When Colorado begins offering psychedelic-assisted therapy next year, it will become the second state in the U.S. to regulate psilocybin mushrooms, following Oregon’s lead.
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Oregon legalized psilocybin therapy in 2020, with businesses starting operations in 2023. Colorado regulators have been looking to Oregon's model as they develop their own rules, but there are already challenges emerging that Colorado may need to address.
Early Lessons from Oregon
In Oregon, psilocybin service centers, where individuals undergo guided therapeutic experiences, have struggled financially. For example, Dee Lafferty, owner of Inner Guidance Services in Albany, served about 165 clients in her center’s first year. However, due to high operating costs—including a $10,000 annual license fee—she had to launch a crowdfunding campaign to cover renewal costs. Despite community support, Lafferty is unsure how she will manage the expenses next year.
Lafferty highlights that between paying facilitators, rent, and other operating expenses, running a psilocybin service center is not profitable. This issue raises concerns for Colorado, where licensing fees are still being finalized. Colorado entrepreneurs will likely face similar challenges unless the fee structure is adjusted to account for the high costs of entering the market.
Colorado’s Licensing Costs
As Colorado prepares to finalize its rules, licensing fees remain a hot topic. Regulators are working to establish costs for participants in the new industry, having already determined requirements for facilitators and businesses. The high costs seen in Oregon—such as the $10,000 annual license fee—are prompting Colorado business owners to express concern about what fees they will face in the state’s upcoming psilocybin industry.
Financial Challenges for Service Centers
Even beyond licensing, businesses face ongoing financial burdens. Compliance costs, the need to pay facilitators, and operational expenses make it difficult for psilocybin service centers to stay afloat. Oregon’s centers are also subject to a federal tax code that prevents them from deducting operating expenses, further driving up costs.
Rachel Gillette, a Denver attorney specializing in cannabis and psychedelics law, explained that businesses dealing with federally controlled substances are often upcharged by banks, landlords, and insurance companies due to the perceived risks. This trend is expected to continue for psilocybin businesses, keeping costs high until the substance loses its federal stigma.
Gillette notes that building a customer base for psychedelic therapy will take time. Unlike cannabis, which saw retail dispensaries flood with customers upon legalization, psilocybin therapy will be more niche, and Colorado won’t allow retail mushroom dispensaries.
High Costs for Patients
For clients, psilocybin-assisted therapy is already expensive. In Oregon, a single guided session can cost thousands of dollars. Facilitators supervise clients for several hours, and the price includes the cost of the drugs and the therapeutic experience. Although the service is recognized as a mental health treatment, insurance does not yet cover it, making it inaccessible to many.
Lafferty, whose center provided $33,000 in free services during its first year, explained that the high price range puts the therapy out of reach for much of the target market. To address this, her center has introduced more affordable options like microdosing counseling, low-dose sessions, and group therapy, which splits costs among participants. These efforts are designed to keep the business open, but it remains a struggle.
Jenna Kluwe, co-owner of the now-closed Journey Service Center in Portland, echoes the need for public education about the value of psilocybin therapy. She emphasizes that preparation and integration sessions—before and after the guided experience—are essential to lasting change. Despite this, the cost remains a barrier for many potential clients.
Colorado’s Approach: Lowering Barriers
Colorado aims to lower the financial barriers that have hindered Oregon’s industry. The state will allow healthcare providers to integrate psilocybin therapy into their existing practices, offering a micro-healing center license for those planning to offer a limited number of psilocybin sessions per month. This option is designed to streamline access and reduce costs for smaller businesses.
However, even the proposed micro-healing center fees are raising concerns. The Colorado Department of Revenue’s draft rules propose fees starting at $3,000 in 2025, rising to $12,000 by 2027. Advocates argue that these fees are still too high for small practices, limiting the accessibility of psilocybin therapy for both businesses and patients.
Shannon Hughes, a social worker offering ketamine-assisted therapy in Fort Collins, hopes to integrate psilocybin therapy into her practice. However, she says the proposed $12,000 annual fee would make it financially impossible for small mental health practices like hers to offer the service.
Conclusion
As Colorado gears up to launch its psychedelic therapy industry, lessons from Oregon highlight the challenges ahead. High costs, both for businesses and clients, pose a significant threat to the success of psilocybin therapy. Colorado's regulators are working to address these issues, but financial barriers remain a concern for those hoping to participate in or access the emerging field of psychedelic healing.
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