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From Magic to Money: The Legal History of Psilocybin

(Editor’s Note: Welcome to the second installment of “From Magic to Money,” a Bold series on the rising psilocybin industry. The first article explored the health benefits of psilocybin. Don’t miss any of these stories–sign up for The Bold Wire newsletter and have them sent directly to your inbox!)

For thousands of years, ancient civilizations have used psychedelic mushrooms. Tribes in South America, Central America and even North Africa recognized the potential health benefits of magic mushrooms. In fact, Americans first discovered the use of these substances in Mexico in the late 1950s. But despite this history, magic mushrooms and its underlying compound psilocybin have not been well received in the U.S. In fact, it has been considered illegal since nearly its first introduction into the country. Based on recent psilocybin facts, however, this may be changing.

Thanks to recent research findings, many cities and even some states are reconsidering the legality of psilocybin. Increasing evidence supports that clear health benefits of magic mushrooms exist. Notably, this process of legalization of psilocybin has been slow and will take some time for broad acceptance to occur. But a more objective look at psilocybin facts is worthwhile based on its potential in managing many conditions. Of course, this is nothing new, given psilocybin’s rocky road of legal support over the decades. By taking a look at the legal history of this substance, it will be easier to appreciate the legal hurdles it may face ahead.

From a Promising Drug to Illegality

The first discovery of magic mushrooms in the U.S. came by way of a banker named R. Gordon Wasson. During a trip to Mexico with his wife, the couple discovered tribes using mushrooms as part of their spiritual rituals. Intrigued by their effects, Wasson introduced them to Swiss chemist Albert Hoffman, who’d been working with LSD. Hoffman then isolated psilocybin from the mushrooms and synthetically reproduced it with the help of Sandoz Pharmaceuticals. As additional psilocybin facts emerged, it was suspected that there were health benefits of magic mushrooms. This led to a boom in pharmaceutical research in the late 1950s and early 1960s.

Unfortunately, the opportunities would not last. In 1971, psilocybin was listed as a Schedule I drug under the Controlled Substances Act. This meant it had no known medicinal use and had a high addiction potential. The increasing recreational use of magic mushrooms prompted this determination, and all research effectively halted. Despite many scientists and mental health professionals believing health benefits of magic mushrooms existed, the DEA prohibited their experimental use. As a result, psilocybin has been banned since that time in the U.S. until very recently.

“Our goal was to move psilocybin out of the medical framework so we could provide access to anyone who might safely benefit.” – Tom Eckert, Co-Author of the Oregon Psilocybin Therapy Ballot Measure

A Framework for Legalization

Despite its illegality, some experimentation into the health benefits of magic mushrooms began to take place again in 2006. Promising psilocybin facts emerged, which has since led several cities and states to reconsider its legal use. Notably, in recent years, a number of major cities have decriminalized its use. Specifically, Denver, Oakland, Ann Arbor, and Washington D.C. have adopted less aggressive legislation against these substances. Naturally, this poses some problems since legalized use of psilocybin is not recognized at the state or federal level in these cities. But they are moving ahead with decriminalizing efforts because psilocybin facts support it. Like the path to marijuana legalization, they hope to use science to justify their actions. (Read more about the future of the cannabis industry in this Bold story.)

This past year, Oregon became the first state to legalize the use of psilocybin based on the health benefits of magic mushrooms. Roughly, fifty-five percent of the state’s voters approved the legal use of psilocybin in combination with psychological therapy. In essence, Oregon provided the first clear framework for reintroducing the use of magic mushrooms. Its use is only allowed by a licensed professional, and individuals must be at least 21 years of age. In addition, the substance may only be used within a treatment facility. While state consultants are still evaluating psilocybin facts, it is expected actual therapeutic use will begin within two years.

“What is different about psilocybin, compared to other mood-altering drugs or pharmaceuticals, is the enduring meaning and belief changes that can occur. People feel ‘reorganized’ in a way they don’t with other drugs.” – Roland Griffiths, Neuropharmacologist and Researcher, Johns Hopkins University

Psilocybin Facts Supporting Legalization

A week after Oregon passed legalized psilocybin use, additional evidence was published supporting the health benefits of magic mushrooms. Johns Hopkins University released a study that showed significant effects of psilocybin in treatment-resistant depression. In the study, seventy-one percent had a substantial response to treatment, and over half had remission at 4 weeks. The psilocybin facts of the study provided strong evidence of the health benefits of magic mushrooms. And this was not the only study doing so. In the last several years, several researchers have demonstrated the health benefits of magic mushrooms in numerous conditions.

