Why Protecting Fungi Matters for Mycopreneurs III: Policies, Profits & the Spore of Justice

(*No Incubator Today due to travel, see you all next week - in the meantime, please enjoy the third and final installment from our guest contributor Ezequiel Cruz - this one is an absolute monster at 3330 words, so buckle in…)

Why Protecting Fungi Matters for Mycopreneurs III: Policies, Profits & the Spore of Justice

Ezequiel A. Cruz-Campuzano - Fungaria

Hello again, my fellow mycopreneurs! In our last installment, we explored the Fungal Conservation Pledge and the push to include wild fungi in the CITES appendices. I shared why I think legislation can benefit us all—from preserving biocultural heritage to promoting sustainability and boosting consumer confidence. We also took a peek at an interesting scientific study involving Psilocybe zapotecorum, which while full of potential for innovation, raised serious questions about biopiracy.

In this final chapter of the series, we’re going to dive deeper into those ideas, in regards to wild fungal strains—this time with a sharper focus on how these conservation and policy shifts could reshape the future of fungal entrepreneurship at different levels. Note that I won’t dive into domesticated strains of fungi, as their legislation exceeds the limits of this series. But before we begin, let’s take a look at this beautiful figure from Meyer et al. (2020) which shows how far the reach of fungi can go: from agriculture to aerospace, pharma to food, textiles to tech—fungi are branching into nearly every major industry. That’s the power we’re talking about, and why it’s more crucial than ever to protect these organisms and the knowledge that surrounds them.

Quick Note: All references are now hyperlinked directly to their sources, so you can access them easily without scrolling through pages of citations.

Minding the Mycobiz: How regulations will empower entrepreneurs and protect consumers

Last time, we explored how conservation-based regulations can benefit consumers—but they also offer key advantages for producers. First, they promote accurate identification of wild fungal strains, helping clarify each species’ properties, support targeted innovation, and reduce the risk of overharvesting rare or cryptic lineages. Second, understanding the conservation status of species used in products encourages more efficient use of raw material and pushes for transparent, species-specific labeling—benefiting both sustainability and consumer trust. Let’s take a closer look at each of these dimensions with some real-world examples where applicable.

I) Why accurate taxonomy matters for fungal product development

Many fungal-based products made from wild mushrooms lack proper identification of the species they come from. While part of the issue stems from producers themselves (more on this later), there’s a bigger picture: most countries still don’t have thorough inventories of their native Funga. This leaves entrepreneurs—who don’t have to be taxonomy experts—facing a tricky challenge when it comes to labeling. Without reliable tools for identification, they often label the fungus as a similar-looking species rather than the one actually used(Shivas and Cai, 2012; Raja et al., 2017 ; Hending, 2024).

But getting the species name right isn’t just a technicality—it’s the starting point for truly understanding how a fungal extract works, both in product development and from the consumer’s perspective (Fusco et al., 2021; Pouris et al., 2024). This is where fungal conservation and trade initiatives come into play. To identify which fungi are threatened and analyze the impacts of trade, countries will be pushed to produce proper inventories of their native Funga (Truong et al., 2017; Mueller et al., 2022; Oyanedel et al., 2024). If global conservancy policies move forward, many nations will need to create these inventories—and that’s a crucial step toward the responsible and sustainable use of wild strains. As Hyde et al. (2019) point out, the process begins by correctly identifying the species in use. From there, it’s about studying what it can do, pinpointing where it’s best applied, and finally, turning all that knowledge into real-world products.

But how does all this affect fungal products? The use of different lookalike species can influence fungal products in three key ways: 

(A) Variations in the concentration of target compounds, which can impact potency, efficacy, and even safety of supplements or extracts, leading to inconsistent consumer experiences (Voigt & Kirk, 2011; Chambergo & Valencia, 2016). To address this, phylogenetic approaches are essential. These methods not only help identify hidden species more effectively than traditional ones but also allow scientists to map the evolution of useful traits—like chemical profiles—across related fungi. In other words, evolutionary trees can act as roadmaps, showing how specific compounds are distributed and have changed within lineages. This knowledge helps biotechnology efforts focus on the right species for specific applications, leading to smarter product development (Schmitt & Barker, 2009; Adamek et al., 2019; Prakinee et al., 2024).

