RN Collins (Series 2) No.14: The Economics of Regulated Psilocybin: Financial Viability, Equity Mandates, and the Sustainability of State Service Center Programs Cannabis Law Report | Audit-Style Reports Series | Cannabis Law Report | How to buy Skittles Moonrock online

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RN Collins has written a series of 20 new articles for cannabis law report on 2026 Psychedelics & Legal Issues.

This is the 14th in a series of 20

Contact RN Collins: https://www.linkedin.com/in/rn-collins/

The Economics of Regulated Psilocybin: Financial Viability, Equity Mandates, and the Sustainability of State Service Center Programs

Cannabis Law Report | Audit-Style Reports Series

Abstract

State-regulated psilocybin service programs in Oregon and Colorado have generated substantial legal and policy commentary focused on regulatory architecture, civil rights safeguards, and governance design. What is conspicuously absent from that commentary is sustained economic analysis. The Policy Reform / Governance / Oversight Series examined in this publication simultaneously advocates for equity mandates requiring sliding-scale pricing, independent oversight structures that add compliance cost, infrastructure requirements that raise operational overhead, and expanded access — without testing whether those recommendations are compatible with a financially sustainable program at current market scale. This article fills that gap. Drawing on Oregon’s inaugural quarterly data dashboard, operational testimony from service center operators, and Colorado’s first licensing metrics, it constructs a representative service center unit economics model; quantifies the revenue impact of sliding-scale mandates; analyzes the federal tax and banking constraints that structurally elevate costs; compares Oregon’s early cost experience to Colorado’s emerging model; and assesses what program scale would be required for equity, oversight, and access recommendations to be simultaneously viable. The analysis reveals a fundamental tension at the core of the first-in-nation regulatory model: the cost structures that make psilocybin services safe and regulated are precisely the structures that make them financially inaccessible to the populations the programs were designed to serve.

I. Introduction: The Financial Viability Problem No One Modeled

When Oregon voters approved Measure 109 in November 2020, proponents projected that the Oregon Psilocybin Services program would be financially self-sustaining within “several months” of launching commercial operations.¹ That projection has proven, in the words of the Oregon Health Authority’s own budget documentation, wildly optimistic. By mid-2023, OHA had tapped $3.1 million from the state general fund to cover program costs for the 2023-25 biennium.² Three years into operations, the program faces a $3.5 million budget shortfall for the 2025-27 cycle, the Legislature has allocated no general fund support, and the agency has publicly signaled that licensing fees — already cited by operators as a primary driver of service center closures — may need to double to sustain program administration.³

At the same time, twelve of the thirty-five service centers that received licenses since the program launched have closed their doors, a closure rate of approximately 34 percent.⁴ The 366 licensed facilitators as of Q3 2025 substantially outnumber the facilitator roles available across the twenty-three operational service centers, creating a saturated market in which most trained facilitators cannot find sustainable full-time work in the regulated system.⁵ The average client income is approximately $153,000 — nearly double Oregon’s median household income — reflecting a program that serves primarily high-income individuals despite statutory commitments to equitable access.⁶

These data points are individually documented in media coverage and agency reports. What they have not been subjected to is systematic economic analysis. The governance series this publication has examined repeatedly acknowledges that service centers face financial stress but never models why, what scale would be needed to relieve it, or whether the equity mandates and oversight requirements recommended across multiple articles are compatible with a market that is, by any honest assessment, operating near the margin of viability.

This article provides that analysis. It is organized in six parts: a unit economics model for a representative Oregon service center; an analysis of the federal structural constraints — Section 280E and banking access — that impose costs with no analog in other regulated industries; a quantitative impact assessment of sliding-scale pricing mandates; a comparative assessment of Colorado’s emerging cost structure; an analysis of what program scale is required before the governance series’ core recommendations become simultaneously viable; and a set of policy recommendations that take financial reality as a binding constraint rather than an afterthought.

