a big tank of green algae on a research lab table
A bioreactor at the Plant. Courtesy Matthew Gilson

Vivid green fluid silently courses down a vertical stack of cascading glass tubes on the third floor of the Plant, the sustainability-oriented Back of the Yards small business incubator where the meat-packer Peer Foods once processed industrial quantities of ham, bacon, and sausage in cavernous stainless steel smokers. 

Nearby, spirulina-spiked Beyond Burgers sizzle and char on a flattop griddle, not far from a cart arrayed with ocean-blue chocolate truffles. Lab workers bustle about, occasionally swigging from tumblers of mushroom- and algae-enriched beer or seltzer. Amid them, Leonard Lerer, a slight, 62-year-old, South African-born scientist washes hydroponically grown red leaf lettuce in a sink. 

Leonard is soft-spoken, with a nasal Cape Town accent, and he’s a bit of a mumbler. But he can also be forceful, direct, and animated when he’s pitching his work to investors or making a point to a reporter. In this moment he’s nearly shouting above the din. “The fact that we happen to be working with psychedelics is essentially because we have the expertise and the knowledge related to cellular agriculture,” he says. “And that’s it. I want to be absolutely clear, because otherwise I’m fucked. I never tried the shit. Never gonna try the shit. The only time I’ll ever try the shit is if I have cancer and I’m about to die and I have terminal depression. Because I believe in the shit.”

The “shit” is the hallucinogenic compound psilocybin, extracted from psychedelic mushrooms, which are fruiting in large quantities on the same floor in secured, sterile, temperature-and-humidity-controlled grow rooms.

Lerer is the chief scientific officer of Back of the Yards Algae Sciences, a food-focused biotechnology company he founded in his downtown apartment kitchen in January 2017. He’s also CFO of its pharmaceutical research arm Parow Entheobiosciences, both of which now occupy the Plant’s 7500-square-foot top floor with millions of dollars worth of high-tech lab equipment. With it, each company integrates lab-grown algae and fungus into the pursuit of their respective missions: to research and develop sustainable plant-based food colorants, meat substitutes, and agricultural biostimulants, along with psychedelic drugs for the treatment of psychiatric disorders like PTSD, OCD, anxiety, depression, and schizophrenia. 

On any given day, some eight to ten employees and interns are working on these problems in the Plant. It’s also home to a pair of “retired scientists” that helped the company with an unprecedented achievement: using cellular engineering to replicate and grow the powerful hallucinogen 5-MeO-DMT. 

Their names are Betty and Bufi, and they spend their days eating crickets and worms in a terrarium above the lab.

It was a typically busy day. Lerer and his team were prepping algae- and non-psychedelic mushroom-based snacks and drinks for an open house following the International Food Technologists Expo at McCormick Place, where BYAS exhibited some of these products earlier in the day. 

Meanwhile, the glass tubes of the photobioreactor, as always, were flowing with spirulina, the anti-inflammatory and antioxidative algae the company purifies into a shockingly blue powder called phycocyanin, a natural colorant and additive that they incorporate into a host of foods and beverages, from curaçao to coated candies to fish substitutes, energy drinks, and a heme—a blood analogue for hacking meatless burgers, enhancing caramelization and mimicking meaty flavor. It makes them bleed blue. A small California burger chain that Lerer contractually can’t name uses it in its veggie burgers, and BYAS has produced plant-based tuna, crab, and fish sauce substitutes with it too—though those haven’t yet reached the market.

Lerer launched Back of the Yards Algae Sciences with phycocyanin. But the substance arrived at a distant remove from his initial training in forensic pathology and epidemiology. His early publications focused on non-natural mortality (see Homicide-Associated Burning in Cape Town, South Africa and Preventable mortality following sharp penetrating chest trauma). He later worked on global public health projects, and earned an MBA, embarking on a successful career in life sciences finance. “I spent most of my professional life working for investors,” he says. “I was the guy who was torturing the companies that were asking for money.” He was living in Paris in 2016, doing a bit of investing of his own, when he bought into a friend’s start-up that had developed a new bioreactor that cultivated living algae. The company was short-lived, but along the way he’d become close to its principal scientist who was attempting to extract gold particles from water, but had accidentally worked out a sustainable method of producing phycocyanin from spirulina.

