Comparing the Psychedelic Legal Frameworks in Oregon and Colorado

With research mounting for the therapeutical potential of psychedelic-assisted therapy, U.S. states are exploring various frameworks to legalize and regulate psychedelic-assisted therapy. In January 2023, Oregon became the first state to legalize and regulate psychedelic-assisted therapy through the Oregon Psilocybin Services Act (“OPSA”) and later adopted rules providing additional color to the legal framework (the OPSA and the adopted rules will be collectively referred to as “Oregon Laws and Regulations”). In November 2022, Colorado became the second state to legalize and regulate psychedelic-assisted therapy through the Colorado Natural Medicines Act (“CNMA”). Unlike Oregon, Colorado has not yet adopted rules around its framework; so, there are still many open questions around the Colorado framework. This article aims to compare and contrast these frameworks, highlighting the key differences and implications.

What Compounds are Legalized and Regulated?
Oregon: Oregon Laws and Regulations legalize and regulate only psilocybin. While psilocybin exists in 200+ species of fungi, Oregon law allows manufacturers to only cultivate psilocybe cubensis mushrooms. Psilocybin products may include whole dried mushrooms, ground homogenized fungi, extracts, and edible products. Nonetheless, it’s certainly possible (and, in my opinion, likely) that Oregon may pass further initiatives legalizing and regulating additional psychedelic compounds.
Colorado: The CNMA initially legalizes and regulates only psilocybin. However, the CNMA explicitly leaves open the option to legalize and regulate ibogaine, DMT, and mescaline services after June 2026. There have also been bills in Colorado attempting to make these other compounds available prior to June 2026. We are still waiting for the Colorado rules and regulations as to the type of species that may be cultivated and the type of products that will be available.
Discussion: While psilocybin has received the most attention in the media, there has been tremendous research around the therapeutical potential of various psychedelic compounds, including natural psychedelic compounds (i.e, ibogaine, DMT, ayahuasca, peyote, mescaline) and synthetic psychedelic compounds (MDMA, LSD, and other new psychedelic chemical entities). While Oregon Laws and Regulations do not explicitly legalize and regulate psychedelic compounds other than psilocybin and Colorado explicitly mentions the potential legalization and regulations of other psychedelic compounds, my expectation is that additional psychedelic compounds will eventually be legalized and regulated in both states as long as there are not significant adverse events during psychedelic therapy and the federally-approved clinical trials around these other psychedelic compounds continue to prove safety and efficacy.

Can Municipalities Ban (or opt-out of) Allowing Operations Within Their Municipality?
Oregon: Under Oregon Laws and Regulations, municipalities are automatically opted-in unless they opt-out through an ordinance. Under this provision, a vast majority of the Oregon municipalities have opted out – leaving limited locations for Service Centers and ultimately limiting access to Oregon Psilocybin Services.
Colorado: The CNMA explicitly disallows municipalities from banning healing centers. However, it allows municipalities to regulate the time, place, and manner of the operations. Looking at past cannabis regulations and implementation, I expect several Colorado municipalities to use the “time, place, and manner” provision to initially relegate Healing Centers to limited zones within their respective municipality.
Discussion: Oregon’s deference to municipalities to ban and Colorado’s deference to municipalities to regulate the time, place, and manner of operations has received much scrutiny by psychedelic advocates. Indeed, this deference will certainly limit access to these medicines. However, deferring to municipalities on local issues is an important part of state/local government. Ultimately, it allows the voters of a particular municipality to determine what goes on within their municipality. With the growing support for psychedelic medicines by Oregon and Colorado voters, I expect Oregon and Colorado municipalities to ease restrictions around psychedelic therapy within their respective municipality.

Do Licensed Operators Need to Be a Resident of Oregon or Colorado?
Oregon: 50% ownership interest must be held by one or more individuals who have been residents of Oregon for two or more years. This requirement ends in 2025.
Colorado: No residency requirement. Nonetheless, Colorado may still ultimately implement a residency requirement in its rules.
Discussion: Recently, state residency requirements for marijuana licenses have been successfully challenged as a violation of the Dormant Commerce Clause of the federal constitution. I expect that similar challenges will occur for the Oregon residency requirement as well as any other states that include a residency requirement in their respective state. In my opinion, the residency requirements are clear violations of the Dormant Commerce Clause; and eventually states will remove such requirements for both cannabis and psychedelics.
Can Health Care Facilities Provide Psychedelic Services?
Oregon: Under Oregon Laws and Regulations, health care facilities cannot provide psilocybin services. Psilocybin services are limited to Service Centers.
Colorado: The CNMA explicitly states that the Department will implement rules that allow for psychedelic services to be provided by health care facilities that are not owned by a healing center. It also explicitly provides protections for holders of a professional or occupational license to not be subject to professional discipline. This leaves open the possibility for health care facilities to provide psychedelic-therapy services.
Discussion: Both Oregon and Colorado do not require participants to have qualifying conditions to receive psychedelic services and thus both Oregon and Colorado are not medical frameworks. Nonetheless, the language of the CNMA leaves open a potential medical-type framework for health care facilities in Colorado.

Commercialized Framework outside the State Licensing Structure
Oregon: While Oregon decriminalized all drugs under Measure 110, it explicitly prohibits any commercial activities under the decriminalization regulations. In other words, you must be licensed by the Department under Measure 109 to conduct any commercial activities.
Colorado: While Colorado’s decriminalization provisions prohibit individuals to sell psychedelics for profit unless licensed by the Department, the decriminalization provisions permit payment to individuals not licensed by the Department for “bona fide harm reduction services, bona fide therapy services, or bona fide support services.”
Discussion: For both underground administration of psychedelics and legal ketamine administration, the main expense incurred by participants or patients is for the psychedelic-therapy and not for the medicine itself. The cost of the medicine itself is de-minimus compared to the time required providing the therapy. Thus, Colorado prohibiting the receipt of payment for the medicine itself while allowing payment for the therapy and support services, may potentially provide an enormous loophole and put this decriminalization model in direct competition with the individuals and companies licensed by the Department.