A Tale of Two Conferences
Cannabis Capitalists in Chicago & Making Psychedelic History in Oregon
Whiplash: the best way to describe a week that began in Chicago discussing capital (or lack thereof) in the cannabis industry and ended in Portland, discussing how to build North America’s first legal psilocybin market. The similarities begin and end with the fact that both cannabis and psilocybin have been demonized and illegalized in this country at a federal level which means that any type of industry and regulatory framework is structured by the state and hindered by endless barriers & challenges. This creates some overlap in the how to approach determining a regulatory framework, but beyond that, the way these markets shape up are going to be very different than many expect.
TLDR: If you are expecting mushroom dispensaries like there are cannabis dispensaries or the famed coffee shops of Amsterdam: think again, that’s not how this is being built.
But before we get into Oregon, let’s start with cannabis in Chicago:
Benzinga: Survive ‘til 25
Survive until 2025 was the mantra at the Benzinga Capital Conference this year, an apt tagline for this very challenging time in our industry. The undertone in Chicago was one of fatigue, exasperation, yet still overlaid with a fighting sense of determination and a thread of stubborn optimism that seems to run through any of us who have chosen this space as our professional home. That unrelenting, and somewhat manic drive is a pre-requisite to withstand the pace and volatility of working in the legal cannabis industry. After a year of layoffs across all sectors, capital markets drying up, wholesale prices dropping across more mature markets like Michigan, California being on fire (literally and figuratively), and New York being a thorn in all of our sides for moving so damn slow: you would think the vibe would have been more hopeless. It wasn’t. Regardless of what you do in this industry, it requires relentless hustle and grit to keep going despite the KOs. It’s exhilarating and contagious and as the week built, so did the energy and my love for the space. Everyone is busting their ass, showing up, putting one foot in front of the other, getting creative and trying to really get shit done. It is not for the faint of heart, but there is a beauty in the struggle, a thread that bonds us. I have not found more welcoming rooms in my entire career than the cannabis rooms - even the ones laden with suits. Despite the differing camps and opinions (of which there are many), we are all in the trenches together, bonded by struggle and trying to push things forward every day.
I have gone to a handful of Benzinga conferences and while they are typically stacked with the the top levels of many organizations, this one was notable as the C-suite from almost all organizations showed up in force. Everyone needs money right now and the big guns are required to get the deals done. There were more women and BIPOC representation than I had seen before at these events (though still vastly outnumbered, as expected) which was encouraging. I attended investor happy hours, intimate dinners with existing and potential partners, a sweet private event at the Tortoise Club, women’s breakfasts, countless 1x1 meetings and impromptu run-ins with friends and colleagues I hadn’t met in person or seen in awhile. I did not however attend the Tao party with Mike Tyson & Rick Flair on Wednesday night despite the many text messages I received from the dance floor. I have been to more parties that Mike Tyson is hosting in the last year than I have with my own husband (exaggeration but not too far off from truth, the dude is everywhere…). I was also preoccupied with wandering around Chicago, smoking a joint, slightly lost & giggling with new friends: my favorite way to end a good night.
Overall: I think people are hunkering down and bracing themselves for recession, turning heads towards international opportunities with a keen focus on Europe, and doubling down on “safe” bets with tried and true investments towards the larger MSOs and organizations that have clear paths for returns.
Horizons Perspectives on Psychedelics: All Eyes on Oregon
A wild juxtaposition going from Chicago partying with a bunch of cannabis capitalists to Portland, Oregon discussing trauma, consciousness and the structure of the new legal psilocybin market with activists and healers. I only attended Friday and Saturday of the 4 day conference - the Psychedelics in Science and Psychedelics in Oregon days. I went to this conference because I wanted to go deeper on how the regulations are being rolled out in Oregon to start taking notes as we observe from the East Coast in preparation for when it’s our turn.
I got to see Paul Stamets speak on Friday about mushrooms, evolution, microdosing and his opinions on the Oregon regs: a bucket list check off for me. His stance, which I share, is that Oregon made a mistake not considering microdosing in the roll out. His point was that microdosing is an accessible way to make psychedelics available for the masses, with much less risk and barriers to access for people who don’t have a ton of disposable income or time to participate in guided treatment. I hope that we can take this into consideration as more states come online.
