Colorado Psychedelics Regulatory Compliance
The Natural Medicine Health Act legalized the use of certain psychedelics in treating a range of mental health conditions. This has placed Colorado in the spotlight nationwide, with regulatory compliance essential for any business looking to enter the sector.
Psychedelics business licenses have been attracting applications from entrepreneurs, investors, clinicians, and manufacturers. As the legal landscape for psychedelics in Colorado takes shape, the advice and guidance of a trusted partner experienced in navigating the legal and administrative hurdles that come with setting up a business in a controversial emerging industry can help you minimize the risks involved.
Our psychedelics attorneys can help businesses comply with regulations and avoid the considerable risks associated with establishing a psychedelics-based enterprise, having helped many cannabis businesses do so in multiple states.
Regulating psychedelics in Colorado
The finer details of how the psychedelics industry will be run in Colorado are in the process of being finalized but we can expect it to be tightly regulated.
The key piece of legislation governing the emerging industry is the Natural Medicine Health Act (also known as “Proposition 122”). Overseeing the industry is the role of the Natural Medicine Advisory Board.
The Board is scheduled to make its recommendations for the legal frameworks by September 30th, 2024. Suitably licensed healing centers are expected to be able to offer psilocybin treatments by the end of 2024. Rules to approve and regulate dimethyltryptamine (DMT), ibogaine, and mescaline (excluding peyote) may also come into effect after June 1, 2026
Colorado’s Department of Regulatory Agencies (“DORA”) is collaborating with 15 experts in various fields related to psychedelics on a comprehensive legal framework for businesses to follow.
As more details emerge, businesses will need to pay close attention to the legal requirements to maintain regulatory compliance.
The Natural Medicine Health Act
The Natural Medicine Health Act enables psychedelics businesses to operate in the following ways in Colorado:
- 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
“Proposition 122” effectively legalized the use of the following psychedelics in healing centers in the state:
- Psilocybin
- Psilocin
- Dimethyltryptamine (“DMT”)
- Ibogaine
- Mescaline (excluding peyote)
The legislation removed all state and local criminal penalties for adults aged 21 years of age and older who grow, process, store, use, process, transport, obtain, share or ingest these substances. It also paved the way for businesses to start offering services based on the research, cultivation, and manufacture of products and the provision of healing services.
Under the terms of the Act, psychedelics businesses may be established in Colorado in five main areas (with the option of more categories becoming available at a later date):
- Facilitator: professionals can provide natural medicine services from licensed healing centers.
- Healing center: establishments can acquire, possess, cultivate, manufacture, deliver, transfer, transport, supply, sell or dispense natural medicine and related supplies.
- Cultivation facility: the cultivation of regulated natural medicine for transfer and distribution to healing center licensees, manufacturers or other licensees.
- Products manufacturer: the manufacture of regulated natural medicine products and cultivation.
- Testing laboratory: conducting independent testing and research of natural medicine.
If you intend to open a psychedelics-based business in Colorado, the first step toward regulatory compliance is to set up an appropriate business structure and prepare documentation for an application for the appropriate business license.
Once you secure a license, your business will be qualified to operate in the specific sector of the industry to which your license relates.
From there, maintaining compliance will be essential to the continued successful operations of your business. If the psychedelics industry follows in the footsteps of the cannabis industry, the regulations will be stringent as the sector finds its feet.
Why work with 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.
We can, therefore, expect tight regulations to be put in place. The need for compliance with these regulations will be essential, regardless of the type of psychedelics business you intend to establish.
The high startup costs of such businesses mean that there are substantial risks involved in non-compliance. Our skilled psychedelics business attorneys can help you establish your business, prepare your license application, and navigate the complex compliance regulations and legal hurdles that you’re likely to face from day one.
Get help with psychedelics business compliance in Colorado
Because of the emerging nature of the psychedelics sector in the U.S., finding the necessary legal expertise related to business establishment, licensing, and regulatory compliance can be challenging in Colorado.
The team at Cannabis Law Solutions has helped many businesses across multiple states meet the stringent requirements of establishing cannabis businesses and we have been following the recent changes in psychedelics laws with great interest.
We’re well qualified to help you with the regulatory compliance process, de-risking your business and potentially saving you time and money.
Whether your psychedelic business works in research, development, commercialization or medical practice, our psychedelics business attorneys can help you maintain regulatory compliance.
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.
