State psychedelics policy roundup: January 2024 edition
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State psychedelics policy roundup: January 2024 edition

New Hampshire proposes retail sales, Colorado considers ways to lower costs of professional services, and more.

Welcome to Reason Foundation’s regular roundup of psychedelics policy developments nationwide. This roundup is intended for policy experts and gives a nuanced analysis of different proposals from activists, lawmakers, and bureaucracies.

The holidays are typically a slow time for legislation, but with many state legislative sessions now underway, there are notable updates in New Hampshire, Colorado, Oregon, Kentucky, and Massachusetts. 

New Hampshire lawmaker proposes medical psychedelics license

A New Hampshire lawmaker introduced a bill that would allow retail sales and at-home consumption of three psychedelic substances through a ‘medical psychedelics’ model. Those substances are psilocybin, mescaline, and LSD.  

The bill has several advantages over frameworks used in Oregon and Colorado, where professional psychedelic services must be conducted in person. The biggest advantage is price: a single psychedelic experience can cost consumers thousands of dollars because providers must factor in the costs of licensing, site location, building expenses, and other overhead, such as insurance obligations. 

For more details, see our analysis of the bill here

Oregon’s booming psilocybin service centers

Proponents of Oregon’s in-person psychedelic facilitation model have argued that many consumers would be willing to pay high prices for an experience supervised by a professional at a dedicated location. New reports suggest that proponents were right: The relatively few service centers authorized by the state have a waitlist of hundreds of people, many from out of state.

Critics of Oregon’s model note that strict regulation and mandatory professional oversight have led to ballooning costs. After all, not everyone can afford thousands of dollars for a single psychedelic session. 

While it is unknown just how many people are getting psychedelic services in the underground market versus the legal market, it is clear Oregon has developed a system that is popular with a large segment of consumers.

Colorado advisory board considers regulated psychedelic therapy, protects gray market

There were still some unanswered legal questions after Colorado voters approved Proposition 122 in Nov. 2022. That initiative legalized the personal possession of some psychedelics. While the proposition tasked the state to come up with an official regulatory framework for psychedelic therapy, it was unclear how the law protected professional guides who freely gave out psychedelics and oversaw experiences with consumers.

The Colorado legislature sought to clarify these unanswered questions through The Natural Medicine Regulation and Legalization Act (Senate Bill 290), signed by Gov. Jared Polis in May 2023. One of SB 290’s key provisions allows professionals to transfer psychedelics while offering bona fide” harm reduction” advice—an industry term that generally refers to educational services on how to safely consume psychedelics, including appropriate dosage or how to psychologically process distressing hallucinations. 

A June 2023 report by Colorado Public Radio revealed there is a thriving cottage industry of professionals using the newly clarified law to offer psychedelic services while gifting substances to consumers who have difficulty obtaining or growing them on their own.

Proposition 122 requires the state to appoint an advisory board to make recommendations on regulating facilitated services for psychedelic therapies. Advisory board hearings began in 2023 (official meeting minutes are available here) and, to date, have generally focused on logistics. 

Proposals from the advisory board’s various subcommittees were recently presented to the full board at its Nov. 17, 2023, hearing. This meeting discussed:

  • A “pre-training” license that would allow facilitators-in-training to earn money and gain experience during their certification process. 
  • An accelerated training requirement, targeted toward facilitators who are already licensed in another jurisdiction like Oregon. 
  • Non-mandatory data collection for research purposes, including data regarding dosages and treatment of various mental health conditions. 
  • A potential financing program that would allow fees to be paid off over time through a staggered payment plan.
  • A brief note about advertising rules that prevent or discourage misappropriation of tribal or indigenous peoples and” excessive commercialization.”
  • A clarification that rules will be published in the Colorado register and stakeholders will be given a short period to request cost-benefit and regulatory analyses. 

In its Dec. 15, 2023, meeting, the committee discussed:

