109 Magazine: Oregon Psilocybin (Summer 2022 Issue)

109

REAL ESTATE | BUSINESS MODELS | MEDICINAL vs. ADULT USE

For Oregon's Psilocybin Business Community

Tom Eckert SHERI ECKERT FOUNDATION'S MISSION

SUMMER 2022

HOW TO (PREPARE TO) OPEN A PSILOCYBIN BUSINESS IN OREGON

EMPOWERING

OREGON'S

PSILOCYBIN BUSINESSES Clients in the psychedelics industry need seasoned lawyers who understand the unique challenges faced by participants in emerging industries. Our attorneys understand these challenges because we helped build these industries.

REGULATORY COMPLIANCE | BUSINESS TRANSACTIONS LITIGATION | CORPORATE SECURITIES & FINANCES REAL ESTATE | EMPLOYMENT

109 MAGAZINE | PUBLISHER'S LETTER

Brad Blommer 109 PUBLISHER

We are excited to share this debut issue of 109 Magazine with Oregon's psilocybin business community. As Managing Partner of Green Light Law Group, I share in the great enthusiasm with our clients who are diligently preparing for this historic launch. As with the opening of the legal cannabis market here in Oregon, we have advised and watched businesses succeed and fail in true tests of entrepreneurship. The new psilocybin businesses will be no different.

Understanding the regulatory nuances and setting up solid business foundations and partnerships will continue to be at the heart of the success stories and we are cheering them all on.

109 Magazine is written and designed by the attorneys and staff of Green Light Law Group. This magazine has the intention to both give practical knowledge of the goings on in the industry, as well as to inform what's coming next over the horizon. Thanks for joining us on this journey and please reach out to me with any questions you may have or what you would like us to cover in upcoming issues at brad@gl-lg.com.

greenlightlawgroup.com

109 MAGAZINE | SPOTLIGHT

SPOTLIGHT AWAKE.NET Awake.net is a non-profit social impact network envisioned as a collaborative gathering place for the entheogenic community to share knowledge, narratives, best practices, research, and guidance about the entheogenic experience to quicken a transformation in human consciousness and culture.

Awake’s non-profit mission is to help end opioid addiction by providing individual ibogaine treatment and integration grants and guidance through FEAT, the Fund for Entheogenic Addiction Treatment. All funds and membership dues raised through this platform are dedicated to the success of FEAT.

SHERI ECKERT FOUNDATION

UPCOMING EVENTS

The mission of the Sheri Eckert Foundation (SEF) is to ensure that Oregon’s evolving psychedelic ecosystem includes professionals and participants from diverse backgrounds, financial means, and geographies around the state.

OHA EQUITY SUBCOMMITTEE MEETING JULY 15, 2022 3:00 PM – 4:00 PM

SEF's first objective is to grant scholarships to qualified student applicants who might not otherwise have access to psilocybin facilitator training. Oregon-approved Psilocybin Facilitator Training Programs are set to launch in 2022.

They are currently accepting interest forms for training program scholarships. Scholarships can be applied to any participating stateapproved program.

greenlightlawgroup.com

OHA PSILOCYBIN ADVISORY BOARD MEETING AUGUST 4, 2022 2:00 PM – 5:00 PM HORIZONS NORTHWEST CONFERENCE PORTLAND ART MUSEUM SEPTEMBER 13-18, 2022 HORIZONSPBC.COM/NORTHWEST

109 MAGAZINE | CONTENTS

1 | How to (Prepare to) Open a

Psilocybin Business in Oregon

6 | Exploring the Psilocybin Service

Center as the Center of Gravity of a Psilocybin Business Model

9 | Too Early for Psilocybin Real Estate Decisions?

11 | COVER STORY: A Conversation with Tom Eckert

14 | Is Psilocybin Microdosing Legal in Oregon Under Measure 109???

17 | “Medicinal” vs. “Adult Use” Approach to Legalization

20 | OHA Survey Results Show Significant Interest in Coming Psilocybin Program

23 | Psilocybin Patenting and the Threat to Patient Access

26 | Canada Opens Access for Psilocybin and MDMA Therapy

28 | What Can Cannabis Legalization Tell Us About Psychedelics?

30 | AIMS v. Garland:

A Disappointment for Psilocybin Advocates, but Progressive Policy May Still be on the Horizon

greenlightlawgroup.com

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How to (Prepare to) Open a Psilocybin Business in Oregon

by Andrew DeWeese, Green Light Law Group In November 2020, Oregon voters passed Measure 109, which creates a state-sanctioned program enabling adults over the age of 21 to access lab-tested psilocybin in a controlled setting, under the supervision of a licensed facilitator. The program doesn’t become operational until January 1, 2023, and in the meantime, the Oregon Health Authority and the Psilocybin Advisory Board are busy working on regulations to govern the program, so currently, there are no legal psilocybin businesses operating, and licenses are not yet available.

So what will the legal Oregon psilocybin industry look like? And is there anything that savvy entrepreneurs and others who wish to engage in the industry can do now to prepare for January 1, greenlightlawgroup.com

2023? (Besides, of course, having been or partnering with Oregon residents for two years as of that date).

Learning Measure 109 The best way to understand what opportunities may exist in the impending Oregon psilocybin industry is first to understand the basic framework of Measure 109. Keep in mind that we haven’t even seen any draft regulations, so all of this could change, but at present, broadly, there are set to be four types of licenses: 1) laboratory testing; 2) products manufacturing; 3) psilocybin service center; and 4) psilocybin facilitator.

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The laboratory testing license allows the holder of the license to operate an analytical testing laboratory at which other license holders can have psilocybin products testing pursuant to the rules. Ultimately, the rules will mandate what testing will be required, but Section 96 of Measure 109 provides some examples of tests that could be required: microbiological contaminants, pesticides, other contaminants, solvents and residual solvents, and psilocybin concentration.

A products manufacturing license is required to manufacture any products containing psilocybin. Subject to rule, a manufacturing license may have different endorsements allowing different types of manufacturing activities; however, what those different activities might be is not described in Measure 109; one could speculate, however, that an endorsement might be required to make edible products. The Oregon Health Authority will establish rules creating a production cap that licensees cannot exceed.

A psilocybin service center license is required to operate a facility at which adults can access psilocybin products, under the supervision of a licensed psilocybin facilitator. Service Centers are not considered healthcare facilities under Oregon law but will be subject to health and safety regulation by the Oregon Health Authority. Most service center employees will need to acquire a worker permit issued by the Oregon Health Authority. Service Centers will have restrictions on where they may be situated; they cannot, for example, be located in an area that is within city limits and zoned exclusively for residential use, or located within 1000 feet of a school. Service Centers may also be subject to local regulations relating to time, place, and manner of operation, and some localities may decide to opt out of allowing manufacturing or service centers altogether, although not laboratories (the facilitator license, in contrast, is personal).

A psilocybin facilitator license is required to

facilitate a psilocybin administration session (which, as you now already know, can only take place at a psilocybin service center).

Facilitator training, licensure, and conduct will all be regulated under Oregon Health Authority. Regulations pertaining to the training required to be undergone by facilitators in preparation for licensure examination are likely some of the first draft regulations we will see from the Oregon Health Authority. A facilitator must also establish that they meet the two year residency requirement, until January 2025.

An individual can only have a financial interest in one manufacturing license, but a manufacturer licensee may hold multiple endorsements. An individual can have a financial interest in up to, but no more than, five psilocybin service centers. However, an individual may hold multiple licenses.

On advertising: Product advertisements are not allowed under M109. Psilocybin service advertisements will be subject to regulation by the Oregon Health Authority.

The Possibilities of Psilocybin Now that we have developed a basic understanding of the M109 framework, we can begin imagining the industry that it will shape.

