Proposed fee increases from the Oregon Health Authority have left some of the state's licensed psilocybin businesses worried about their future.
Under the proposal, annual licensing fees for service centers and manufacturers would double from $10,000 to $20,000 beginning next year.
The proposed increases are intended to address a funding shortfall in Oregon's psilocybin program, which is largely funded through licensing fees paid by service centers, manufacturers and facilitators. Business owners say higher fees could make it even harder for the industry to grow.
Andreas Met co-founded Satya Therapeutics in Ashland, a licensed service center where adults 21 and older receive supervised psilocybin services. When the center opened in 2023, he expected demand to be much stronger.
“Very few service centers are doing well since the inception of the program," he said.
Met said a lack of public awareness has limited growth. He also said advertising the business is difficult because federal law classifies psilocybin as a Schedule I controlled substance, making online advertising difficult and expensive.
Most of Satya's business comes through word of mouth. Met said the center has served about 500 clients, enough to cover its current licensing fees. If the proposed increase takes effect next year, he said Satya would need about 20 additional clients to cover the higher costs.
“Don't get me wrong, I don't like these licensing fee increases,” Met said. “I think it's more of a fait accompli, that it's a done deal.”
Oregon voters approved Measure 109 in 2020, creating the nation's first state-regulated psilocybin program. Under the law, Oregon Health Authority programs are funded primarily through licensing fees.
Psilocybin is a naturally occurring psychedelic compound found in certain mushroom species. Under Oregon's program, adults 21 and older can receive supervised psilocybin services at licensed facilities.
The Oregon Health Authority said slower-than-expected industry growth and higher operating costs have left the state's psilocybin program with a funding shortfall. The agency said the proposed fee increases are needed to keep the program financially sustainable.
Sam Chapman, executive director of the Center for Psychedelic Policy, said the industry's fee-based funding model has "cracks in the foundation." He believes it should be revised before higher licensing costs make it even more difficult for businesses to succeed.
Chapman said the organization is preparing a report for Oregon lawmakers and Oregon Health Authority leaders, summarizing research on psilocybin's safety, effectiveness and potential health care cost savings. He said he hopes the report will demonstrate the program's value as officials consider its long-term funding.
The Center for Psychedelic Policy expects to complete the report within the next two weeks.
Met said he is skeptical the Oregon Health Authority's Rules Advisory Committee will make significant changes based on feedback from license holders, though he hopes the fee increases are not adopted.
"What I fully expect to happen is no matter what we all say about how this is going to hurt the industry, they're going to put these licensing increases," Met said.
The Rules Advisory Committee concludes its review of the proposed rules Thursday. Oregon Psilocybin Services will consider the committee's recommendations before revising the proposal. A public comment period is scheduled to begin Sept. 1.