Some magic mushrooms growing under a UV light
The health benefits of psilocybin are important, but equally so are the legal questions surrounding it.

The range of health benefits from magic mushrooms could be quite extensive. Active research involving psilocybin are exploring effects in not only depression but a wide variety of mental health conditions. These include anxiety, obsessive compulsive disorder, addictions, and schizophrenia. The psilocybin facts surrounding these investigations have also led to some important changes at the federal level. In 2019, the FDA granted breakthrough status to psilocybin and psychological therapy use for treatment-resistant depression. This suggests the landscape has become more favorable for its eventual legalization more broadly.

“I welcome the broadening of the indications, because I think psilocybin is likely to be effective in a range of disorders.” – David Nutt, Director of the Neuropsychopharmacology, Brain Sciences Unit, Imperial College, London

Proceeding with Caution

For those who believe in the health benefits of magic mushrooms, the plan is to proceed with caution. Having learned lessons from the past, researchers and therapists alike wish to see psilocybin eventually attain legal status. Psilocybin facts support this, but there remains stigma associated with the use of magic mushrooms and other hallucinogens. This is why states like Oregon are moving slowly through the process. It’s been a rocky road for psilocybin since its introduction into the U.S. But hopefully, evidence and facts will win out eventually and allow the use of these substance in an appropriate manner.

 

The official Bold Business survey results are clear: most favor work-from-home over going back to the office. Read more in this important Bold story!

10 Bold Companies Tackling the Climate Change Problem

When it comes to climate change, there are two primary strategies to offset greenhouse gas emissions. One requires the world to embrace more sustainable practices and reduce our carbon footprint. The other, however, acknowledges that these efforts alone won’t be enough, and thus, takes a different approach. It involves being proactive and leveraging the latest technologies to design reverse current trends. Often referred to as clean tech, many startups focusing on climate change are taking this latter perspective. And several of these climate change companies deserve our attention.

Startups focusing on climate change are exploring a variety of  possible ways to curb carbon emissions. Some are creating methods to extract and capture carbon dioxide from the air and atmosphere. Others are introducing biological and chemical solutions to reduce carbon levels. And some climate change companies are investing in technologies that turn carbon into useful fuels and products. The spectrum of innovation among these clean tech startups is quite broad as well as fascinating. The following lists some of the more impressive ones certain to be a part of the climate change solution.

