Hi Reed! Yes, you would add the mushroom extract to the water portion of the recipe. (That’s where most powders usually go when making lotion so the water will dissolve them, and you can experiment with this idea with different mushrooms/powders.)
As far as I know, mushroom extracts won’t extend shelf life; for that, you’d need an organic approved or ‘natural’ preservative.
Here’s my article on those:
https://thenerdyfarmwife.com/natural-preservatives-for-skin-care/

For clarity, when making the water infusion is that where the commercial mushroom extract can be used to replace the reiki tea? Also, does that extend the self life

Thank you in advance!