Colorado passed Proposition 122 in 2022, making the state the second after Oregon to decriminalize the use of psychedelic mushrooms as part of its natural medicine program.
In the past couple of years, the legal frameworks for regulating psychedelics businesses in Colorado have been formulated and the state is now getting ready to issue psilocybin licenses for businesses. Psilocybin is the active ingredient found in “magic mushrooms”.
From 2025, licensed facilitators will be able to legally operate psilocybin businesses with related treatments offered in licensed healing centers and some clinical practices in Colorado.
First psychedelics healing centers in Colorado set to open in the summer…
Healing centers offering treatments with psychedelics will not operate in the same way as cannabis dispensaries in Colorado. Retail sales of psilocybin mushrooms are prohibited in the state.
Rather than purchasing quantities of the once-illegal drug for personal use at a later time, customers will undergo treatments using psychedelic mushrooms or other psilocybin products with close supervision by licensed therapists or “facilitators” at licensed premises.
Before treatment, patients must pass a screening process to determine any risks of taking natural medicine. If appropriate, candidates will undergo natural psychedelic therapy in a secure, regulated environment with a licensed facilitator supervising the session and providing support throughout.
The law also permits clinical facilitators to offer psilocybin services at their existing practice as well as a licensed healing center. Local governments in Colorado can determine when and where healing centers may operate but cannot ban them.
Responsibility for regulating the natural medicine program is split between two agencies in Colorado:
- The Colorado Department of Revenue Natural Medicine Division regulates natural medicine businesses including healing centers, cultivation sites, manufacturers and testing facilities, licensing owners and employees.
- The Colorado Department of Regulatory Agencies (DORA) regulates training and licensing for facilitators (therapists who engage with people consuming natural medicine).
No facilitators can begin practicing until regulated medicine is available, which won’t happen until cultivation sites are licensed and operating.
That hasn’t happened yet but it’s not far away. Several individuals have received approval from the state’s Natural Medicine Division already but each respective business also needs to be issued a psychedelics business license before it can begin operating.
This applies to all businesses, whether they are designed to cultivate mushrooms, manufacture natural medicines or operate healing centers.
Despite no business licenses being issued to date, Colorado has received applications for at least 15 healing center licenses, nine cultivation licenses, four manufacturer licenses, and one testing facility license for growing and preparing the mushrooms—as of mid-March 2025.
The first healing centers are expected to open in the summer of 2025, if not before—approximately two years since Oregon began offering similar services.
Psilocybin licenses in Colorado
Applications are still being accepted for psilocybin healing centers, cultivation, and manufacturing, representing exciting opportunities for local practitioners and entrepreneurs.
However, the heavily regulated nature of the industry creates legal challenges with business formation, securing a license, and regulatory compliance.
The assistance of an experienced psilocybin business lawyer is recommended to simplify and de-risk the process of setting up a related business in Colorado.
Facilitator and cultivation licenses have already been issued to individuals in the state. Some of these need to be renewed every year and others every two years. Licensing fees for facilitators also vary depending on the type of license a facilitator applies for. Some examples include:
- Facilitator in training license: $420
- Full facilitator license: $840
- Clinical facilitator license: $970
- Distinguished educator license: $1,120
The growing potential of psychedelics in psychotherapy treatments
Research suggests that natural psychedelics like psilocybin could be used to treat several mental health disorders, including:
- Post-traumatic stress disorder (often experienced by army veterans)
- Obsessive-compulsive disorder
- Substance use disorder
- Major depression that is resistant to other treatments
The U.S. Food and Drug Administration has designated psilocybin as a “breakthrough therapy” option for treatment-resistant depression and major depressive disorder. Late-stage trials, often a precursor to application for FDA approval, are underway. This suggests that there could be more positive news about the expanding potential of psychedelics in other treatments as research into the medical benefits of these substances becomes more widespread.
At present, “magic mushrooms” are a Schedule I drug and illegal under federal law except for clinical research. However, as more psychedelics businesses open and psilocybin and other natural medicines become more widely used in treatments, we can expect more states to follow Colorado and Oregon in legalizing them.
For informed advice about setting up a psilocybin business in the U.S., call 866-329-0729 for a consultation at Cannabis Law Solutions.
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