‘I don’t think the industry can survive this’: Oregon regulators propose steep psilocybin fee hikes

State regulators are seeking steep fee hikes on Oregon’s nascent psilocybin industry, a move that critics say would push the already high price tag of a legal mushroom trip even higher while causing more businesses to close.

The Oregon Health Authority in late June announced proposed fee increases that would affect virtually every corner of the industry, aiming to financially sustain the groundbreaking program. Among the biggest changes would be doubling annual license fees from $10,000 to $20,000 for psilocybin manufacturers and service centers where adults 21 and older take supervised trips. 

The potential fee increases come after a wave of service center closures, raising doubts about the viability of Oregon’s legal psilocybin experiment that voters approved in 2020. The state has issued licenses to 39 service centers, about half of which have expired or been surrendered, according to state figures. 

“I don’t think the industry can survive this,” said Ryan Reid, the co-founder and operations director of Bendable Therapy, a Bend-based service center. “I think (what) you’re going to see over the next couple years is a major contraction to where there’s just a few people surviving.”

Oregon’s psilocybin program is not supported by taxpayer money and is instead funded through fees, health authority spokesperson Erica Heartquist said in an email. Because revenue has not kept up with rising costs, she continued, “the only option is increasing fees” despite the program’s cost-saving efforts. 

Heidi Pendergast, Oregon director of the Healing Advocacy Fund, which advocates for psilocybin access, called the proposed fee increases “unprecedented” and out of line with other licensing costs for the cannabis businesses and health-oriented professions. 

An individual psilocybin session can cost between $850 and $3,000, which has meant clients have skewed white and wealthier. Pendergast said she anticipates clients would see higher costs from the fee increases, which would mostly take effect next year. 

The uncertainty comes as psilocybin continues gaining acceptance as a mental health treatment and as the state has opened the door to integrating it with the medical system. Pendergast described the program as safe, noting that just a sliver of the estimated 22,000 people who have used legal psilocybin have reported adverse events since service centers opened in 2023.

“This program really deserves to be part of the behavioral health framework in this country,” she said. 

One licensed lab

As the head of Rose City Laboratories, Daniel Huson oversees Oregon’s only licensed and accredited psilocybin testing laboratory. 

Despite being a linchpin in the state’s psilocybin system, he said the $26,000 his lab made last year from compliance testing didn’t cover all of its costs, including the $10,000 annual licensing fee. Huson continued offering the testing because he’s passionate about how psilocybin can positively change people’s lives. 

Regulators are seeking to double the annual laboratory licensing fee starting January 2029, later than the other hikes. 

Since the lab began testing psilocybin in 2023, Huson said he’s increased the cost of a compliance test from $250 to $600, which he expects to rise further. Without a regulatory change of course, he said the industry may not be viable over the next two years and his lab will stop offering psilocybin testing in 2029, potentially leaving the state without a psilocybin testing lab.

“There’s no incentive to be a testing laboratory because it’s expensive,” he said. “And they’re going to be in trouble.” 

No more discounts

The proposed changes would also eliminate reduced fees for nonprofits, veterans and low-income people. Currently, each pays half the annual fee for a manufacturer or service center license. If regulators’ proposed changes take effect, those license holders would see their licensing fees quadruple to $20,000.  

Nearly a third of Oregon’s roughly 400 psilocybin-related licenses qualify for a reduced fee, according to the health authority’s Heartquist. 

As a nonprofit service center, Bendable Therapy is focused on accessibility over its margins, said Reid, one of its co-founders. The elimination of reduced fees, he said, would mean increased costs for clients and less money for scholarships to make its services more affordable. 

“This is a tight industry, and we’ve done a good job surviving,” he said. “But this is just going to make it that much harder and just really increase the costs and reduce access for our customers.”

Facilitators, who guide clients through psilocybin sessions, would see their annual licensing fees double to $4,000 — with discounts for veterans and low-income applicants eliminated. They typically work part-time as contractors. 

Reid said his center will subsidize the licensing costs of the centers’ six facilitators. Plus, regulators’ changes would increase the cost of a permit needed to work in a center from $25 to $200. In total, he expects licensing costs to increase by as much as $50,000.

Campaign promise 

The ballot initiative campaign that legalized psilocybin in Oregon promised to make the life-altering substance safe, accessible and affordable — without ongoing costs to taxpayers after a startup period.  

However, a health authority budget document states the industry’s slow growth has meant it hasn’t generated enough license fees to cover the program’s cost. The authority blamed local restrictions on psilocybin-related businesses, as well as challenges getting banking and insurance for an industry centered on a federally illegal drug. It also blamed unexpected administrative costs. 

Pendergast, of the Healing Advocacy Fund, said it’s common for new programs to require additional funding before they are self-sustaining and called for more budget transparency before the fees increase. 

“This is really a matter of how we are right-sizing regulation for this program,” she said. 

Dr. Eric Lee started Space Psychedelic Clinic in 2024 on what he called a “shoestring” budget in “not a gorgeous location” in Portland that allows him to charge $925 for an individual session. He expects to weather the fee increase and plans to move into a larger building to accommodate demand. 

But he doesn’t think other centers will survive and wants other states considering legal psilocybin to take note of what’s happening in Oregon. 

“There is a vast segment of the population that will just never be able to use legal psychedelics because of the price point,” he said, adding, “I don’t think people want that from this law, and I think it’s a huge part of why the business is failing.”