Hericium, a famous edible mushroom used for medicine and food, has fleshy white spines hanging down from their thick unbranched cluster and always grows on decaying or dead wood. This study was performed in Uttarakhand, India, to produce these mushrooms artificially and to optimize their mycelial growth on agar culture media. The temperatures, pH levels, carbon sources, nitrogen sources, and the ratio of media constituents varied under different conditions. For this study, a H. erinaceus (DMR-779) culture strain procured from the Directorate of Mushroom Research, Solan HP, India, and tissue culture techniques from H. erinaceus fruiting body PDA plates were used to compare the difference at varying temperatures. from 18 to 25 °C, and a pH of 4–4.5. After the successful running of mycelia on the plates, they was transferred to bags containing cereals such as wheat and rye at different concentrations, 2.5% calcium carbonate, and 0.5% gypsum, the latter used to manipulate the mycelia running rate in the bags. It was observed that bags made with pure wheat had a higher mycelium running rate than others. Healthy mycelia bags (mother bags) were further used to produce fruiting bags (commercial bags) containing different ratios of sawdust (eucalyptus and poppy) and wheat bran (80:20). The data collected from this experiment will be useful in cultivating Hericium mushrooms, which in turn can further be used to enhance the health benefits of a variety of food products.