It’s an attitude that has rubbed some people in psychedelic communities the wrong way: that it’s OK for organizations developing psychedelic therapies to have nothing to do with reforms like decriminalization, and generally not care about the opinions of anyone other than investors. I think people are right to object to this. What's more, organizations indulging in this behavior are ultimately asking for trouble. 

Stakeholders, not just shareholders

The idea that businesses have more responsibilities than just making money isn’t anything new. One way of looking at this that’s helpful is “Stakeholder Theory”—a system of organizational ethics that’s been around since the 1960s. In stakeholder theory, a stakeholder in an organization is anyone impacted by its decisions (Freeman, 2010), as illustrated in Figure 1. Some people are affected more, some less. This theory, in a nutshell, says that organizations should consider what’s best for all stakeholders, not just the people in narrower categories such as shareholders in a company.

The reasoning behind this isn’t just through the sense of connectedness we sometimes experience, though that would make sense in the psychedelic sphere. What stakeholders do affects organizations. If they like what your company does, they’ll buy your products, and make the brand part of their identity. Happy stakeholders in a charity will donate their time and money to help meet the organization's goals.  

What goes around…

But there’s a flip side. Upset your stakeholders, and things are very different. If they buy anything from you at all, it’s because they have no other choice (and they’ll resent you for it). They’ll make your PR on social media a dumpster-fire of bickering or outright abuse. At this point, if share prices and profits are high, you might not care. But disgruntled stakeholders, if you neglect them for long enough, will start to take actions that have real teeth. You could face product boycotts or shareholder activism (Yang, Uysal, & Taylor, 2018). They might even enlist politicians and the legal system to stifle your efforts or give advantages to your competitors. 

Understandably, corporations tend to focus on appeasing their most powerful stakeholders (Barnett, 2019). But even groups that are usually marginalized and ignored can derail the plans of powerful companies, e.g., the protests of Indian farmers forcing Monsanto to abandon aspects of its genetically modified seed sterilization strategy (Hart & Sharma, 2004).  

What does this mean for psychedelic corporations like COMPASS Pathways and ATAI Life Sciences? First, while there are people who have a more direct stake in what these companies do, like shareholders, employees, and prospective patients, there are a whole bunch of other people who are impacted by their decisions. Psychedelic community groups, underground therapists, plant medicine enthusiasts, and drug-law reform advocates all count as stakeholders in psychedelic businesses. 

The traditional custodians of the knowledge on which all of this is based (who won’t see a cent from the recent spate of feverish share-trading) are stakeholders. People who end up in jail for possession of psychedelics, or who are harmed because the pill or tab they bought wasn’t what they thought it was, are stakeholders. 

Like it or not, we’re all connected

A company might not want anything to do with decriminalization. But in boosting the therapeutic profile of psychedelics, it’s causing more people to be interested in using them. An organization might say that they don’t advocate for changes to the law for “non-clinical” use, but the harm that comes from criminalization is just as real as the mental-health problems they wish to address. People are smart enough to join these dots, and as more of them do, the risk of stakeholder backlash grows. 

Corporate life isn’t naturally conducive to ethical behavior. If it were, modern capitalism would look very different, right? I’m not naïve enough to claim that companies learn to care for everyone rather than just their shareholders because history has shown us that they usually don't. But psychedelic corporations are young. Compared to established businesses, even the largest of them are relatively small and vulnerable. They might talk a big game when wooing investors, but getting the market access required to sell their products will rely heavily on community support. If they want this, they are going to have to learn some potentially tough lessons. 

You know what one of these lessons is going to be? It’s that if we’re still being thrown in jail for a tab of LSD or bag of mushrooms at the same time as these corporations are expecting to make billions selling sanitized versions of the same substances, there are communities all over the world who aren’t going to take it well.

We don’t exist in isolation. The choices we make alter other people’s lives, just as theirs can impact ours. Our interconnectedness isn’t an abstract illusion we have in psychedelic experiences—it is real and has real-world consequences. This is as true for organizations as it is for individuals. Corporations that can embrace this will win the support of their stakeholders, and be that much closer to being forces for good. Those who don’t might find the road to profit rougher than expected.  

By Sam Douglas, PhD

References

Barnett, M. L. (2019). The business case for corporate social responsibility: A critique and an indirect path forward. Business & Society, 58(1), 167-190. 

Freeman, R. E. (2010). Strategic management: A stakeholder approach: Cambridge University Press.

Hart, S. L., & Sharma, S. (2004). Engaging fringe stakeholders for competitive imagination. Academy of Management Perspectives, 18(1), 7-18. 

Yang, A., Uysal, N., & Taylor, M. (2018). Unleashing the power of networks: Shareholder activism, sustainable development and corporate environmental policy. Business Strategy and the Environment, 27(6), 712-727.