The Rise Of The Psilocybin Retail Market
I know what you are thinking– how could there be a retail psilocybin market when the laws around the drug haven’t changed? Well, in the same way, all…
I know what you are thinking– how could there be a retail psilocybin market when the laws around the drug haven’t changed? Well, in the same way, all illegal substances have a market. It is well known that making something illegal doesn’t mean it is not being bought and sold. Psilocybin, and other psychedelics, have been sold underground since they were banned decades ago. However, as psychedelics have become less stigmatized, their sales have begun to step into the light.
Three weeks ago The New York Post released an article, by Matthew Sedacca, highlighting a new phenomenon– smoke shops selling magic mushroom chocolate bars. Only, it isn’t a new concept. The underground drug scene often takes up shop in retail spaces. Psilocybin products have long been sold out of New York smoke shops or Oakland coffee shops– though not explicitly advertised. Sedacca wrote: “A majority of stores had their bars tucked away behind the counter and in zippered bags, bringing them out to see only upon customer request. Many also sell weed candies and vape pens out in the open.” There is certainly still caution exercised around selling these illegal products, however business has had some big shifts in open advertising and the quality of products.
Once upon a time, magic mushrooms came in a ziplock bag from the messy house of a drug dealer. The products being offered in these stores, however, are of high quality. Of course, they are not regulated. But many of the companies making them take great care to grow the mushrooms and manufacture properly dosed chocolates and other products. The number of people interested in the benefits of psilocybin is increasing, and as a result, the products are becoming more formal and easily accessible.
The NY Post article highlights a few brands of mushroom chocolate, and that is only a small percentage of what is available on the market. Tons of small-underground companies are offering mushroom chocolate, capsules, tea, and more. As harsh stigmas on psychedelics soften, sellers are getting bolder with their advertising. These products are moving through respectable, legal businesses such as smoke shops, fitness apparel brands, coffee shops, and more. They are being advertised and sold by professionals and influencers through their social media. What would once be unthinkable– for fear of being charged with a felony– is now common practice. There are even shops in Vancouver with the sole purpose of selling psychedelics including psilocybin, mescaline, and LSD.
So, if these substances are illegal, how are businesses getting away with this? Psychedelics aren’t as big of a priority for law enforcement as they once were. A handful of US cities have decriminalized psychedelics. Even those that have not, have greater concerns than prosecuting the makers and distributors of products that are not likely to do any harm. At this point, it appears that law enforcement will not be taking action to shut down businesses that are participating in magic mushroom sales, though the threat always remains.
What Does This Mean For The Future Market?
A legal recreational psychedelics market is not something that will come to fruition in the near future. Recreational meaning that psychedelic compounds are available for purchase by anyone over a certain age inside a retail store. At this point– so early in the psychedelic industry– it is difficult to make predictions. Based on recent developments, however, it is safe to assume that a recreational market won’t be legally operational in the US or Canada within this decade.
Many countries around the world are just taking the first steps to provide medical psychedelic treatment. The compounds are being studied for their safety and effectiveness, which means that in the next two or three years we will see the first legal psychedelics hit the market. This, however, will be strictly medical. These drugs will be highly regulated– only allowing medical professionals to prescribe the supervised treatment. Oregon is taking a slightly softer approach– access to magic mushrooms does not require a prescription, but does have to happen within a certified clinic. So, if we are just now seeing the beginning of controlled psychedelic access, then recreational access will not likely happen for at least ten years in most countries. Although, the exact timeline is unknown.
The underground market has existed since psychedelics were first banned. Right now the underground market is growing and psychedelics are increasingly being sold illegally in legal storefronts. There is an increase in the types and quality of products available on the market. The shift from a bag of dried mushrooms to lab-grade psilocybin chocolate bars signifies the growth of the market. A wealth of articles on mainstream news platforms have been publicizing studies that show the benefits of psychedelic medicines. This is creating a higher demand for the compounds. Since they are illegal, the supply growth is coming from the black market.
It is easy to assume that once psychedelics do become legal for retail sales, this underground market will automatically transfer to the legal one. However, the Cannabis market has shown that this is not necessarily the case. The high tax rate of legal cannabis has kept the underground market very much alive. In 2018, illegal revenue from cannabis was nearly three times more than legal revenue in California. In states where it is less challenging for companies to enter the market, this number was lower, though still relatively high.
If profits are high and risks of operating are low, psychedelic manufacturers and sellers may keep their work underground. As a result, those entering the legal market will be business persons and investors who are relatively new to the space, as opposed to the underground workers who have often been involved in psychedelics for years, if not decades.
The continued growth of the illegal market will ultimately be good for the recreational market– when it does become legal. Not every customer will switch over to legal retail stores, but many will, and new customers will be more inclined to purchase the compounds once they are legal. The psychedelic retail market is on the rise, along with all things psychedelics. The entire landscape is shifting and over the next ten years, new business opportunities will continue to appear.