One episode of psychosis is not a life long psychotic illness.
When people say "psychedelics cause mental illness" that could mean:
* Someone with no underlying mental illness takes a few doses of LSD and is left with a life long psychotic illness
* Someone with no underlying mental illness regularly takes huge doses of LSD, and ends up with a life long psychotic illness
* Someone with underlying mental illness has that illness surfaced by LSD use, when it would have gone un-known if they hadn't taken psychedelics
* Someone with underlying mental illness has that illness surfaced by LSD. But it probably would have happened anyway.
* Someone with mental illness has that illness temporarily triggered by LSD.
Because LSD is illegal and it's very hard to research we don't know much about the interactions of LSD and mental illness.
While I'm strongly pro-legalisation I do find it problematic when people dismiss any possible harms of drug use, when it's fine to say we don't know, but should legalise anyway.