Colorado Psychedelics Business License
Colorado’s Natural Medicine Health Act (“Proposition 122”) was signed into law in May 2023, creating exciting opportunities for those looking to set up businesses in the emerging psychedelics sector in the state.
Researchers, entrepreneurs, investors, clinicians and manufacturers are all expected to apply for licenses for new psychedelics businesses.
But the opportunities do not come without great risks. The rest of the country is watching to see what happens with psychedelics in Colorado. Consequently, the industry will be highly regulated and those hoping for a business license will need to pass considerable hurdles before they can open for business.
Being able to turn to a trusted partner to navigate the legal and administrative hurdles can help you de-risk the process of securing a psychedelics business license and get set up properly from the beginning.
Our psychedelics attorneys are experienced in helping businesses in challenging industries get started, having helped many cannabis businesses become licensed in multiple states.
What is a psychedelics business license?
According to Colorado’s Natural Medicine Health Act, opportunities exist for entrepreneurs, health practitioners and investors to open businesses in four key areas:
- Open and operate healing centers where psychedelics are used to treat patients
- Cultivate natural psychedelics for use in healing centers
- Manufacture products for use in healing centers
- Open and operate testing facilities for psychedelic products
Regardless of the type of Colorado psychedelics business you intend to start, you’ll first need a license that covers you for your intended business activities.
Once you secure a license, your business will be qualified to operate in the specific sector of the industry to which your license relates.
What type of psychedelics business licenses are there in Colorado?
Under the Act, the Natural Medicine Advisory Board is responsible for regulatory oversight in the emerging industry.
The natural medicines covered by the Act include:
- Psilocybin
- Psilocin
- Dimethyltryptamine (“DMT”)
- Ibogaine
- Mescaline (excluding peyote)
The Advisory Board will make its recommendations by September 30th, 2024 and licensed healing centers are expected to be able to offer psilocybin by the end of the year.
Working alongside Colorado’s Department of Regulatory Agencies (“DORA”), 15 experts in various fields related to psychedelics will create a comprehensive framework for businesses to follow.
The psychedelics business licenses available in Colorado will fall into five main categories:
- Facilitator license: a license for individuals to provide natural medicine services with preparation, administration, and/or integrative sessions for participants (operating from licensed healing centers, as outlined in the next category).
- Healing center license: an entity license allowing establishments to acquire, possess, cultivate, manufacture, deliver, transfer, transport, supply, sell or dispense natural medicine and related supplies.
- Cultivation facility license: this allows the cultivation of regulated natural medicine for transfer and distribution to healing center licensees, product manufacturers or other cultivation facility licensees.
- Products manufacturer license: this allows the manufacture of regulated natural medicine products and cultivation pursuant to a cultivation facility licensee.
- Testing laboratory license: a license to conduct independent testing and research of natural medicine for concentration and contaminants to ensure all products are safe for human consumption.
It should be noted that the Act authorizes the issuance of any additional natural medicine business license as determined necessary by DORA.
Who can apply for a psychedelics business license?
The qualifications and procedures for obtaining licensure for aspiring Colorado psychedelics businesses have been developed by the Advisory Board since May 2023.
Any application for a Colorado psilocybin business license requires that the applicant provides documentation to address the following:
- Environmental, social, and governance criteria
- Safe provision
- Refusal of service
- Transportation
- Testing standards
- Advertising and marketing standards
- Health and safety warnings
- Educational materials
- Consent
- Record keeping, including session completions
- Patient data privacy
- Training programs
- Permissible financial relationships between licensees and other entities, and
- Further requirements as determined.
Applicants must also demonstrate how they will establish their business in the proposed premises (by ownership, lease, rental agreement or other arrangement).
License applications require a significant amount of supporting documentation that can be challenging to provide to the satisfaction of regulators without fully understanding their requirements.
Social equity and preferred applicant status
When awarding cannabis business licenses, many state authorities have placed a strong emphasis on social equity because of the disproportionately high involvement of low-income communities and the potential for exploitation and misappropriation of indigenous peoples.
With psilocybin and other natural medicines, the same applies even though the connections are not quite as strong as with cannabis.
Preference will also be given to individuals who are residents of Colorado.
Why do you need a psychedelics business lawyer?
Colorado is the first state to legalize certain psychedelic substances. Other cities and states that have relaxed some regulations are watching closely to see what happens next in Colorado.
Because of the tight regulations that will be in place, the process for obtaining these licenses is stringent. With high startup costs for many types of psychedelics businesses, there are substantial risks involved.
Our skilled psychedelics business license attorneys can help you prepare your licensing application and navigate the complex compliance regulations and legal hurdles during the crucial startup phase.
Apply for a psychedelics business license in Colorado
Locating the necessary legal expertise to secure a psychedelics license and start your business on the right track can be challenging because it’s such a new area of law.
We’ve helped many businesses across multiple states meet the challenging requirements of obtaining cannabis business licenses and have been paying close attention to the recent changes in psychedelics laws.
We’re well qualified to help you with the competitive and rigorous license acquisition process. By helping you meet the stringent regulations, we can save you time, money and headaches.
Whether your intended business is in research, development, commercialization or medical practice, our psychedelics business attorneys can help you obtain the business license you need.
Call 866-329-0729 for a consultation with a knowledgeable psychedelics attorney at Cannabis Law Solutions.
How will our cannabis and psychedelic business services help you
Cannabis & psychedelics business entity formation
Whether you are looking to form a limited liability company (LLC) or a corporation, our experienced business lawyers can discuss the pros and cons of both and help you incorporate your business with the optimal structure to achieve your goals.
Cannabis & psychedelics business licenses
If you want to run a cannabis or psychedelics business, you will need a valid business license issued by your state authority as well as local permits. Eligibility criteria are likely to be stringent and we can help you navigate the often-complex license application process.
Cannabis & psychedelics corporate documentation
Whether you need to prepare for a license application, transfer of business ownership, change of corporate structure, transfer business location or another business process, we can help you identify and draft the documentation you need to operate legally in your state.
Cannabis & psychedelics administrative law
State authorities watch licensed and unlicensed cannabis and psychedelics businesses closely. If you violate regulations, you could face an administrative penalty. Our attorneys can provide representation or help you prepare for an administrative hearing, settlement conference or appeal.
Cannabis & psychedelics disputes and litigation
Whether you have a dispute with another business, a legal issue with one of your partners or a licensing or administrative issue, you may need legal assistance to help resolve it. We are adept at alternative dispute resolution methods as well as civil litigation.
Cannabis & psychedelics regulatory compliance
As the cannabis and psychedelics industries emerge in states around the U.S., they are more heavily regulated than most other industries. We can help your business navigate the red tape and plan to stay on the right side of the regulatory authorities in whichever state you are based.
