The Ayahuasca Industry Under Siege

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Why Government Crackdowns and Deaths Are Forcing a Billion-Dollar Business to Reinvent Itself

The ayahuasca retreat industry is facing its most serious crisis in modern history. In January 2025, the United States Embassy in Peru issued an unprecedented warning advising American citizens to completely avoid ayahuasca ceremonies. 

Just days later, Costa Rica's Ministry of Health followed suit with its own public advisory against psychedelic retreats. Multiple deaths, sexual assault reports, and regulatory raids are forcing what was once a thriving wellness industry to confront hard truths about safety, regulation, and sustainability.

For entrepreneurs and investors who have been watching the psychedelic tourism sector, these developments represent a watershed moment. 

The era of unregulated jungle ceremonies marketed as spiritual healing is ending. What comes next will determine whether ayahuasca tourism evolves into a legitimate wellness industry or collapses under the weight of its own excesses.

This is not just another story about drug policy. 

This is about a multi-million dollar industry at a crossroads, affecting everyone from Indigenous communities in the Amazon to Silicon Valley executives seeking alternative therapies. 

Understanding what is happening right now is essential for anyone involved in wellness tourism, psychedelic therapy, or business development in Latin America.

The US Embassy Warning That Changed Everything

On January 23, 2025, the United States Embassy in Lima took the unusual step of issuing a formal health alert specifically targeting ayahuasca and kambo consumption. T

he language was unambiguous and stark. Embassy officials urged American citizens not to ingest these substances under any circumstances, citing multiple deaths and severe health complications throughout 2024.

The warning detailed several critical dangers. First, ayahuasca contains DMT, a Schedule I controlled substance in the United States and many other countries. 

Second, several Americans died or experienced severe illness after consuming ayahuasca in 2024, with incidents occurring in remote Amazon locations far from medical facilities. Third, American citizens reported being sexually assaulted, injured, or robbed while under the influence at retreat centers.

Perhaps most damaging to the industry was the embassy's explicit statement that facilities offering ayahuasca are not regulated by the Peruvian government and may not follow health and safety laws. 

This undermined years of marketing that positioned these retreats as safe, traditional healing centers operating with Indigenous knowledge and cultural authenticity.

The embassy emphasized that these incidents often occur in areas with limited connectivity and no access to emergency services. 

When something goes wrong during a ceremony, participants can be hours away from proper medical care. The warning was not a suggestion. It was as close to a travel prohibition as diplomatic language allows.

This was not the first time US authorities raised concerns about ayahuasca tourism. Previous warnings were issued in 2012, 2013, and 2022. But the 2025 advisory used significantly stronger language and represented a clear escalation in official concern.

Costa Rica Follows With Its Own Crackdown

Five days after the US Embassy warning, Costa Rica's Ministry of Health issued its own public advisory on January 28, 2025. The ministry warned against advertising, using, or consuming ayahuasca and ibogaine for therapeutic purposes. Unlike the US warning, which was advisory, Costa Rica's statement had regulatory teeth.

The ministry made clear that ayahuasca and ibogaine lack the required sanitary registration in Costa Rica. Any product marketed for therapeutic use must comply with national regulations for control and registration. 

The ministry emphasized that healing practices must be conducted by certified professionals in establishments approved by health authorities.

Costa Rica went further than Peru by explicitly asking residents and tourists to report any suspicious activity involving unregistered psychoactive substances to government authorities. 

The message was clear. The permissive environment that had allowed dozens of retreat centers to operate in legal gray areas was ending.

This matters because Costa Rica had emerged as a major alternative destination for ayahuasca tourism. 

When Peru's reputation began suffering from safety incidents, many retreat operators and tourists shifted to Costa Rica. 

The country marketed itself as having better infrastructure, easier access, and a more tourist-friendly environment than deep Amazon locations.

Major retreat centers like Rythmia, which claims to have served over 15,000 participants since 2015, suddenly faced uncertainty about their operating status. The industry that had grown quietly for years was now in regulatory crosshairs.

