Investment Opportunities in Measure 109

2022 has been an exciting year for psychedelics. The industry has had great publicity, discoveries, and promising breakthrough treatments. As we head into the second half of the year, it is time to start looking at 2023 and the start of the first legal psilocybin market in the US!

Oregon is the first state to pass any legislation allowing the use of psilocybin legally. Given that this is the first program of its kind, the path that it will carve is hard to predict. The successes and failures in Oregon will set the tone for other states that follow suit, and it will be the first opportunity for psychedelic companies to get in on the ground floor of a legal market in the US.

The Oregon Psilocybin Services Act (“Measure 109”) was passed on November 3, 2020. The measure allows the legal use of psilocybin for people over 21 years of age in a clinical setting. 

The psilocybin treatments in Oregon will not be Medical. Officially, the use of Psilocybin in these clinics will be for “Personal Development.” No doctor recommendation or prescription is required, and the facilitators do not need to be medical professionals. All that is required to administer the medicine is a high school diploma and completion of a licensed program and exam.  

The Oregon Health Authority (OHA) has been tasked with developing and establishing the rules for Measure 109, and they’ve been busy defining the parameters around the first program of its kind. Here’s what we know about it so far…

The OHA is tasked with designing the requirements for facilitators, the dose, labels, and packaging for the psilocybin, and the licensing of service centers. 

The first set of rules was announced in May 2022. They released the requirements for cultivators and manufacturers of the psilocybin. They also released the curriculum requirements for the training program that facilitators will be required to complete before they can start working with clients. They have already started taking applications for companies creating the training programs that facilitators will be required to complete before taking someone through a psilocybin trip. 

They will begin taking applications from those eager to start their psilocybin service center on January 2, 2023. Given this timeline, we can expect the first service centers to be up and running toward the end of the year. 

Quite frankly, it is hard to say what this program is going to look like and what investment opportunities will be available. Most of what you will read about opportunities will warn you that investing in companies emerging to service this new market requires high start-up costs and unknown returns, and that’s not entirely wrong. However, the fact remains that there will be opportunities to get in on this emerging market, and projections are looking promising.

Market research done by Red Light Holland projects that the Oregon Psilocybin market will reach $1 Billion.

The board has put some regulations in place to keep that money in Oregon. To become a facilitator, you must be a resident of Oregon for at least two years. Also, all licensed companies must be majority owned by a resident. This makes it more difficult for international companies to get in on the action, but not impossible. 

They also put in place a rule that says you can only hold “financial interest” in one company and no more than five service centers. Companies can build vertically, meaning that they can manufacture the psilocybin products as well as run service centers. But, growth beyond that will be difficult within the current regulations. 

The OHA wants to start with slow growth, which from a legislative standpoint is wise. There is a lack of knowledge of where the industry could run into problems, and starting small is the best way to mitigate that. As the market grows, so too will the laws that govern it. 

Despite regulations, a handful of companies are still laying the groundwork to capitalize on the new market. 

There are a handful of companies preparing to take advantage of Measure 109. The Netherland’s Synthesis institute has already submitted its application for a facilitator training program. They have also purchased 124 acres of land in Ashland indicating that they have plans to open a retreat center. However, the company came under some scrutiny after the head of the board creating the rules for the use of psilocybin in Oregon reported that he was dating the CEO. The board member, Tom Eckert has since resigned and the status of Synthesis Institute’s training program application is yet to be disclosed. 

The Synthesis Institute is already running an 18-month psychedelic practitioner training program in the Netherlands that costs students $21,500. It is currently unclear what the American version of this program will look like, but two things are certain: it will be a significant financial and time commitment. 

The Canadian company, Field Trip Health, has indicated intent to open at least one service center in Oregon. They give us a good idea of what a psilocybin session may cost. They are currently offering the service for over four thousand dollars in Amsterdam, and their guided ketamine sessions in the US are even higher. This will attract those who have been traveling to Costa Rica and Jamaica to seek these treatments but will be unaffordable for many Oregon residents.

Red Light Holland is working on its proposed treatment, with a different focus than the other retreat centers. They are hoping to open centers that offer microdosing, instead of a full trip. This would make the program accessible to a greater number of people. Psilocybin treatment is going to cost a pretty penny, and many of those interested in attending a retreat or individual session will not be able to afford it. 

A microdose will not require as many resources as it would if someone was taking a full dose and needed to be supervised by a facilitator for a significant part of the day. With this business plan, Red Light Holland would be able to tap into a larger market than many of the other companies. However, the OHA has yet to decide if they will be allowing microdosing as part of the program. 

There is a significant amount of uncertainty in the psychedelic investment space. It is clear that it is taking off, but the details of how everything is going to go down is largely unknown.

The development of Oregon’s psilocybin program will start to give us an idea of what works, what doesn’t, and how laws will be shaped around psychedelic treatments. As with any new industry, some of the people trying to get in on this gold rush are going to fail. But, the companies that can navigate the new laws and secure enough funding to get the ball rolling are going to be incredibly successful.

Many psychedelic companies are years off from turning a profit. It is unsure when the companies that are developing new compounds and working on patents are not going to be able to enter the market, but Oregon offers a platform to start drastically increasing income for companies that can bring their services to market. 

As the final details of Measure 109 are hammered out and put into action, we will start to get answers to the questions about what a legal psychedelic market will look like.