While the possible business models under this framework are limited only by human imagination, a few seem obvious. First, psilocybin facilitators will be licensed professionals. There will be a limited supply of these licensees in the beginning of the licensing period, and demand is likely to outstrip demand relatively quickly. However, as the ranks of licensed facilitators swell, it will be important for facilitators to distinguish themselves in various ways in order to remain competitive. We are already seeing ancillary companies offering music and other administration session-adjuncts. greenlightlawgroup.com

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"Now that we have developed a basic understanding of the M109 framework, we can begin imagining the industry that it will shape. The possible business models under this framework are limited only by human imagination."

-- Andrew DeWeese

greenlightlawgroup.com

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Personally, given my background as a musician, I wonder if other musicians will decide to become facilitators, and incorporate live performance into their administration sessions.

Visual and other performing artists may also be interested in the experiential possibilities in supervised psilocybin administration sessions.

Psilocybin service centers will open, some with their own staff of facilitators, but others probably renting out facilities to independent facilitators, rules permitting. Larger operations will incorporate resort-like retreats, licensed as service centers, with their own manufacturing license, and a staff of licensed facilitators; the largest will max out their ownership of five centers, along with a manufacturing license, and try to supply product to other service centers.

I expect that some small service centers will open, with licensed facilitators as staff/owners, and do well using a small, sustainable business model. The trick will be for Oregon’s regulators to allow those small businesses to survive.

Stepping into Business So, how can interested parties prepare to open psilocybin businesses when licensure becomes available?

First, people who want to be licensed facilitators should be watching the Oregon Health Authority rule-making progress very closely, to determine when qualified training programs, or other means of qualification to take the license exam, will be available. Our understanding is, that the Advisory Board is advocating that licensees be in place prior to January 1, 2023, so that licensees may begin providing psilocybin services on the first day the program is active. If this was to occur, it would mean that the licensing exam would have to be given in Q4 2022, at the latest, which means training would have to occur prior to that. Given expected demand, anyone who is serious should be locating a qualified training greenlightlawgroup.com

facility now and reserving a spot. Although we don’t yet know what regulations will govern training programs, existing facilitator training companies, such as SoundMind Center Philly, intend to offer training programs to prepare facilitator license applicants.

Second, anyone who wants to open a physical psilocybin facility, either manufacturing, service center, or laboratory, should understand that there is still a great deal of uncertainty in where these facilities will be allowed to be located.

In other words, it is risky to start buying up former hotels or medical buildings, or bucolic farms or pastoral ranches, for that matter, before we understand the local regulations that may apply to limit or even prohibit psilocybin service activities conducted within the locality. However, those with a larger appetite for risk might consider whether a local government such as Multnomah or Lane County, or the cities of Portland, Bend, or Eugene, are likely to adopt significant restrictions, and make a wager on promising real estate on which a licensed premises may (or may not) be situated. To be clear, we do not recommend this approach!

Finally, keep abreast of the Oregon Health Authority rulemaking process, and participate in any public-facing events the agency holds.

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Exploring the Psilocybin Service Center as the Center of Gravity of a Psilocybin Business Model

by Allison Campbell, Green Light Law Group In 2020, Oregon voters passed Ballot Measure 109 to legalize psilocybin services administered by licensed facilitators under supervised conditions at licensed service centers. The Measure created a nearly two-year runway for the Oregon Health Authority (OHA) to create administrative rules to regulate the program.

OHA already issued proposed rules for facilitator training, products, and testing. However, the public has yet to see proposed rules for individuals interested in service center licensure. This article discusses how service centers may serve as the center of gravity in a business model based in Oregon’s legal psilocybin program.

Interest in Service Center Licensure A recent survey published by OHA found that 20% of the more than 4,000 responses indicated interest in obtaining service center licensure. We believe this number will be even higher once the public sees proposed rules on how

exactly centers will operate. While we wait for draft rules, it is important to understand just how valuable service center licensure could be in Oregon.

Rulemaking for service centers commences in the fall of 2022, and OHA will adopt final rules by December 31, 2022. So far, Measure 109 lays out what service center licensure permits, application qualifications, and general guidance on where centers can be located. Additionally, an OHA bulletin states that rulemaking will consider operating ancillary or peripheral services alongside psilocybin services, offering additional revenue streams and helping with service center financial viability. This guidance indicates that the service center model may be scalable, thus offering vast business opportunities, so a smart psilocybin business plan should be grounded in service center licensure.

Opportunities for Profitability First, although dependent on final rules, OHA guidance indicates that service centers in the future may be scaled to offer a variety of wellness-related services. Health greenlightlawgroup.com

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and wellness professionals, who practice in areas such as acupuncture, naturopathic medicine, massage, chiropractic medicine, and life coaching, may seek to add psilocybin services to their menu of offerings. Transitioning to psilocybin services or adding psilocybin services to an already existing suite of services will allow health and wellness professionals to capitalize on their existing customer base, which is likely already interested in holistic health and niche lifestyle treatments. Professionals will also already have general business management skills and vendor relationships that will position them to hit the ground running when it comes time to open a psilocybin service center.

An important note of caution, neither OHA nor any licensing boards, to our knowledge, have yet opined on whether certain licensed medical practitioners, such as doctors and psychologists, will run into ethical issues or risk their medical license if they engage in a psilocybin business or provide services. That issue is outside the scope of this article but is an important consideration. Green Light Law Group will track this issue and keep readers informed of any future guidance or applicable rules.

Service center licensure also presents strategic opportunities for entrepreneurs and small businesses. The barriers to enter the industry are relatively low; qualified applicants need only be 21 or older, the center must be located within the geographical bounds permitted under Measure 109 and local land use laws and zoning, and until 2025, 51% of ownership interest in the licensed entity must be held by at least one person who has been an Oregon resident for two or more years.

Compared with the operating costs required to support psilocybin cultivation and processing operations, which may require industrial machinery and other significant infrastructure, operating a service center may be substantially more cost effective. Although the Advisory Board has not yet published recommendations greenlightlawgroup.com

concerning the minimum number of required employees and job positions that service centers will need to hire, it’s possible that licensees will not necessarily need to purchase real estate. Data from the OHA survey indicates that those interested in service center licensure already intend to run small, efficient operations. Of those interested in service center licensure, about 76.6% intend to hire fewer than 10 employees. Service centers may also see increased savings by potentially hiring facilitators on an independent contractor basis, meaning there may be limited liability and lower payroll expenses on a continuing basis.

Significant opportunities also exist for those with the capacity to vertically or horizontally integrate their business.

Measure 109 allows a service center licensee to simultaneously hold a producer license at the same or different premises. Additionally, service center licensees may hold up to five service center licenses. The potential for vertical and horizontal integration based on these provisions is boundless. By holding both a service center and a manufacturer license, service center operators can lower costs through economies of scale, ultimately increasing profitability and lowering transportation expenses and turnaround times between manufacturing steps.

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Conversely, if a service center holds several service center licenses, its competition is reduced, its market power increases, and other synergies, such as marketing, are possible.

Despite these benefits, a company should carefully evaluate the costs and complexities of vertical and horizontal integration before making a business decision.

Finally, service centers present a massive business opportunity simply because Oregon is literally the only place in the country with a state-sponsored psilocybin program. Measure 109 has zero residency requirements for clients, so service center licensees can expect to serve both out of state and out of country clients. The Oregon residency requirement for licensees stands to benefit service center licensees by acting as a “golden ticket.” The residency requirement is in effect for only two years, meaning that starting in 2025, as far as we know, service center licenses may be given out to anyone who otherwise qualifies. The timedependent nature of the current residency

requirement gives Oregon residents a headstart at establishing profitable service centers in the state before big business and foreign corporations swoop in. Aside from the residency requirement’s “golden ticket” characteristics, the requirement also ensures that Oregon business owners who take on out of state or foreign investment generally still stand to retain 51% ownership of the entity, unless financing arrangements provide otherwise.

