As psilocybin pioneer, road to regulation, acceptance is a rocky one

As the first state to decriminalize and manage production of psilocybin, or “magic mushrooms,” Oregon is a pioneer for the psilocybin industry. That doesn’t mean the State legislature is without criticism, though, as Uptown Fungus owner Gared Hansen pointed out.

2020’s passage of Measure 109 allowed for the State to regulate and monitor psilocybin manufacturing and dispensing throughout the state, which began about a year ago. This allowed for businesses like Uptown Fungus to operate and push out psilocybin products to licensed service centers throughout the state.

The State of Oregon didn’t change much in the psilocybin business last year except for making some “administrative fixes to the rules,” which Hansen said have not been completely well-received. Last year, Oregon Health Authority (OHA) said Oregon Psilocybin Services (OPS) “amended administrative rules to address technical fixes or clarifications to rules that were adopted in 2022.”

These rules were adopted on Jan. 1 “and clarified that licensed laboratories are not allowed to test psilocybin products from unlicensed sources because doing so would be inconsistent with provisions of the Oregon Psilocybin Services Act (ORS 475A),” OHA wrote, emphasizing that these administrative amendments were not new requirements, but rather clarifications made to its rules to align with Oregon’s legislature.

Hansen said the biggest hindrance with Oregon’s psilocybin regulations regards psilocybin labs and their ability to test the product. There are two reasons why this rule change is affecting those in the psilocybin industry, according to Hansen.

The first regards Section C because the State has decriminalized psilocybin usage, and since there are complications surrounding the testing of psilocybin, Hansen is mostly concerned about how this creates safety issues.

“The State is already allowing people to grow their own, to use their own, to share it with friends, but now the State is saying you can’t have it tested at a lab to be more safe. They’re allowing this, but they’re not allowing people to be safe with it,” Hansen said. “It’s like saying, ‘OK, you can drive, but you’re not allowed to wear seatbelts.’”

The other problem is that the “gray market” is much more profitable for psilocybin labs than the legal market.

“One of the labs has already told me that they’re not going to be renewing their license in June, specifically because of this (rule change). We only have two licensed labs (in Oregon). The other lab was also talking about how they might shut down because of this,” Hansen said. “If we lose both of our labs, the whole (industry) shuts down.”

Oregon’s two labs are based in Portland.

OHA said it received comments from people who share Hansen’s concerns and requested that test labs “continue to test products.”

“Licensed psilocybin laboratories have never been able to test psilocybin products from unlicensed sources,” OHA wrote in response to those comments. It further emphasized that “OPS may amend administrative rules, but it does not have the authority to amend law.”

Once the safety issue is figured out, Hansen said the State should find a way for its labs to do both legal and profitable business.

“I think some legislators may need to visit this specific part of the law and make an adjustment,” he said. “If people are going to be using it, black market or gray market, they should be able to have it tested and be safe – especially if it’s decriminalized in the state.”

OPS will not be introducing or discussing legislation during the 2024 legislative session about psilocybin services.


Hansen has been working on getting the green light to produce psilocybin extractions – turning the mushroom’s chemicals into a pill form – which requires approval from the county. There have been some hiccups, though, which Hansen attributes to the long, arduous process being coupled with the public’s misconceptions about the psilocybin industry.

Lane County asked for letters from Uptown Fungus’ neighbors regarding a rule or code violation as to why Hansen could not pursue extractions, and the consensus was that they were not happy there was a psilocybin business in their midst.

“No one had any idea that the business was there, but as soon as they found out, so many people were upset there was a psilocybin mushroom farm in their neighborhood, and they were writing all kinds of letters to the county,” he said. “They didn’t seem to understand that this was just about whether I can do extractions. They were telling the county, ‘Don’t allow this business here; don’t allow it in our neighborhood.’ It was kinda sad.”

Hansen said his neighbors’ most common concern was that “it was going to bring a bunch of druggies to the neighborhood.” Uptown Fungus is not open to the public, though. Nobody goes to Hansen’s property for work except lab technicians who come to pick up test samples. Uptown Fungus operates privately with licensed service centers, which are dotted around Oregon, and Hansen delivers to those service centers from Portland to Ashland to Bend.

If Uptown Fungus becomes able to add more extractions to the industry’s pool, it would make psilocybin more accessible, according to Hansen. This is because extractions allow for people to take a large dose of psilocybin with just one pill instead of having to eat a significant amount of mushrooms.

“It makes it easier because a lot of people are having health conditions – that may be why they’re seeking out psilocybin, or even end-of-life issues with their health – and they might not be able to eat a whole bunch of mushrooms, or their stomach might not be able to handle it,” Hansen said. “This can be a way for people that have issues like that to have better access to psilocybin.”

Hansen said these misconceptions are harming the public’s perception of this new and innovative business, and he added that people who take psilocybin are under observation at one of Oregon’s 21 licensed service centers which is a very professional, controlled setting. The first, yet smallest, of Oregon’s licensed service centers is Epic Healing Eugene (EHE), which served its first clients on June 23, 2023.

EHE founder, owner, and CEO Cathy Jonas said psilocybin facilitators – staff who monitor the clientele through their psychedelic experience – have to earn a facilitators’ license in order to work at a licensed service center. This licensing ensures that no client will be without immediate, trained assistance if necessary, which allows clients to have a safe session.

Jonas added that the general public may not realize the work a client must do to prepare for the six to eight hours of monitored psilocybin use. For example, a client who is on medications for mental health disorders would need to ensure they are stable prior to using psilocybin. It’s also recommended for clients to practice mindfulness and other calming strategies to prepare for the experience.


Hansen said the State has found that psilocybin is beneficial for people with medication-resistant depression, post-traumatic stress disorder, and addictions – as well as people with a life-ending illness who can use psilocybin to “mentally deal with the idea that they’re going to be dying soon and to come to peace with that.”

“I’m hearing so many stories of people who have been helped and who have received benefits from the new industry and all the new healing that’s been happening, so I’m really happy that I could be part of that,” Hansen said.

Hansen called psilocybin a “great benefit to humanity,” and he praised the State, saying it has done a great job of being at the forefront of this issue.

“I think it’s really going to be a small, medical revolution where all these people who have not been able to find peace or health or relief from pain are now having this avenue opened up to them that is finally working,” Hansen said.



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