Psychedelics have made it back into the cultural zeitgeist, expanding not just minds but investor portfolios too.
“Psytech” firms attracted a record $2.5 billion dollars in total between 2020 and 2021, with the overwhelming majority aimed at drug development.
As investment builds, demand for substances like psilocybin, MDMA, and DMT from private drug corporations and universities is climbing too.
Precision fermentation, which uses microbes to manufacture biological compounds, could become an important way to meet demand sustainably.
Here is how microbial manufacturing could build a psychedelics supply chain.
A new age for psychedelics
This week, US president Donald Trump signed an order to loosen restrictions on psychedelics-based mental health therapies. The order says it aims to cut bureaucratic barriers to patients’ access.
Markets reacted almost immediately: shares of psychedelic drug developer AtatiBeckley jumped 31% in Monday trading while rivals like Compass Pathways, GH Research, and Definium Therapeutics saw similar leaps.
Trump’s new legislation caps a buoyant moment in the psytech sector, where unprecedented private funding flows are coinciding with regulatory easing.
2023 saw Australia become the first country to reclassify MDMA, making it prescribable under certain circumstances. The Netherlands and Canada are also allowing psilocybin – the psychoactive component of magic mushrooms – for certain therapeutic and research purposes. Last year, New Zealand approved the substance for medical use.
Some of these shifts originate in Silicon Valley and other centres of US private capital. In recent years, key figures within tech, insurance, and finance have engaged in political lobbying and research aimed at getting psychedelic therapies on the market.
Mark Zuckerberg’s former collaborator Joe Green, tech founder Genevieve Jurvetson, and former Goldman Sachs partner Ron Beller are just some of those now leading influential psychedelic non-profits like the Psychedelic Science Funders’ Collaborative and New Approach PAC which promote legalisation, promote wider cultural acceptance, and fund research into psychedelic clinical trials.
Mind and body
The cultural, legal, and financial shifts also have deep historical roots: psychedelics have long had a place in therapy and mental health treatment.
Scientific research into this was all but shut down by the conservative turn of the 1970s. Yet in recent times, psychedelic substances like psilocybin have shown promise in trials on depressive patients.
A 2021 double blind trial comparing traditional SSRI antidepressants showed psilocybin was at least as effective in reducing severity.
This is not an isolated result. A 2023 meta-analysis across 9 studies found the chemical had a significant effect compared to a control.
Overall, researchers are reporting that the main advantage of psychedelics over traditional antidepressants is that they relieve symptoms faster.
The psychedelic economy
With winds of venture capital and regulatory support in their sails, industry demand for basic psychedelic compounds is set to boom.
Yet as product development quickens and drugs get regulatory approval, the psytech industry could soon hit a supply shortfall in these chemicals.
Psychedelic drug manufacturers mostly source chemicals from non-profits and small research labs. Without economies of scale, high quality psychedelic substances remain expensive.
Another supply issue is that many compounds are extracted from natural organisms like plants or fungi. As industry expands, large-scale harvests could threaten biodiversity around the world.
With limited sources of sustainable, cost-effective supply, there is a growing urgency for new ways of making high-quality chemicals.
Microbial production lines
This is where psychedelic precision fermenters are stepping in. One of them is Optimi, founded by the son of Luluelmon’s founder.
The company is already one of the leading names in the nascent field of biomanufactured psychedelics and its IP centres around precision fermentation, a manufacturing pathway already common in biopharma, biochemicals, and foodtech.
In general, precision fermentation involves genetically programming microbes to make custom chemicals inside their bodies. The chemicals are then harvested, purified, and further processed.
All this takes place indoors, minimising land use. Because the yeast is set up to make the chemical itself, there is no need to harvest and extract it from natural ingredients.
In the case of Optimi, the startup is using yeast to make tryptamine – a precursor chemical that can be transformed into many of the psychedelics that industry needs.
The biggest advantage of precision fermentation is that it can lower production costs. Yeast are hardy and resource-efficient – they take energy from simple sugars, which can be drawn from agricultural waste and other cheap sources.
With proper optimisation, using these microscopic chemists can also be more sustainable than either synthetic manufacturing or traditional extraction techniques.
The psychedelic substance Ibogaine is a poster child for how precision manufacturing could help with supply and sustainability issues in the psytech industry.
This was one of the compounds named in Trump’s psychedelic drugs order. Since then, Optimi has announced that it was embarking on a pathway to biomanufacture it.
