Alternative approaches to psychedelics legalization and regulation after California Gov. Newsom’s veto
Photo 25700037 © Brandon Bourdages |


Alternative approaches to psychedelics legalization and regulation after California Gov. Newsom’s veto

California is still in a strong position to pioneer the best regulatory system for psychedelics in the world.

California Gov. Gavin Newsom recently vetoed a historic psychedelics decriminalization bill, Senate Bill 58, the first bill of its kind enacted by a state legislature. The California bill would have legalized personal possession of some botanical psychedelics by 2025 while stopping short of authorizing any regulated commercial access in a similar manner to the policies Oregon and Colorado are implementing. 

While advocates might view Gov. Newsom’s veto as a setback, it now creates an opportunity to craft a broader framework for legalization that includes a commercial market for certain psychedelics. In his veto message, Newsom signaled a willingness to sign a psychedelics bill next year that could tackle the shortcomings of decriminalization—highlighted by Reason Foundation during public testimony on Senate Bill 58—by creating a better structure for a regulated market.

Notwithstanding its merits, one clear downside of decriminalization-only policies is that no one can legally sell psychedelics; only gifting and growing would be permitted, and only in very small quantities. Yet, most people don’t have the time or know-how to safely grow their own mushrooms, for example, nor to test a harvest for safety and quality. In reality, mere decriminalization, or “decrim” as it is frequently called, is predicated on perpetuating a thriving underground market where authorities ignore illicit dealers so long as they remain inconspicuous. Unfortunately, under this unspoken system of nonenforcement, there are no consumer safeguards, and this absence threatens access to safe compounds and services.

A commercial or even quasi-commercial marketplace would overcome these shortcomings, but to date, only Oregon and Colorado have launched such programs (still in their infant stages), and many potential policy frameworks are available. This analysis explores six different regulatory approaches that California policymakers and stakeholders could consider:

  1. In-person, professionally guided psychedelic therapy (“facilitated access”); 
  2. A medical psychedelics license, similar to medical cannabis, allowing at-home consumption after a doctor’s recommendation and a safety exam;
  3. Synchronous teletherapy;
  4. Allowing nearly all medical regulatory exemptions for incorporated churches for spiritual psychedelic use;
  5. Allowing psychedelic experiences to be overseen by peer counselors or apprentices, an alternative to expensive licensed therapists who are quickly certified after a demonstration of personal experience rather than lengthy schooling requirements; and
  6. Passing experimental regulation as a temporary pilot that automatically sunsets. 

1. Facilitated Access Model

Highly regulated, in-person, professionally guided facilitation is almost certainly going to be considered next year, potentially in both the legislature and at the ballot box. The so-called “facilitated access” model already exists in Oregon, where in 2020, voters approved Measure 109, directing the Oregon Health Authority to establish a regulated market for psilocybin treatments. Service providers go through state-approved training programs there, and consumers can purchase professionally guided experiences at approved locations. Colorado voters subsequently approved a similar measure in the early stages of regulatory rulemaking.

Facilitated access is regulated similarly to medical cannabis. Manufacturers must adhere to strict production standards, including accurate potency testing and site inspections. Only authorized buyers may purchase and dispense psilocybin. Consumers, by contrast, can only use psilocybin at authorized, licensed facilities strictly regulated by the state. 

Despite this significant restriction, Oregon’s approach to psilocybin is also more relaxed than existing medical cannabis programs in that licenses are granted only to the service providers, not to consumers (e.g., medical cannabis cards). So, a consumer does not need to receive a recommendation from a physician and subsequently apply for permission from a state agency before they can purchase psilocybin services. Instead, consumers only need to complete an initial screening appointment with their provider so the provider can ascertain whether the prospective consumer suffers from any contraindicated conditions. Those who oversee psilocybin experiences must complete more than 100 hours of training in state-approved courses covering topics ranging from neuroscience to basic counseling. Once a student becomes a certified “facilitator,” they must partner with an approved site (“service center”). Service centers are subject to their own rules, ranging from bans on proximity to schools or public parks to parameters for on-site storage of psilocybin products.

As we are learning from Oregon’s program rollout, there are a few ongoing problems with the facilitated access model. First, regulations must allow for the inclusion of non-traditional health experts who are experienced with psychedelics and who bring relevant professional credentials. For instance, Oregon’s regulations do not officially permit therapy or anything that treats a medical diagnosis. Facilitators receive some training as a condition of licensure, but they are not licensed therapists. So, it is difficult for consumers with diagnosed mental illnesses to receive treatment from a licensed professional during a psychedelic experience.