The case of Reishi works as a great model for this. Long considered a single species—Ganoderma lucidum—research has shown that this name properly refers only to Eurasian strains. In reality, what’s commonly known as Reishi or Lingzhi includes anywhere from 13 to 42 distinct lineages (Zhou et al., 2015; Fryssouli et al., 2020), with at least 10 growing naturally in the United States (Loyd et al., 2018). Although chemical profiles of all these lineages remain largely unexplored, studies on lucidum-like species show they don’t all share the same medicinal properties (Wang et al., 2020). 

For example, Hennicke et al. (2016) used phylogenetic analyses to identify two commercial strains marketed as G. lucidum, confirming one as the latter, and the other as G. lingzhii. They also found G. lingzhi contained significantly higher levels and higher diversity of triterpenoids, the bioactive compounds responsible for medicinal effects. This challenges the long-standing prestige of G. lucidum as a powerful medicinal mushroomand underscores that not all Reishi offer the same therapeutic potential (Quick note: Since Ganoderma is saprophytic, non-native species can be introduced unintentionally through cultivation).

Phylogenetic diversity of the genus Ganoderma: lucidum-like species are within Clade A (Fryssouli et al., 2020); Triterpenoid profiles of G. lucidum and G. lingzhi, exhibiting a higher diversity and concentration in the second species  (Hennicke et al., 2016).

(B) Potential for companies to patent extraction or processing methods tailored to specific lineages,  driving innovation and higher-performing products, while also giving producers a competitive edge in a rapidly expanding market (Oldham et al., 2013; Simmonds et al., 2020). Because different lineages may produce distinct chemical profiles, these variations themselves can open new avenues for patentable techniques and species-specific formulations (Bills & Gloer, 2016).

A great example of where accurate taxonomy meets opportunity is the famous Fly Agaric (Amanita muscaria), now popular among mycoenthusiasts. But did you know not all Fly Agarics are the same? Studies by Geml et al. (2006, 2008) revealed that A. muscaria is not a single species but a complex of at least three to eight distinct lineages—,seven of which are found in North America, and all have been recorded in the U.S. (Quick reminder that USA ≠ America). Some are even hyper-local, like three lineages that are unique to Santa Cruz Island in California. This hidden diversity opens a window not only for research into variations in the content of key bioactive compounds (like muscimol), but also to patents for lineage-specific extraction methods—providing scientific and commercial value alike (Sandall et al., 2023).

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(C) Overharvesting of certain strains thought to be widespread—especially when done poorly, such as through improper collection techniques that damage the mycelium or disrupt natural regeneration (Money, 2005). This risk increases when cryptic or narrowly distributed lineages are unknowingly exploited, as seen in the Tricholoma matsutake species complex (Luoma et al., 2006; Murata et al., 2023; Furukawa et al., 2024).

This can also be exacerbated when these lineages lack basic biological and ecological data. Ophiocordyceps sinensis, for instance, isa complex of 8 to 10 species, some geographically restricted and likely with specific ecological needs (Dai et al., 2020; Dai et al., 2024). Without this knowledge, harvesting can become a death sentence—leading to population declines and reduced fruiting body production, especially in areas heavily exploited to meet demand(He, 2018; Hopping et al., 2018; Wei et al., 2021).

Ophiocordyceps sinensis production in Nagqu Prefecture (1983–2017): After peaking in 1999, yields declined steadily, likely due to overharvesting (Wei et al., 2019). In the Himalayas, most sites also report decreasing yields, indicating overexploitation as the main cause [highlighted with red pie chart
segments for both] (Hopping et al., 2018).

But perhaps the clearest—and most concerning—example of how poor taxonomy can harm fungal populations is the case of the Agarikon. This is another case of a widely appreciated species—Laricifomes (= Fomitopsis) officinalis—valued for its antiviral and antimicrobial properties, given by the production of chlorinated coumarins in its mycelium and triterpenoids in its fruiting bodies—like in medicinal Ganoderma(Girometta, 2019; Muszyńska et al., 2020). Today, it’s believed to have a patchy and declining distribution, with isolated populations in the Pacific Northwest of North America, parts of the Mediterranean, Eastern and Central Europe, as well as regions of Russia and Japan (Chlebicki et al., 2003; GBIF, 2025).

However, wide distributions are more the exception than the rule in fungi, and this scattered pattern likely points to a species complex—though no comprehensive phylogenetic study has confirmed it yet. This lack of taxonomic clarity has had disastrous consequences, as populations of L. officinalis in the alps are considered to be extinct. In the early 1900s, growing pharmaceutical interest led to intense harvesting, with no awareness that Alpine populations may have slower growth rates or distinct ecological needs. As a result, harvesting pressure outpaced natural regeneration—possibly wiping out a unique lineage before it was even recognized (Girometta et al., 2021; Hinsley et al., 2023).

