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Psychedelic Pharma Has Arrived—But Will It Really Be Different from Big Pharma?

Psychedelic businesses have an opportunity to disrupt existing paradigms with regenerative economic practices. The question is: will they take it?

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Updated February 25, 2023

DoubleBlind Mag is devoted to fair, rigorous reporting by leading experts and journalists in the field of psychedelics. Read more about our editorial process and fact-checking here.

The word “regenerative” has entered the mainstream business lexicon, poised to replace “sustainable” as the next trendy business term. It has also entered the psychedelic business lexicon, most visibly in Vine Ventures’ recent announcement of a “regenerative financing vine” to provide $70 million of funding to the Multidisciplinary Association for Psychedelic Studies (MAPS) in order to continue pursuing legal MDMA-assisted therapy for the treatment of post-traumatic stress disorder. But what exactly does “regenerative” mean in an economic context? And what does it have to do with psychedelics?

In economics, “regenerative” refers to a pattern of activity in which resources circulate to restore and strengthen the economic, social, and natural systems supporting individual and collective well-being. A regenerative economic pattern follows the pattern of natural systems such as forests, in which nutrients and information circulate in order for the system to thrive and regenerate itself in the future. Such a pattern (regenerative capitalism) stands in stark contrast to the established economic pattern (extractive capitalism), in which resources are extracted from bottom to top and periphery to center to benefit a single group—financial investors—at the expense of overall well-being.

Disconnection between corporate actors and local communities enables the extractive pattern. Outposts of multinational corporations tethered to Wall Street have replaced local businesses on Main Street, extracting the financial capital created by community economic activity to a concentrated set of remote shareholders. And corporate managers—disconnected from local ecosystems and beholden to shareholders—disregard the effects of their decisions on the health and well-being of communities’ natural and human resources, leading these forms of capital to be extracted.

READ: Conscious Capitalism is an Alibi and an Apology for Our Existing Paradigm

Increased social disconnection bolsters economic disconnection. The ascent of hyper-individualistic values during the past half-century and the decline of civic organizations—religious groups, labor unions, volunteer organizations, and others—have impaired local social networks, extracting the social capital necessary to support robust local economic systems.

The extractive pattern has produced unsustainable imbalances in our worldly systems, evidenced by widening financial inequality in the economic realm and escalating climate change and ecosystem destruction in the natural realm. It has also led to unsustainable imbalances in our personal systems, impairing peoples’ ability to make meaning in life and disconnecting them from themselves. Elevated rates of depression, anxiety, addiction, and suicide—which are correlated with inequality and economic distress—reflect this despair.

Regenerative patterning represents the only possible antidote to these destructive imbalances. Natural systems regenerate themselves through a continual balancing process. For example, many terrestrial and aquatic systems seek balance using rootlike mycelial networks, which collect and distribute nutrients and information. (Fascinating fact: Mushrooms grow where microscopic “roots” known as hyphae fuse with one another to form a mycelial network—true connectors!) In a regenerative economic system, densely interconnected webs of people and organizations play the role of mycelia, supporting local feedback loops and the local circulation of community capital to seek balance.

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To understand why regenerative patterning is relevant to psychedelics, it’s useful to recognize that the current pharmaceutical centered approach to delivering mental health treatment—the default for making psychedelics widely available—reflects extractive patterning. Since the introduction of the first psychiatric drugs, the pharmaceutical industry has promoted the view that mental “disorders” can be viewed primarily as clusters of biologically based symptoms, with relatively little regard for psychosocial influences. Though this approach has benefited pharmaceutical shareholders, it hasn’t helped patients as much. For example, despite the fact that antidepressants represent the most prescribed category of pharmaceuticals for the US non-geriatric adult population, according to the CDC—and have grown to generate over $6 billion in revenue in North America alone since Prozac was introduced 35 years ago—the rate of disease burden from depression in the American population has risen by more than 20 percent during this period.

READ: Psychedelics Could Become Extractive Capitalism—Unless We Hold Stakeholders Accountable

It would be counterproductive to deliver psychedelic experiences using practices that embody the same extractive patterning making people unwell in the first place. A regenerative approach to delivering such experiences flips the pharmaceutical-centered approach on its head: Rather than focusing on symptom management in an unwell patient, it aims to create well-being.

Well-being is an inherently holistic concept; it arises from balance within and among the systems that infuse and include us. A regenerative approach to well-being necessarily has a multidisciplinary orientation, in which practitioners of diverse healing modalities treat mind, body, and spirit in an integrated manner. Such an approach does not deny that mental diseases exist or that psychiatric drugs may bring relief to some. Rather, it recognizes that people are themselves complex systems, and the most natural way to improve their well- being is by treating them as such.