II. Unit Economics of a Representative Oregon Service Center

A. Revenue Architecture

Oregon’s psilocybin service centers generate revenue through a session-fee model. Unlike cannabis retailers, which generate revenue per product unit sold, service centers bill for the facilitated session as an integrated service — covering facilitator time, facility use, and psilocybin product. Individual sessions in the Oregon market range from $1,000 to over $5,000, with select multi-day retreat packages offered at prices exceeding $15,000.⁷ Group sessions — typically three to eight clients per session — are significantly more affordable, with some service centers offering group rates between $300 and $500 per participant.⁸ The Q3 2025 Oregon data reflects 3,721 individual sessions and 573 group sessions among the 4,577 clients served in the first three quarters of 2025.⁹

The revenue ceiling for a representative service center depends critically on the number of sessions it can physically accommodate. A typical OHA-licensed service center in an urban setting operates one to four administration rooms, each capable of conducting one session per day given the duration of psilocybin administration sessions (commonly five to eight hours). A four-room service center running at full capacity, six days per week, fifty weeks per year, could theoretically accommodate approximately 1,200 individual sessions annually. At the Oregon market average of $1,500 per individual session — consistent with industry testimony — this yields a gross revenue ceiling of approximately $1.8 million annually before any equity pricing adjustments.¹⁰

In practice, service centers are operating well below capacity. One of the program’s largest operators, Satya Therapeutics in Ashland, reported facilitating approximately 1,000 sessions over multiple years of operation.¹¹ The 4,577 clients served across all active service centers in three quarters of 2025 implies an average of approximately 66 clients per active service center per quarter, or roughly 22 per month — a utilization rate consistent with early-stage market development but insufficient to cover the fixed cost structures described below.

B. Fixed and Variable Cost Structure

Table 1: Representative Oregon Psilocybin Service Center Annual Cost Model

Break-even analysis at representative price points:

A service center with $200,000 in annual fixed costs — the midpoint of the Table 1 range — requires the following session volumes to break even before facilitator compensation and before any equity pricing adjustment:

• At $1,500/session average: 133 sessions per year (approximately 11 per month)
• At $1,000/session average: 200 sessions per year (approximately 17 per month)
• At a blended rate reflecting 20% group sessions at $400/session: 156 sessions per year

These break-even volumes are achievable under favorable conditions. The problem is that market penetration in Year 1 to Year 2 of operations is systematically below break-even for many operators. The closure data is consistent with this: operators who cannot build client volume in their first year face license renewal decisions that do not pencil out. One service center founder estimated that a viable operation requires approximately $1 million in startup capital to sustain operations for two years before reaching self-sufficiency — a capital requirement that most facilitator-founders do not have access to and that equity-focused operators specifically targeted by Measure 109 are least likely to possess.¹²

C. The Facilitator Compensation Problem

The most structurally ambiguous cost in the model is facilitator compensation. Most Oregon service centers engage facilitators as independent contractors rather than employees, meaning facilitators bear their own licensing costs ($500 initial facilitator license fee), training costs ($3,000 to $10,000 or more for OHA-approved training programs), continuing education requirements, and the opportunity cost of time spent on SB 303 compliance paperwork. A facilitator guiding six individual sessions per week at $150–$250 per session (a common fee-splitting arrangement with service centers) generates gross income of approximately $46,800 to $78,000 annually — before self-employment taxes, health insurance, and ongoing training costs.

This compensation structure creates a market in which facilitation is economically feasible primarily for individuals with alternative income sources or low fixed-cost lives. It systematically disadvantages facilitators from lower-income backgrounds — precisely the equity-focused workforce Measure 109 was designed to cultivate — and produces the facilitator saturation dynamic now visible in the Q3 2025 data: 366 licensed facilitators competing for roles at twenty-three active service centers.¹³

III. Federal Structural Constraints: Section 280E and Banking Access

A. Section 280E and the Psilocybin Business

Section 280E of the Internal Revenue Code disallows businesses from deducting ordinary and necessary business expenses — including rent, employee compensation, insurance, and marketing — if the business consists of “trafficking in controlled substances” within the meaning of federal Schedule I or II of the Controlled Substances Act.¹⁴ Because psilocybin remains a Schedule I controlled substance under the CSA, every Oregon and Colorado psilocybin service center is legally subject to Section 280E’s prohibition on deductions.

The practical effect of Section 280E is to tax gross revenue rather than net income, dramatically elevating the effective tax rate on service center businesses. A service center generating $200,000 in gross revenue with $150,000 in legitimate operating expenses would ordinarily report $50,000 in taxable income. Under 280E, it may owe federal income tax on the full $200,000 — or on the portion attributable to services rather than the psilocybin product itself — depending on whether any portion of revenue can be characterized as cost of goods sold rather than ordinary operating expense.

Oregon and Colorado have each enacted state-level mitigation. Oregon Revised Statutes § 316.680(1)(j) allows a state income tax subtraction for expenses that would otherwise be allowed for federal purposes but are disallowed under the CSA’s Schedule I classification.¹⁵ Colorado’s SB23-290 similarly allows regulated natural medicine businesses to subtract expenses disallowed under Section 280E from their Colorado taxable income.¹⁶ These state provisions provide meaningful relief on state taxes — but not federal taxes. Because federal income tax represents the larger effective obligation, state-level 280E carve-outs reduce the burden but do not eliminate it.