The Deaths That Nobody Wants to Talk About

Behind the government warnings lies a grim reality. People are dying at ayahuasca retreats, and the industry has struggled to address this transparently. 

According to research tracking media reports from 1994 to 2022, at least 58 deaths were attributed to ayahuasca consumption, with 40 percent linked to tourist retreat centers in Amazonian countries.

The actual number is likely higher. Many deaths occur in remote locations and may not be reported to authorities or media. Families often face pressure to avoid publicity. 

Retreat centers have financial incentives to keep incidents quiet. Indigenous communities may handle matters internally without involving outside authorities.

Some deaths result from direct physiological reactions to ayahuasca. 

The brew can cause dangerous interactions with common medications, particularly antidepressants, blood pressure medications, and stimulants. Participants sometimes fail to disclose their full medical history or current medications. Facilitators may lack training to screen for contraindications properly.

Other deaths stem from circumstances during ceremonies. Participants experiencing intense psychological distress have wandered away from retreat centers into jungle environments, becoming lost or injured. Some deaths involved violence between participants or between participants and facilitators. 

There have been cases of tobacco purging ceremonies, which are sometimes offered as preparation for ayahuasca, causing fatal nicotine poisoning.

The 2015 death of New Zealander Matthew Dawson-Clarke became widely publicized. He died of cardiac arrest after a tobacco tea purging ceremony at a retreat center. 

This death was not directly from ayahuasca but from associated practices offered at the same facility. It highlighted how retreat centers often bundle multiple intensive practices together without adequate safety protocols.

Sexual assault allegations have also emerged as a persistent problem. Women report being assaulted by shamans or facilitators while in vulnerable states during ceremonies. 

The power dynamics in these settings are inherently problematic. Participants are in unfamiliar environments, often alone, under the influence of powerful substances, and trusting facilitators whom they just met.

Why Peru Cannot Regulate What It Does Not Control

Peru faces a unique regulatory challenge. Ayahuasca is legal for traditional use by Indigenous communities. It is part of protected cultural heritage. 

The Peruvian government recognizes ayahuasca as having spiritual and medicinal significance for Amazonian peoples.

But tourist retreat centers exist in a legal gray zone. They are not traditional Indigenous ceremonies. They are commercial operations, often owned by foreigners, marketing to international clients. Yet they invoke Indigenous tradition to claim cultural protection and avoid regulation.

The Peruvian government has been reluctant to impose strict controls because doing so might be seen as interfering with Indigenous practices. 

There is also economic pressure. Ayahuasca tourism brings significant revenue to regions with few other economic opportunities. Research indicates that the ten largest retreats in Iquitos alone generate approximately 6.5 million dollars annually.

This has created a situation where facilities operate with minimal oversight. There are no standardized training requirements for facilitators.

 No mandatory health screening protocols for participants. No emergency response requirements. No licensing or inspection systems specifically for ayahuasca retreat operations.

Local government offices in places like Iquitos are aware of the problems but lack resources and political support to implement comprehensive regulation. The Ministry of Culture, which has some jurisdiction over traditional practices, is not equipped to regulate what has become a massive tourism industry.

The result is that safety depends entirely on individual retreat operators. Some maintain high standards with trained medical staff, thorough participant screening, and robust emergency protocols. Others are profit-driven operations with minimal safety measures, inexperienced facilitators, and no accountability.

The Economics of a Billion-Dollar Underground Industry

Estimating the size of the ayahuasca tourism market is difficult because much of it operates informally. Based on available data, researchers estimated there were at least 232 retreat centers operating in Amazonian countries and Costa Rica by 2019. 

The typical week-long retreat cost around 1,000 dollars. If estimates of 62,000 ayahuasca tourists in 2019 are accurate, the industry generated approximately 62 million dollars that year.

But these numbers likely undercount the market significantly. 

They do not include smaller ceremonies, individual shamans operating informally, or the growing number of retreat centers that have opened since 2019. They also do not account for higher-end luxury retreats charging 3,000 to 7,000 dollars per week.