Conclusion In conclusion, service center licensure offers substantial business opportunities because of the possibility for combining psilocybin services with already existing health and wellness services, the low barriers to entry, the opportunity for vertical integration and horizontal expansion, and the fact that a similar psilocybin program can’t be found anywhere else besides Oregon.

greenlightlawgroup.com

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Too Early for Psilocybin Real Estate Decisions?

by Brad Blommer, Green Light Law Group The clock is ticking on the launch of Oregon’s psilocybin program in 2023. One key decision facing entrepreneurs entering this new industry is where to locate their new business. Unfortunately, now may not be the best time to buy that property or sign a lease.

What is Holding Psilocybin Real Estate Back?

Uncertainty still exists because Measure 109 allows for future changes in the law which could dramatically effect where a psilocybin business may legally operate. For instance, an Oregon county has the ability to pass an ordinance prohibiting psilocybin businesses within county limits and bring the ordinance up for a vote in the next statewide election. Under M109, a psilocybin business cannot be in a residential zone within an incorporated city or town, and service centers cannot be located within

greenlightlawgroup.com

1000 feet of a school (500 feet for some schools). While this language provides some guidance, Oregon cities and counties may enact local laws affecting the “time, place and manner” of a psilocybin businesses operation. Many cannabis companies were burned by these local laws in 2016 when the cannabis market launched. These cannabis companies purchased property or signed long-term leases in 2015, but local jurisdictions later enacted regulations which prohibited the cannabis business from operating at their site.

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How to Start Researching Here are some tools we use at the firm to assist our clients in beginning to vet properties. These websites should be used only for preliminary research on possible site locations.

1. Determine whether the property is located within the limits of an incorporated City or Town.

Follow these steps for an initial review.

Go to www.randymajors.org Click on “Map Tools” in the ribbon at the top of the page and select “City Limits” Enter property address in the search bar located at the top of the map Click “Show US Townships” located at the bottom left of map to show both City and Town Limits 2. Determine whether the property is located within 1000 feet of a school.

Go to pdx.maps.arcgis.com Select ArcGIS World Geocoding Service and enter the address Anything green/surrounded by blue is a school Google search can be a backup search method if the line is very close, and measurements need to be taken.

"Making informed real estate decisions can be the difference between success and failure for a new psilocybin business in Oregon."

-- Brad Blommer

Conclusion Over the next few months, local jurisdictions will begin to think about their views on a M109 and psilocybin businesses. After the November 2022 election, the landscape will begin to clear and hopefully psilocybin entrepreneurs will get more clarity about where they can legally operate and their psilocybin real estate decisions. greenlightlawgroup.com

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A CONVERSATION WITH TOM ECKERT

by Steph Barnhart, Green Light Law Group

In 2020, Oregonians voted to pass Ballot Measure 109 with over 55% approval, legalizing psilocybin services statewide. We had a chance to catch up with the co-chief petitioner of the measure, therapist Tom Eckert, about all that has transpired since and what will happen next for psychedelics-supported mental health offerings in Oregon.

Green Light Law Group (GLLG): What has been the biggest surprise since the passing of M109?

Tom Eckert (TE): It’s a lot to take in. The national focus, the interest to see Oregon succeed - which is necessary and important.

To watch the Oregon model rise to sit on

(L) Tom Eckert with (R) Nathan Howard. Photo by Sam Gehrke.

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the same platform as the [Food and Drug Administration] FDA or MAPS process. It is clear that Oregon is key to the future of psychedelic medicine and therapy; and, importantly, wellness services. In addition – just the scale of it. There could be thousands of participants here in the next couple of years. Compared with important studies that are rolling out, there is nothing like that [data set] to understand the impact of psychedelic therapy.

GLLG: What is the Sherri Eckert Foundation, and how will it assist with these goals?

TE: The mission of the Sheri Eckert Foundation (SEF) is to ensure that Oregon’s evolving psychedelic ecosystem includes professionals and participants from diverse backgrounds, financial means, and geographies around the state.

GLLG: What about Innertrek? How is it different from the foundation?

TE: The state’s minimum requirement to become a facilitator of psilocybin services is 120 hours of “core training” and 40 more hours of supervised “practicum.” InnerTrek, [of which Eckert is the Program Director and co-founder] is one of numerous programs emerging to provide this training. Students are actively being admitted to the first round of training, beginning in the Portland area in July and set to complete in December 2022, just prior to the January 2023 launch of the first licensed practicum sites in Oregon. The inaugural cohort will spend six months immersed in study under a line-up of lead and guest lecturers, texts, and experience.

Course work will range from history of plant medicine, to safety and ethics, pharmacology, neuroscience, and clinical research, to conducting group facilitation.

Individuals looking to apply to any of OHA’s licensed facilitator programs are encouraged to

apply for grants from the Sherri Eckert Foundation to make the cost of their training accessible.

GLLG: As with cannabis, we imagine other states are not too far behind from passing their own legislation for legal psilocybin therapy. What advice would you give to those co-petitioners in other states or countries?

TE: Take your time. Build the coalition.

Ensure diversity of voices participating.

Understand the ethos and the values of the movement. This is not an opportunistic thing, or about who gets there first. It’s about getting it right. The way we do this is important.

I think the Oregon model, in its DNA, has access and inclusion in mind, [because it takes] a step outside of conventional medical models. There is a lot of work to do to figure out how to support equity. But it’s in the spirit of the law, it’s at the fore of the discussions happening within the Oregon Health Association, the Oregon Psilocybin Advisory Board, as well as in the wider sphere of influence on infrastructure and development. [And so] I hope this is portable to other states.

In some ways, it is similar to cannabis where you might be looking at a map for potential national roll out, hoping for a synergy of “ground game” and “air game.”

Air game is the national community and the funders interested in helping this along. But you need a real, true grassroots movement on the ground. And that is how it happened [in Oregon]. It started because Sheri and I traveled the state and raised funds to do greenlightlawgroup.com

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initial polling to show support. Through creating community, our voice became strong enough to get the attention of the air game. A lot of networks are now in place. Values should percolate from the ground up and then be supported by a national coalition that wants to see change in our mental health care system.

GLLG: A common misunderstanding of M109 that keeps popping up is that the program is for “psilocybin therapy” specifically. Can you explain the dynamic of “psilocybin services” and its overlap with possible mental health treatment? And what will the necessary facilitator training look like to accomplish all of this?

TE: Psilocybin services vs psilocybin therapy really comes down to "scope of practice" - a topic that we will address fully and carefully in our training program and hopefully becomes clearer generally.

[There has been great interest] in the part of the Oregon model that shifts the narrative around mental health care to include a spectrum addressing wellness, therapy, medicine, focusing on mental well-being from all angles in a way that is actually supported by the state.

Even before you get to psychedelics, we are usually just addressing symptoms [with conventional western medicine], but not coming at it from a preventative outlook. We need healthier communities, and the status quo is not working. [With] the health care system, generally, there is something off. And people know that.

greenlightlawgroup.com

GLLG: There is so much more to discuss. One place to learn more might be at a psychedelics conference we hear is coming to Portland this fall. How can someone learn more and who should attend?

TE: The Sheri Eckert Foundation’s debut conference, Horizons Northwest, is produced in partnership with the folks at Horizons PBC. It will be held at Portland Art Museum on September 13-18, 2022.

We've planned five days of learning, connection, and community to explore the many dimensions of psychedelics with speakers from around Oregon and the world.

Tickets and more information on Horizons Northwest can be found at horizonspbc.com/northwest.