The critical distinction for psilocybin service centers — not yet addressed in any judicial or IRS administrative guidance — is whether the session-fee model creates a meaningfully different 280E analysis than the product-sale model applicable to cannabis retailers. Cannabis 280E litigation has established that a business can deduct cost of goods sold (including the cost of cannabis product itself) but not ordinary business expenses such as rent and labor.¹⁷ For a service center that charges a single session fee covering both the facilitated experience and the psilocybin product, the question of what portion of the fee constitutes cost of goods sold (potentially deductible) versus service revenue (not deductible) is unresolved. If the IRS were to treat the entire session fee as service revenue subject to 280E, the effective tax rate would be materially higher than for a cannabis retailer able to at least deduct product costs. No court or IRS guidance has addressed this issue specifically for psilocybin service businesses, leaving operators in significant tax uncertainty.

B. Banking Access and Cash-Management Costs

Psilocybin’s Schedule I status also creates banking access constraints that parallel — and in some respects exceed — those faced by cannabis businesses. OHA’s Business Resource Guide explicitly identifies “challenges with banking, insurance, and federal tax filing issues” as consequences of psilocybin’s federal status.¹⁸ Unlike cannabis, for which Congress has repeatedly considered but failed to enact the SAFE Banking Act (which would provide federally insured depositories a safe harbor for serving state-licensed cannabis businesses), no specific legislation addresses banking access for psilocybin service businesses.¹⁹

In practice, some Oregon service centers have found credit unions willing to provide basic depository services, while others have operated primarily in cash.²⁰ The cash-management costs of an unbanked or partially banked business — secure cash storage, cash payroll administration, inability to accept cards, restricted access to lines of credit, and elevated insurance costs — are not zero-dollar inconveniences. Industry experience from the cannabis sector suggests that banking friction adds 2-5 percent to effective operating costs, and the absence of conventional debt financing forces operators to rely on higher-cost equity capital or personal loans.²¹ For a service center operating near the margin of viability, these frictional costs can be the difference between sustainability and closure.

IV. The Sliding-Scale Mandate: Quantifying the Equity-Viability Tension

A. What the Governance Series Recommends

Document 1 of the accompanying Policy Reform / Governance / Oversight Series recommends that a specified percentage of sessions at licensed service centers be offered at sliding-scale pricing as an equity mandate. Document 4 similarly advocates for mechanisms to ensure access for lower-income clients. Neither document models what this mandate costs a service center operating near the financial margin.

The tension is not merely theoretical. The OHA’s SB 303 data from Q1-Q3 2025 reveals that the average client income is approximately $153,000 — nearly double Oregon’s median household income of approximately $88,000.²² This income gap reflects both the cost of services (individual sessions ranging from $1,000 to $5,000+) and the composition of the facilitator workforce (predominantly Western and Eastern European heritage, as reflected in licensee demographics).²³ The program is, by the evidence of its own data, serving a substantially wealthier clientele than Measure 109 contemplated.

B. Revenue Impact of Sliding-Scale Requirements

Oregon’s existing equity framework requires service centers to submit a Social Equity Plan as part of annual license renewal, including objective performance measures such as the percentage of clients benefiting from financial assistance.²⁴ The requirement has not specified a mandatory percentage of sliding-scale sessions.

To model the fiscal impact, this article analyzes a 20 percent sliding-scale requirement — consistent with the governance series’ recommendations for “a specified percentage” of sessions — at a representative mid-market price point.

Table 2: Revenue Impact of a 20% Sliding-Scale Mandate

Assumptions: Service center generating $300,000 in gross annual revenue from 200 sessions at an average full price of $1,500. Fixed costs: $200,000. Pre-mandate net income: $100,000.

A 20 percent sliding-scale requirement at a 50 percent discount reduces net income by 30 percent — from $100,000 to $70,000. At a 75 percent discount, net income falls by 45 percent to $55,000. Full subsidization reduces net income by 60 percent.

These reductions are significant in an industry in which many service centers are already operating near break-even. The service center in this model — generating $300,000 gross with $200,000 in fixed costs — is performing better than the median Oregon service center based on the available utilization data. A service center generating $180,000 in gross revenue (120 sessions at $1,500) with $175,000 in fixed costs has a pre-mandate surplus of only $5,000. A 20 percent sliding-scale mandate at even a 50 percent discount would push it into deficit.

