Regulatory Spotlight: Functional Mushrooms

Functional mushrooms are rapidly gaining popularity across the United States. Unlike psychedelic mushrooms, functional mushrooms are completely legal for sale and are commonly sold as whole mushrooms or in dietary supplement form. These supplements come in various forms, including tinctures, capsules, mushroom coffee (as an alternative to traditional coffee), and gummies. Some of the most well-known functional mushrooms include reishi, lion’s mane, and chaga, each offering unique properties that can complement a balanced diet.

While these mushrooms provide potential health benefits beyond basic nutrition, the U.S Food & Drug Administration (FDA) has intensified regulatory oversight at manufacturing facilities. This heightened scrutiny may be linked to the 2024 recall of the Diamond Shruumz-Brand product line, which resulted in over a hundred reported illnesses, hospitalizations, and suspected deaths. In response, the FDA is increasing inspections at functional mushroom production facilities to ensure consumer safety. Before diving into the details of this investigation and what to expect from an FDA visit, let’s explore the most popular functional mushrooms and the reasons behind their rising demand.

Some of the most commonly used functional mushrooms with potential health benefits include the following:

• Reishi (Ganoderma lucidum) – Often called the “mushroom of immortality,” it may support immune function, stress reduction, and sleep.
• Lion’s Mane (Hericium erinaceus) – Associated with cognitive benefits, including memory, focus, and nerve regeneration.
• Chaga (Inonotus obliquus) – Rich in antioxidants and may help support immune health and reduce inflammation.
• Cordyceps (Cordyceps militaris & Cordyceps sinensis) – Traditionally used for boosting energy, endurance, and respiratory health.
• Turkey Tail (Trametes versicolor) – Supports gut and immune health due to its polysaccharides, including PSP and PSK.
• Maitake (Grifola frondosa) – May aid in blood sugar regulation and immune support.
• Shiitake (Lentinula edodes) – Known for promoting heart health and enhancing immune function.
• Tremella (Tremella fuciformis) – Often used for skin hydration and anti-aging benefits.

As the demand for functional mushrooms continues to grow, so does the regulatory landscape surrounding their production. Understanding these mushrooms and the FDA’s role in ensuring their safety is essential for consumers and manufacturers alike.

FDA & Diamond Shruumz

The FDA published a health alert concerning Diamond Shruumz-brand products in 2024, including their Microdosing Chocolate Bars, Infused Cones, and Gummies. The FDA, in collaboration with the Centers for Disease Control and Prevention (CDC), has been investigating a series of severe illnesses associated with these products. According to the FDA website, “As of October 31, 2024, CDC’s investigation identified a total of 180 illnesses* reported from 34 states; 73 people have been hospitalized, and there are three (3) potentially associated deaths.” A few data points to cover the investigation:

The FDA’s Key Findings from their Investigation:

• Severe Health Risks: Consumers have reported serious symptoms such as seizures, loss of consciousness, confusion, abnormal heart rates, and significant blood pressure changes after consuming Diamond Shruumz products.​
• Product Recall: All flavors of Diamond Shruumz-brand Microdosing Chocolate Bars, Infused Cones, and Gummies have been recalled. Despite this, some products may still be available due to their long shelf life. ​Recall Information Here
• Contaminants Identified: FDA testing revealed the presence of harmful substances in these products, including muscimol, acetylpsilocin, psilocin, pregabalin, and kavalactones (desmethoxyyangonin, dihydrokavain, kavain).

FDA Surprise Site Visits

Knock knock, it’s the FDA! As a result of the Diamond Shruumz investigation, the FDA is ramping up inspections at functional mushroom production facilities to help safeguard consumer health. Allay Consulting has noticed a rise in unexpected FDA inspections at functional mushroom production facilities. What can facilities expect? All the surprise FDA inspections at mushroom production facilities were audited against CFR 111 for Dietary Supplements. Many of the firms inspected resulted in Warning Letters, requiring violation corrections. Not only are the Warning Letters online for all to see, the FDA will also follow up with correcting all issues found during the inspection.

​The FDA has identified several recurring violations in dietary supplement manufacturing, as evidenced by recent warning letters. The most prevalent issues include:​

1. Failure to Establish Product Specifications: Manufacturers did not set specifications for identity, purity, strength, and composition of their products.
2. Inadequate Component Testing: Firms failed to establish specifications for the purity, strength, and composition of dietary supplement components.
3. Lack of Identity Specifications: Manufacturers did not establish identity specifications for components.
4. Deficient Quality Control Procedures: Firms lacked adequate written procedures for quality control operations.
5. Poor Holding and Distribution Practices: Inspections cited failures to establish proper procedures for holding and distributing operations.

Prepare for an FDA Visit

Ensuring compliance with product safety standards is critical—covering everything from employee hygiene and food handling to ingredient traceability and sanitation requirements. The best way to prepare for an FDA inspection is to get acquainted with the set of regulations that applies to you. Regulations may include CFR 111 for Dietary Supplements, CFR 117 for Food, CFR 210 & 211 for Pharmaceuticals. Determine which regulations apply to your company – thoroughly review them – identify any compliance gaps – implement necessary changes – and prioritize continuous staff training!

Outside of preparing yourself for the inevitable FDA inspection, companies would benefit from an outside eye, such as Allay Consulting to conduct an audit to identify compliance gaps. A mock audit is a proactive way to identify areas for improvement and create a clear, step-by-step roadmap toward full compliance. These audits help businesses prepare for regulatory inspections by pinpointing gaps and ensuring all necessary standards are met.

At Allay Consulting, we conduct mock audits to assess compliance with FDA/cGMP regulations, unique state requirements, OSHA standards, and organic certifications. By addressing potential issues before an official inspection, we help businesses stay ahead of regulatory challenges—saving time, money, and stress.