The following year his wife, a prominent oncologist in her own right, took a job in Northbrook as the head of global medical affairs for cancer research at the U.S. headquarters of the Japanese pharmaceutical multinational Astellas, and the couple moved to Chicago. “I was at a loose end,” says Lerer. “Like, ‘What am I gonna do here?’” This was around the time that Mars Food had expressed an interest in working with natural food colorings, and he saw an opportunity: “I said, ‘Maybe I can upscale the production of this blue stuff and sell it to Mars.’ So I brought the scientist over and we started to work.”

He eventually moved the operation into a small corner bay in the Plant. The rent was cheap, but he realized phycocyanin wouldn’t be cheap enough for Mars. Instead he became fascinated by the sustainability projects housed in the Plant, particularly the indoor farming efforts. He thought that algae’s demonstrated accelerative effects on plants could overcome the enormous energy costs that continue to prevent large-scale vertical farming—growing crops in stacked vertical layers, often indoors—from becoming economically sustainable. And he conducted experiments that showed that his phycocyanin could dramatically boost growth rates and yields in indoor-grown lettuce, basil, peppers, tomatoes, and strawberries. 

Later he applied algae to the practice of cellular agriculture but quickly abandoned the idea of developing lab-grown meat products. “I had the idea that you could use the algae extracts as food for the meat cells,” he says.Once we were doing it, we realized there was no way. ‘This thing is impossible. Anybody who says we’re gonna have lab-grown meat in Whole Foods in a year or two doesn’t know what the hell they’re talking about. It’s a lie.’”

Nevertheless, “I had enough money to basically start the business and keep going,” he says. “Every now and again somebody would come up here and say, ‘I want to give you some money,’ and I started to bring more and more people on board. Suddenly I became, at a very late age in life, an entrepreneur.”

Leonard Lerer with a spirulina photobioreactor. Courtesy Matthew Gilson Credit: Matthew Gilson for Chicago Reader

Jay Pleckham spent the early part of the day grinding Psilocybe cubensis, a species of magic mushroom commonly available to recreational and religious users, and one that scientists have rediscovered for its therapeutic potential. In this case grinding is the first step in extracting their psychoactive compounds for shipment to a psychedelics company in Jamaica. He was one of the people Lerer brought on board in late 2018. 

Pleckham, a red-bearded glassblower with HVAC training and construction skills, had recently returned to Chicago after a decade in northern California, where he’d built and managed a clandestine off-grid cannabis farm and an extraction lab. Pleckam invested in a now-defunct chocolate company at the Plant, building out and equipping a space on the second floor—and he made himself useful to other businesses in the building. One day Plant founder John Edel asked if he’d be willing to help a tenant on the third floor who was having trouble with a panning machine, used to coat candies or nuts with a sugar-based shell. 

Pleckham found Lerer attempting to make M&M-type candies he intended to coat with a phycocyanin coating, but the machine wasn’t cooling the chocolate enough for the colorant to adhere. Pleckham solved the problem by rigging an old home air conditioning unit to the machine’s tumbler, forcing cold compressed air into the machine. 

“Len’s like, ‘What else do you do?’” says Pleckam, who replied, “‘We grow mushrooms.’” On the side, Pleckham was building an edible mushroom supply company with his former partner in the cannabis farm, a fellow glassblower named Tony Milewski, who’d also returned home to Park Ridge to take custody of his young son. 

Milewski was also an accomplished amateur mycologist who’d grown up foraging mushrooms, a skill he’d independently inherited from his grandfather. Pleckham caught the fungi-hunting bug from Milewski, and they’d begun supplying restaurants like the Girl & the Goat and Kimski with fresh, next-day, air-freighted wild, west coast morels, matsutakes, and porcini. He’d also built Milewski a laminar air flow hood so he could culture and grow mushrooms from spores in his garage when the imports were out of season, but they ran into a roadblock when they discovered that, at the time, the Cook County health code contained obsolete language that forbade commercial indoor mushroom growing.

Lerer and Edel had already rented a portion of lab space to a couple of PhDs from Argonne National Laboratory who were attempting to make a chicken substitute from mushroom mycelia. “I was looking at the bioreactor, and saying, ‘What would happen if we added some of the algae to the mushrooms?’” says Lerer. “They weren’t very interested in that, but I was.”