C. Why the Tension Cannot Be Resolved Through Mandate Alone

The equity mandate literature in the governance series — and in analogous literature from the cannabis equity context — typically treats sliding-scale requirements as redistributive within a financially viable industry. The assumption is that service centers above a certain revenue threshold can absorb the cost of discounted sessions, cross-subsidizing access for lower-income clients.

This assumption fails in a market where a substantial fraction of licensed operators are at or below break-even. The Oregon closure data demonstrates that the market has not yet reached the scale at which cross-subsidization is viable for the median operator. Mandating sliding-scale pricing in this environment does not redistribute revenue from profitable operators to under-served clients; it accelerates the closure of marginally viable operators, reducing the total number of service centers and leaving fewer access points for all clients, including those the mandate was designed to serve.

The correct sequencing — which the governance series does not address — is to first achieve a scale and revenue density at which operators are systematically profitable, and then impose equity mandates calibrated to a financially sustainable baseline. Alternatively, equity access should be funded through external mechanisms — state equity access funds, philanthropic subsidies, Medicaid reimbursement — rather than mandated cross-subsidization within an already stressed operator population.

V. Colorado Comparative Analysis: A Different Model, Similar Constraints

A. Colorado’s Structural Differences

Colorado’s natural medicine program, which began accepting license applications on December 31, 2024, differs from Oregon’s in several ways that may affect its economic trajectory.²⁵ Colorado allows two facilitator tracks — a general facilitator track and a clinical facilitator track for licensed mental health professionals — potentially enabling professional integration of psilocybin services with existing healthcare practices.²⁶ Colorado’s framework also permits micro healing centers, which allow mental health practitioners to add psilocybin services to existing clinical practices at lower startup cost; micro healing center license fees are set at $4,000, compared to Oregon’s $10,000 service center fee.²⁷ Colorado also permits home administration with additional safety measures, potentially reducing facility overhead for some service models.²⁸

Colorado’s regulatory model has also learned from Oregon’s operational experience. The Colorado Sun reported in late 2024 that when industry professionals were shown Oregon’s financial data, approximately 80 percent paused or abandoned their Colorado entry plans.²⁹ Colorado’s Natural Medicine Division was designed with nine full-time staff positions — a deliberately lean structure compared to Oregon — and its licensing fee schedule is structured to be self-sustaining from the outset.³⁰

B. Colorado’s Unit Economics: Early Indicators

The Center Origin in Denver, the first licensed Colorado healing center, began offering sessions in April 2025 at approximately $3,500 per individual session.³¹ This price point is above Oregon’s typical range and reflects the early-adopter premium common in nascent regulated markets, as well as Colorado’s higher cost of doing business (Denver commercial real estate costs are substantially higher than Oregon’s smaller-market cities where many OPS service centers are located).

Colorado’s Blue Book fiscal analysis projected state regulatory costs of approximately $5.2 million in fiscal year 2024-25 and $5.6 million in 2025-26, with state revenue of approximately $5.2 million per year from licensing fees — projecting rough fiscal neutrality for the regulatory program itself.³² This contrasts sharply with Oregon’s experience of a $3.1 million general fund subsidy in the current biennium and a projected $3.5 million shortfall going forward.³³

C. New Mexico as Structural Counterpoint

New Mexico’s medical psilocybin model — in which licensed medical providers administer psilocybin in clinical settings under a health department licensing framework — represents a structurally distinct economic model. Rather than purpose-built service centers, New Mexico’s framework leverages existing clinical infrastructure, potentially allowing a practitioner who already operates a mental health practice to offer psilocybin services without the full fixed-cost overhead of a dedicated facility. The state licensing fee structure and the insurance implications of the medical model also differ materially from Oregon’s.

The New Mexico model implies lower fixed-cost overhead but also a narrower access pathway — one that, by definition, requires a licensed health care provider as the service delivery mechanism. This may create access constraints for clients in rural New Mexico with limited provider access, even as it reduces the viability burden on individual providers compared to service center operators. A rigorous comparative analysis of New Mexico’s economic model is warranted but is beyond the scope of the current data available; New Mexico has not yet published comprehensive utilization and financial data comparable to Oregon’s SB 303 dashboard.