To cultivate well-being requires reconnecting people to the community systems from which so many have become disengaged. Psychedelic experiences are well suited to this purpose because they open people to connection, as research conducted by Dr. Rosalind Watts, a clinical psychologist, and others at Imperial College London shows. However, the mere ingestion of a psychedelic compound (or a psychiatric drug, for that matter) is unlikely to reconnect people and create well-being on its own. A regenerative healing approach harnesses the openness to connection fostered by psychedelic experiences using group therapy, group integration, communal treks through the forest, and other activities that help people reconnect to each other and to the natural world.

Organizations that support regenerative healing serve as “pollinators” of well-being. Pollinator organizations circulate capital in community systems, in the same way that pollinator organisms circulate nutrients in natural systems. (For example, a community- owned bank that uses local residents’ savings to finance locally-owned business projects acts as a financial pollinator.) Well-being pollinators “circulate” human capital in local social and economic systems by providing therapies and activities that help people overcome disconnecting afflictions such as depression, anxiety, and addiction.

A critical element of a pollinator’s circulatory function is to catalyze the densely interconnected social and economic networks intrinsic to regenerative patterning, complementing and contributing to individual healing. The reconnection activities noted above serve this purpose, as do broader community-building activities held in partnership with local businesses and other community organizations. Organizational attributes that foster inclusivity—such as local ownership and democratic decision-making—as well as innovative revenue mechanisms that offset pre-existing financial disparities also help to re-complexify the sparse social and economic networks supporting the extractive pattern.

This brings us to the second reason why regenerative patterning is relevant to psychedelics: This burgeoning new “industry” (projected to reach $10.75 billion in sales by 2027) has the potential to catalyze regenerative patterning on a large scale. But how will this actually happen? And what challenges lie in the way?

To address these questions, it’s helpful to consider the process of emergent change, through which pattern shifts occur in complex systems. Such change does not start with the specification of a master plan or the issuance of a central directive. Rather, it manifests as the components of a system start exhibiting new behaviors that lead them to self-organize into a new pattern. The beginning of the universe, our development as human beings, the evolution of capitalism, and the rise of the internet all represent examples of emergent change.

Pattern shifts obviously do not happen easily. In fact, one of the characteristic properties of a complex system is its propensity to sustain its existing pattern in a state of equilibrium. The current chaotic state of our community systems heralds the emergence of a new pattern, because chaos allows for the self-directed reorganization of system elements underlying emergent change.

Psychedelic experiences have the potential to catalyze the emergence of a regenerative pattern through their influence on the elemental units of our economic and social systems: human beings. Human cognition plays a central role in the social construction of reality, in which our habituated behaviors give rise to society’s pattern, which we then accept as an external and immutable fact. (For example, we all try to take the biggest piece of pie because we have been taught we must do so to survive, creating a society in which competing for pie becomes necessary for survival.) Psychedelic experiences have the potential to break the self-reinforcing habit loop giving rise to extractive patterning because, as recent research by Dr. Christopher Timmerman of Imperial College London and co-authors shows, such experiences may induce lasting changes in peoples’ beliefs about the fundamental nature of reality.

The research by Watts on connection comes into play here as well. The extractive “reality” that we currently confront has been constructed by our own disconnected behavior, shaped by disconnecting beliefs (such as hyperindividualism), and disconnecting structures (such as corporations). Psychedelic experiences may counteract these forces by helping people feel their intrinsic connection to everybody and everything else. The embodied experience of nature’s pattern—held and integrated in a container of community—may engender the personal behaviors necessary for regenerative patterning to emerge at a societal level.

A central challenge that the psychedelic field faces as a progenitor of regenerative patterning is the threat of colonization by the established pattern, transmitted through institutional pressures for conformity. For example, healthcare insurers enforce established conceptions about what constitutes “mental health treatment” by reimbursing for some services and not others. So too do state-level corporate practice of medicine (CPOM) laws, which restrict the delivery of “psychological services” to specialized professional corporations owned by licensed practitioners. These laws have the worthy intent of insulating the professional judgment of practitioners from the profit-driven pressures that traditional forms of corporate organization create. But by restricting the range of services that psychological corporations may offer, they impede an integrated approach to well-being.