After Pleckham solved Lerer’s tumbler problem, “He hands me a bag of this blue powder and says, ‘Here, see what this does.’ I don’t even really understand what it is, but I bring it back to Tony. He mixes it up with some media to make petri dishes, and also mixes it up with some water to mist the mushrooms. The stuff in the petri dishes grew really fast, and we also noticed that it was making little points of mushrooms grow straightaway. It was totally fucking amazing.”

The phycocyanin had similar effects on some of the edible and nutritional mushroom spores Milewski was culturing, even remediating a contaminated specimen, which began to thrive, rapidly developing mycelia—the branching, spreading threads of a germinated fungal spore. 

But it had a particularly profound effect on a dish inoculated with Psilocybe cubensis.

Psilocybin, and other associated psychoactive compounds, or entheogens, are present in more than 200 fungal species. The federal Drug Enforcement Agency classifies it as a Schedule 1 drug, along with heroin, LSD, and cannabis, and possession is prosecutable with stiff penalties. A lab-grown fungus culture usually doesn’t produce psilocybin until it fruits into a mushroom, which doesn’t often happen until it’s transferred from a petri dish into a healthy substrate. Milewski, a single father, was leery of the risks of fruiting psychedelics, but thrilled with the early results. 

Pleckham reported back to Lerer, who was working toward patenting his phycocyanin as an agricultural biostimulant. He invited Pleckham and Milewski to replicate their petri dish experiments in the controlled environment of the lab. The results were equally impressive, but at first they were circumspect about every variety they were growing.

“‘Can you tell me what kind of mushrooms you were growing?’” Lerer asked. “They were very sheepish about the whole thing. Eventually I got it out of them. I said, ‘Oh that’s cool.’ But what do I know?” 

“We walk out of the lab,” says Pleckham. “Me and Tony high-five each other, and we’re like, ‘That will be an interesting story for the rest of our lives.’”

Lerer wasn’t up to speed on recent research into psychedelics, nor was he paying any attention at all to the snowballing national movement that pushed cities like Denver and Oakland to decriminalize psilocybin. (A resolution supporting plant-based psychedelic decriminalization has been languishing in Chicago City Council for a few years, but more recently state representative La Shawn Ford has begun drafting a bill for the Illinois House.) 

But Lerer is a voracious reader, and he began to devour the research until he was ready to take a serious risk and bounce the story off of his older brother, Dr. Bernard Lerer, a retired but still active internationally esteemed neuropsychopharmacologist and psychiatry professor at Hadassah-Hebrew University in Jerusalem.

“He’s a conservative dude,” says Lerer. “He’s the exact opposite of me. We never got on very well. Now, over the years, as we got older, our relationship improved.” That summer Lerer phoned his brother to wish him a happy birthday. 

“I was scared to ask his advice. I was very circumspect about the whole thing. I said, ‘Beni, I’ve heard these psychedelic mushrooms could have potential in psychiatry.’ My brother says, ‘That’s the future of psychiatry. I’ve been thinking of doing something.’ I almost fell off my chair.”

A few months earlier Bernard Lerer received a lifetime achievement award at a conference hosted by the International Society for Affective Disorders, where he stumbled into a talk on the latest research on the positive effects of psilocybin on patients with depression. “He was blown away,” says Lerer. “He spent 40 years treating people with PTSD and nothing worked, and here they had these results.”

The brothers decided to join forces, the younger Lerer to develop production in Chicago, the older to run trials on mice at Hadassah BrainLabs, the research laboratory he founded. They launched a new company to raise money, naming it for Parow, the Cape Town suburb where they grew up.

They moved fast. Bernard wanted to start immediately with preclinical trials, the precursor to human trials that, after much time and hard work, could lead to the production of FDA-approved drugs. Leonard applied for and very quickly received DEA licensing to produce and study psilocybin, a process the agency had fast-tracked for all Schedule 1 drugs the year before. By August of last summer, Pleckham and Milewksi were working in the lab full-time, culturing, growing, and extracting magic mushrooms with the approval of the federal government.