VI. The Scale Question: What Volume Makes the System Work?

A. Revenue Scale Required for Program-Wide Sustainability

Oregon’s OPS program faces a regulatory cost structure of approximately $3.1 million per biennium (approximately $1.55 million annually) in program administration alone, before any consideration of equity access fund capitalization or independent oversight body costs.³⁴ License fee revenue — which must cover these costs if the program is to be fee-sufficient — depends on the number and type of active licensees. As of Q3 2025, the program has issued licenses to 35 service centers (23 operational), approximately 366 facilitators, 12 manufacturers, and one testing laboratory.³⁵

At $10,000 per service center annually and $500 per facilitator, the current licensee population generates approximately $533,000 in licensing revenue annually — substantially below the $1.55 million annual program cost. Even if every approved service center license were active (rather than the 23 operational), the fee revenue would reach only approximately $683,000. Reaching fee self-sufficiency at current fee levels would require approximately 155 active service centers, roughly 6.7 times the current operational count.

This is a systemic problem, not a temporary liquidity issue. The program cannot become fee-sufficient at current scale; it requires either a significant expansion of the licensed operator base or a significant increase in licensing fees — the latter of which threatens to accelerate closures rather than support them.

B. The Scale Required for Equity Mandates to Work

As analyzed in Part IV, a 20 percent sliding-scale mandate is compatible with financial viability only for service centers generating gross revenue above approximately $250,000 annually. Using the Table 1 cost model, a service center operating at that revenue level while maintaining a 20 percent sliding-scale allocation at 50 percent discount would have a net operating margin of approximately 11 percent — thin but viable.

Oregon’s current utilization data implies that the median active service center serves approximately 22 clients per month. At $1,500 per session, that implies gross monthly revenue of approximately $33,000 ($396,000 annually). A service center at that revenue level with $200,000 in fixed costs has a pre-mandate surplus of $196,000, making a 20 percent sliding-scale mandate at 50 percent discount ($30,000 in reduced revenue) readily manageable.

The problem is that a substantial fraction of the current service center population is not at this volume. The closure data suggests that many operators closed before reaching the 22 sessions/month threshold. For the equity mandate to work without accelerating closures, the program needs a larger active service center base in which the high-volume operators cross-subsidize the equity requirement without threatening the marginal operators — or it needs external equity funding that does not depend on cross-subsidization.

C. What External Equity Funding Would Cost

A realistic equity access fund — providing $1,500 grants to enable 2,000 lower-income clients annually (approximately 20 percent of the current annual client volume) — would cost approximately $3 million per year. The Sheri Eckert Foundation’s Psilocybin Access Fund, launched in 2024, set a fundraising goal of $1 million with individual grants averaging $1,500.³⁶ This is a meaningful start but falls well short of the population-scale equity access required to meaningfully shift the $153,000 average client income.

Medicaid reimbursement — referenced by multiple service center operators as the most consequential medium-term revenue opportunity — would require federal approval of psilocybin as a Medicaid-eligible service, which is not achievable at Schedule I status and unlikely in the near term. Oregon-specific Medicaid initiatives have been discussed but not enacted.³⁷

VII. Implications for the Governance Series Recommendations

The economic analysis in this article has direct implications for several core recommendations in the accompanying Policy Reform / Governance / Oversight Series:

On the equity mandate (Document 1, § V.B): The recommendation to mandate sliding-scale pricing at a specified percentage of sessions is not operationally viable at current program scale for marginal operators. The mandate should be redesigned as a tiered obligation triggered by revenue thresholds, with a statutory floor below which service centers are exempt and above which the mandate scales proportionally. A $300,000 annual gross revenue threshold — above which a 20 percent sliding-scale requirement is imposed — would apply the mandate only to financially viable operators while protecting those near break-even.

On independent oversight body funding (Document 2, § VIII): The recommendation to fund an independent oversight body from a dedicated percentage of annual licensing revenues is sound in structure but premature in timing. At current licensing revenue levels, any percentage set high enough to fund meaningful oversight would further stress the operator population. The oversight body should be funded from legislative appropriation during the program’s development phase, with a transition to fee-based funding contingent on reaching a defined licensing revenue milestone — for example, $2 million in annual licensing fee revenue.

On fee structure reform: The most important single economic intervention available to state regulators is redesigning the fee structure so that the licensing fee burden scales with operator revenue rather than being flat per licensee. A service center generating $50,000 annually and one generating $500,000 annually both pay $10,000 under Oregon’s current framework. A percentage-of-revenue licensing fee — set at approximately 3-5 percent — would reduce the burden on marginal operators while maintaining or increasing aggregate revenue as the program grows.