However, from anecdotal news stories, many clients are clearly seeking treatment for common conditions, such as trauma or anxiety. 

Oregon’s advisory board tried to address some of these shortcomings and thus included experts in indigenous groups that have a lineage of psychedelic use as well as “legacy” providers, a diplomatic term for those who have overseen psychedelic therapy in the black market or “underground.” 

Next, traditional state health authorities and public health experts alone may have difficulty regulating psychedelics. While the Food and Drug Administration (FDA) has recognized multiple psychedelic compounds as “breakthrough therapies” and has authorized clinical trials on humans for a wide range of psychedelic compounds, the agency has not yet approved specific dosing regimens and protocols. As the FDA holds exclusive jurisdiction over drug regulation, it would be imprudent for California state medical boards and regulators to endorse any position prematurely over drug protocols. Instead, lawmakers should protect medical providers from censure if, based on their review of the medical research, they believe a psychedelic could hold promise for a patient and recommend its use. 

At the same time, individuals experienced in traditional or ceremonial use of psychedelics who are not licensed health care providers should not be prohibited from facilitating psychedelic therapies. These ceremonial guides have not been demonstrated to pose a medical danger to psychedelic users and have developed practices that continue to inform FDA protocols. 

Finally, facilitated access is very expensive, costing consumers thousands of dollars for a single psychedelic experience. This pricing makes psychedelic therapy inaccessible to lower-income groups. Oregon charges a $2,000 fee to providers just to obtain a license after graduating from a training program. All of these costs ultimately are pushed onto consumers, and the market for psychedelic services is not as broad as the market for cannabis, so there are fewer consumers across which to defray licensing costs. Activists and other stakeholders may oppose a bill that only permits facilitated access because of its extraordinary costs, dimming the likely prospects of advancing through the legislature to the governor.

2. Medical Psychedelics License Model

Multidisciplinary Association Of Psychedelic Studies (MAPS) Founder Rick Doblin has advocated for a “driver’s license” model of drug regulation, where users are required to receive training and can lose access due to recklessness. Under this framework–conceptually similar to medical cannabis licensing–potential users would need a medical professional to give them a recommendation after being diagnosed with an eligible condition, and states would create the regulatory framework for commercial markets via a system of licensure for production, distribution, and retail enterprises. 

One of the lessons from the rollout of regulated cannabis is that the illicit market will continue to thrive unless regulations satisfy consumer demand for accessible and competitively priced products. Colorado and Oregon have gotten around the high costs of facilitated, in-person psychedelic services by also easing rules on personal possession. Oregon decriminalized all drugs in a separate 2020 ballot measure (Measure 110), while Colorado legalized limited possession of plant-based psychedelics. A medical psychedelics model similarly has the potential to reduce existing illicit markets by striking a prudent balance between cost, safety, and accessibility.

Fortunately, Reason Foundation’s ongoing work shows that the legalization of personal possession of psychedelics in Colorado appears to have had negligible impact on public safety, counter to opponents’ fears. Our investigation looked at public crime data and interviewed public health experts after the passage of Proposition 122. Preliminary evidence suggests that there has been no uptick in the abuse of psychedelics.

While it appears that most consumers and service providers are generally responsible when it comes to using psychedelics despite the lack of outside professional supervision, there are anecdotes of abuse and recklessness that are cause for concern. To reduce these rare instances of harm, psychedelics could follow the path of cannabis and begin by allowing users to receive a state-administered personal license for medical use, but with a slight modification. Unlike medical cannabis, psychedelic users would also need safety training covering a range of topics, including safe dosing, contraindications, how to safely select a professional facilitator and basic mindfulness practices. 

Given that the two states that have advanced regulatory frameworks for legal psychedelics access (Oregon and Colorado) to date are using the fairly constrained facilitated access model, embracing a medical license model would represent a bold new step among the states, though one that ultimately borrows heavily from the relatively familiar medical cannabis experience of more than three dozen states. 

A forthcoming Reason Foundation policy brief will outline the medical license model in depth and provide model legislation based on our technical assistance work in various statehouses. Under the bill, users will need a recommendation from a licensed professional in order to receive an annual, renewable state license to use psychedelics, similar to how medical cannabis cards work in dozens of states. As part of the prerequisite training, users would be required to undergo one in-person facilitated session to instill a high level of confidence that users can safely use psychedelics on their own. This in-person experience would be regulated similarly to the framework already established in Oregon.