  • Global Thermostat – Based in New York, Global Thermostat has raised over $42 million in addition to partnering with Exxon-Mobil. It is one of the startups focusing on climate change by removing carbon dioxide from the air. But it can also remove it from industrial factories on-site and turn it into usable carbon byproducts. In fact, its modules can remove up to 40,000 tons of carbon dioxide per year. It hopes to scale its capabilities through its partnership with Exxon-Mobil.
  • Newlight – There a few climate change companies that are using carbon negative techniques to make products. In other words, their production processes absorb carbon dioxide from the atmosphere. Newlight does exactly that while creating a host of bioplastics, concrete and other construction building materials. It actually uses these bioplastics and products to create fashion and foodwares. Newlight has branded its products by the name “Air Carbon.”
  • Carbon Engineering – This is one of the Canadian startups focusing on climate change that has already raised $68 million in funding. Like other climate change companies, it too pulls carbon dioxide from the air. However, it does so through the use of special chemicals. The facilities created by Carbon Engineering can remove 1 million tons of carbon dioxide from the air per year. This is about the equivalent of 40 million trees by comparison.
  • Prometheus – Prometheus takes a different approach as a startup focusing on climate change. Its Titan Fuel Forge machine pulls carbon dioxide and water from the air, which is not that unique. But it then exposes it to electricity made from solar and wind technologies. The end result is actual carbon-based fuels that are created using a net-zero carbon process. In essence, its one of the climate change companies creating usable gas from thin air.
  • Charm Industrial – Some startups focusing on climate change capture and store carbon dioxide out of the atmosphere. But Charm Industrial does it through a process known as pyrolysis. This process allows it to convert carbon biomass into a carbon-rich, thick liquid that can then be pumped deep underground. Thus, not only do their plants absorb carbon dioxide from the air, but it effectively removes it for good. Potentially, this liquid may also have some important uses to be determined in the future.
  • Visolis – This California-based company is well recognized among climate change companies. As a result, it enjoys several key partners around the globe. Using synthetic biology, Visolis produces carbon-eating microbes and a variety of bio-based chemicals. These are then used to create specialty materials from waste biomass and carbon dioxide using a carbon-negative process. Like Newlight, their specialty products cover a wide range of goods.
  • Ocean-Based Climate Solutions – Some startups focusing on climate change tend to take a more naturalistic approach. Ocean-Based Climate Solutions is one of these climate change companies. Using the power of ocean waves, the company provides water pumps that stirs up ocean waters. In the process, this stimulates the growth of phytoplankton, which enhances carbon dioxide removal. At the same time, this also creates more food for aquatic life, which boosts overall food security for all.
  • Climeworks – Based in Switzerland, Climeworks is another one of the climate change companies using direct air capture of carbon dioxide. In essence, the company has created a very large filter that bonds to carbon dioxide, removing it from ambient air. Named Orca, the company’s direct air capture plants traps carbon dioxide and then stores it deep underground as carbonate salts. Its most recent plant has been built in Iceland.
  • Carbon Collect – Other climate change companies are similarly interested in sequestering carbon dioxide and storing it underground. Carbon Collect has achieved this by creating mechanical tree machines that can capture 100 metric tons of carbon dioxide per day. Reportedly, its full-scale plants to sequester as much as 4 million tons per year. Unlike other startups focusing on climate change, Carbon Collect recycles its stored carbon products. These can then be used as fuels, foodstuffs, building materials, and agricultural products.
A bunch of company logos on an iceberg.
These startups focusing on climate change are helping the world combat a very real problem.

Innovative Solutions Through Climate Change Technology

The climate change companies listed here are just a few startups focusing on climate change today. And certainly, others will follow, offering other innovative solutions to deal with these issues. As seen, there are a number of intriguing approaches that these companies offer in dealing with carbon emissions. Combined with reduces carbon production and sustainability practices, these strategies hold great promise. It’s thanks to these types of businesses the light at the end of the tunnel is look ever so brighter. Their bold commitment to solving the climate change problem should inspire us all to be a part of the solution.

 

The official Bold Business survey results are clear: most favor work-from-home over going back to the office. Read more in this important Bold story!

BOLD OPINION: Pricing Strategies Are Good Business

Over the last few years, the number of both man-made and natural disasters has seemingly increased significantly. Hurricane seasons have become more intense, with flooding and damage extending from the Gulf to the Northeast. Forest fires now plague the west coast almost year-round. Major security breaches have resulted in widespread shutdowns and even oil shortages. (Read more on how cybersecurity is a non-negotiable facet of business in this Bold story.) And of course, the pandemic essentially shut down the entire world. While the causes of these disasters are quite varied, they do have one thing in common. Each has been associated with the potential for price gouging, and each has triggered anti-price gouging laws. But whether this is an appropriate response to the situation is quite questionable.

The debate about how to handle price gouging is one that divide economists and politicians alike. In theory, it may seem at first that anti-price gouging laws are a good thing. They ensure essential goods are priced in an affordable range in times of disaster. They are also believed to prevent opportunists from taking advantage of others. But these assumptions are not necessarily true, and the negative impacts that these laws have are actually much more substantial. The disincentives they create affect disaster recovery in a bad way, limiting access to the very goods they try to protect. With this in mind, it’s worth taking a closer look at the effect price gouging legislation has overall.