On 280E relief: Advocacy for federal psilocybin rescheduling — which would remove the 280E prohibition on expense deductions for Schedule II substances — should be framed explicitly as an economic viability issue, not merely a philosophical one. The 280E constraint imposes a structurally elevated tax burden on service center businesses that could be eliminated through rescheduling, and the resulting improvement in after-tax cash flow would be among the most significant regulatory changes available to psilocybin operators.

VIII. Conclusion

The economic viability of state-regulated psilocybin programs is not an operational detail incidental to the legal and policy questions at the center of this publication series. It is the foundational question on which every other recommendation depends. A program that cannot sustain its licensed operators cannot achieve equity, provide effective oversight, or serve the public health goals that motivated its creation.

Oregon’s three-year data record reveals a program that is smaller, more expensive, and less financially sustainable than projected — with an operator closure rate of approximately 34 percent, a regulatory funding gap requiring general fund subsidy, a client population skewed heavily toward high-income individuals, and a fee structure that is simultaneously inadequate to fund the regulatory program and burdensome enough to drive closures. Colorado is beginning with structural advantages — a lower fee profile for micro healing centers, a lean regulatory apparatus, and the benefit of Oregon’s operational experience — but has not yet generated sufficient data to assess whether its economic model is meaningfully different.

The path to a financially sustainable, equitable psilocybin program runs through a clear-eyed acceptance of the current scale problem, a redesign of equity mandates as tiered obligations tied to revenue thresholds, external equity funding that does not depend on cross-subsidization by marginal operators, federal action on 280E and banking access, and a licensing fee structure that scales with program revenue rather than imposing flat costs on operators regardless of their viability. These are not small adjustments. They represent a fundamental rethinking of the economic model that has underpinned the first-generation regulatory frameworks — and without them, the governance architecture recommended in the accompanying series will have insufficient financial ground on which to stand.