3. Telehealth and Synchronous Teletherapy

Given the growing interest in personalized health optimization and mental health solutions, it is safe to assume that many users will want to receive therapy in conjunction with their psychedelic experiences, whether in person or while consuming on their own. Allowing remote psychedelic teletherapy offers the promise of reducing costs and improving access because physical locations incur significant costs in rent, maintenance, and fees that are passed on to consumers. Oregon, for instance, charges a $10,000 licensing fee annually for approved service centers. At a recent committee hearing of the advisory board overseeing Colorado’s implementation of psychedelic services, one member estimated that it would cost facilitators $22,000 per year to partner with a service center.

Additionally, there is emerging evidence that small microdoses of psychedelics are also an effective treatment for certain illnesses, such as cluster headaches. Microdoses are doses at quantities too low to induce hallucinogenic effects. It would be impractical and onerous, for instance, to require patients to drive to an approved psychedelics site at the onset of every headache.

In the last few years, there has been a surge of interest in remote psychedelic services. During the pandemic, the federal government relaxed rules related to online prescriptions. Specifically, the Ryan-Haight Amendment, which requires an in-person meeting with a physician for a prescription of some controlled substances, was waived during the COVID-19 public health emergency.

This allowed ketamine clinics, which usually administered the medicine in person under the supervision of a medical professional, to ship sublingual lozenges or nasal sprays to patients. Patients would self-administer ketamine and be guided through mindfulness or therapy remotely. 

There has been public criticism of remote psychedelic therapy, claiming it has been understudied for safety and efficacy. However, the criticism to date is largely anecdotal. For example, the Food and Drug Administration recently issued a bulletin warning against the use of oral ketamine for treating psychiatric disorders, but the warning only referenced a single adverse event report, ignoring other available peer-reviewed research on remote psychedelics teletherapy concluding that it is moderately effective and safe for treatment of depression and anxiety. 

“The combination of strong and rapid effects with very small numbers of adverse events suggest that at-home sublingual ketamine therapy is an important avenue for overcoming long-standing barriers to depression and anxiety treatment, safely and conveniently,” concluded one study, which was based on observational data from a private ketamine company.

Telehealth is best thought of as an add-on policy to facilitate access or medical psychedelics, where regulations covering things like production, health, transportation, and patient access have already been settled and where a state could add additional regulations regarding virtual therapy.

4. Spiritual Exemption

Many in the community of users report a preference for using psychedelics to advance personal and spiritual growth. At one point in its deliberations, Oregon’s psilocybin advisory board had considered granting a broad regulatory exemption for spiritual use when consumers expressly use psychedelics for prayer or spiritual beliefs. 

The United States has rich legal precedent for protecting the spiritual use of psychedelics. In 2005, the U.S. Supreme Court ruled in favor of a Brazilian church, the União do Vegetal, that serves ayahuasca as part of its ceremonial practice, against a challenge from the Drug Enforcement Administration and U.S. Department of Justice.

Based on these past victories, there has been a new trend of incorporating psychedelic churches, including in Oakland and southern California. As attorney Matt Zorn argues, the federal rules around these new churches remain unclear. The same law that protects established indigenous groups with a deep history in psychedelic practice may not protect newer religious groups.

To date, the Drug Enforcement Agency has not aggressively prosecuted these churches. For example, law enforcement seized psychedelic products at Zide Door—a psychedelic church in Oakland that sells psilocybin to members—but the organization was not shut down. 

Churches represent a lower risk of psychedelic abuse than individuals using in a recreational context. Anecdotal reports of reckless behavior, such as an unruly airline passenger who attacked flight staff in 2022, are typically “lone wolf” incidents of people taking psychedelics on their own and outside of any supervision or best practices.

Church-based psychedelic use is different. Though they do not follow medical guidelines, church-based psychedelic experiences tend to be deliberate and are often based on a rich history of respected use. To incorporate, organizations follow a standard set of practices in the founding documents, such as detailed ceremonies. Clinical trials have borrowed common practices, so-called “set and setting,” from long-standing church rituals. Participants, for instance, are encouraged to sit and be contemplative for a portion of the ritual rather than move around so that they can focus on thoughts and feelings. 

Eyes-closed meditation is a key distinction between psychedelics for therapeutic and recreational use; in recreational settings, users might dance, converse, and generally be distracted from their internal monologue. Ceremonial and therapeutic settings encourage stillness and introspection, which generally discourages reckless behavior that would endanger others.

