Its Own Way

Fees were supposed to pay for the program by now, not tax dollars.

(Mushroom photo by Paul van de Velde / Illustration by Mick Hangland-Skill)

Backers of Oregon’s psychedelic mushroom law made big promises when they pitched Measure 109 to voters in 2020. Oregonians would get access to a life-changing compound in a safe, legal setting, and, after a two-year startup period, it wouldn’t cost taxpayers a dime.

Licensing fees paid by mushroom growers, testing labs, trip facilitators and service centers would cover the costs of a new bureaucracy within the Oregon Health Authority.

But two years have come and gone, and Oregon Psilocybin Services is nowhere near paying its own way. Fee revenue is anemic because too few people are seeking the various licenses (“Stuffed Mushrooms,” WW, May 24). Just four manufacturers, two testing labs, and eight service centers have been licensed. All three types of entities pay a one-time fee of $500 and then $10,000 a year to operate. Many more facilitators have been approved (88), but they pay only $150 up front and then $2,000 annually.

So far this year, Psilocybin Services has raised just $318,419 in fees, OHA says. That’s in line with estimates by WW. Tallying the number of permits issued and multiplying by all the fees, we came up with a total of $342,425 since the program began licensing participants on Jan. 2.

Backers of Measure 109 said the program would cost far more—$3.1 million a year—to run. To fill at least part of that gap, Oregon lawmakers appropriated $3.1 million from the taxpayer-supported general fund for the two-year period that started July 1. OHA is betting that shroom fee revenue will pick up as the biennium proceeds, making up the rest of the shortfall.

OHA spokesman Afiq Hisham counsels patience. “It takes time to build a new section in state government and to become 100% fee-based, specifically because ORS 475A is the nation’s first regulatory framework for psilocybin services and required an intensive two-year development period,” Hisham says in an email. (Oregon Revised Statute 475A is the law created by Measure 109.)

Some psilocybin experts are skeptical.

“The promise was that taxpayers wouldn’t be on the hook for this,” says Dr. Mason Marks, a professor at Florida State University College of Law and a senior fellow at Harvard Law School’s Project on Psychedelics Law and Regulation. “That was the promise to voters.”

Marks knows the Oregon system because he served on the Oregon Psilocybin Advisory Board for a year, and he’s pessimistic. “I don’t think this is ever going to be funded by fees,” he says.

Among the problems is cost. Opening a service center, a place where trippers don eye shades and headphones and venture into the psychosphere with a facilitator nearby, can cost thousands of dollars. OHA requires the centers to have robust security systems and safes to store mushrooms (still a Schedule I illegal drug). Liability insurance costs thousands more.

Worse yet, Marks says, costs could go up because the Legislature passed Senate Bill 303 last session, requiring service centers to collect aggregate data on people seeking legal psilocybin experiences: age, race, ethnicity, income, gender identity, and reason for using psilocybin. In addition to creating privacy risks, Marks says, the law will add costs to running the program.

“The data collection mandate proposed by SB 303 will cost the OHA additional money, pushing an essentially bankrupt program further into the red,” Marks said in testimony on the bill.

To cover those costs, OHA may have to raise its fees, making licenses even less attractive to facilitators and service center owners, OHA administrator André Ourso wrote in a February letter to Sen. Deb Patterson (D-Salem). Higher fees could have particular impact on people of color, whom Measure 109 sought to enfranchise in the psilocybin economy.

“Directing [Oregon Psilocybin Services] to implement SB 303 would require an increase in licensing fees, which would have a detrimental impact to licensees,” Ourso wrote. “ORS 475A creates additional opportunities for the workforce in Oregon, specifically for licensed facilitators from diverse backgrounds that may support the health of their communities through culturally responsive and equity-centered psilocybin services. Increasing licensing fees will create more barriers for a diverse workforce in Oregon and to effective psilocybin services.”

It’s much easier to go underground. Many of the facilitators that are pouring out of training programs (shroom schools are exempt from shroom system fees) are guiding subjects in their homes and Airbnbs, or on expensive retreats in foreign countries.

And growing mushrooms is easy. Untold numbers of Oregonians are filling plastic tubs with sterile grains, inoculating them with spores, and watching mini-forests of shrooms pop up. It doesn’t take much to send someone on a long trip, and there is likely a surplus of fungi.

In short, it’s easy to do an end run around the regulated system. Until that changes, OHA may have trouble convincing people to play by the state’s (expensive) rules, and the budget shortfall will have to be filled by taxpayers who were promised otherwise.

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