Current drug policy classifies psilocybin, a compound found in psychoactive mushrooms, as having high abuse potential while overlooking its therapeutic properties. We evaluated the risk of psilocybin mushrooms to Brazilian public health compared to other toxic agents and assessed the need for regulatory discussions. This retrospective cross-sectional study followed STROBE guidelines, using data from the Notifiable Diseases Information System (SINAN) on adverse events reported from 2007 to 2022. Participants were categorized into a general drug abuse group, which was further divided into psilocybin and unknown mushroom subgroups. Clinical outcomes included non-hospitalization, hospitalization, and death, with associations analyzed via the Chi-square test. Out of 112,451 individuals seeking medical attention for drug abuse-related events, men predominated (<i>n</i> = 79,514; 70.7%), with alcohol being the primary agent (<i>n</i> = 71,824; 49.2%). The psilocybin mushroom group included 13 participants, and the unknown mushroom group included 51. Hospitalization rates were 19.5% (<i>n</i> = 21,923) for drug abuse, 46.2% (<i>n</i> = 6) for psilocybin mushrooms (0.02% of all hospitalizations) (99% CI: 10.6%-81.6%), and 23.5% (<i>n</i> = 12) for unknown mushrooms (99% CI: 8.3%-38.7%). Mortality was 1.8% (<i>n</i> = 2035) for drug abuse group, with no fatal events in the psilocybin or unknown mushroom groups. Deaths were mainly linked to cocaine (33.3%). These findings suggest a low risk for psilocybin mushrooms, though underreporting may be a factor. This study underscores the need for evidence-based regulatory discussions to ensure safe access to psilocybin for clinical and ceremonial use.