Some analysts have characterized the broader psychedelic wellness retreat market, which includes ayahuasca, psilocybin, and other plant medicines, at approximately 3.8 billion dollars in 2023, with projections reaching 10.7 billion dollars by 2027. Ayahuasca tourism represents a significant portion of this market.

The economic impact extends beyond retreat centers. Local communities benefit from employment as facilitators, cooks, groundskeepers, and guides. 

Suppliers provide food, transport, and materials. Cities like Iquitos have developed entire service ecosystems around ayahuasca tourism, including hotels, restaurants, and tour operators.

However, much of the profit leaves the region. Most retreat centers are owned by foreign entrepreneurs who do not reside in Peru year-round. 

They control marketing, bookkeeping, and financial operations. Local workers, including Indigenous facilitators, receive wages but do not share in ownership or major profits.

This economic structure creates tension. Indigenous communities see their traditional medicine commercialized by outsiders. 

They watch tourists pay thousands of dollars for experiences that were never intended as commercial products. Meanwhile, they remain economically marginalized in their own territories.

What Makes This Crisis Different From Previous Scares

The ayahuasca industry has weathered concerns before. Periodic media coverage of deaths or bad experiences never fundamentally changed the trajectory of growth. 

Retreat operators could dismiss incidents as outliers, emphasize the overall safety record, and continue operating with minimal disruption.

This time is different for several reasons. First, the official government warnings from both the United States and Costa Rica represent an unprecedented level of formal disapproval. 

These are not media stories or advocacy group critiques. These are official statements from governments with diplomatic and regulatory power.

Second, the warnings come from multiple countries simultaneously. This suggests coordinated concern rather than isolated incidents. When Costa Rica moved just days after the US warning, it signaled a broader shift in how authorities view ayahuasca tourism.

Third, the language in both warnings was notably strong. Previous advisories used cautionary language. The 2025 statements essentially told citizens to avoid ayahuasca entirely. 

This makes it difficult for retreat operators to reassure potential clients that concerns are exaggerated.

Fourth, insurance and liability issues are beginning to surface. Some retreat centers may struggle to obtain insurance coverage. 

Tour operators who package ayahuasca experiences face increased liability exposure. Medical travel insurance providers are excluding ayahuasca-related incidents from coverage.

Fifth, the growth of the industry itself has made problems more visible. With hundreds of retreat centers and tens of thousands of participants annually, statistical probability alone means more incidents. As the industry scaled up, so did the number of things going wrong.

The Indigenous Communities Caught in the Middle

While government warnings focus on tourist safety, Indigenous communities face their own crisis related to ayahuasca commercialization. Traditional knowledge that was shared within communities for generations has become a commodity sold to wealthy foreigners.

In July 2025, twelve Indigenous communities in Peru issued the Chachibai Declaration, demanding that REDD+ projects and conservationists leave their territories. 

While focused on carbon credit schemes, the declaration reflected broader frustration with outside exploitation of Indigenous knowledge and resources, including ayahuasca.

Many traditional curanderos have mixed feelings about tourism. 

The income provides economic opportunities in regions with few alternatives. Young people who might have left for cities can earn money by working at retreat centers. Families that struggled with poverty now have steady income.

But the commercialization fundamentally changes the practice. Traditionally, only the curandero drinks ayahuasca to diagnose patients and determine treatments. The medicine was not something patients consumed for their own visions. 

Tourist expectations have forced practitioners to adapt, with ceremonies now centered on tourists drinking the brew themselves.

Some Indigenous healers have moved away from their communities to work at retreat centers catering to foreigners. This brain drain depletes traditional communities of knowledgeable practitioners. Local people who need traditional healing increasingly cannot access curanderos because those healers are occupied serving tourists.

There are also concerns about ecological impact. The growing demand for ayahuasca has increased harvesting pressure on the vine and other plants used in the brew. While not yet at crisis levels, there is worry about sustainability if demand continues growing without management.

Cultural appropriation remains a sensitive issue. Many Indigenous leaders feel their traditions are being misrepresented and exploited.

Foreign retreat operators often lack deep understanding of the cultural context and spiritual significance of ayahuasca. They market ceremonies using superficial Indigenous imagery while stripping away actual cultural meaning.

