Biomass pretreatment incurs 40% of the overall cost of biorefinery operations. The usage of mushroom cultivation as a pretreatment/delignification technique, and bio-ethanol production from spent mushroom substrates, after subsequent pretreatment, saccharification and fermentation processes, have been reported earlier. However, the present pilot-scale, entirely-organic demonstration is one of the very first biorefinery models, which efficiently consolidates: biomass pretreatment; in-situ cellulase production and saccharification; mushroom cultivation, thereby improving the overall operational economy. During pretreatment, the oyster mushroom, Pluerotus florida VS-6, matures into distinct substrate mycelia and fruiting bodies. Consequential variations in the kinetics of growth, biomass degradation/substrate utilization, oxygen uptake and transfer rates, and enzyme production, have been analyzed. Signifying the first-time usage of a biomass mixture, comprising vegetative waste and e-commerce packaging waste, the 30 day-long, bio-economical, non-inhibitor-generating, catabolite repression-limited, solid-state in-situ pretreatment-cum-saccharification, resulted in: 78% lignin degradation; 13.25% soluble-sugar release; 18.25% mushroom yield; 0.88 FPU/g.ds cellulase secretion. The in-situ saccharified biomass, when sequentially subjected to ex-situ enzymatic hydrolysis and fermentation, showed 37.35% saccharification, and a bio-ethanol yield of 0.425 g per g of glucose, respectively. Apart from yielding engine-ready bio-ethanol, the model doubles as an agripreneurial proposition, and encourages mushroom cultivation and consumption.