Psilouette Founder Derek Chase on Taking Risks in Psilocybin Products

July 21, 2023 · Green Market Report

Chase sees opportunity in the limited enforcement actions by the DEA.

The limited legality of most psychedelic products hasn’t stopped some people from trying to get an early advantage. Case in point, Derek Chase founded L.A.-based entheogenic wellness company Psilouette to take advantage of what he called a “lucky period” for the industry.

Green Market Report’s Executive Editor Debra Borchardt recently interviewed Chase to get more insight on why now was the time to found the company and where he sees the regulated psychedelics industry heading.

Why did you create this product?

Chase: Back in 2015 is really when I started my intentional psychedelic use. At the time I was working for L’Oreal and, you know, I’ve been an anxiety-prone guy my whole life, but it had grown into a chronic issue for me, mostly based on my work-life balance.

So I was lucky enough to be living in New York City at the time, which had a thriving underground psychedelic community, and was able to get involved with some medicine circles and start to work with a whole bunch of different plants and fungi, but most notably psilocybin. And so through that process, I was able to get out of my corporate job, moved to California, and started to kind of flail around to figure out what I was going to do.

At the time, it was just 2017. Cannabis had just been legalized recreationally here in California, and so I started conceiving our brand form fast. And then about a year later, we got into more of our passion project, which was making psilocybin.

Through that process, we basically let demand dictate our progress. We started to sample these things to our consumers and everybody was amazed specifically by the effects driven by a mid-range dose of mushrooms.

So, it was all born out of my experience, utilizing psychedelics to get out of a bad situation and improve my mental health. Then once I was on the flip side of that, we were able to utilize the mushroom for the improvement of mental health and others.

Where are you sourcing your psilocybin?

Chase: We grow it up in Oregon. Oregon, as you probably know, had the decriminalization laws. It now has a regulated legal psilocybin services market. So we operate up there.  We have not gone as far as to apply for a license because of a whole list of issues with how Oregon is going to market, but that’s where we have our cultivation – so it’s still a gray bar cultivation.

We will likely be moving down just south of Portland to a biodynamic farm, where we currently grow our cannabis. We will be buddying up next to our facility there and producing biodynamic mushrooms there. So right now we produce everything in Portland. We ship it down here for processing in downtown Los Angeles for the creation of our gummy and tea products.

What are the regulatory challenges there? It seems like, specifically with psilocybin mushrooms, it’s a real patchwork of what is allowed and what isn’t allowed, which states have decriminalized, and then you’ve got the federal situation. How are you able to jump those regulatory hurdles?

Chase: We’re in this sort of lucky period, which is not risk-free, but is a relatively low-risk venture.

The DEA has stated that they don’t have the budget to prosecute plant-based psychedelic offenses. So right now, no one’s really looking for anything – and that’s really the only key to commercializing a psychedelic is the fact that there isn’t much enforcement.

By no means would any of the activity that we do be considered legal by the federal government. So right now we’re basically saying, hey, it’s like writing’s on the wall. We have to go in order to try to save the market from what happened to cannabis, which is irresponsible money-hungry marketers trying to market a highly therapeutic drug similar to alcohol simply for financial gain.

So what we do we know is still not legal as per the federal government. That being said, because of the lack of enforcement and because of the huge groundswell of consumers looking for mental health days after COVID, it just kind of has worked so far.

We get this question a lot and there’s no other answer, but we’re just moving ahead of time because right now it’s a relatively low-risk option.

How are you able to test these products in order to standardize the dosing?

Chase: As part of these regulated legal markets, we get a lot of upgrades in terms of things that allow us to create a usable product right now. Currently, if you were to source a black market, raw product, you would have no idea about anything of the dosing, and so it’s very hard to source therapeutic medicines from a source that you can’t really tell what it is.

With these regulated markets comes the ability to test. There are people nationally who have the standards, who the FDA licenses to be able to acquire the standards and therefore test the substances. And then there’s a ton of independent testers out there.

We use a mix of both. We want to validate our tests through third parties. We have two guys up in Oregon who do our testing, one of which is a private guy who does our R&D testing. The R&D testing is really primary research to understand how different cultivars are performing specifically on their yields. We have the same circumstances (as cannabis) on the mushroom side where you have psilocybin and then a host of other items to test for.

Obviously, it’s very easy to use testing, simply deriving your potency, but going further with testing, it’s really about: How do we understand what the mushroom is producing, and how can we work with the genetics to produce the most therapeutic mushroom possible?

How do you determine the descriptions on these different various products? I noticed that you have various let’s say mood descriptors.

Chase: We wanted to give a sense of what the effect would be, knowing that people are very new to these things. That being said, the original descriptions that we use are not highly informative for the customer. Luckily, we have a customer service team who handles all of our first-time customers and can explain the differences between the products.

We are moving away from these psilocybin-specific claims on what they will do for you, because different potencies lead to different outcomes for different people – and set and setting is a bigger determining factor of the experience than you know most people get credited.

So we are moving away from detailing the effects too much and trying to simply give people the knowledge to understand what is the potency and then how to find their preferred dose, which is our dose ID approach, which is a very, very short potency gummy that allows users to find their doses through the sequential eating of a gummy until they’ve reached the state where they want to be.

The reason why it’s so small is that we don’t want people to “overdose.” A psychological overdose is discomfort. We don’t want to deliver a discomfort or anxiety response, especially because we have a ton of people coming to us for anxiety treatment.

Do you have any concerns with the FDA, which has gone after a lot of CBD companies for claims that they’ve made on packaging or on websites?

Chase: I mean, anytime the FDA gets involved, you got to be concerned.

We look at the potential rollout of psychedelics and get a little bit frightened when we think about that happening through a medical system. Because our medical system seems to treat medicine like a take it and forget it, whereas psychedelics aren’t like that.

So the idea that the FDA is going to, all of a sudden, understand that this is a totally different approach to medicine, while they don’t even understand the Western approach to proper mental health care – we see it as a potential issue, should they intervene too much because they just don’t think.

Do you have restrictions as to which states you send to?

Chase: You know, a prudent business owner would probably do that. We don’t simply because we are trying to provide access.

It’s illegal everywhere. We don’t really see a safe haven anywhere.

What is your most popular product?

Chase: Our most popular are our higher-potency products. The macro 500 is our number one unit mover. Then our psychotherapy key is our number two unit. Over those two products, one serving will deliver a mid-range dose.

Most people that come to us are looking to feel something, but not a psychedelic experience right off the bat. Our customers grow into wanting to do more, and they get improvements in the micro-dosing regime and want to go into a macro-dose regime.

Those are the things we’re working on now, which is recruiting current therapists who work in this space both serving the medicine and doing integration work and then identifying and training. Right now our two targets are registered nurses and social workers who would be our internal employees who we would train to serve. (Full Story)

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