We’re very honored to help bring this gathering to Portland. Horizons’ annual conference, which until this year has only ever been in New York City, is the largest and longestrunning annual gathering of the psychedelic community in the world.

And if the conference does well financially, meaning a lot of people buy tickets, that translates into the Sheri Eckert Foundation being able to award more scholarships. Pretty awesome mission.

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Is Psilocybin Microdosing Legal in Oregon Under Measure 109?

by Brett Mulligan, Green Light Law Group Psilocybin microdosing (i.e., taking a small, non-hallucinating dose of magic mushrooms several times a week, or daily) is gaining popularity. What was originally a trend amongst college students and Silicon Valley billionaires is quickly becoming mainstream. One might think of Oregon as a sanctuary for individuals interested in microdosing, as Ballot Measure 109 legalized psilocybin services with service centers coming online in 2023. However, whether microdosing is allowed under Measure 109 is complicated and ambiguous.

Textualist Reading of Measure 109 The term “microdosing” does not appear anywhere in Measure 109. The measure also does not set dosing “minimums,” and only tasks the Oregon Health Authority (OHA) with

establishing maximum dosing standards.

While most service sessions are expected to last several hours, there is no set rule for the minimum amount of time clients must stay at a service center. From this purely textualist read, Measure 109 does not forbid microdosing, which might open the door for rapid fire service sessions using only small amounts of psilocybin. However, the practicality of microdosing under the Measure 109 framework runs into logistical problems.

The Oregon Psilocybin Services Act will allow individuals over the age of 21 to use psilocybin at licensed service centers under the supervision of a trained facilitator. Before greenlightlawgroup.com

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receiving services, clients must complete an intake screening, participate in a preparation and administration session, and have the option of completing an integration session after their psychedelic experience. This is not inherently welcoming to microdosing, as most clients who want to take a small dosage regularly don’t have the time or money to go through the entire screening and administration process daily or several times a week.

Individuals wanting to incorporate microdosing as an ordinary part of their weekly or daily routine might not benefit from, or want, a fully guided experience with a facilitator every time they take a small amount of psilocybin. It is also unclear how long microdosing clients will need to wait until they can safely leave or transport themselves from a service center.

Thus, while the text of Measure 109 does not bar microdosing, it becomes complicated when considering the broader regulatory requirements.

Intent of Measure 109 The main architects of Ballot Measure 109 are themselves conflicted about whether microdosing is within the spirit of the measure.

As reported by Willamette Weekly, there is a split of opinion whether Measure 109’s lack of prohibition against microdosing leaves the door open for microdosing, or, whether the spirit of 109 in creating a more therapeutic, nondispensary model is at direct odds with microdosing practices.

Measure 109’s intentional divergence from a cannabis dispensary model is clear. Service centers are the only location administration sessions can occur, sessions are expected to last several hours, and psilocybin products cannot leave service centers. Cannabis dispensaries sell cannabis that is to be consumed off site. If clients go to service centers weekly, or daily, to receive microdosing services, this quickly looks like a dispensary system we see with cannabis, greenlightlawgroup.com

just subtracting the fact psilocybin product must remain on site.

On the other hand, Measure 109 legalized psilocybin “services” broadly. While much of the marketing behind Measure 109 focused on “psilocybin therapy,” there is no requirement for clients to receive a medical diagnosis before accessing services. An individual's motive in seeking services is largely irrelevant under the measure, and consumers can receive services for purposes of improving mental health, personal wellbeing, spiritual enlightenment, or maybe even microdosing?

Microdosing Efficacy is Still Unknown The Oregon Psilocybin Advisory Board’s research subcommittee heard a presentation from Chris Stauffer, MD, on the efficacy of microdosing during a meeting in January 2022. Dr. Stauffer highlights in his presentation that “popular use has outpaced scientific evidence.”

Currently available data is not fully reliable as there are shortfalls in research methodology and data collection. This includes studies using a wide range of

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dosage protocols, gender bias, and a notable lack of double-blind testing for placebo effect.

Studies compiled by Dr. Stauffer in his presentation to the research subcommittee show conflicting results. A 2018 interview study found that those microdosing psilocybin reported improved mental health and creativity, but there were also reports of insomnia and some participants stated they would not continue microdosing. A 2020 online survey found similar improvements in mental health and cognitive function but noted negative effects such as anxiety and adverse physical side effects. A 2021 study employing “self-blinding” citizen science, where participants were given online instructions directing them to incorporate placebo control into their own microdosing routine, found no significant difference between microdosing and placebo in terms of personal well-being and mental health.

Conclusion OHA is still in the middle of rulemaking, and the first set of proposed rules impacting microdosing will not come out until this summer. This means the fate of microdosing is still up in the air, and we may not know the full answer until rule making finishes and license applications open in 2023. Several other states are currently considering psilocybin legalization or decriminalization, with some following Oregon’s “adult services” approach, and others considering a medical approach. It will be interesting to see how aggressively these states tackle microdosing, and when science will finally catch up and allow consumers to make an informed decision of whether psilocybin microdosing is right for them.

"...the fate of microdosing is still up in the air, and we may not know the full answer until rule making finishes and license applications open in 2023."

-- Brett Mulligan

greenlightlawgroup.com

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“Medicinal” vs. “Adult Use” Approach to Legalization

by Brett Mulligan, Green Light Law Group Several states introduced legislation this year seeking to either legalize or decriminalize psilocybin. The two most noteworthy came out of New York and Washington state. While both efforts were unsuccessful, the different approaches taken in each state provides a helpful contrast between a medicinal approach to legalization, as was seen in cannabis, and an adult use approach that is currently under experimentation in Oregon via Measure 109.

New York: the “Medicinal” Approach Assembly Bill 8569 would have legalized psilocybin services only for medical purposes and require that a patient be “certified” before receiving treatment. A patient would have been certified if they are a New York resident or were receiving medical care in New York, under the greenlightlawgroup.com

continuing care of a practitioner who believes the patient is likely to receive therapeutic or palliative benefit from psilocybin, and the patient is diagnosed with any of the following: Cancer, HIV/AIDS, ALS, Parkinson’s disease, multiple sclerosis, damage to the nervous tissue of the spinal cord with objective neurological indication of intractable spasticity, epilepsy, inflammatory bowel disease, neuropathies, Huntington’s disease, PTSD, chronic pain, substance use disorder, Alzheimer’s, muscular dystrophy, dystonia, rheumatoid arthritis, autism, or any other condition certified by the patient’s practitioner.

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Practitioners would need a new psilocybinlicense before they could certify patients for treatment. To get one, a practitioner would need to complete a two-hour course, the details of which would be determined by the New York State Department of Health. Practitioners would certify patients for a specific period of time, or for the entire life of the patient. Once certified, a patient (or their caregiver) would get a registry card allowing them to receive psilocybin.

Psilocybin treatment would only occur indoors at a licensed psilocybin service center under the supervision of a licensed facilitator.

Individuals under the age of 18 could receive psilocybin services if they are a certified patient and with the approval of the person responsible for making their health care decisions.

New York’s legislation includes a psilocybin services grant program that provides financial assistance to veterans and first responders who want to access psilocybin services. Legalization of psilocybin is often marketed to help people suffering from post-traumatic stress disorder (PTSD), and this grant program would help veterans and first responders access psilocybin treatment.

Washington: the “Adult Use” Approach The Washington Psilocybin Services Wellness and opportunity Act, Senate Bill 5660, would have legalized psilocybin services for any individual over the age of 21, and unlike the legislation proposed in New York, SB 5660 expressly states that psilocybin services “shall not constitute medical diagnosis or treatment.”

While not recreational in the sense of cannabis where one can go to a dispensary to buy product, Washington’s proposed psilocybin program is accessible to any one over the age of 21 who passes a screening process. Clients wouldn’t need a medical diagnosis to receive psilocybin, and could participate for personal growth, religious experience, or even just for fun.