Ibogaine is naturally found in the root bark of a shrub native to Central and West Africa. Today, certain companies are licensed suppliers that harvest and process the raw material. Yet industry growth is set to make the harvest of natural ingredients increasingly unsustainable.
Synthesising the chemical in the lab through conventional means throws up its own problems. The drug has been notoriously difficult to recreate in the lab due to its chemical complexity and it was only recently that UC Davis researchers developed a process for doing this. Precision fermentation could offer a cleaner, more efficient route to mass production.
Gut feelings
Aside from its mind-altering effects, psychedelics also have unexpected benefits for the gut microbiome.
Today, scientists know that gut microbes play a crucial role in human wellbeing. Key to their health influence is their connection to the brain.
Our gut microbes interact constantly with our minds, modulating emotions like anxiety and depression – as well as the physical manifestations of these mental disorders.
This has important medical implications. Tufts Medicine researchers have found promising results that psychedelics could treat gut-brain disorders like irritable bowel syndrome, which affects 10% of the population.
The reason why intervening on the gut-brain axis through psychedelics (and other therapies like it) works is that chronic ailments may originate in how the brain processes trauma.
Psychological damage affects the guts, which in turn act back on the brain, creating a vicious loop of mind-body symptoms. Psychedelic drugs offer a way to break this cycle.
AtaiBeckley turns to precision fermenting
One of the most notable startups developing psychedelics-based mental health treatments is the UK’s AtaiBeckley.
In June 2025, Germany’s Atai mounted a $390 million takeover of the smaller UK firm Beckley Psytech to form AtaiBeckley. Atai is one of the behemoths in the burgeoning psychedelics industry and its merger with Beckley indicates just how quickly the industry is growing.
The company’s flagship product is a nasal spray of mebufotenin benzoate – a psychedelic found in plants and the Colorado River Toad. Its pipeline also includes VLS-01 (a DMT derivative to treat depression) and EMP-01 – a formulation of MDMA to treat social anxiety.
AtaiBeckely’s psilocin anti-depression drug first entered first patient trials in 2023. By July 2025, it had completed phase II trials, where it showed a statistically significant reduction in depressive symptoms. This year it enters its phase 3 planning.
The company is not just working on drug development, however. It has also been involved in creating a reliable supply chain for the basic compounds it needs to experiment and manufacture with,
The drive to obtain a reliable supply of chemicals led it to collaborate with a precision fermentation specialist. In 2021, Beckley partnered with the company to form TryptageniX – a new startup dedicated to growing psychedelic compounds in the lab, as well as discovering new ones.
Beckley’s partner CB Therapeutics is one of the more established precision fermenters working specifically to make psychedelic compounds. Like Optimi, it uses yeast as a chemical workhorse to make chemicals including cannabinoids, psychoactive fungal substances, and even human food.
Unnatural alterations
Building its own supply chain in psychedelic compounds is not the only motive in setting up Triptageni.
Precision fermentation allows producers to alter the properties of chemicals found in nature, creating new substances that have no natural analogue. This is attractive to drug developers as, unlike naturally occurring substances that can be extracted from plants, lab-made derivatives are patentable.
This could lead to precision fermented psychedelics that offer psychiatric benefits without hallucinations – something that certain researchers are now saying is possible.
Others maintain that hallucinatory effects are fundamental to the treatment – or can be.
A recent meta-review of psychedelics and depression that analysed 48 studies into psychedelics and depression revealed that the quality of a patient’s psychedelic experience matters in how effective these drugs are.
Patients that underwent mystical experiences or ego dissolution during trials improved depressive symptoms much more than those that had negative experiences.
The psychedelic economy
Precision fermentation is one of the most promising ways to lower costs in psytech manufacture and mitigate environmental impacts as industry appetite for psychedelic compounds grows.
The success of fermented psychedelics will build on a solid track record of scaling. Already, biofuels, biochemicals, biomaterials, and pharmaceuticals are made using workhorse microbes at commercial volumes.
Yet as industry grows and the costs of production lower, it is important to maintain a scientifically grounded approach towards the health applications of psychedelics, from trials through to prescription.
Psychedelic drugs are no more a silver bullet for disorders than the synthetic drugs we have today.
Talking therapy, professional support, judicious prescriptions, and a culture of education are critical to maximising the benefits of these substances as they gain mainstream acceptance.
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