Where Does the Industry Go From Here

The ayahuasca retreat industry faces several possible futures. One path is continued decline as safety concerns, regulatory crackdowns, and insurance issues make operating increasingly difficult. Retreat centers could close, tourists could stay away, and the boom could become a cautionary tale about unregulated wellness tourism.

Another possibility is evolution toward legitimate regulation and professionalization. 

This would require governments to create specific frameworks for psychedelic retreat operations, including licensing, safety standards, insurance requirements, and training certification. Retreat operators would need to embrace regulation rather than resist it, accepting that legitimacy requires accountability.

A third path is fragmentation, with different countries taking different approaches. Some might ban ayahuasca tourism entirely. Others might create strict medical frameworks requiring licensed healthcare providers. Still others might maintain loose regulations while hoping safety improves voluntarily.

The most sustainable path forward likely involves several components. First, clear legal frameworks that distinguish traditional Indigenous use from commercial tourism operations. 

Second, mandatory safety protocols including participant screening, trained medical personnel, and emergency response plans. Third, certification programs for facilitators that require demonstrated training and accountability.

Fourth, benefit-sharing arrangements that ensure Indigenous communities receive fair economic participation. Fifth, ecological sustainability measures to protect plant populations from overharvesting. Sixth, insurance mechanisms that provide coverage for participants and operators while incentivizing safety.

Several jurisdictions are exploring these approaches. Some regions in Oregon and Colorado, which have legalized psilocybin therapy, are developing regulatory models that could inform ayahuasca policy. These frameworks emphasize medical oversight, trained facilitators, and controlled settings.

For Peru specifically, any solution must balance respect for Indigenous traditions with tourist safety. This is politically and culturally complex. Indigenous groups have valid concerns about outsiders imposing rules on their practices.

But the reality is that most ayahuasca tourism has little connection to authentic traditional practice. Finding a middle path requires careful consultation and compromise.

The Business Case for Legitimate Operation

For entrepreneurs considering entering or continuing in the ayahuasca retreat business, the message is clear. The days of operating in unregulated gray markets are ending. Future success requires legitimacy, professionalism, and genuine commitment to safety.

This means higher operational costs. Hiring trained medical staff. Implementing rigorous screening protocols. Obtaining proper insurance. 

Investing in emergency response capabilities. Securing appropriate permits and licenses. Paying fair wages and sharing profits with Indigenous partners.

But legitimacy also creates competitive advantages. Retreat centers that can demonstrate safety credentials will attract clients who are deterred by recent warnings. Insurance coverage protects against liability. Good relationships with local authorities prevent regulatory problems. Fair treatment of Indigenous partners builds authentic cultural connections.

The market for psychedelic wellness is not disappearing. Interest in alternative therapies and consciousness exploration continues growing. 

As psychedelic research advances and medical applications develop, there will be ongoing demand for these experiences. The question is which operators will adapt to the new environment and which will be swept away by it.

Smart operators are already making changes. Some are bringing in medical doctors and psychologists. 

Others are implementing thorough intake processes that screen out high-risk participants. Many are improving physical facilities to include medical equipment and better communication infrastructure. A few are pioneering partnership models with Indigenous communities that share ownership and decision-making.

What Tourists and Participants Need to Know

For individuals considering ayahuasca experiences, the government warnings deserve serious attention. This does not mean ayahuasca is inherently deadly or that all retreats are dangerous. But it does mean due diligence is essential.

Potential participants should thoroughly research any retreat center. Look for verifiable information about ownership, facilitator training, safety protocols, and medical capabilities. 

Check multiple review sources, but be aware that reviews can be curated or fake. Seek references from past participants who can speak honestly about their experience.

Disclosure of medical history is critical. Ayahuasca can interact dangerously with many common medications and health conditions. 

Anyone taking antidepressants, blood pressure medication, or other prescription drugs should consult with knowledgeable medical professionals before participating. Heart conditions, psychological disorders, and other health issues create significant risks.

Understand that ayahuasca is illegal in many countries. Possession or import of materials containing DMT is a serious criminal offense in the United States and many other jurisdictions. 