Like Oregon’s psilocybin program, Washington’s program would have issued licenses for (1) manufacturing, (2) service centers, (3) facilitators, and (4) testing. A person could hold both a manufacturing and service center license at the same premises, allowing for holistic, vertically integrated service centers where products are grown onsite. There is a two-year state residency requirement for licensees, but as discussed briefly in one of our earlier blog posts, such a requirement may be vulnerable to a legal challenge under the Dormant Commerce Clause.

Like Oregon’s psilocybin program, Washington’s legislation would have allowed its state health authority to regulate the production of psilocybin to limit supply and ensure there isn’t a product surplus.

Washington’s legislation also sought to stop overproduction by banning individuals from having a financial interest in more than one psilocybin manufacturing license.

Medicinal vs. Adult Use Advocates supporting the adult use approach (OR and WA) will argue that limiting psilocybin to a medical context (NY) inhibits access and limits psilocybin’s potential in bettering the lives of everyone, and not just medical patients or those suffering from terminal illness. Allow an adult use approach to develop first could also delay the inevitable influence that big pharma will have on the psychedelic industry.

However, one possible pro of New York’s medical approach is the focus on research.

New York’s psilocybin program would create research licensees that permit a licensee to produce, process, purchase and/or possess psilocybin for the following research purposes: (a) to test chemical potency and composition levels; (b) to conduct clinical greenlightlawgroup.com

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investigations of psilocybin-derived drug product; (c) to conduct research on the efficacy and safety of administering psilocybin as part of medical treatment; and (d) to conduct genomic or agricultural research. A psilocybin research licensee could have also contracted with a university or hospital within the University of New York system and conduct joint research projects.

Shared Traits of Each Approach Oregon, New York, and Washington’s psilocybin legislation all focus on exploring psilocybin’s potential to address the ongoing mental health crisis in the United States, which is only getting worse due to the COVID-19 pandemic. All the programs create an “advisory board” that provide policy recommendations for each state’s health authority to consider when promulgating rules and regulations. There is also a year-plus runway in each state before service centers become operational to provide time to create appropriate regulations.

The 3-step process for receiving psilocybin services is fairly uniform: 1. Preparation session where a client meets with their facilitator to prepare for their psilocybin experience 2. Administration session where the client receives psilocybin under the supervision of a psilocybin service facilitator, and 3. Integration session following psilocybin services where the client meets with a facilitator to discuss their experience.

The model for training facilitators is also uniform, with both the medical and adult use models focusing on training skills that are affirming, nonjudgmental, and “nondirective.”

All three policies limit the advertising of psilocybin products. New York’s bill authorized its health agency to make rules and regulations restricting the advertising and marketing of medicinal psilocybin.

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Washington proposed legislation outright banned public advertising of psilocybin products, and tasked their health agency with adopting rules regulating and prohibiting advertisements of psilocybin services that are appealing to minors, promote illegal activity, or otherwise present a risk to public health.

Equity is a shared focus, but to different extents. In Washington, a social equity program would have help individuals and businesses that qualify as “social opportunity” applicants. In New York, the chief equity officer of the state’s health department would work to place service centers in underserved areas of the state.

These additional sites are intended to reflect the demographics of the state and represent communities disproportionately impacted by psilocybin prohibition. While Measure 109 in Oregon did not include major equity provisions, the Oregon Psilocybin Advisory Board has established the Equity Subcommittee to provide recommendations for consideration during rule making.

Conclusion Analyzing New York and Washington’s psilocybin legislation shows two different frameworks for legalizing psilocybin. An adult use model where access is available to anyone over 21 who passes screening, and a medicinal model that more closely tracks the path of cannabis legalization. Green Light Law Group will monitor these bills and keep readers up to date on major developments.

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OHA Survey Results Show Significant Interest in Coming Psilocybin Program

by Allison Campbell, Green Light Law Group On February 28, 2022, the Oregon Psilocybin Services (OPS) Section, part of the Oregon Health Authority (OHA), released results from a community interest survey concerning Oregon’s still-developing psilocybin program.

Measure 109 legalized psilocybin, the main active ingredient in magic mushrooms, in Oregon in 2020 and created a program to administer psilocybin for therapeutic purposes in supervised settings.

The survey opened on January 7, 2022, and closed on February 6, 2022, receiving 4,421 total responses. Data from this report will help OPS better prepare for license and compliance work in January 2023 when it starts accepting license applications for the program. Although the survey results are encouraging, keep in mind that it was distributed only via press release, OHA distribution and partner distribution lists, and posted onto the OPS website, so data collection was not randomized, and thus, the results cannot be generalized.

Who is interested in accessing psilocybin services and why?

The survey’s results show strong interest in the psilocybin program, particularly in accessing services.

94% of total respondents indicated interest in accessing services, with 89% of those individuals living in Oregon.

Access to psilocybin services appears attractive across the gender spectrum. 42.9% of respondents interested in accessing services identified as male, and 41.7% identified as female, with the significant remaining responses identifying as non-binary, feminine leaning, masculine leaning, or preferring not to answer. Results are more skewed for sexual orientation, with 61.4% of those interested in accessing services identifying as straight, 9.1% identifying as bisexual, and 7.1% preferring not to answer. Other sexual orientations represented minimally included pansexual, queer, gay, lesbian, and asexual. Results are also skewed concerning race, with 59.6% of those interested in accessing services identifying as Western European or Other White, while only 1% identified as Mexican, 0.8% identified as American Indian, and 0.5% identified as African American.

Of those interested in accessing services, 72% list “general wellbeing” as their reason for seeking services. Depression and anxiety (both 64%) are a close second, followed by spirituality (48.9%), trauma-related issues (46.9%), greenlightlawgroup.com

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addiction and substance use (17.2%), and endof-life psychological distress (10.3%). Although no medical diagnosis is required to receive access to psilocybin services under Measure 109, these results show that psilocybin therapy is attractive to a wide variety of individuals, regardless of mental health conditions and life experiences.

Who is interested in obtaining training program approval, and what might these programs look like?

Fifteen percent of total responses indicated interest in obtaining facilitator training program approval. A majority plan to offer an in-person training program in Oregon (61.5%), while a minority plan to offer an online program (20.4%), and still fewer are undecided (13%).

Although COVID-19 remains a persistent threat to in-person gatherings, the data show that most respondents view in-person, hands-on training, and its related educational benefits, as too valuable to move online.

Although a majority plan to recruit licensed mental health professionals, guides/facilitators working in the field, and licensed mental health and health care workers as trainers, respect for historic psilocybin use is reflected by 59.2% of respondents reporting that they intend to recruit indigenous or Tribal traditional health workers as trainers. Efforts to encourage equity and inclusion were also seen in who respondents intend to recruit as students in the training programs. While 53.1% intend to recruit licensed mental health professionals, 49.8% intend to recruit from communities of color, and 49.6% intend to recruit members of the LGBTQIA+ community.

Facilitator training programs will likely be small in the beginning. 52.2% of those who indicated interest in training program approval stated they have capacity to include less than ten students in their first cohort, while only 21.5% of respondents plan to include 10-20 greenlightlawgroup.com

students. Given that draft rules regarding facilitator training are still in progress, it is unsurprising that about 69% of respondents indicated that they have not yet started designing a curriculum.

Who is interested in facilitator licensure?

Thirty-six percent of total respondents indicated interest in facilitator licensure.

Although Measure 109 requires only a high school diploma or its equivalent for facilitator eligibility, 12.9% of those interested have an advanced degree (MD, ND, etc.), 35.4% have a graduate degree, and 26% have a bachelor’s degree. Only 15.9% of those interested have a high school diploma or its equivalent.