Financing mechanisms and legal structures that prioritize the maximization of financial profit above all else represent another set of such pressures. The hockey stick returns sought by traditional forms of venture finance are incompatible with the local circulatory flows intrinsic to regenerative patterning, and the quick exits favored by such mechanisms are at odds with a pollinator’s community ethos. Additionally, the legal tenet of shareholder primacy, which binds traditional corporations to the narrow maximization of shareholder profit, conflicts with the regenerative principle of stakeholder inclusivity—the idea that economic organizations should operate for the benefit of all stakeholders including workers, local community members, Indigenous wisdom keepers, and others.

A regenerative approach to the delivery of psychedelic experiences—one focused on the mission of producing well-being—can develop only in a container that resists the institutional forces of colonization. The pioneering efforts of psychedelic organizations dedicated to this mission provide examples of how such a container might be constructed.

Some provider organizations are exploring the use of multipartite legal structures, in which practitioner-controlled psychological corporations collaborate with other practitioner-controlled entities to offer a holistic approach to well-being. State-level decriminalization laws such as Oregon’s Measure 109 create an alternative path to holistic treatment by providing for the legal delivery of psychedelic experiences in safe, supportive settings outside of the traditional healthcare system.

READ: Why the “Psychedelic Renaissance” is just Colonialism by Another Name

New forms of funding that combine features of traditional equity, debt, and philanthropy are also being used to prevent the subordination of an organization’s broader social purpose to financial pressures. For example, the regenerative-style funding vehicle set up by Vine Ventures for MAPS is a form of revenue- based financing that provides investors with limited participation in MAPS’ North American revenues from the sale of MDMA for a finite period of eight years, without giving them a long-term equity stake in the business. Transformative Capital Institute (TCI), an organization that funds and stewards regenerative prototypes, is exploring its own novel funding approach with the “New Economy Wealth Engine,” an investment fund that combines elements of a hedge fund with those of an endowment fund by using a portion of the financial returns it generates (from investments in cryptocurrencies and other digital assets) to make philanthropic grants to strategically important regenerative prototype projects.

A related innovation is the use of legal designations that supersede the false dichotomy between “for-profit” and “non-profit” by recognizing that the same organization may generate both financial and social returns. The non-profit organization MAPS has set up a wholly-owned “public benefit corporation,” MAPS PBC, to balance social benefits with profits from the North American sale of MDMA. And Usona Institute (whose synthetic psilocybin received breakthrough therapy status from the FDA and is currently completing Phase II clinical trials) operates as a non-profit pharmaceutical company under the special IRS designation of “medical research organization.” This designation permits Usona to operate and control other profitable organizations, with the proceeds benefiting Usona’s research and development of new drugs and associated therapies.

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Provider organizations are also adopting novel legal structures that prioritize purpose over profit, subverting the principle of shareholder primacy. Synthesis Institute, a leading psilocybin retreat center and provider of practitioner training, recently raised $7.25 million of early-stage investment funding in conjunction with its transition to a “steward-ownership” structure, a form of governance in which designated stewards who are accountable to Synthesis’s defined purpose and social impact participate in decisions about the organization’s direction. And Brooklyn Psychedelic Society recently received a philanthropic grant from Dr. Bronner’s to pursue another route, developing a democratically-owned psychedelic co-op to offer community-based healing services.

Several for-profit organizations taking an integrated approach to drug development and treatment have also created “reciprocity” structures to compensate and engage Indigenous communities that hold wisdom traditions involving the use of plant medicine in ceremonial settings. Journey Colab and Woven Science, for example, have both allocated 10 percent of their equity to non-profit entities, the Journey Trust and El Puente foundation, that include representation from such communities in their governing body.

These innovations are encouraging, but are they enough to ensure the emergence of regenerative patterning in the field of psychedelics (and beyond)? As the old adage about set and setting reminds us, it’s not just the container that matters—it’s also the intention. Though the jargonization of the word “regenerative” may indicate growing awareness of the existential need for a pattern shift, it may also signal the nascent colonization of a potentially disruptive force, executed by extractive actors in search of a new marketing tool. The best chance of resisting this threat is for those stewarding regenerative projects to use the natural wisdom they already hold to discern the pervasive forces of colonization they will inevitably confront.

*This article was originally published in DoubleBlind Issue 7.

DoubleBlind Magazine does not encourage or condone any illegal activities, including but not limited to the use of illegal substances. We do not provide mental health, clinical, or medical services. We are not a substitute for medical, psychological, or psychiatric diagnosis, treatment, or advice. If you are in a crisis or if you or any other person may be in danger or experiencing a mental health emergency, immediately call 911 or your local emergency resources. If you are considering suicide, please call 988 to connect with the National Suicide Prevention Lifeline.

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