Dr. Bronner’s: Psychedelics at a Crossroads: We Need Constructive Not Extractive Capital

Summary: In Dr. Bronner’s All-One! Blog, David Bronner and Les Szabo outline the numerous challenges of increasing access to psychedelics amidst a profit-driven economic system, and explain their company’s philanthropic support of MAPS’ non-profit approach.

“As we envision the future of the industry we want to see,” they suggest, “we must first consider who—and what—exactly we are trying to heal with psychedelic medicine.”

Originally appearing here.

In her recent thoughtful and well-researched article for Vice, Shayla Love asked, “Is it possible to create an ethical psychedelics company?” A lot of focus in the psychedelics space over the last few months has centered around the unethical behavior of select companies—David himself has weighed in. Our take is that it’s not only possible to create an ethical psychedelics company, but that such companies already exist. We want to move the discourse towards creating an ethical psychedelics industry as a whole.

As longtime and committed activists in the psychedelic movement, we’ve encountered thoughtful business models and innovative ownership and capitalization structures that, together, present a unique case study on how an industry can move from “extractive capitalism” towards more constructive economic models based on reciprocity, community investment, and trust.

As we envision the future of the industry we want to see, we must first consider who—and what—exactly we are trying to heal with psychedelic medicine. According to the Institute for Health Metrics and Evaluation’s 2017 study, nearly 800 million people worldwide suffer from a mental health issue, roughly one tenth of the global population. When treating these conditions at the individual level, we sometimes miss larger societal issues that are not typically attributed as causative. But this last year has given us no shortage of opportunities to look deeply at the root causes of the mental health crisis, and who is most affected by it.

The protests that rocked the country in the aftermath of the police murder of George Floyd brought about a renewed reckoning with the deep systemic racism and ongoing trauma that Black people, Indigenous people, and people of color face in this country. Indeed, as a report from the American Psychiatric Association revealed, people from racial and ethnic minority groups not only bear a disproportionately high burden of disability resulting from mental disorders, they are less likely to receive mental health care. And when we consider how societal isolation, economic hardship, and racial injustice were all intensified by Covid-19—especially among underserved populations—it’s clear we’re in the midst of another pandemic that is a symptom of an economic system and a society that is wracked with generational trauma and inequality, and is wildly out of balance with nature.

It’s important to acknowledge that the western medical pharmaceutical-driven approach to mental health is deeply and fundamentally inadequate. Conventional pharmaceutical approaches to the mental health crisis largely seek to treat only symptoms, which keeps people dependent on these medications. Moreover, it has failed to truly deliver the healing that people are most in need of which includes the support of nurturing communities and adequate access to education, food, housing, health care, and other basic and essential needs.

Jumping the S-Curve

Because the mainstream application of psychedelics is in its early days and is just beginning to gain a foothold in the broader mental health industry, there is no better time for leaders and investors committed to true healing to push not only for a revolution in the way we treat mental health issues, but also in the way we scale and finance innovation in the mental health industry as a whole.

Why is this transitional stage of an industry’s life so important?

In her online course, Sustainable Business Strategy, Harvard Business School professor Rebecca Henderson helps us understand the kind of innovation that is possible after a mature industry has reached stagnation by referencing the classic framework of an industry’s lifecycle known as the “S-curve.” One can argue the current mental health industry has reached this stagnation, as there has been little innovation in treatment since the introduction of SSRIs in the early eighties. Use of pharmaceutical psychotropic drugs are at an all-time high, but so are pandemic levels of depression, suicide, and PTSD. If these medications were especially effective, we should be seeing a decline in these conditions, but this is not the case.

“In mature industries firms may be at risk of disruption as new technologies and new business models emerge to satisfy customer needs more effectively. Firms that don’t ‘jump’ the S-curve may be left behind by those who adopt the new ways of doing things,” Henderson explains. To jump the curve, Henderson says, “industries and firms begin by experimenting. If they’re lucky or skillful, they discover entirely new ways of doing things.”

We have a unique opportunity in the psychedelics space because not only are firms experimenting with new medicines, but they are also exploring groundbreaking new treatment modalities and business models that are redefining what mental health care delivery looks like.

But Henderson notes another crucial aspect of an industry’s life cycle in today’s operating environment. Historically, businesses have enjoyed free natural and social capital; they have not had to “pay” for the harmful externalities created by shareholder-centric capitalism. Henderson argues this is starting to change as companies are increasingly being held accountable by their customers, employees, and investors.

For a psychedelics company to succeed in the only way that matters—where all stakeholders benefit, including society at large and the natural world—we believe a company must have a model that addresses reciprocity, equitable access, philanthropy, and environmental stewardship. In other words, they must be willing to embark upon a true cost accounting of the positive and negative impacts they create through their business.

The Dr. Bronner’s approach

Dr. Bronner’s interest in the psychedelic space is connected to our founder Emanuel Bronner’s “All-One!” vision to heal the planet. Emanuel firmly believed that true healing could only be achieved by “sharing the profits with the workers and the earth from which you made it.”

That’s why we are such strong advocates of an industry-wide embrace of stakeholder economics, where companies not only answer to investors but also to the Indigenous communities where these medicines originated, individuals and groups who have historically been underserved by the mental health industry, and pioneers in the scientific and psychedelic community who have so willingly shared their knowledge about these life-saving medicines and forms of treatment.

Our interest is also informed by over two decades in both the cannabis and natural products industries—that experience has taught us a great deal about what happens when founders’ visions for a healthier world are thwarted and coopted by extractive forms of capitalism.

Take cannabis. We and our fellow activists devoted so much time and energy fighting for legalization that we didn’t think nearly enough about the kinds of businesses that would develop when the movement won. As a result, the industry is closer in values and practice to the industrial agriculture business model than the movement we’ve been part of for so long. Increasingly we are seeing the effects of the negative externalities of this industry—a massive carbon footprint, harm and disruption to the livelihoods of small-scale farmers, and the proliferation of racial inequity and injustice, to name a few. Unfortunately, the over $5 million dollars Dr. Bronner’s has donated to cannabis reform efforts is a drop in the bucket relative to the private capital that has entered the market.

Our desire to avoid the same mistakes in the psychedelic space led to supporting policies and initiatives that minimize the barriers for entry for smaller players and limit the scale that any single operator can have; for example, Measure 109 in Oregon limits the size of mushroom grows, caps the number of clinics any one operator can own to five, and prohibits branding and marketing of medicine.

Realizing that support of purpose-driven social enterprises is also required, we are now launching Dr. Bronner’s catalytic impact investing initiative this year—a third portfolio of giving sitting alongside our policy and philanthropic work. We believe that, together, these three areas are mutually synergistic and by deploying all three we are in the strongest position to help create true systemic change.