Spirulina-spiked Beyond Burgers being cooked at the Plant. Courtesy Matthew Gilson

Tony Milewski spent the better part of the day in his mycology lab, behind two locked and coded doors, seated in front of another Pleckham-refurbished laminar flow hood. A current of forced air blew toward him, preventing contaminants from landing in the open petri dishes he was working with. He scalped tiny strands of mycelia bred from two different cubensis varieties, transferring them to fresh dishes in the hope that he created a successful mutation. One variety known colloquially in the underground mycology community as Money Bags, and represented by a dollar sign, grows dense clusters of small, potent mushrooms in a short amount of time. The other, Penis Envy, is revered by psychonauts for its large, heavy, slower-growing, and extremely powerful fruit. Since he started working in the lab, he’s bred several novel varieties made possible by the library of over 300 different medicinal and edible mushroom spore prints he’s amassed and cataloged via the mycological community, which acts, in its own collaborative way, like a mycelial network. 

“Being in the counterculture for such a long time I had easy access to these things,” he says. “I put it out there: ‘Hey guys, here’s an opportunity. I’m building an analytical laboratory. Let’s figure this out.’ So everybody gave me spores from their collections. I absorbed like six of the largest collections in existence.”

When Lerer introduced me to Milewski as the head of mycology for BYAS and Parow, he draped his arm around the younger man and declared, “This is my brother.” The feeling is mutual, but they’re an unlikely pair. Milewski, a natty vintage dresser, has no formal scientific training, but he does have a spiritual reverence for all fungi, and fervently believes that it can save the world. 

Lerer is also a believer—but he believes only in the data, and is agnostic when it comes to the advisability of decriminalization, or whether the hallucinogenic trip associated with psychedelics is necessary for patients to benefit from psilocybin.

“Tony has never had the opportunity to get an education,” says Lerer. “If he had, he would have been a great researcher. But he and Jay are serious readers, and they are better informed in the scientific research than a lot of academic mycologists. I feel a great affinity toward him on an intellectual and even spiritual level. He’s taught me this reverence for nature because he does it in a very rational way.”

Pleckham, who, along with Milewksi has an ownership stake in Parow, is the lab’s jack of all trades. He does have a scientific degree in brewing technology from the Siebel Institute of Technology, one of the many skills he draws on to put his hands in nearly every project. 

Pleckham and Milewski’s work was interrupted that afternoon when they were summoned downstairs to the Plant’s Packingtown Museum to help workshop a poster abstract the company was presenting later in the week to a gathering of mass spectrometry chromatographers. Lerer was in attendance, along with his wife Karin Blakolmer, who’d stepped down from her corporate cancer research job last October to lead Parow as CEO. 

They joined a handful of staffers spread out on folding chairs in front of a large projection titled, informally “The 10 Mushroom Challenge.” A chemical analyst named Sean Johnston stood before them and laid out the results of a study that addresses the heart of Bernard Lerer’s preclinical mouse research: Do the therapeutic benefits of psychedelic mushrooms result from the presence of psilocybin alone, or is psilocybin only effective in concert with associated nonpsychedelic chemicals known as tryptamines, a concept called the entourage effect? The answer might resolve the thorny problem of whether to test extractions of isolated psilocybin in the mouse trials, or full spectrum extractions of all the known chemicals present in the mushrooms. 

Based on popular anecdotal experience—and personal experience—Milewski and Pleckham passionately believe the latter is the way to go. What’s more, they believe that fresh mushrooms, which most casual users have never tried, produce a more robust, holistic trip than dried ones. “It’s like playing a note on headphones on a Casio keyboard, compared to playing that same note on a grand piano in a concert hall,” says Pleckham. “It’s the same frequency, there’s just more there.” 

The scientists are more cautious. “Listen,” says Lerer. “When you’ve got malaria, you’re not gonna eat the bark of a quinine tree. If you’ve got depression, why the hell should you be taking a mushroom? You should be taking a drug.”

Blakolmer and Lerer hope that the trip isn’t necessary to manufacture and administer an effective pharmaceutical-grade drug that would be accessible to the millions of people suffering from mood disorders. In the end, an FDA-approved, full-spectrum drug extracted from fresh mushrooms would be much more difficult to develop and manufacture than one made from isolated psilocybin extracted from dried mushrooms.

Analysis for “The 10 Mushroom Challenge” was conducted on dried, ground mushroom varieties, all of which produce variations in the intensity of their visual and physical effects. A debate ensued:

“Dried mushrooms are considered to be very dark,” said Milewski. “Things can get extremely introspective—people hiding in tents. You know, bad trips. That’s not a rare thing, but I’ve never seen that happen with a fresh mushroom.”