Interest in facilitator licensure is again representative across the gender spectrum.

40.7% of those interested identify as male, and 39.7% identify as female, with significant remaining responses identifying as non-binary, feminine leaning, masculine leaning, or preferring not to answer. Results are skewed again, however, regarding sexual orientation, with 57.2% identifying as

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straight, and nearly 10% preferring not to answer. Other sexual orientations represented minimally included bisexual, pansexual, queer, gay, and lesbian. Results concerningrace are also skewed, with 52.9% of respondents identifying as Western European or Other White, while nearly 10% preferred not to answer.

Who is interested in service center licensure and manufacturer licensure, and how big will these operations be?

Twenty-two percent of total responses indicated interest in manufacturer licensure, and 20% indicated interest in service center licensure.

The results indicate that these operations will be small. Of those interested in manufacturer licensure, about 75.6% intend to hire less than 10 employees. Of those interested in service center licensure, about 76.6%

intend to hire less than 10 employees.

Based on this data, those who imagined future psilocybin service centers as sprawling psychedelic havens may need to wait a while before their dreams come to fruition.

The OHA survey results are extremely promising. Oregon’s psilocybin program appeals to a significant portion of the state’s population, and respondents represent members of all different races, genders, sexualities, and educational backgrounds.

As program design and implementation continues, we look forward to the day when Oregon residents can safely and affordably access psilocybin services.

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Psilocybin Patenting and the Threat to Patient Access

by Brett Mulligan, Green Light Law Group Oregon’s developing psilocybin program is nothing short of revolutionary and provides an opportunity to investigate the potential of psilocybin in treating a myriad of mental health conditions. However, the highly regulated nature of the emerging psilocybin program and outside financial interests are threatening to turn Oregon’s experiment into another cash cow for big pharma. An especially worrisome development is the efforts of pharmaceutical companies to patent psilocybin products. This blog post will explain how psilocybin patenting and other factors could make Oregon’s psilocybin program prohibitively expensive for lowincome patients and consumers, and how big pharma is maneuvering to monopolize psychedelic therapy.

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The Race to Patent Psilocybin Mental health treatment is big business, with the global antidepressant drug market valued at over $13 billion in 2016. Psilocybin offers an alternative that will certainly upset this market. Recent estimates indicate that the psychedelic drug market may reach $10.75 billion by 2027. Big pharma is responding accordingly, and businesses are working to patent psilocybin products and stake their claim in the emerging market.

Patent law in the United States won’t allow companies to patent psilocybin outright, because it is a product of nature, so companies are patenting synthetic versions of psilocybin that vary slightly from what is found in nature.

For example, the for-profit mental health care company COMPASS Pathways in October 2021 received a patent for its “Form A Hydrate” psilocybin product. The patent covers a synthetic psilocybin product that COMPASS developed by crystallizing psilocybin molecules and rearranging them to create a new polymorph that, the company maintains, differs from already existing synthetic psilocybin products. This small molecular change is what allowed COMPASS to receive their patent, their fifth granted by the U.S. Patent and Trademark Office. COMPASS also has patents in the U.K., Germany, and Hong Kong.

On December 15, 2021, the non-profit organization Freedom to Operate (FTO) filed a post-grant review filing to challenge a

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separate patent awarded to COMPASS in March 2021. Additional lawsuits are likely coming to challenge COMPASS’s other patents, including its most recent patent for Form A Hydrate psilocybin. FTO alleges in their lawsuit that COMPASS’s “new” psilocybin product is not novel, but rather, substantially similar to existing products, and is therefore unpatentable. The chance of success in this lawsuit is uncertain, and while FTO should be applauded for their efforts, the fact the non-profit was required to fundraise almost $1 million dollars to bring the suit is an ominous warning of the difficulties advocates will face to stop questionable patent practices by for-profit companies.

Relationship Between Researchers and Private Industry COMPASS recently published what is now the largest study investigating psilocybin’s potential for treating depression. The FDA will likely refer to this data as it considers formal approval for psilocybin therapy and products. While this research is needed to investigate psilocybin’s potential, COMPASS’s status as a for-profit company should raise red flags regarding the revolving door between some researchers and private industry.

Companies who receive patents will dictate the evolution of psilocybin treatment, as they will receive massive revenue and decide who receives licenses to use patented products. This creates an economic incentive for researchers to take the lead in the IP race for psilocybin, and then pivot to the private sector. From there, former researchers working for big pharma will dictate what products are available to patients, how treatments are accessed, and cost.

Threat to Patient Access in Oregon The history of ballot measures in Oregon developed from the state’s early populist leanings. The irony then for Ballot Measure 109, which was pushed with the promise of assisting

veterans and people with addiction problems, is that Oregon’s psilocybin program might be on course to provide little access for people of lower-income.

Insurance won’t cover treatment sessions due to psilocybin’s status as a Schedule I drug. The regulatory requirements for licensure and opening a business means individual sessions could cost thousands of dollars. The equity subcommittee of the Oregon Psilocybin Advisory Board is doing great work to ensure equitable access, but the subcommittee’s powers are limited, and the subcommittee’s recommendation may not remain fully intact through Oregon Health Authority’s rulemaking process.

There are two main mechanisms that Measure 109 employs to limit monopolization and out-of-state interests.

First, licensees cannot hold more than one manufacturing license, and no more than five service center licenses. The second mechanism is residency requirements for licensees and facilitators. These residency requirements, however, are constitutionally questionable, and many legal scholars maintain that similar residency requirements in the context of cannabis violate the Dormant Commerce Clause. This presents a situation where big pharma may challenge Oregon’s residency requirements, and if successful, open the flood gates for out-of-state interests looking to corner the market. greenlightlawgroup.com

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A couple solutions exist that could allow Oregon to remain a sanctuary for ethical psilocybin treatment and research. First, the federal government could pass legislation explicitly allowing states to institute residency requirements for psilocybin licenses. Supreme Court case law dictates that the Dormant Commerce Clause can be lifted in situations where the federal government expressly allows state governments to discriminate against outof-state individuals and business. This removes the Dormant Commerce Clause problem, but would require movement from a federal government that still classifies psilocybin as a Schedule I drug. Second, the Oregon legislature could create new psilocybin research licenses that are tailored to expand opportunities for researchers who are not backed by big pharma.

Bringing in these researchers would help ensure that one or two companies do not take the lead in research, patent new products, and then cut

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out other researchers and monopolize the market.

Conclusion Patent law can encourage innovation by rewarding inventors for researching and developing novel products. Psilocybin, however, is not a new product, and its use dates back thousands of years. Findings that certain psilocybin products are only now being “discovered” ignores history, and minimizes psilocybin’s role in indigenous cultures. These notions reek of colonialism.

Research into psilocybin’s efficacy is needed, alternatives to anti-depressant drugs are needed, but predatory psilocybin patenting practices will only corner psilocybin for the very wealthy in the short term, and in the long term, create incentives to turn psilocybin into another industry that values profit over patient access.

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Canada Opens Access for Psilocybin and MDMA Therapy

by Brett Mulligan, Green Light Law Group

Canada recently amended its Controlled Drugs and Substances Act (CDSA) to allow for psilocybin and MDMA therapy in limited circumstances. Subsection 56(1) of the CDSA will exempt medical providers from enforcement of the CDSA when providing psilocybin and MDMA treatment to patients suffering serious or terminal health conditions. Thus, providing a new pathway for patients to access psychedelic treatment, and another example of the medicinal approach to psychedelic legalization.

