Inside the illegal psychedelic economy

Six percent of Canadians have used psychedelics in the last year.

Good afternoon everyone.

In today’s edition, a special contributor will give you a peek inside the city’s growing psychedelic economy. Over the summer, I started noticing people were increasingly swapping tequila sodas for mushroom candies: at cottage weekends, music festivals, and (especially) weddings. If you’re wondering where the industry stands right now, this might help clear things up.

Also in today’s newsletter: A ‘strip club’ at Exhibition Place has become the talk of Queen’s Park, there’s a new private airline for business travellers, why the “cigarette aesthetic” is all over social media.

Behind a pink door in Kensington Market, there’s a poorly guarded secret…

Bright and clean, the vibe is a cross between a health food store and a boho boutique (writes Christopher Lo). Looking at what’s on offer, I find dried magic mushrooms, psilocybin chocolate bars and bottles of microdose adaptogen capsules for activity pairings. 2,000 mg chocolates run $25; a bottle, $60.

This is a snapshot of the fast-growing grey market psychedelic economy. Dozens of mushroom shops have sprouted across Ontario to meet growing demand—with about 6% of Canadians saying that they’ve used psychedelics in the past year, according to a national survey. Some operate franchises, like Shroomyz and FunGuyz. Others, like Pink Door, appear independent. As a psychologist and health researcher, I’ve had a front row seat as psychedelics climb from the back alley into the clinic, and now onto the main street.

Psilocybin—the ingredient in magic mushrooms—offers users a 3- to 6-hour euphoric high and causes hallucinations. If you’re confused about its legality in Canada, you’re not alone—but it’s definitely illegal. And yet together with legal ketamine clinics and underground ayahuasca ceremonies, these storefronts make up a psychedelic ecosystem that crosses the boundary between personal wellness and a criminal offence.

Blocks away, I find Shroomyz. It’s the day after an arson attack at another location, so the atmosphere feels edgy—I imagine these are the perils of operating a business in the underground economy. After navigating improvised cement barricades (to protect against truck attacks, which have also happened), I’m buzzed into a narrow, dark interior lit by neon mushroom art. An employee greets me. Summer is high season, with festivals and concerts bringing in business, he says, but “today, it’s crickets.”

Psychedelics like psilocybin, LSD and DMT (the hallucinogen found in ayahuasca) are federally controlled substances requiring Health Canada exemptions for medical or research use. The exception is ketamine, an anaesthetic useable off-label for depression and anxiety. Alberta was the first to regulate psychedelic-assisted therapies (other provinces are wait-and-see)—but without federal reform, only ketamine is available. In Ontario, ketamine treatment runs $250 to $1,400 per session. This tracks with Oregon and Colorado, where legal psilocybin therapy has launched but remains too costly for most to access. And the underground is thriving, despite its risks.

Back in Toronto’s underground, an ayahuasca retreat ($700 for the weekend) invites seekers. One participant, a tech worker in his mid-40s, tells me the draw is spiritual, not medical. Looking for his next experience, he’s cautious of fake shamans, but accepts “there has to be some element of danger.”

“No one should be using these substances outside of clinical research,” Dr. Roger McIntyre, psychiatrist, tells me. A recent Canadian survey found about half of psychedelic users had experienced bad trips (paranoia and sensory overload were common), although some said these were of value later.

Eighteen psilocybin clinical trials are active in Canada, with roughly a dozen based in Toronto (CAMH, University Health Network, Sunnybrook and Unity Health Toronto). A Queen’s University trial of 3 mg microdose psilocybin for anxiety, the first of its kind in Canada, has made headlines this month. Most trials target depression and anxiety, but chronic pain, OCD, post-concussion, substance use disorder and end-of-life distress also make the list. Meanwhile, the pink door remains unlocked, and the grey market has become a natural experiment in psychedelic rollout. Research is humming along, with trials on the way, pointing toward legal medical access. But who’s in the waiting room?

Christopher Lo is a journalist, psychologist and health researcher.

