Frequently Asked Questions for Psychedelics Law

To understand psychedelics law — as it stands now — a little better, we’ve compiled some of the most frequently asked questions on the topic…

Please note that this area of law is rapidly evolving and is very location-dependent so it’s best to check with a qualified psychedelics attorney if you are in any doubt about the rules and regulations…

Psychedelics Law FAQ

What are psychedelics?

Psychedelics are also known as “hallucinogens”. They are a class of psychoactive substances that produce changes in perception, mood and cognitive processes.

Some grow naturally (like mescaline from peyote or psilocybin from magic mushrooms) while others are synthetically manufactured in labs (like LSD and MDMA).

Are psychedelics Illegal in the U.S.?

Because of the different federal, state and local laws about psychedelics and the variety of psychedelic substances that fall under the classification, there is a high degree of confusion about the legality of psychedelics in the U.S.

The laws in the city of Seattle differ from the laws in the rest of Washington State, which again differ from the laws of the United States.

At a federal level, psychedelics are illegal (like cannabis is) and they are placed right at the top of the list of controlled substances. The Psychotropic Substances Act of 1978 still stands as the governing legislation.

Don’t expect too much leniency if you are charged by federal agencies like the DEA for crimes such as possessing, selling, transporting or cultivating/manufacturing psychedelics.

However, the attitude is changing in many states and cities across the U.S. Oregon and Colorado became the first states to legalize and decriminalize the use, possession and sale of psychedelic mushrooms. In Colorado, the legislation also effectively legalized the use of three other psychedelic substances (with some limits).

Some major cities around the country have also essentially decriminalized some psychedelics, including Seattle, Detroit and Cambridge (Mass.).

Elsewhere, reform efforts are aimed at developing legislation to help other states follow suit, including California, Montana, Arizona, New York, Virginia, Florida and several other states.

Momentum is gathering pace with psychedelics. Similar steps are being taken as in the early days of cannabis legalization across the United States and, while there is still considerable opposition in some quarters, it’s a good idea to watch this space.

What are Schedule 1 controlled substances?

Schedule I controlled substances are substances that are perceived by the federal government to have no accepted medical use and a high potential for abuse. Their possession, use and sale constitute a serious criminal offense.

The Schedule 1 list includes heroin, ecstasy, methaqualone and cannabis (yes, even cannabis) as well as psychedelic substances like lysergic acid diethylamide (LSD), peyote, ketamine, DMT and MDMA.

Where is it legal to open a psychedelics business in the U.S.?

It is currently legal to open a psychedelics business in Oregon and Colorado if you have a valid business license.

The Oregon Psilocybin Services Act created a licensure process for manufacturers, service center operators, laboratories and facilitators for the use, manufacture, delivery and possession of psilocybin products.

A similar piece of legislation was enacted in Colorado with the Natural Medicine Health Act, which included dimethyltryptamine, ibogaine and mescaline (excluding peyote) as well as psilocybin.

You may be able to form a limited liability company (LLC) or a corporation. Colorado only legalized psychedelics in 2023, so you should discuss the opportunities and license application process with a specialist attorney with knowledge of the changing legislation.

The eligibility criteria for licenses are generally stringent and you may need assistance to navigate the complex license application process.

What types of psychedelics businesses are licensed?

It’s not just the big pharmaceutical companies that stand to gain from the commercial opportunities provided by the decriminalization and legalization of psychedelics.

Small business owners, clinicians, investors and entrepreneurs with expertise in research, manufacturing, medical treatments and retail can set up business operations in states where psychedelics have already been legalized.

Who regulates psychedelics businesses?

Regulation and compliance laws are necessarily stringent for psychedelics-related businesses because the topic remains controversial for many.

In Colorado, psychedelics businesses are regulated by the Natural Medicine Advisory Board (Department of Regulatory Agencies) while the industry in Oregon is regulated by The Oregon Health Authority.

What medical benefits are associated with psychedelics?

The potential medical benefits of psychedelics mainly focus on mental health.

For instance, MDMA was endorsed by the FDA as a breakthrough therapy for post-traumatic stress disorder as far back as 2017.

The following year, the agency recognized psilocybin, which is the active ingredient in “magic mushrooms”, as a breakthrough therapy for treatment-resistant depression.

The results of studies showing that psilocybin has great value in treating depression, anxiety, life-threatening cancers and other conditions conflict greatly with the federal stance that psilocybin has no medical purpose.

Other psychedelics, such as ibogaine, ketamine, and dimethyltryptamine are also the subject of ongoing psychiatric research.

On the subject of ketamine, the drug is listed on the World Health Organization’s list of essential medicines and is often given to pediatric patients and injured soldiers. There is great promise in its ability to treat depression (hence its approval by the FDA).

Why do I need specialist legal assistance to set up a psychedelics-based business?

Few law firms can currently provide reliable legal advice on the therapeutic use of psychedelic drugs. This emerging area remains poorly understood, which can lead to legal issues at local, state and federal levels. The lawyers at Cannabis Law Solutions have significant expertise in the areas of cannabis and psychedelics laws across the U.S.

We can help you comply with state and federal regulations and overcome the many potential challenges concerning the research, development, commercialization and medical practice of psychedelics.

Call 866-329-0729 for a consultation with a knowledgeable psychedelics attorney at Cannabis Law Solutions.

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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.

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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.

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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.

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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.

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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.

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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.