Timeline of Medicinal Legalization Canada’s Special Access Program (SAP) allows health care professionals to request drugs for patients with serious or life-threatening conditions where other available treatments fail to work (analogous to the Right to Try (RTT) program in the United States). Pursuant to subsection C.08.010(1) of Canada’s Food and Drug Regulations (FDR) statute, the Minister of Health can issue a “letter of greenlightlawgroup.com

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authorization” allowing for the use of a new drug for emergency treatment. Once a letter of authorization is issued for a new drug, a physician must become a “licensed dealer” under subsection J.01.015 of the FDR before providing the new drug to a patient. Each request is decided on a patient-by-patient basis and approval is usually only given to drugs with successful phase II or phase II clinical trials.

In 2013, section C and J of Canada’s FDR statute were amended so that “restricted drugs” were inaccessible through SAP. Restricted drugs are controlled substances with no approved medical uses (think “Schedule I” in the United States) and are only available for scientific or research purposes. The 2013 amendment cut off access to SAP for psychedelic drugs like MDMA and psilocybin, leaving clinical trials as the only vehicle for patients to access psychedelic services.

Subsection 56(1) Exemption In January 2022, the FDR statute was amended to give healthcare professionals access to restricted drugs through SAP. Subsection 56(1) of the CDSA comes into play because the exemption protects medical professionals and pharmacists from certain CDSA regulations when dealing specifically with MDMA or psilocybin. The changes to the FDR and CDSA do not outright legalize MDMA or psilocybin.

Physicians still need SAP approval on a patientby-patient basis and SAP approval is only granted when other available treatments prove ineffective.

The new exemption reflects the emerging global renaissance of psychedelic treatment. In 2020, Health Canada published a Notice of Intent alerting the medical community of the plan to reopen SAP to restricted drugs. A public comment period opened, and submissions overwhelming supported the exemption with 80% of respondents associating the 56(1) exemption with increasing access to psychedelic greenlightlawgroup.com

drugs. While the Canadian government maintains this exemption is not a step toward legalization, a publication from Health Canada discussing public support of 56(1) specifically highlights MDMA and psilocybin’s designation as a “breakthrough therapy” by the United States FDA. Conclusion Canada’s 56(1) exemption does not give the green light for patients to access psilocybin and MDMA. It only restores the possibility of accessing restricted drugs though SAP. Patient access is dependent on their doctor’s willingness to apply for SAP designation, and it’s unclear how many doctors are willing to go through the lengthy process. A story broke last month of 65year-old Winnipeg women who was terminally ill and could not access psilocybin services because none of her doctors were willing to apply for SAP. Publications from Health Canada stress that clinical trials are still the best avenue to access drugs like psilocybin and MDMA. Regardless, subsection 56(1) is an important landmark in expanding psychedelic access globally.

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substances. The cannabis legalization movement has been in the works for decades, and it does seem that federal cannabis prohibition will end soon. The current push to legalize psychedelics is in its early stages. This article examines what cannabis legalization can tell us about psychedelics.

What Can Cannabis Legalization Tell Us About Psychedelics?

by Allison Campbell, Green Light Law Group In both the well-established cannabis industry and the emergent psychedelics space, federal law has fallen behind public sentiment. Marijuana, LSD, Mescaline (contained in Peyote), MDMA, Psilocybin (from “magic mushrooms”) are all listed in Schedule I of the Controlled Substances Act (CSA) and are all major topics of interest of late, according to Bloomberg. In addition, states have taken the legality of these substances in their own hands, legalizing medical and adult-use cannabis and legalizing or decriminalizing certain psychedelics or entheogens.

However, the fact that most entheogens and cannabis have been stuck in Schedule I of the CSA means that the US is behind on researching these mind-altering

U.S Cannabis Legalization Timeline Despite some similarities, psychedelic legalization is playing out differently than cannabis legalization, at least in terms of timing. The modern movement to legalize cannabis can trace its first great success to California in 1996, when the state became the first in the nation to legalize medical cannabis. Several states followed suit, including Oregon in 1998. And finally, in 2012, Washington and Colorado voters decided to legalize adult-use, or, recreational cannabis.

Slowly, over time, public opinion on cannabis has changed significantly.

Now a majority of Americans are in favor of legalizing marijuana nationally. As the cannabis industry has developed, the focus has shifted from legalizing medical marijuana to legalizing marijuana for both medical and recreational cannabis.

Alternatively, public support has come quickly for the psychedelic movement. Oregon was the first state to establish a regulated entheogen back in 2020. While it took years for public support to tip in favor of cannabis, just months after Oregon legalized psilocybin (and years before the program is actually greenlightlawgroup.com

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operational) a report from The Hill indicates that more than a third of voters in America already believe that psychedelic substances, such as “magic mushrooms” have medical value. It took much longer for support to grow for the legalization of cannabis. Bipartisan support for psychedelic treatment is also developing rapidly, with former Texas Governor Rick Perry (R) supporting legislation allowing for clinical research of psilocybin to help veterans suffering from PTSD. Psychedelics in the Pharmaceutical Space Big money is flooding the psychedelics space much faster than the cannabis market, as well.

According to Psychedelic Stock Watch by early 2021, nearly $540 million had been poured into psychedelic companies. As another article on Psychedelic Stock Watch points out, “unlike cannabis, most psychedelic drugs are much more amenable to a drug patent system.

Translation: much more robust profit potential for pharmaceutical companies in comparison to cannabis.” While there is certainly “big money” in cannabis, especially investments in multi-state operators (MSOs), money has flown much more quickly to firms focused on psychedelics.

At this time, it seems unlikely that psychedelics legalization will eventually allow for the non-medical or recreational use of psychedelics. This distinguishes psychedelics from cannabis in the sense that many states are legalizing cannabis for recreational, non-medical use. Simply put, psychedelics are stronger than cannabis and may not be safe for recreational use. Because psychedelics are better for patent purposes, there is also more incentives for the development of pharmaceutical psychedelics.

Priorities of the Psychedelic Industry: Spiritualism or Commerce?

However, there are other avenues that policy makers should explore in legalizing psychedelics. For thousands of years, humans greenlightlawgroup.com

have used psychedelics for spiritual or religious purposes. Many entheogens are considered sacramental. In the United States, most of the discussion around cannabis has focused on the difference between recreational and medical use or the difference between marijuana and hemp. In contrast, in Jamaica, cannabis legalization has not just impacted medical and recreational cannabis, it has also legalized the sacramental use of cannabis, or ganja, in the Rastafarian tradition.

I am hopeful that as states and the federal government begin legalizing and regulating psychedelics, there is a place in the industry reserved for traditional, spiritual use, as is the case with ganja in Jamaica. Although legalization of psychedelics has been pushed rapidly by commercial interests, that does not preclude the use of psychedelic for noncommercial purposes.

Recreational Cannabis vs Recreational Psychedelics The fact the psychedelics legalization movement is similar in many ways to the cannabis movement does not mean that it will or should follow the same course towards legalization. In many ways, the legalization of cannabis at the state level, has laid the groundwork for the rapidly evolving psychedelic movement but that does not mean that we should expect to see a push for recreational psychedelics down the road. Advocates for psychedelic legalization should learn from the cannabis movement but should not attempt to recreate the exact trajectory towards legalization, what makes sense for cannabis may not make sense for psychedelics.

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AIMS v. Garland: A Disappointment for Psilocybin Advocates, but Progressive Policy May Still be on the Horizon

by Allison Campbell, Green Light Law Group

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit dismissed[DS1] a petition for review of a Drug Enforcement Administration (DEA) response to an attorney’s letter seeking advice and guidance on how a physician could administer psilocybin to a terminally ill patient without incurring liability under the Controlled Substances Act (CSA).

Despite Petitioners’ noble cause, the case turned on a technicality after the Court determined that the DEA’s letter stating that

such psilocybin treatment was not allowed, the document that prompted the lawsuit, was not a “final” decision of the Attorney General that the Court had jurisdiction to review.