Participating in ceremonies abroad does not eliminate legal risk, particularly if problems occur.

Consider the cultural and ethical dimensions. Tourism that exploits Indigenous knowledge and communities is problematic even when legal. Participants should think carefully about whether their experience genuinely respects traditional practice or merely extracts what serves foreign consumers.

There are alternatives for those interested in psychedelic therapy. 

Clinical trials and licensed programs in certain jurisdictions offer supervised experiences with psilocybin and other substances. These settings provide medical oversight and legal protection that underground ceremonies cannot match.

FAQ

Is ayahuasca legal in Peru?

Ayahuasca is legal for traditional Indigenous use in Peru, protected as cultural heritage. However, commercial retreat operations exist in a legal gray area. 

The Peruvian government does not specifically regulate tourist ceremonies, which means they are neither explicitly legal nor illegal. The US Embassy warning emphasized that facilities offering ayahuasca are not regulated by Peruvian authorities.

Why did the US Embassy issue this warning now?

The January 2025 warning followed multiple deaths and serious incidents involving American citizens throughout 2024. The embassy cited deaths, mental health emergencies, sexual assaults, and robberies at retreat centers. 

The timing suggests an accumulation of reported incidents reached a threshold where official action became necessary.

Is ayahuasca dangerous?

Ayahuasca carries real health risks, particularly for people with certain medical conditions or taking specific medications. It can cause dangerous interactions with antidepressants, blood pressure medications, and heart conditions. 

Most serious problems occur because of inadequate screening, poor facilitation, or lack of emergency response capabilities. Ayahuasca itself is less toxic than many assume, but the circumstances of unregulated ceremonies create significant risks.

What is happening in Costa Rica?

Costa Rica's Ministry of Health issued a warning on January 28, 2025, stating that ayahuasca and ibogaine lack required sanitary registration and are not authorized for therapeutic use. 

The ministry asked residents and tourists to report unlicensed operations. This represents a significant shift from Costa Rica's previous unofficial tolerance of psychedelic retreats.

How big is the ayahuasca tourism industry?

Estimates suggest at least 232 retreat centers operated in South America and Costa Rica by 2019, serving approximately 62,000 tourists annually and generating around 62 million dollars. 

The broader psychedelic wellness market, including ayahuasca, was valued at approximately 3.8 billion dollars in 2023. However, much of the industry operates informally, making precise measurement difficult.

What should someone do if they want to try ayahuasca safely?

Anyone considering ayahuasca should thoroughly research retreat centers, verify facilitator credentials, confirm medical staff availability, and honestly disclose all health conditions and medications. 

Consider alternatives like legal psilocybin programs in Oregon or Colorado, which provide medical oversight. Consult healthcare providers knowledgeable about psychedelic interactions. 

Most importantly, recognize that no ceremony is without risk, and official government warnings exist for valid reasons.

How does this affect Indigenous communities?

Indigenous communities face complex impacts from ayahuasca tourism. Some benefit economically through employment and business opportunities. 

Others feel their traditional knowledge is exploited by foreign-owned operations that extract profits while leaving communities marginalized. 

Traditional practitioners are moving away from serving local needs to focus on tourists. There are concerns about cultural appropriation, ecological sustainability, and loss of authentic practice.

Will the industry recover from these warnings?

The industry will likely undergo significant transformation rather than disappear entirely. 

Demand for psychedelic experiences remains strong. However, operations that cannot demonstrate safety, legitimacy, and ethical practice will struggle. 

The future belongs to retreat centers willing to embrace regulation, invest in safety infrastructure, partner fairly with Indigenous communities, and prioritize participant wellbeing over profit.

Official Sources and References

All information in this article is sourced from official government documents and verified reporting. The following sources were consulted:

U.S. Embassy in Peru - Health Alert: Do Not Use Ayahuasca/Kambo (January 23, 2025)

U.S. Department of State - Peru Travel Advisory

U.S. Department of State - Peru International Travel Information

Costa Rican Ministry of Health - Public Warning on Ayahuasca and Ibogaine (January 28, 2025)

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