Scientists are making LSD from microbes? Hardly. I was really excited when I first saw this article, but its title is woefully inflated, although the actual facts are still pretty cool.
There's a guy named Jake Wintermute whose job is to make synthetic biofuels. He was kidding around one day and said that he'd like to make LSD, since it's so expensive. LSA, a related compound, is currently synthesized from the Ergot fungus and then purified and used to make a dementia medicine called nicergoline. Right now he's working on genetically modifying yeast to make this compound (just add water!) but he's only one third of the way there.
This is not a "living LSD factory." He's doing perfectly legal and legitimate things with that yeast. However, it would be great to be able to make LSA that easily, since it's also hallucinogenic: it's what you get from eating morning glory seeds. I'd love to be able to buy that at the supermarket, but unfortunately, that's not what's happening. At all.