Taxpayers May Soon Be Filling the Funding Gaps in Oregon’s Psilocybin System

So far, just three psilocybin service centers—offices where people can go on legal mushroom trips—have been licensed by the state of Oregon.

That’s bad news for law-abiding people itching to avail themselves of the much-advertised benefits of psilocybin: relief from depression, alcoholism, obsessive-compulsive disorder, and end-of-life dread.

It’s also bad news for taxpayers, who may soon find themselves underwriting a shroom system that was supposed to pay for itself.

Proponents of Measure 109, the initiative that created Oregon’s legal psilocybin program, designed it to be funded by fees, not taxpayer dollars, so it would be palatable to more voters. Service centers, mushroom growers, and psilocybin testing labs are all required to pay $10,000 a year for their licenses. Facilitators, the people who sit with tripping subjects and guide them into the psychosphere, pay $2,000 a year.

The problem is that very few people are getting licenses of any kind to cover the cost of running the Oregon Health Authority’s Psilocybin Services unit, in large part because of the high fees. Very few licensees means very little fee revenue, which means the state has to find cash someplace else to keep the program running.

That other place could be the state’s general fund. OHA has asked for $6.6 million to fill the program’s budget gap for the fiscal biennium starting July 1, according to a 13-page “policy option package,” or POP, that’s now sitting in the Legislature (Salem budgets two years at a time).

“Without the additional funding, the sustainability of the work would be jeopardized,” OHA says in the POP document. “There would be insufficient staff to continue to implement the regulatory program, review license applications and conduct licensure inspections. Consequently, psilocybin businesses seeking licensure could experience financial hardship.”

The request is a black eye for backers of Measure 109, who promised, after a two-year “development period” ending last December, the program would cost $3.1 million a year, an amount that would be funded by fees and a 15% tax sales tax on psilocybin products.

It also raises questions whether the psilocybin program can really run on fees alone. Licensing started Jan. 2. In addition to the three service centers, three manufacturers, one testing lab, 10 facilitators, and 87 workers have been licensed. All the fees those people would have paid—one-time and annual—add up to less than $100,000, by WW’s calculations.

Even if every application submitted so far were to get a license, fees from all of them would total about $625,000, far short of OHA’s request from the general fund.

“We don’t believe that licensing fees will be enough to cover the first year of the biennium,” Angela Allbee, head of OHA’s Psilocybin Services unit, tells WW. “We knew it would take some time for licensees to be ready. There are a lot of unknowns right now.”

OHA’s request for taxpayer cash irks Noah Heller, an entrepreneur who suffered severe depression and found relief in ketamine. It worked, but it was too expensive. He looked into opening a psilocybin service center, hoping he could help others at a fraction of the cost. After months of study, he determined it would be terribly hard just to break even.

Indeed, one of the three service centers that has been approved, EPIC Healing Eugene, charges $3,500 for a high-dose, six-hour trip, the price the owners say they need to stay in business.

Backers of Measure 109 took great pains to try and make psilocybin available to the masses. After the initiative passed, then-Gov. Kate Brown instructed the new psilocybin advisory board to “ensure equitable access to this therapy for anyone who might benefit from treatment, including Oregon’s Black, Indigenous, Tribal and communities of color.”

OHA’s request for general fund dollars galls Heller because, if granted, he says the money would go to subsidizing a regulatory framework that allows psilocybin experiences that, so far, only the wealthy can afford.

“This is all about health equity, but state money is going to subsidize $15,000 service centers,” Heller says. “And those probably serve wealthy people from out of state.”

He’s not exaggerating the price point. Lucid Cradle, a Bend company, plans to charge $15,000 for an eight-hour trip, with a six-hour prep session the day before and an integration session the day after.

Lucid is still waiting on its service center license, according to its website. The founder, a fine artist and clinical psychologist named Jeanette Small, didn’t reply to emails seeking comment by press deadline. Once Lucid is open, it plans to offer clients the option of using a zero-gravity recliner with “14 percussive elements built into it, which pulse through the body and flush the nervous system and realign optimal physiological function through resonance.”

Though the authors of Measure 109 sought to make the psilocybin program pay for itself, there is no hard and fast date for when that has to happen, says Allbee, the Psilocybin Services head. The program could run on other funds, as long as it can get them.

But there are hurdles. Gov. Tina Kotek didn’t put OHA’s psilocybin request for general fund dollars in her recommended budget, Allbee says. Instead, Kotek said to use “other fees” to pay for the shortfall. Other fees are licensing fees. But Psilocybin Services doesn’t have enough licensing fees.

“We have to figure out a strategy for what to do next,” Allbee says.

If licensing fees fail to materialize, the state will find the money to keep Oregon’s mushroom test alive, says Elisabeth Shepard, a spokeswoman for Kotek.

“Given how early the program is in implementation, it is difficult to anticipate how much revenue will be generated through licensure,” Shepard says in an email. “It’s our understanding that it is well positioned to be fully implemented, and in the event it requires additional resources there will be opportunities through an interim budget committee to request funds to the program if necessary, which our office would support.”

So, it appears the money will come, even if licensing revenue continues to lag. That’s good news for people who want to try psilocybin for depression and other ailments, and for the rich who want to trip, legally, in vibrating chairs.