Endnotes

1. Oregon Health Authority, 2023–25 Biennial Budget Request for Oregon Psilocybin Services, cited in Anthony Effinger, Oregon’s Legal Psilocybin Program Gets Taxpayer Funds Despite Promise to Pay Its Own Way, Willamette Week (Aug. 30, 2023), https://www.wweek.com/news/2023/08/30/oregons-legal-psilocybin-program-gets-taxpayer-funds-despite-promise-to-pay-its-own-way/ (noting that OHA said it might take “several months” before licensing fees covered program costs).
2. Id. (reporting that Oregon lawmakers appropriated $3.1 million from the taxpayer-supported general fund for the two-year period beginning July 1, 2023); see also Cathy Jonas, Written Testimony Before the Oregon Legislature on HB 2387 (2025 Regular Session), available at https://olis.oregonlegislature.gov/liz/2025R1/Downloads/PublicTestimonyDocument/128171 (describing a “$3.5 million budget shortfall” that “threatens to undermine” the OPS program and could “double licensing fees”).
3. Anthony Effinger, Oregon’s Psychedelic Service Centers Are Closing Amid High Costs and Tough Regulation, Willamette Week (June 3, 2025), https://www.wweek.com/news/2025/06/03/oregons-psychedelic-service-centers-are-closing-amid-high-costs-and-tough-regulation/ (quoting OHA spokeswoman Erica Heartquist: “There is no funding that OPS is aware of that is coming from the Legislature to support the program for 2025-27, which means that OPS must evaluate the possibility of increasing licensing fees.”).
4. Psychedelic Alpha, The Oregon Psilocybin Services Tracker (Q3 2025 Update), https://psychedelicalpha.com/data/the-oregon-psilocybin-services-tracker (reporting that as of Q3 2025, only 23 of 35 licensed psilocybin service centers remain operational, marking 12 closures since early 2024, with reports of an additional closure planned for January 2026).
5. Id. (reporting 366 licensed facilitators as of Q3 2025, with “growing concerns that the number of trained facilitators is becoming unsustainable and increasingly misaligned with the number of licensed service centers and, by extension, available facilitator roles”).
6. Id. (reporting that the estimated average income of OPS clients is approximately $153,000, compared to Oregon’s median household income of approximately $88,000, based on Q1-Q3 2025 SB 303 data).
7. Psychedelic Alpha, Oregon Psilocybin Services Tracker: Q1 2025 (Oct. 10, 2025), https://psychedelicalpha.com/news/oregon-psilocybin-services-tracker-q1-2025 (reporting session costs “often range from $1,000 to over $5,000, with one offering costing $15,000 for a 5-day inclusive package”).
8. Psychedelic Alpha, The Oregon Psilocybin Services Tracker (Q3 2025 Update), supra note 4 (reporting that “group sessions tend to be significantly more affordable, with some service centers offering rates between $300–$500”).
9. Id. (reporting 4,577 clients in Q1-Q3 2025, comprising 3,721 individual sessions and 573 group sessions averaging approximately 3 clients per group).
10. See Lucid News, Oregon’s Psilocybin Program: Industry Insiders Weigh In on Closures and the Future (Feb. 2026), https://www.lucid.news/oregons-psilocybin-program-industry-insiders-weigh-in-on-closures-and-the-future/ (quoting industry participant: “I think psilocybin therapy at the average price point in Oregon — around $1,500 — is affordable compared to a lot of things.”).
11. Effinger, supra note 3 (quoting Andreas Met of Satya Therapeutics: “he and his facilitators have guided 1,000 mushroom journeys at $1,000 per session”).
12. Lucid News, supra note 10 (quoting service center founder Jenna Kluwe: “She estimates $1 million is needed to properly launch and sustain a service center for two years.”).
13. Psychedelic Alpha, The Oregon Psilocybin Services Tracker (Q3 2025 Update), supra note 4 (reporting 572 total facilitator applications and 366 currently licensed or approved facilitators across 23 operational service centers).
14. I.R.C. § 280E (“No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.”).
15. Or. Rev. Stat. § 316.680(1)(j); Oregon Health Authority, Oregon Psilocybin Services Business Resource Guide (Updated January 2025), https://www.oregon.gov/oha/PH/PREVENTIONWELLNESS/Documents/Psilocybin-Business-Resource-Guide.pdf (noting that “Oregon law allows a subtraction for the same ordinary and necessary expenses you incur for your business” that would otherwise be allowed if not for the CSA’s Schedule I classification).
16. Colo. Rev. Stat. § 12-170-101 et seq., as enacted by S.B. 23-290 (2023); see also Colorado SB23-290 Final Fiscal Note, Colorado Legislative Council Staff (May 2023), https://content.leg.colorado.gov/sites/default/files/documents/2023A/bills/fn/2023a_sb290_f1.pdf (describing that the bill “allows a taxpayer who is licensed pursuant to the Colorado Natural Medicine Code to subtract an amount equal to any expenditure that is eligible to be claimed as a federal income tax deduction, but disallowed under 26 U.S. Code Section 280E, from their state taxes”).
17. See Californians Helping to Alleviate Med. Problems, Inc. v. Comm’r, 128 T.C. 173 (2007) (establishing that cannabis businesses may deduct cost of goods sold but not other business expenses under 280E). The specific application of 280E to session-fee service businesses rather than product-sale retail businesses has not been addressed by any Tax Court decision or IRS administrative guidance.
18. Oregon Health Authority, Oregon Psilocybin Services Business Resource Guide (Updated January 2025), supra note 15 (identifying “challenges with banking, insurance, and federal tax filing issues” as consequences of psilocybin’s federal status as a Schedule I substance).
19. See Secure and Fair Enforcement Regulation Banking Act (SAFER Banking Act), S. 2860, 118th Cong. (2023); H.R. 2891, 118th Cong. (2023), available at https://www.congress.gov/bill/118th-congress/house-bill/2891 (providing banking protections for state-licensed marijuana businesses only; not applicable to psilocybin businesses). No comparable legislation has been introduced specifically for psilocybin.