With this in mind, I ran a quick phylogenetic analysis using nrITS sequences from GenBank (Sayers et al., 2024)—and the results are striking: at least three distinct clades are hiding under the single name L. officinalis! One consists solely of European samples, another of Pacific Northwest specimens, and a third mixes both Eurasian and North American sequences. While this is just a preliminary look—and more data from additional samples and genetic markers is definitely needed—it already raises a red flag: we shouldn’t harvest fungi blindly. Doing so risks wiping out local populations, as happened in the Alps, and potentially losing unique lineages before we even recognize them. (Quick note: If you're curious about how I built the tree, I'm happy to share the details.)

II) How species-specific trade regulations can drive smarter use and boost consumer confidence

Now that we’ve explored how accurate taxonomy—as a result of conservation efforts—can benefit fungal product development, let’s turn to other advantages tied to the conservation and trade status of the species themselves. If certain fungi are classified as threatened or protected and brought under trade regulations, it’ll naturally lead to shifts in how they're harvested, processed, and incorporated into products (Lofgren & Stajich, 2021; Oyanedel et al., 2022). These changes can influence everything, from harvesting and production methods to labeling practices—and here’s how:

(A) Global guidelines for sustainable use, which can provide a strong foundation for responsible fungal product development. By standardizing the collection of wild strains—whether saprophytic or symbiotic like mycorrhizal fungi—such guidelines will ensure harvesters, from entrepreneurs to researchers and traditional communities, will follow best practices (de Frutos et al., 2019; Kaplan-Mintz et al., 2024).

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Especially for species that can’t be cultivated, proper harvesting is critical to long-term fruiting body production and forest health, and strategies can range from species-specific techniques (e.g. those applied to Tricholoma matsutake in Asia) (Yang et al, 2009; Gevelt, 2014) to broader fungal or forest-level approaches like (myco-)silviculture (Cunningham et al., 2011; Tomao et al., 2017). With unified standards, fungi can shift from being opportunistically exploited to sustainably managed, turning vulnerable resources into renewable assets (Boa, 2004; Oyanedel et al., 2022).

(B) Innovation in product manufacturing, as some commercially traded species—Ophiocordyceps sinensis and Tricholoma matsutake, for instance— will inevitably be categorized as endangered and included in international trading policies, new regulations will limit both the number of fruiting bodies that can be harvested and the amount of wild biomass that can be used to isolate strains for cultivation (Oyanedel et al., 2024; Furci & Scanlon, 2025). As a result, both large and small-scale mycopreneurs will need to find innovative ways to get the most out of their fungal resources.

At a larger scale, existing methodologies could be adapted for endangered species: for example, cultivating ectomycorrhizal (ECM) fungi, which would help both fungal and host tree populations (Yamada, 2022; Ferreira et al., 2023) or growing mycelium in bioreactors to reduce reliance on wild harvesting, especially when the desired compounds are produced by the mycelium, as enzymes responsible for metabolite synthesis can be isolated without repeated foraging (Berovic, 2019; Ángeles-Argáiz et al., 2020; Tong et al., 2022). At a smaller scale, artisanal methods will need to be refined or newly adopted to increase the value extracted from each fruiting body (Ramírez-Carbajal et al., 2025), and mushroom cultivation can be carried out successfully for further usage (Wendiro et al., 2019).

(B) Clear product labeling, because as previously mentioned, regulatory restrictions are likely to increase, and mycopreneurs will be expected to maintain full transparency about the ingredients in their supplements. This transparency starts with the accurate identification of the fungal species being used and the precise quantification of specific bioactive compounds—practices that should already be standard, as such are essential for building consumer trust and ensuring broader acceptance (Raja et al., 2017; Chezan et al., 2022).

