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Rules for Psilocybin Mushrooms Complicate Competitive Landscape in Oregon 

How will new rules shape growing and processing the cubensis mushrooms that will lead Oregon’s legal psilocybin revolution?
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The Oregon Health Authority (OHA) published updated draft Psilocybin Products Rules on April 1 to support the legal use of magic mushrooms under Measure 109, which passed in 2020. 

Experts have been poring over these rules for insights on how the state expects to create a marketplace for legal psilocybin treatment in Oregon in 2023.

Some highlights of the proposed rules include: 

  • Suppliers will not be permitted to create psilocybin synthetically or by using GMOs (genetically modified organisms).
  • All psilocybin products must be stored in a locked area and be entered into the state’s Psilocybin Tracking System. 
  • Oregon residents can grow psilocybin mushrooms anywhere unlike treatment centers whose locations are regulated. Since mushrooms are grown in the dark, this includes warehouses and shipping containers. (Whereas you can’t just open a treatment center anywhere you like.) 
  •  All psilocybin products must be designed for oral consumption and other methods are barred including transdermal patches, inhalers, nasal sprays, suppositories and injections.
  • Mushroom growers will be barred from cultivation in animal dung or wood chips to avoid bacterial contamination. 

Many of the proposed new rules appear to echo state food preparation or legalized cannabis guidelines. Security and storage are also key factors. 

For instance, people processing mushrooms for use in psilocybin treatment must use food grade equipment and adhere to standards of cleanliness associated with a food processing factory or restaurant kitchen. While these are not quite semiconductor manufacturing clean room standards, they will require mom and pop mushroom outfits to invest more money and up their professional game to comply. 

As with cannabis – and as the wording of Measure 109 stated early on – marketing must not appeal to minors, which rules out a lot of wacky mushroom cartoons with googly eyes and cute banter. 

Limiting Oral Ingestion to One Strain

As arguments advance for the oral ingestion-only provision in the Psilocybin Products Rules, attorney Vincent Sliwoski, managing partner at the law firm Harris Bricken Sliwoski, points out that this could be a problem for end-of-life patients, many of whom can no longer swallow a caplet or a powder. 

The OHA also only allows one species of mushroom for psilocybin products: Psilocybe cubensis. Sliwoski told Lucid News that some people have criticized the choice.

“Similar to cannabis, different strains appear to have different effects,” said Sliwoski. “Some could screw up your sleep for just one example or help it. So it’s all-or-nothing when you limit the availability to only P. cubensis.” 

Different mushroom strains are allowed in the Dutch model. Sliwoski notes that according to a Dutch government study, there are no safety issues with the other strains such as the more potent Psilocybe cyanescens or wavy caps.

Psilocybe azurescens. Source: Chad Brigman with Empyreal Nomad photography.

“That’s probably the most controversial and talked about (rule), the fact that we’ve limited it to this single strain,” said Sliwoski. He added that Indigenous groups have long used non-cubensis mushrooms for healing. “A lot of those people are going to be unable to participate in a program in accordance with their traditional or sacramental uses.” 

Others disagree, however. Alissa Bazinet, a psychedelic therapist and researcher, is co-founder of the Sequoia Center, a nonprofit clinic in Portland, Oregon that currently offers ketamine-assisted psychotherapy. Bazinet says she plans to open a psilocybin service site in 2023. She follows the product rules from a distance, knowing her center will have to purchase psilocybin next year. 

“I think it’s a wise decision, and that might be an unpopular opinion because I’ve talked to a lot of people in the community who feel like that’s too restrictive,” says Bazinet. “It’s wise to restrict the variables in the beginning phases of the program, because that gives manufacturers a chance to get the process down with one species of mushroom.”

Bazinet argues that having one strain and small manufacturers will help standardize the product. “So even though it will place limits on businesses at first, I think it makes sense from a safety standpoint, to start small and build in opportunities for variety once the program has been running for a while” she said.

Sliwoski said he has heard less pushback on the sanitary guidelines. Also less controversial is the rule that people making edibles must be licensed as a food establishment by the Oregon Department of Agriculture because these products are public health and consumer safety related. “The debate was a lot more fulsome and acrimonious on the (restriction to) a certain strain. As far as sanitary requirements, people are just going to have to step up if they want to participate in the market and they’ve been growing in what the state would consider a more rudimentary way,” Sliwoski said.

Rules for Edibles and Cost of Compliance

​Jonathan Fredette is a mushroom cultivator at Evolved Mushrooms in Portland. He retails and wholesales tinctures of medicinal, non-psychedelic mushrooms such as Turkey Tail and Reishi. Some they cultivate, some they wildcraft or forage. 

Fredette​’​s background is primarily in health sciences, and he sees an overlap of clientele between seekers of psilocybin and of regular medicinal mushrooms. 

“When it comes to mushrooms in general, they seem to be emerging into the zeitgeist all at once,” Fredette told Lucid News. “The awareness of psilocybin is helping broaden people’s awareness to the diversity of different species of mushrooms.” 

Fredette is excited about the rules around extracts, which filter out chemicals that can cause nausea and discomfort. “Extraction is what we do with our nutritional mushrooms, so it’d be interesting to see that kind of concept apply to psilocybin as well.” 

In his extraction process, Fredette says he uses water and ethanol only. “Methanol is listed (by the OHA) and as someone who conducts extractions, that’s not something that I would ever be really interested in working with,” says Fredette.

Mushroom Botanical Blends. Source: Chad Brigman with Empyreal Nomad photography.

Fredette says he is taking a wait-and-see approach to working with P. cubensis. “Having a fine-tuned extract that balances the preservation of psilocybin, without its degradation, is going to be key,” he said.

In the meantime, Fredette says he is considering applying for a manufacturer’s license. 

“We’re focusing on a network of Cordyceps laboratories and extraction facilities,” he said of the fungus. “If we do decide to move forward with the protocol, and everything makes sense from the production and cost standpoint, and the policy standpoint, then we would be in a good position to move forward,” Fredette said of psilocybin. 

Fredette cautioned, however, that genetic or PCR testing for psilocybin mushrooms, to prove that their products are from the approved strain, could price smaller growers out of the market.

In the recent public comments on the OHA’s Zoom meetings, participants seemed concerned about the cost of complying with the new product rules. One potential grower, Brandon Davis, used his two minutes to say that two-pound batches were too small for testing. Davis calculated it would cost $600 to test each batch for potency, pesticide, microbials and heavy metals.

“Is there any way to move that to 15 lbs?,” asked Davis. “We’re just trying to keep costs down. I’m already looking at building rents, licensing cost, lab equipment, packaging, etcetera. I’m already $20,000 into this and I don’t expect to get a return this first year. I don’t want to pass what I paid on to on to these clients and the facilitators.”

The Oregon Health Authority will finalize the psilocybin rules in late 2022.

Main Image: Cordyceps mushrooms by Chad Brigman with Empyreal Nomad photography.

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