California could create regulations based on these best practices to formally protect newly incorporated churches that grow and administer psychedelics on their own terms. 

5. Peer Support Specialists and Apprenticeships

Extensive schooling and training requirements can dramatically increase the cost of psychedelic services because professionals must amortize their training costs and licensure fees and renewals onto consumers. In Oregon, tuition alone can cost between $8,000 and $15,000, on top of months’ worth of training that takes practitioners away from work. 

By contrast, peer counselors, after addressing their own mental health challenges, can gain their education and clients through apprenticeships with experienced service providers instead of through traditional schooling. Both the federal government and states have begun allowing peer counselors to substitute or complement more traditional licensed mental health therapists who might, for instance, assist depressed clients with cognitive behavioral therapy or prescribe an antidepressant. In 2020, California ratified SB 803, a bill to create standards for mental health peer support specialists and a billing code for payment through Medi-Cal.

There is a growing body of literature showing mental health professionals who have personal experience with a condition can safely offer effective guidance. Training time for peer “support specialists” in California is a fraction of that for a licensed therapist; many programs can be completed in as few as 80 hours. 

In an Oct. 19 meeting of Colorado’s Natural Medicine Advisory Board, members discussed the possibility of apprenticeship arrangements. Dr. Jamie Beachy, a former therapist with MAPS, noted apprenticeships could offset some of the hours of required schooling. In these situations, students would first learn to support a lead psychedelics facilitator; a group of apprentices may help set up a room for consumers or help someone to the restroom during an experience. In this way, peer counselors can earn a wage while gaining direct experience with psychedelic facilitation that may be at least as informative as school. 

6. Regulatory Sandbox

Pilot regulations to test experimental ideas have become increasingly popular around the world, from Japan to Singapore. In a “regulatory sandbox,” companies apply for a provisional license to sell services under temporary rules. 

Pilot regulations often have three components:

  1. Rules have an automatic sunset;
  2. Consumers must sign informed consent documents to prove they understand the risks; and
  3. Service providers must collect data on user outcomes and report them to the state (which can be just simple anonymous surveys).

Utah set up an Office Of Regulatory Relief that streamlines sandboxes to permit temporary regulations for experimental services and collect data for later evaluation. A Stanford University study of Utah’s early experience found that “
[r]egulatory reforms are spurring substantial innovation.” For example, the study found that firms can use software and partner with non-lawyer staff to reduce consumer costs while giving lawyers time to address more complex problems. 

As a case study of a company highlighted in the study, Utah Legal Advocates, a family law practice, “sought authorization to train law students and paralegal staff in the provision of limited legal services such as simple legal advice and form completion assistance for family law matters.” With authorization, “consumers can choose to pay a lower price for services from these non-lawyer providers but, according to the authorization materials, the work of those providers will be regularly reviewed for quality by the qualified lawyer.”

A similar “sandbox” approach to expanding legal access to psychedelics could offer an approach that balances a lack of long-term regulatory certainty in the early stages with a lower risk, lower stakes path of policy experimentation that could increase political appeal. As discussed throughout this article, California has several possible regulatory options—from medical licenses to church exemptions—to advance legal access to psychedelics, and any of these regulatory approaches could be done as a temporary pilot inside of a regulatory sandbox as a proof of concept. 

Next Steps in California

Whatever final policy approach is adopted in California, Gov. Newsom will likely want to set up an advisory board similar to those in Oregon and Colorado. Both states created advisory boards to guide the implementation and regulatory rulemaking processes following the passage of each state’s voter-approved psychedelics facilitated access program. The ballot initiatives in Colorado and Oregon were careful to include a wide range of voices that put business leaders and legacy facilitators on par with public health authorities so that ensuing rules reflect a broad set of concerns. State health authorities are an important voice, but there is no consensus on medical or therapeutic guidelines, nor is it likely that a medical consensus will emerge in the next few years. This situation demands the input of business leaders and other psychedelic experts to inform emerging regulations.


California is in a strong position to pioneer the best regulatory system for psychedelics the world has yet seen. The state has a rich tradition of incubating world-changing industries, and there are several viable approaches available for policymakers to help create a robust psychedelics policy that improves upon the few existing examples to date in Oregon and Colorado. Adapting these states’ initial psychedelics policy frameworks and using the lessons learned from the familiar implementation of state medical cannabis programs could allow California to pioneer a new and more functional medical license model for psychedelics that holds significant promise, though a range of options are available. With the right legal framework, California could set a national precedent for the next frontier of mental health.