20. Harris Sliwoski LLP, Oregon Psilocybin: Banking (Nov. 7, 2022), https://harris-sliwoski.com/psychlawblog/oregon-psilocybin-business-issues-part-2/ (noting that the author did not expect “any chartered financial outfit opening accounts (even basic depository accounts) for Oregon psilocybin businesses in early 2023” and describing multiple cash-management headaches for unbanked operators).
21. See American Banker, Cannabis Banking Is a Reality. So Do Banks Still Need the SAFE Banking Bill? (Sept. 18, 2023), https://www.americanbanker.com/news/cannabis-banking-is-a-reality-so-do-banks-still-need-the-safe-banking-bill (describing banking friction costs for Schedule I businesses and the operational overhead of cash management).
22. Psychedelic Alpha, The Oregon Psilocybin Services Tracker (Q3 2025 Update), supra note 4 (reporting estimated average client income of approximately $153,000, representing a decrease from $164,000 in Q2, against Oregon’s median household income of approximately $88,000).
23. Id. (reporting that approximately 40% of Q1-Q3 2025 clients identified as Western European heritage, with Western European and Eastern European clients together accounting for more than half of respondents; and that 100% of the 78 licensee applicants in Q2 and Q3 were Western European or “Other White” heritage).
24. Oregon Health Authority, Oregon Psilocybin Services 2025 Rulemaking, https://www.oregon.gov/oha/ph/preventionwellness/pages/psilocybin-administrative-rules.aspx (noting that annual Social Equity Plan submission is now mandatory for license renewal, including objective performance measures); see also Psychedelic Alpha, The Oregon Psilocybin Services Tracker (Q3 2025 Update), supra note 4 (describing the requirement for facilitators, service centers, and manufacturers to submit social equity plans detailing sliding-scale pricing commitments and diversity metrics).
25. Colorado Department of Revenue, Natural Medicine Division, Natural Medicine Frequently Asked Questions, https://dnm.colorado.gov/natural-medicine-frequently-asked-questions (confirming that the NMD-DOR began accepting license applications on December 31, 2024).
26. Colorado Department of Regulatory Agencies, Division of Professions and Occupations, Colorado Natural Medicine Homepage, https://dpo.colorado.gov/NaturalMedicine (describing the two-track facilitator licensing system: standard Facilitator and Clinical Facilitator for licensed mental health professionals).
27. Colorado Sun, Mushroom Startups Ready Themselves for Colorado’s Untested Psilocybin Healing Industry (May 29, 2025), https://coloradosun.com/2025/05/29/psilocybin-healing-industry-colorado-regulations/ (reporting state rules finalized in October set licensing fees “ranging from $4,000 for a micro healing center to $8,000 for a product manufacturing facility in 2025”).
28. Id. (noting that Colorado’s rules permit home administration with additional safety measures, unlike Oregon’s service-center-only model).
29. Id. (quoting an industry consultant: “The number of leads we have talked to in Colorado is astronomical. When we really break down the numbers, and tell them what’s transpired in Oregon, 80% are either pausing the project or abandoning it all together.”).
30. Id. (reporting that the Natural Medicine Division “pared down the number of full-time positions in the department from 19, the number proposed in a 2023 senate bill, to just nine”).
31. CBS Colorado, Denver Psilocybin Healing Center Becomes First Licensed in Colorado (Apr. 8, 2025), https://www.cbsnews.com/colorado/news/denver-psilocybin-healing-center-first-licensed-colorado/ (reporting that The Center Origin’s session price is “around $3,500” and sessions “can last five to eight hours”).
32. Colorado Blue Book, Proposition 122: Access to Natural Psychedelic Substances (2022), https://myctbl.cde.state.co.us/sites/default/files/pdf/blue-book/2022/Prop122.pdf (estimating DORA costs of approximately $5.2 million in budget year 2024-25 and $5.6 million in 2025-26; state revenue of approximately $5.2 million per year); see also Colorado SB23-290 Final Fiscal Note, supra note 16 (appropriating $733,658 from general fund to Department of Revenue and $838,402 to Department of Public Health and Environment for FY 2023-24 startup costs).
33. Jonas, supra note 2; Effinger, Oregon’s Psychedelic Service Centers, supra note 3.
34. Effinger, Oregon’s Legal Psilocybin Program Gets Taxpayer Funds, supra note 1 ($3.1 million biennial general fund appropriation); Jonas, supra note 2 ($3.5 million projected shortfall for 2025-27).
35. Psychedelic Alpha, The Oregon Psilocybin Services Tracker (Q3 2025 Update), supra note 4 (reporting 35 service centers licensed total, 23 operational; 366 licensed facilitators; 12 manufacturers; 1 testing laboratory).
36. Sheri Eckert Foundation, Psilocybin Access Fund, https://www.sherieckert.org/paf (describing the fund’s goal to raise $1 million in 2024, with average grant sizes of approximately $1,500 directed to facilitators and service centers on behalf of financially underserved clients).
37. Lucid News, supra note 10 (quoting service center operator: “I am in full support of all of the work that’s been done to go after Medicaid and Medicare dollars…I also believe in a slightly more incremental approach, and that the best way to really get to Medicaid dollars for some states…is to simply go to the legislature and ask for general fund dollars.”); see also McCrone, Paul, et al., Cost-Effectiveness of Psilocybin-Assisted Therapy for Severe Depression: Exploratory Findings from a Decision Analytic Model, 53 Psychol. Med. 7619 (2023), https://doi.org/10.1017/S0033291723001411 (finding that psilocybin-assisted psychotherapy “has the potential to be a cost-effective therapy for severe depression,” which provides a health economics basis for Medicaid coverage arguments, though the study was conducted in a UK clinical context using UK pricing and therapist-time assumptions not directly transferable to Oregon’s service center model).