NEWS:

• Over the last few days, a ‘strip club’ at Exhibition Place has become the talk of Queen’s Park. The central question is whether the owner of FYE Ultraclub, Zlatko Starkovski, used any part of the $10 million of Ontario government funding his companies benefited from, as exclusive ‘training’ and ‘employer’ partners, to train employees of the new night club (where access to private rooms costs $400). Charlie Pinkerson, the co-author of the original piece that ran in The Trillium, told me there have been some “interesting interpretations” of his reporting. I’ve edited for clarity and length, but he told me:

  • “We really don’t know, because the people who did the training say that’s not the case. What we’re talking about is a lot of different companies run by a small group of people at one physical location, which is the Horticulture Building. So that’s hard to explain. The numbers we were given are that $10 million in grants were used to train 700 people (about $14,000 a person) under the Skills Development Fund, by the Social Equality and Inclusion Centre, a non-profit set up by Starkovski. The training included a short, online component, a few days of in person training, and up to 60 hours of paid training shifts at events run by the Toronto Event Centre (another one of Starkovski’s companies) including the MLSE Foundation’s Reds Soirée and a Samsung Canada product launch. So taxpayer dollars were being used to pay people at those types of events. I think most people think there’s nothing inherently wrong with using taxpayer money to train workers, and there have been a lot of legitimate businesses that have received funding (roughly an equal amount has gone to those with connections to the Ford government). But this one is the most questionable because of the nature of the business.”

• Nearly 1,000 people requested a reservation for a pay-what-you-want dinner at Clandestino. It pays to be a regular, as owner Desaret Dulaj said nearly a third of reservations have been reserved for existing customers.

• Roots opened a pilot concept store in Rosedale this week. Unclear if the company’s new holiday concierge, Seth Rogen, will make an appearance.

• There’s a new airline dedicated to business travel across Ontario and Quebec. I haven’t given much thought to how an executive living in, say, Oshawa might get around for meetings, but an airport map on NectAir’s website shows how connected the province is for private air travellers. The company launched about a week ago and offers four-seater planes for the same cost as business class tickets from Toronto to Montreal.

  • Meanwhile at Air Canada, revenue for corporate travel grew by 11% in September alone, with first class cabins far outperforming economy.

    

• Can Forest Hill Farmhouse convince finance bros to eat carbs at lunch?

• The New York Times added 460,000 subscribers last quarter. Canadians, who read more international titles than any other country except Ireland, make up an important part of the Times’ fast-growing subscriber base.

• Marriott will display the couch that Addison Barger slept on during the World Series in its lobby next week. Will be fun to explain this to guests.

• The second technology IPO in Canada in four years might be 1Password.

• Four years ago, Canadian social media manager Jared Oviatt launched his “Cigfluencers” Instagram account. He told Bloomberg that a photo of Dua Lipa smoking inspired him to capture what he saw as quiet shift back to smoking in the West, particularly among young adults. Lately I’ve seen celebrities proudly lean into the cigarette aesthetic, and while smoking is much cooler than vaping and usage remain at all-time lows, it’s hard to say how this will pan out alongside a renewed obsession with thinness.

  

• So many people have told me about ‘The Walkers’ this week. Mostly those who are upset they didn’t think of documenting their walks first.

• Canadian Tire should be able to sell $30 million worth of Hudson’s Bay blankets. A deal to buy the bankrupt retailer’s intellectual property in May (which included the iconic stripes) kicked off a six-month sprint to bring a new collection including mittens and pillows to shelves for the holidays.

• Maple, a telehealth company, acquired New Brunswick-based startup Beyond ADHD. In 2023, Manulife reported a 24.5% increase in unique adult claimants for ADHD medication. The company says up to 4.9% of Canadians could be living with the disorder, which seems a bit high.

• The Bank of Canada will lay off 10% of staff to “align with Mark Carney’s request to save money.” Bankers will have to work for those bonuses as the federal government shifts open banking oversight to the central bank.