Background a. Psilocybin Psilocybin is the hallucinogenic chemical found in “magic mushrooms.” Controlled research into psilocybin for therapeutic greenlightlawgroup.com

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purposes reveals that it may allow people suffering from depression, anxiety, PTSD, and potentially addiction, to more easily face and overcome painful or stressful memories and experiences. Psilocybin’s therapeutic benefits are so promising that Denver, Colorado became the first city to decriminalize psilocybin in May 2019, and in 2020, Oregon passed Measure 109, which paved the road for a program allowing for legal manufacture, delivery, and administration of psilocybin to clients at supervised, licensed facilities in the state.

Oregon isn’t alone; legislators in New York and Washington State also recently introduced bills to legalize supervised psilocybin services in those states. While some states recognize its positive uses and have legalized supervised use at the state level, psilocybin is still federally illegal because it is currently registered as a Schedule I drug under the CSA. This means it can be produced, dispensed, or possessed only in the context of research, which requires special registration, the requirements of which the DEA is responsible for enforcing. Enter the Right to Try (RTT) Act. b. The RTT Act Congress passed the RTT Act in 2018 to give qualifying patients access to investigational drugs outside of a clinical trial setting. This effectively relieved regulatory requirements that would otherwise be imposed on eligible investigational drugs, speeding up the timeline for giving dying patients the “right to try” a drug that could potentially alleviate anxiety and depression associated with terminal illness and palliative care.

To qualify under the Act, a drug or treatment must: 1) have completed an FDA-approved Phase 1 clinical trial; 2) be in an active clinical trial intended to form the basis of an application for approval or be the subject of an application for approval filed with the FDA; and 3) be in ongoing active development or production and greenlightlawgroup.com

not discontinued by the manufacturer or placed on clinical hold.

Psilocybin successfully completed an FDAapproved Phase 1 clinical trial in 2019, and two companies, COMPASS Pathways and Usona, both currently have Phase 2 trials ongoing. Thus, psilocybin would appear to fit squarely within the RTT Act’s definition of qualifying drugs. The issue in question that formed the basis of the lawsuit was how psilocybin could be dispensed to cancer patients under the RTT Act without violating the CSA. Case Context The lawsuit’s origins take place on a simple timeline. In January 2021, Dr. Sunil Aggarwal, co-director of the Advanced Integrative Medical Science Institute (AIMS) in Seattle, Washington, and Kathryn Tucker, counsel to AIMS and Mr. Aggarwal, wrote a letter to the DEA Regulatory Section. The letter requested advice from the DEA on how Dr. Aggarwal could obtain and administer psilocybin for therapeutic use with terminally ill cancer patients suffering anxiety and depression. After the initial letter, Ms. Tucker also sent an additional email to the DEA suggesting that the DEA could also simply issue Dr. Aggarwal an exemption from prosecution under the CSA via the RTT Act (the DEA has previously issued exemptions for religious purposes— click here for more information).

One week later, Thomas Prevoznik, Deputy Assistant Administrator, Diversion Control Division of the DEA responded to Dr. Aggarwal’s letter. The DEA response stated that, “the RTT does not waive the requirements of any provision of the CSA or

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its implementing regulations,” and “absent an explicit statutory exemption to the CSA, DEA has no authority to waive any of the CSA’s requirements pursuant to the RTT.” The DEA confirmed that Dr. Aggarwal could apply for researcher registration but rejected the idea of issuing an exemption from prosecution because that specific provision “applies to individuals already registered with DEA to engage in research in controlled substances,” and Dr. Aggarwal did not have registration for researching psilocybin. The response concluded that if Dr. Aggarwal obtained researcher registration from the DEA, then he could petition the DEA Administrator for a grant of exemption from prosecution under the CSA. Petition for Review In response to the DEA’s letter, AIMS, Dr. Aggarwal, and two patients seeking access to psilocybin under the RTT Act filed a lawsuit in the U.S. Circuit Court of Appeals for the Ninth Circuit pursuant to 21 U.S.C. § 877, a provision allowing judicial review of final decisions of the Attorney General. It was in the language of this statute that Petitioners’ case ultimately failed.

Although the term “final” is not defined in the statute, legal precedent, stemming mainly from Bennett v. Spear, 520 U.S. 154, 177-78 (1997), established a two-part test for determining whether an administrative action is a “final” decision: 1) the action must mark the consummation of the agency’s decision-making process and must not be of merely tentative or interlocutory nature, and 2) the action must be one by which rights or obligations have been determined or from which legal consequences will flow. Ultimately, an administrative agency’s decision is final “when the agency has rendered its last word on the matter in question.”

The panel for the Ninth Circuit determined that the DEA’s response was not a “final” decision under the meaning of Bennett, and because of this, the Court lacked jurisdiction to

hear the case, necessarily requiring the panel to dismiss the action. The Court distinguished between an informational document providing an agency’s interpretation of a statute (not considered final agency action) and a decision that determines how a statute or regulation applies to facts for enforcement purposes.

The Court deemed the DEA’s response an informational letter, the type of advice letter that agencies prepare countless times per year in dealing with a regulated community.

Using Bennett specifically, the Court found that the DEA’s response failed both required elements to be considered “final.”

First, regarding consummation of a factfinding process, the Court found no indication that the DEA’s response was preceded by fact-finding or a public hearing, or that the DEA engaged in a decisionmaking process that resulted in the letter.

The DEA’s response simply informed Ms. Tucker that the RTT Act on its face did not give the DEA authority to waive CSA requirements and did not grant or deny any request or make any ultimate decision.

Regarding Bennett’s second element requiring imposition of legal consequences,

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the Court found that the DEA’s response did nothing but point to the plain language of existing law and failed to expressly impose any legal consequences for noncompliance. The panel noted that if Dr. Aggarwal chose to ignore the DEA’s response and offered psilocybin to his patients, he would face liability only for noncompliance with the CSA, not for disagreeing with the agency’s determination stated in its response. Thus, because the letter’s content was not the consummation of a fact-finding process and failed to impose any form of legal consequences, the Court found the letter did not suffice as “final,” as required for judicial review under § 877.

To contrast its decision with prior cases, the Court gave examples of responses and documents that were ultimately deemed final.

First, in Hemp Indus. Ass’n v. DEA, 333 F.3d 1082, 1085 (9th Cir. 2003), the DEA published a rule that banned the sale of certain products containing hemp products in the Federal Register. The Court deemed that rule final because it imposed obligations and sanctions in the event of violation. Similarly, in John Doe, Inc. v. DEA, 484 F.3d 561, 566 (D.C. Cir. 2007), the D.C. Circuit found that it had jurisdiction under § 877 to review the DEA’s denial of a permit application. The Court deemed the decision final because the DEA affirmatively denied the permit application, thus marking the culmination of its decision-making process and establishing legal consequences by expressly prohibiting action without a permit.

Although the Ninth Circuit’s opinion is disappointing for RTT advocates and psychedelics proponents, remember that the Court dismissed the case on a relative technicality, rather than the merits. This case had strong support across the country—last spring, a bipartisan group of attorneys general from eight states and the District of Columbia, along with the ACLU, and both the Cato and Goldwater institutes submitted amicus briefs greenlightlawgroup.com

supporting Petitioners and noting psilocybin’s therapeutic properties. A coalition of end-of-life caretakers and a group of law professors and bioethicists also submitted briefs supporting Petitioners’ case. Further, in January 2022, a bipartisan group of Congress members sent a letter urging the DEA to give terminally ill patients access to psilocybin.

In conclusion, despite the Court’s decision, it is our opinion that the advocates bringing this case are tireless and committed, and are likely even now digesting this decision and preparing to redouble their efforts in order to obtain a decision on the merits on this important issue. We heartily applaud their efforts and wish them success.

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