Unfortunately, fungal product mislabeling is all too common worldwide, often due to poor taxonomic understanding and, at times, mismatches between the reported and actual levels of key compounds. Just take the case of the “Hongo Michoacano”—a common name given to Mexican lucidum-like Ganoderma—as an example of what a fungal product label shouldn’t be. The following table highlights other four brief examples of mislabeling practices:

Myco-heritage Matters: Safeguarding traditional mushroom economies from Biopiracy and the race to patent the wild

We’ve already explored how legislation stemming from conservation efforts can directly affect entrepreneurial initiatives. However, it’s equally important to recognize that these same dynamics also influence traditional mycopreneurial practices, as discussed in our previous installment. In this section, I’ll share my personal perspective on why I believe trade policies should take a holistic approach that prioritizes the preservation of biocultural heritage, because without this mindset, such policies risk either favoring solely industrial interests by ignoring the barriers communities face in adopting industrial alternatives to mushroom harvesting, or becoming so restrictive to even neglect traditional usage, getting to a point were even Indigenous and local groups are prevented from accessing and using their ancestral resources (Oyanedel et al., 2024; Furci & Scanlon, 2025). 

To begin, I’ll say that limiting mushroom picking of certain species is easier said than done. When considering restrictions on fungal harvesting, it is essential to acknowledge that for many Indigenous and local communities, this activity represents a cornerstone of their livelihood. Imposing blanket limitations without considering these socio-economic realities risks undermining not only cultural practices but also the financial stability of entire households—and ultimately, such policies are unlikely to be respected or followed, like in the highlands of Chiapas, where authorities have imposed harsh restrictions on wild fungi consumption and selling—not for conservation, but to prevent fatal poisonings. Despite these efforts, the measures have been ignored (Ruán-Soto et al., 2012).

Now, in terms of the economic significance of wild mushroom trade, a striking example can be found in the work of Arora (2008), who literally documented “The Houses that Matsutake Built” in Shangri-La County, within the Diqing Tibetan Autonomous Prefecture. In this region, income from the harvest and sale of Tricholoma matsutake allowed families to build homes and improve their living conditions. In such contexts, mushrooms are far more than forest products—they are vital economic assets, deeply intertwined with local identity and survival.

On the other hand, the promotion of industrial alternatives to wild harvesting, while often framed as sustainable, can unintentionally fuel biopiracy. Isolating and cultivating species traditionally used by Indigenous communities often sidelines these groups, stripping them of economic and cultural rights. This is worsened when outsiders—especially from wealthier countries—source resources without notifying local authorities or communities, violating the Nagoya Protocol’s core principles: Prior Informed Consent (PIC) and Mutually Agreed Terms (MAT) (Convention on Biological Diversity, 2011). 

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The recent study on Psilocybe zapotecorum led by Millet et al. (2024), which we discussed in our previous installment, serves as a concerning example of these dynamics. The paper makes no mention of ethnic or cultural considerations, nor does it acknowledge any mutual agreements with the Indigenous communities that have traditionally used and valued this species. As the study lays the groundwork for cultivation outside its native context—and in the absence of legislation preventing this—there is a real possibility that this fungus could become commercially exploited abroad, cutting local communities out of the economic benefits they rightfully deserve. 

Such actions not only marginalize traditional users but also risk turning sacred or communal resources into privatized, commodified products. While this story is still unfolding, so far it reflects a familiar pattern: privileged white people leveraging their access and economic power, while leaving behind the very people who have safeguarded the knowledge and use of these fungi for generations. This is why innovation involving traditionally traded fungi must go hand in hand with inclusive strategies that actively involve researchers, applied biotechnologists, and—most importantly—local communities who have long sustained these resources (Teran, 2010; Bavikatte and Robinson, 2011).

Bringing together the need for balanced regulation and the promotion of sustainable use, the most ethical path forward is one that centers Indigenous and local communities in all processes involving their traditionally used fungi. These communities should not be seen merely as resource providers, but as key actors whose cultural knowledge and long-standing stewardship are essential to the value of these species. Inclusive frameworks must empower them to co-develop technologies, engage in fair benefit-sharing, and maintain their role as primary traders of their own funga. Ultimately, policy must go beyond biodiversity conservation—it must also defend the rights of these communities to manage, protect, and benefit from the fungi they have cultivated through generations of care and tradition.

Final remarks: Mycopreneurship done the right way

Conservation and trade regulations, when thoughtfully crafted, can serve as powerful tools to ensure protection of fungal diversity, while promoting sustainability, improving fungal products quality. The key lies in balancing innovation with responsibility—encouraging ethical entrepreneurship while respecting the ecological and cultural roles fungi play. “Mycopreneurship done the right way” is not just about market success, but about building inclusive frameworks that support communities, safeguard ecosystems, and contribute meaningfully to global sustainability goals (Meyer et al. (2020).

(Editor’s Note: Thanks for reading this edition of the Mycopreneur Newsletter, and see you next week)