  • Standardizing manufacturing processes and whether to allow novel forms of psilocybin products beyond whole or powder dry mushrooms. 
  • Screening for prior mental health issues and how certain mental health issues could impact the way facilitation is delivered.
  • Whether a maximum ratio of four consumers for one facilitator should be expanded to allow for larger group therapy sessions that help defray costs across a wider base of consumers.
  • Whether facilitators could also use psychedelics in healing sessions with participants, a common practice in indigenous traditions.
  • Whether there should be an upper limit of 30 mg of psilocybin (psilocybin content is around 1% of dried weight). It was discussed that consumers need much to feel an effect and an upper limit may deny some users a therapeutic experience. 
  • Whether low-income populations should be able to use a payment plan for government fees, rather than paying a lump sum.
  • Whether psychotherapy rendered in conjunction with a psychedelic session can still be billed to Medicaid. It is unclear whether state regulation of Medicaid allows the state’s Medicaid program to cover federally illegal services.
  • Whether a separate license and training are needed to qualify to hold a facilitated session in a private residence and whether facilitators should be able to conduct services in their own homes. Zoning regulations could complicate whether local communities want psychedelic commercial services in residential areas, but a facilitator might be able to have more efficient business practices and a better environment if their home is set up for psychedelic services.
  • Whether data provided to the public based on surveys collected from psychedelic sessions could be used by insurance companies to determine coverage. To protect consumer privacy, board members discussed whether it was better to anonymously aggregate survey data into batches from different sessions as the Internal Revenue Service does when it releases taxpayer statistics.

In its Jan. 19 meeting, the committee discussed:

  • Concerns over the size of group-based administration sessions. Currently, the upper limit under consideration is 64 people and a maximum ratio of four participants to one helper (so a group as large as 64 people would require 16 staff). 
  • Whether facilitators could have personal relationships with consumers, and how it is common for indigenous groups to work with family members.
  • Preparing final recommendations so that state agencies can ratify rules by summer.
  • Being more inclusive of different community concerns, including the LGBTQIA+ community. 
  • Allocating resources from sales charges to collect observational data.
  • Whether potential rules for apprenticeship or accelerated training are consistent with the indigenous approach to training.
  • Whether people with a facilitator license in Oregon could be granted accelerated training requirements. 
  • Whether there will be prohibitions on combining psychedelics with other drugs, such as alcohol, or more common supplements, such as lion’s mane mushrooms.
  • Restrictions on a new type of proposed facilitator license, the Natural Wellness Facilitator, preclude these licensees from practicing psychotherapy or treating people with a range of physical ailments and some acute mental illnesses.
  • Training requirements, including approaches to trauma and challenging experiences.

Massachusetts psychedelics proposal may be on the Nov. ballot

A proposal to legalize the personal possession of botanical psychedelics and create a regulated framework for professional services is likely heading to the Massachusetts ballot in 2024. The campaign had previously run into a technical snafu that invalidated many signatures and had to rush to make up for the mistake before last year’s deadline. 

Reason Foundation’s previous analysis of the proposal concluded its home-grow provision provides a nice balance, both for consumers who want a more structured professional services market and those who are more comfortable consuming on their own. 

New York, New Jersey and Connecticut consider medicalization bills

New York Rep. Pat Burke (D-Buffalo) has again proposed a new psychedelics bill. Rather than legalizing medical psychedelics, the bill tasks the New York State Department of Health to create a pilot program to treat 10,000 people, focused on veterans. 

Reason Foundation provided technical assistance to Rep. Burke’s office, and the pilot program concept is similar to analyses we’ve done on state-based pilot programs. Pilot programs sometimes help policymakers become more comfortable with the concept of psychedelic therapy and spur them to support a limited program, whereas they might hold strong reservations over broad legalization. 

Across the Hudson River, New Jersey lawmakers reintroduced legislation that would create a framework of psilocybin service centers, similar to Oregon, which permits in-person, professionally-guided administration sessions. The bill would also allow non-commercial home growing of mushrooms.

Finally, there are reports Connecticut lawmakers may also consider another bill to legalize psilocybin, though the final proposal is not yet public.

Kentucky ibogaine program in jeopardy

Kentucky officials have a proposal to allocate $42 million of opioid abatement settlement funds toward clinical trials to assess the effectiveness of ibogaine as a potential treatment for opioid-use disorder. Bryan Hubbard, the now-former chair of the Opioid Abatement Advisory Commission, had championed the idea and convened testimony from many leading experts. 

Newly elected Kentucky Attorney General Russell Coleman evidently wanted a change in direction. Coleman replaced Hubbard with former Drug Enforcement Agency Acting Administrator Chris Evans. While Evans hasn’t publicly given an official position on ibogaine, he hasn’t shown any signs of being an enthusiast. The commission will vote on how to spend the funds later this year, but the prospect of Kentucky funding clinical trials to investigate ibogaine now looks far less likely than it did a few months ago.

Despite this setback, newly published clinical research provides compelling evidence of the benefits of ibogaine. Reason Foundation summarized how this new study could help remove concerns about ibogaine’s safety profile and encourage further investment into its development as an accepted treatment in the United States.