“It makes no difference,” said Blakolmer. “Because you cannot give a patient a fresh mushroom and you cannot give a patient a dried mushroom. You have to find out what’s inside.”

But the team was just “bioprospecting”; they’re only in the discovery phase of the company’s research. There’s much more to be learned. Blakolmer directed the group to get started on a continuing study of fresh versus dried mushroom species. 

Parow is a long way from developing the right formulations and dosages for clinical trials on human subjects, but they have a leg up on most other psychedelic companies. The majority of psilocybin trials are conducted with synthetically derived compounds. Few researchers have access to large-scale quantities of natural psilocybin, let alone the full spectrum of chemicals that develop in a mushroom. 

They also have Blakolmer, who “righted the ship” when she came on board, according to Milewski. She used her long experience in clinical development to tighten the budget, forecast future needs, keep the company in regulatory compliance, and place timelines on Bernard Lerer’s preclinical experiments. They’ve already sent one shipment of natural, full-spectrum powdered mushroom extract to Israel, where he used it to study its effect on marble burying behavior in mice, a proxy for OCD; and he studied a telltale head twitch response in psilocybin-dosed mice, which mimics similar behavior in tripping humans.

“We are dealing with these compounds like I deal with an oncology molecule, because we think that this is what patients deserve,” says Blakolmer. “Patients with mental disorders need treatment that is developed with the same rigor as treatment for diseases, like cancer or diabetes. There cannot be any shortcuts in development, even though these drugs have been used for thousands of years.”

About a year and a half ago Jay Pleckham unmuted his mike during a Zoom call about cellular agriculture and asked if they could grow toad cells in the lab. 

Lerer had no idea what he was talking about, but he was intrigued when Pleckham told him about Incilius alvarius, the Sonoran desert toad which, when threatened by predators, secretes a toxin from the parotid glands located behind its eyes that includes 5-MeO-DMT. The brief but intense psychedelic trip the secretion causes in humans who ingest it has created an enormous demand on the black market. Toad “milking” is stressful, often fatal to the creatures, and its popularity threatens the species. 5-MeO-DMT is also interesting to researchers, but not easy to come by in large quantities for study. If they could find a way to grow it in the lab, it might be scalable, and someday it might relieve the pressure on the species. 

Lerer gave the experiment a green light and Pleckham sourced a pair of female toads from a Texas reptile and amphibian dealer. They were shipped to the lab, where an amphibian veterinarian anesthetized the toads and biopsied cells from their glands. The cells were then placed in a bioreactor for two months, where they did indeed begin to produce 5-MeO-DMT. 

No one will say exactly how algae was involved in the process. But the company has patented and open-sourced it so it’s publicly available for any researcher to access. “It was a pilot project,” says Blakolmer. “We know it can be done in order to upscale and really grow large amounts of these cells. But it will require completely different expertise and a lot more funding, which we currently do not have.”

But the toad experiment might reveal the solution to the problem of upscaling psilocybin production for use in drug manufacturing. Yet Lerer isn’t ready to commit to that. “Forget about how you’re gonna grow psilocybin. The fundamental question is, ‘Is there a difference between eating a mushroom and taking a synthetic psilocybin?’ We will know very soon. If it turns out that natural mushrooms are better than synthetic psilocybin, there’s a case to be made for growing the mushrooms to scale, or genetically modifying microbes, such as bacteria, yeast—or algae—to produce all the molecules. If it turns out that there is little or no difference between the two, it doesn’t make sense to grow psychedelic mushrooms because the only thing that is effective is psilocybin. If these entourage molecules have no effect, then the cheapest method wins. If that’s the case, yeah, maybe using genetically modified microbes is cheaper than chemically synthesizing psilocybin.”

As for the aforementioned  “retired scientists” Betty and Bufi (named for the toad genus Bufo), “They are alive and well and they are much loved by the entire team,” says Blakolmer, who is the keeper of the toads in the small apartment she and Lerer stay in above the lab. “They definitely connect with humans. This is why we have to protect them.”

But she may be underselling a deeper personal connection. “You walk in the room and they just stare at Karin,” says Pleckham. “They are in tune with her.”

And for Lerer, even though the company’s research into magic mushrooms is still in its infancy, it’s produced at least one tangible result. “You could say that psychedelics brought me and my brother together. And we didn’t need to take the psychedelics.”

The Food Issue