Psilocybe mexicana grows alone or in small groups among moss along roadsides and trails, humid meadows or cornfields, in particular in the grassy areas bordering deciduous forests.
Common at elevations between 300–550 metres (980–1,800 ft), rare in lower elevations, known only from Mexico, Costa Rica and Guatemala. Fruiting takes place from May to October.
Like several other psilocybin mushrooms in the genus,
Psilocybe mexicana has been consumed by indigenous North American and Central American peoples for its entheogenic effects.
In the Western world, sclerotia of Psilocybe mexicana are sometimes cultivated for entheogenic use.
The sclerotia have a lower content of active substances than the actual mushrooms themselves.
Psilocybe mexicana may form sclerotia, a dormant form of the organism, which affords it some protection from wildfires and other natural disasters.
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