Overview of the Oregon Regs:
Oregon will begin accepting applications for Psilocybin business licenses on January 2, 2023. There will be 4 license types for psilocybin services (21 and older, at least 50% ownership with Oregon resident for more than 2 years):
Manufacturer License
An individual cannot have a financial interest in more than one psilocybin manufacturer business. There is still ALOT TBD on details around psilocybin manufacturing, much of which will be finalized during the public comment period in November. METRC will be managing the tracking for psilocybin as it does in most states for cannabis, though it will be a much less intense iteration than what is currently required in cannabis. Cannabis tech coming to psychedelics already. Let’s go.
Service Center License
An individual can hold up to 5 service center licenses AND a manufacturing license. They can manufacture on premise at the service center or on a different location. There are limitations on location of these service centers not too dissimilar to cannabis, taking in to account how near they are to schools, churches, etc. and following the same roll out as cannabis with municipalities opting in or out. Most counties have opted in for psilocybin Oregon. This license is one of the few that has a fee tied to it.
Facilitator License
To be a facilitator, you only are required to have a GED and complete one of the state accredited training programs like Innertrek (I am biased towards this one as they have Dr. Erica Zelfand as a lead educator having done some of her courses, but there are a few others). The Innertrek program is conducted over a 6 month window, courses mostly happening on weekends and costs just under $8,000. It is still TBD if you can hold another professional license AND be a psilocybin facilitator.
Psilocybin Testing Laboratory Licenses
In speaking with someone from the OHA on site, they mentioned that the only thing they would be testing for was mushroom strain and potency, but in further digging post-conference I confirmed that they will be testing for contaminants, pesticides, and solvents as well. Testing licenses will likely be across a handful of existing labs.
My Overall Take on Oregon
Pros
I love that Oregon is making it low barrier to entry to secure licenses in the state. I met a ton of prospective licensees many of which were reiki masters, massage therapists, end of life doulas, and social workers who are already providing underground psilocybin care. There is a strong effort to avoid “medicalizing” the market and thus there were less doctors there than I was expecting, many more holistic healers and guides. I think this stays a bit more true to the ways mushrooms have been used historically, in more of a holistic/shamanic context versus in a the Western hyper-clinical structure we are so used to. It is not being built in a way that will make sense for outside investors either, as the model isn’t that scalable from a business perspective, leaving alot of space for individual practitioners and smaller practices to thrive without big business competition.
Concerns
While securing a license has been made fairly low barrier to entry, the same cannot be said for individuals who will be looking to access psilocybin services. For someone who wants to participate in the legal psilocybin market as a consumer, you will need to make an appointment with a facilitator, go the licensed facility, take the psilocybin on site with the facilitator and stay with them for the 4-6 hours you will be under the influence, regardless of dose size. Paul Stamets said it best: “That is going to be a VERY boring 4 hours if you just took a microdose.” While manufacturing and distributing psilocybin will NOT be expensive, the facilitator’s time is what will be cost prohibitive and the time commit itself will be prohibitive to many who don’t have the time to spare. This is not a new concern for the psychedelics industry, one we see already with ketamine, as the widening of the mental health care gap is one that must be considered in every conversation we have around these medicines. How do we ensure we provide access to healing for people who don’t have thousands of dollars in disposable income and open weekends to spare?
I also have some concerns about the general financial model of the market being built. The psilocybin licensees will be facing the same financial burdens we face in cannabis with 280E (not being able to file business expenses because psilocybin is a Schedule 1, federally illegal substance) and challenges with traditional business financing. Because the structure of the market in Oregon is intentionally not built for mass scalability and large financial gains, I do see challenges on the capital side if any of these businesses are looking to raise funds as there is no real line of sight on any type of return on investment, though my takeaway from the conference is that anyone looking for ROI on this work, is not quite welcome anyway.
There is something beautifully organic about the way Oregon is rolling out the licensing regulations, so very Oregon of them. I think they got alot right, with some gaps, particularly on the microdosing and access side, but an incredible first pass and a guiding light for the rest of the country and the world to follow and ultimately learn from. A historic moment for us all..
