🫠 Psychonaut POV

Welcome to Tricycle Day. We're the psychedelics newsletter that’s afraid of math. We’ll never stop counting our blessings though. 🥹

Grant Ferrier is a numbers guy in a field where most numbers are finger-in-the-wind guesses. But Grant does not guess. Four decades into sizing multi-billion-dollar industries, he's now appraised the psychedelics market, right down to the head shop shelf. 

We asked Grant how you size an industry that's partly underground, what future he sees for gray market microdosing brands, and where psychedelic investors have lost the plot.

Humans have been using psychedelics for millennia.

While the Horizons conference hasn’t been around that long, it is one of the longest-running in the field.

On October 15-17, Horizons returns to New York Academy of Medicine for its 19th edition, with a roster of heavy-hitter speakers at the center of psychedelic science, medicine, policy, and culture.

And let’s not forget about the set and setting of NYC. The week of the conference is packed with social events throughout the big city, hosted by the wider community.

We’ll be there. Rates increase on Tuesday, September 1.

I grew up in the 60s and 70s, during the environmental movement, when pollution, litter, water quality, and air quality were pretty big issues. I felt compelled to do something about it, so I went to UC Berkeley and studied environmental economics, planning to solve the world’s problems with technology.

Then in the early 80s, the Reagan administration eliminated the funding for the graduate research project I was set to join, and I thought, if I couldn't solve environmental problems through science and engineering, who else could and how might I support them?

Those questions became the seed of Environmental Business Journal. The fundamental insight was that executives were motivated to solve problems but had no perspective on who else was working on them. So we started connecting the dots.What a business intelligence service does is segment an industry into a game board where companies collaborate and compete. A $580 billion environmental industry sounds enormous, but if you're a $400 million company, your actual game board might only be $120 billion of that, and the piece where you're strongest could be $60 or $80 billion.

It took about five years from 1987 to build our segmentation framework. Nutrition Business Journal followed in 1996 using the same process, which was defining the industry, making logical categories, gathering databases of those companies, and building quantitative models segment by segment.

I see psychedelic wellness working in harmony with natural foods and healthy lifestyles, so when friends and partners of mine got deeper into psychedelics over the last few years, I figured it was time to do here what I'd done in other industries.

Let’s say partially illicit. The framework comes down to one question: where does a consumer actually find psychedelics? We ended up with six categories.

The first is supervised medical and wellness care. That category includes ketamine clinics and the licensed centers in Oregon and Colorado, where the data is public. The second is Spravato, the pharma category, where J&J publishes clinic and patient numbers in its annual report. The third is what we call non-medical supervised, which includes retreats, guides, and churches. That one's harder to track, because some of those facilitators are validated, certified, and trained, and many aren't. The fourth is self-medicating microdosing. The fifth is mental health and healthcare practitioners, everyone from MDs to family therapists. And the sixth is the illicit, recreational market.

Those six categories added up to $9.6 billion in the U.S. in 2025, and we project about $10.89 billion in 2026. What we're defining as the industry today is people buying and using therapies and products right now. We don't count the R&D pipeline behind patented psychedelic drugs (beyond Spravato), because they aren’t generating revenue yet.

The report is free on our website, and I want people to use the feedback box. Poke holes in our numbers if you think you know better. It'll test our assumptions and help us improve before we publish next year.

Three or four years ago, I bought a chocolate bar with nice, professional-looking packaging. It had ten segments, and the packaging said two pieces would give you a nice buzz, four would make you feel a bit trippy, and all ten would make the walls melt. That told me a branded, professionally produced gray market was already up and running, and that this brand wasn't the only one doing it.

To size that market, you start on the consumer side. The RAND study is the best recent source, since the federal government's own drug use surveys don't really track microdosing specifically. To reach our $1.5 billion number, I built a model with about 1.7 million adults who are regular self-medicating microdosers spending an average of $50 a month, another 4.3 million occasional users, and probably 20 million people who've tried it.

From there you break it into channels, such as back doors of websites, smoke shops, and even gas stations. Then you look at manufacturers. We know there are 300 or 400 companies selling microdose capsules, tinctures, chocolates, and gummies. You estimate their rough sales, then add a markup through retail where retail exists. Triangulating the consumer estimate, the channel data, and the manufacturer numbers against each other is how you land on a number for one segment.

Our estimates are more likely low than high. You always start out undercounting, because there's a group of companies you know exist but simply haven't found data on yet. Every time we dig deeper into a segment, we find more companies than we had before.

Nobody would go on the record, but yes, there may be a couple microdosing companies in the $30 to 50 million range.

By revenue, the supervised care category, especially if you include Spravato, is still the largest slice of the pie, at $3.5 billion in 2025. But by number of users, microdosing wins by a wide margin. I'd estimate three or four times as many people are microdosing on their own as are getting supervised care, simply because it's so much cheaper.

There’s also an important difference in what people are actually paying for. Of that $3.5 billion in supervised care, only about $850 million is the product itself. The rest comes from surrounding services, from the clinical care to the handling of insurance paperwork. Microdosing doesn't have that overhead. The entire $1.5 billion we estimate for that segment is product. So if I'm supplying the raw materials, that's the better market for me to be in.

Since microdosing is a products business, I see the dietary supplement industry as a reasonable model for it. The Dietary Supplement Health and Education Act, passed in 1994, opened the door for plant-based products to reach the market largely unregulated. Of course, minimal oversight cuts both ways. When I was publishing NBJ, I watched bad actors spike their products and get chased down by the FTC for making claims they couldn't back up. But I also saw independent labs step in to test potency and keep the ecosystem honest.

The upside is that it works, and it scales, because it doesn't depend on a clinic or a prescription. I believe microdosing is heading down that same path. My bet is that most Americans who end up getting some wellness benefit from psychedelics will get there through their own self-administration.

The biggest misconception is that there's only one path to success here, and that’s through drug development. A lot of investors are familiar with the classic biotech model, where you fund a patentable compound, push it toward blockbuster status or an acquisition, and get your return that way. But that's just one viable path.

Part of our mission at Psychedelic Business Journal is to point out that this industry is already generating $10 billion a year, totally independent of the new wave of psychedelic compounds still working their way through FDA trials. There's already a real market built on products and services that exist today. Most of the investment happening in those segments is from angels and smaller family offices, so you simply don’t hear about them as often.

The other piece is that investment isn't always monetary. You can also invest perspective, experience, and advice to help this industry grow and flourish. Entrepreneurs are good at juggling every function of their company themselves when they start out, but eventually they need to delegate the parts they're not best at, and that's often the hardest thing for a founder to recognize.

Read the first issue of Psychedelic Business Journal for free.

That’s all for today, Cyclists! Whenever you’re ready, here’s how we can help.

Forwarded this email? Subscribe here.

DISCLAIMER: This newsletter is for educational and informational purposes only and is not intended as a substitute for professional medical advice. The use, possession, and distribution of psychedelic drugs are illegal in most countries and may result in criminal prosecution.