Rollups: The Emerging Magic Mushroom Monopoly

This story is part of a new Prospect series called Rollups, looking at obscure markets that have been rolled up by under-the-radar monopolies. If you know of a rollup like this, contact us at rollups(at)prospect.org.

In December 2017, one of the godfathers of the contemporary psychedelic renaissance, Bob Jesse, penned a manifesto for the commercial era of hallucinogens, one that echoed as far and wide as when Timothy Leary famously evangelized, “Turn on, tune in, drop out,” in 1966. Jesse delivered a very different kind of message: “Open science for all!”

A philanthropist and independent researcher, Jesse was instrumental to reviving a new wave of medical interest into psychedelic-assisted therapy starting in the 1990s. This new form of therapy offers a revolutionary approach to treating the rising cases of depression and anxiety in the U.S. But Jesse began to see this pioneering research pillaged by Big Pharma, as soon as it showed commercial value as a breakthrough treatment for mental illness.

In the manifesto, Jesse took a stand against would-be monopolists for flagrantly misusing patent laws, advocating instead for a shared creative commons for psychedelic research, with limited intellectual-property rights. The statement attracted over 100 co-signers, including every major figure in the psychedelic research and NGO community, from philanthropic funders to grassroots advocates.

But there was a notable absence from the list: the founders of Compass Pathways, a rapidly growing psychedelic therapy company bankrolled by major investors, notably Peter Thiel, the PayPal co-founder and right-wing political financier.

“It was very suspicious when they didn’t sign on to the letter. It gave a lot of people pause about what their plans were,” said Carey Turnbull, a longtime philanthropist in the psychedelic community who has become one of Compass Pathways’ main detractors.

Over the last several decades, the guardrails against rapacious patent use have eroded.

Compass’s founders—millionaire couple George Goldsmith and Ekaterina Malievskaia—had already raised eyebrows by quietly transitioning from a charity organization to a for-profit corporation in 2017. Compass was also conducting dubious drug trials on the Isle of Man, an infamous tax haven for the uber-wealthy with lax regulatory oversight. Suspicions abounded about the unusually restrictive contracts it pushed researchers to sign, and reports that Compass had blocked other organizations from signing a deal with one of their drug manufacturers.

The unwillingness to sign the letter was more than a snub. It was a harbinger of things to come.

After assembling a phalanx of patent lawyers, Compass Pathways began filing broad claims to control key synthetic versions of psilocybin, the psychoactive component in magic mushrooms, as well as its therapeutic application for patients. Now the highest-valued publicly traded company in the magic mushroom market,…