“Higher prices encourage consumers to purchase what they actually need, leaving goods on the shelf for others. This discourages consumers from needlessly stockpiling goods.” – Daniel J. Smith, Director of the Political Economy Research Institute at MTSU, and Associate Professor of Economics, Jones College of Business

Anti-Price Gouging Laws and Hoarding

The pandemic had struck, and quarantines were beginning to go into effect. Everyone became suddenly obsessed with hand-washing, cleanliness, and mask-wearing as a result. In order to prepare for coronavirus, we rushed to the store for sterile wipes, hand-sanitizer, and of course, toilet paper. But when we arrived, many of us found the shelves empty. Others before us had already hoarded what supplies there were. Believe it or not, this is one of the downsides of anti-price gouging laws. Because price increases weren’t allowed, those who arrived first stockpiled all the essential goods.

Despite the fact that price gouging sounds bad at face value, it actually serves a very important purpose. When specific goods are in high demand, retailers increase the price as a mean to better ration a limited supply. In a disaster, however, anti-price gouging laws prevent this from occurring. Thus, rather than having the higher price deterring consumers from hoarding, the fixed lower price does just the opposite. As a result, fewer people actually gain access to these essential goods. In reality, price gouging (or increases) would encourage a more equitable distribution of these items.

“The statistic to focus on was not the price but, rather, the shortfall of supply relative to demand. Figuring out how best to eliminate that shortfall is the problem we need to confront.” – Michael A. Salinger, Former Director, Bureau of Economics, Federal Trade Commission

Price Gouging and Supplier Effects

Anti-price gouging laws affect consumer behavior, and they also influence supplier behavior as well. Consider a lumber yard that produces building materials. In the wake of a major tornado or hurricane, such supplies are in high demand. The building materials present in Home Depot and other retailers will sell out quickly, even in the absence of hoarding. In a normal situation, such demand would drive prices higher as supplies diminished. This would encourage the lumber yard to pay workers overtime, increase trucking and shipping lines, and boost production. But because price gouging isn’t permitted, the lumber yard has no incentive to do so. In fact, the extra costs, lower profit margins, and legal penalties actual deter such decisions.

Some essential supplies that are sold out
Anti-price gouging laws have their purpose, but they should never stifle entrepreneurship and getting products into the hands of willing consumers.

Consider the same situation if price gouging behaviors were allowed. As building materials diminished, retailers would increase their prices of goods. Assuming consumers would be willing to pay these higher prices, suppliers would be encouraged to increase production. They would also preferentially supply regions where the supplies were most needed because they would be incentivized to do so. This actually works much better because building supply prices would only increase in the region affected by the disaster. Anti-price gouging laws prevent these normal market adjustments from occurring. And in turn, they actually contribute to the shortage of supplies in the areas with the most need.

“If prices are capped, there’s little incentive for businesses to hustle to increase supplies. It’s costly to find and transport extra products in hazardous conditions. If these extra costs eat up the profit associated with a fixed retail price, Adam Smith’s invisible hand won’t work; there’s no financial carrot.” – Rafi Mohammed, Founder of Culture of Profit

Letting the Market Take Care of Itself

Those who favor anti-price gouging laws generally fail to appreciate the negative effects they impose. Others who wish to prevent price gouging recognize these pitfalls and suggest additional measure to encourage fairness. Hybrid policies that invite both anti-price gouging laws as well as supplier subsidies represent one solution. But this does nothing to prevent hoarding and stockpiling. Though they may encourage suppliers to boost production, such solutions only address one aspect of the problem. Others believe purchase limits is the way to go alongside anti-price gouging laws. But here again, this too only focuses on one side of the issue. This approach would do nothing to boost needed supplies to a given region.

This leads us to the inevitable conclusion that anti-price gouging laws do little to promote fairness. Plus, they do nothing to alleviate an already bad situation where essential goods are needed in increased supply. Pricing strategies that let natural market forces and demand forecast price and supply based on demand remain the best approach. Not only will this better allocate and distribute resources. Such strategies will also address a critical need quickly so that markets can return to normalcy sooner. By definition, disasters are unwanted events, and price gouging is never something that’s going to be attractive. But it remains the best approach to solving the true needs that a disaster imposes. That’s why such pricing strategies are indeed good business practices from a political, economic, and even social perspective.

 

The official Bold Business survey results are clear: most favor work-from-home over going back to the office. Read more in this important Bold story!