RN Collins: Series 2 No.3 of 20 Articles: Model Regulatory Framework for State Psilocybin Programs Policy Reform / Governance / Oversight Series

R.N. Collins has written a series of 20 new articles for cannabis law report on 2026 Psychedelics & Legal Issues.

This is the second

Model Regulatory Framework for State Psilocybin Programs

Policy Reform / Governance / Oversight Series

Author RN Collins

Contact: https://www.linkedin.com/in/rn-collins/

 

EXECUTIVE SUMMARY

Three states have now enacted statutory frameworks for supervised psilocybin services — Oregon through Ballot Measure 109 in 2020, Colorado through Proposition 122 in 2022, and New Mexico through legislative enactment of the Medical Psilocybin Act (Senate Bill 219) in 2025 — while nearly thirty state legislatures considered psychedelic-related bills in 2025 alone.¹ Each of these frameworks reflects different structural choices about regulatory agency placement, license typology, qualifying-access criteria, supply-chain design, and the extent to which clinical medical oversight is required. The divergence among them produces practical consequences for safety, equity, market structure, and regulatory effectiveness that any state contemplating a psilocybin program must study carefully.

This article proposes a model regulatory framework for state psilocybin programs, drawing on the statutory and administrative law of all three operational programs, the emerging legislative proposals in states including Minnesota, Illinois, Arizona, and Massachusetts, and comparative lessons from analogous regulated-access systems including cannabis, methadone maintenance, and state-licensed clinical trial programs. The model framework addresses six core design questions: (1) agency placement and structural independence; (2) license typology and supply-chain architecture; (3) facilitator qualification and training standards; (4) service center standards, location requirements, and access constraints; (5) client protection and informed consent infrastructure; and (6) data collection, outcome monitoring, and ongoing regulatory adjustment. A seventh section addresses the federal preemption problem that currently constrains all state programs and identifies the specific pressure points at which federal enforcement discretion, banking access, and scheduling interact with state program design.

The model framework proceeds from a foundational premise: psilocybin programs are not cannabis programs, and regulatory structures optimized for a high-volume commercial product market will systematically fail a context-dependent therapeutic-access program. The design choices that produced Oregon’s urban concentration problem — in which service centers cluster in Portland while rural residents have limited access — and the cost barriers that produced session prices ranging from $1,500 to $3,000 per client² are not accidental features of Oregon’s program; they are predictable consequences of regulatory design choices that a model framework can deliberately correct.

I. THE LANDSCAPE: THREE OPERATIONAL PROGRAMS AND A NATIONAL SURGE

A. Oregon: The Pioneering Framework

In November 2020, Oregon voters approved Measure 109, the Oregon Psilocybin Services Act, with 56 percent of the vote, directing the Oregon Health Authority (OHA) to license and regulate the manufacture, transport, delivery, sale, and purchase of psilocybin products and the provision of psilocybin services.³ Measure 109 is codified at ORS Chapter 475A. The OHA established Oregon Psilocybin Services (OPS), a dedicated section within the agency, to administer the program, and convened the Oregon Psilocybin Advisory Board (OPAB) to guide rulemaking.⁴

Following a two-year development period, OPS began accepting license applications on January 2, 2023, across four license types: service center, facilitator, manufacturer, and testing laboratory.⁵ Licensed service centers began operating in the summer of 2023. By early 2025, the program had licensed approximately 31 service centers, 356 facilitators, and 12 manufacturers, with approximately 10,000 clients having participated in psilocybin sessions since the program’s launch.⁶ Oregon’s OHA released its first quarterly data for Q1 2025, covering January through April 2025, documenting 1,509 clients served through approximately 24 active service centers and 377 licensed facilitators.⁷

Oregon’s model establishes the foundational architecture that subsequent states have adapted: a supervised, session-based service model rather than a take-home product model; mandatory preparation, administration, and integration sessions; facilitator-supervised consumption exclusively at licensed service centers; and a supply chain that requires psilocybin products to be cultivated by licensed manufacturers and tested by licensed, ORELAP-accredited laboratories before sale to service centers.⁸ The model does not require a clinical diagnosis as a condition of access; any adult age 21 or older may seek services.⁹

Oregon’s program has surfaced structural limitations that inform the model framework. Annual licensing fees of $10,000 for manufacturers, laboratories, and service centers, and $2,000 for facilitators — in addition to training costs ranging from $4,500 to $12,000 — contribute to session prices of $1,500 to $3,000, creating significant access barriers for low-income clients.¹⁰ Service centers are prohibited from operating within incorporated city or town limits and in areas zoned exclusively for residential use, which in practice has concentrated access in peri-urban areas and left rural residents underserved.¹¹ Oregon allocated no legislative funding for the 2025–2027 biennium, and the OHA has indicated that licensing fees may rise further to sustain the program, compounding the cost burden on providers.¹²

Oregon’s Senate Bill 303, effective January 1, 2025, addressed one significant data gap by mandating that service centers gather demographic information about clients — including race, gender identity, sexual orientation, income level, and county of residence — as well as the reasons clients seek psilocybin services and any adverse reactions experienced during administration.¹³ This data infrastructure, prospective rather than retrospective, provides the foundation for meaningful equity and safety monitoring.

B. Colorado: The Expanded Scope Model

Colorado voters approved Proposition 122, the Natural Medicine Health Act (NMHA), in November 2022 with 53.64 percent of the vote.¹⁴ The implementing legislation, SB23-290, enacted May 23, 2023, established the Colorado Natural Medicine Code and divided regulatory authority between two agencies: the Department of Regulatory Agencies (DORA), which oversees facilitator credentialing and practice standards, and the Natural Medicine Division within the Department of Revenue (DOR), which regulates the commercial supply chain — cultivation, manufacture, testing, storage, distribution, transportation, transfer, and dispensation of regulated natural medicines.¹⁵

Colorado’s framework is distinguished from Oregon’s in three significant respects. First, it covers a broader universe of natural medicines: in addition to psilocybin and psilocin (the only substances permitted through June 1, 2026), the NMHA authorizes the Natural Medicine Advisory Board to recommend adding dimethyltryptamine (DMT), ibogaine, and mescaline (excluding peyote) to the regulated program beginning June 1, 2026.¹⁶ On September 18, 2025, the Advisory Board voted to recommend including ibogaine in the framework, initiating a potential regulatory expansion.¹⁷ Second, Colorado establishes two facilitator licensing tracks — a general facilitator track and a clinical facilitator track available to licensed medical and mental health professionals — creating more nuanced pathways for practitioners with existing clinical credentials.¹⁸ Third, Colorado explicitly designed its framework to permit administration at locations other than licensed healing centers, including potentially private residences, through rules adopted by DORA.¹⁹

DORA began accepting facilitator and healing center license applications on December 31, 2024, with 60-day processing requirements.²⁰ The first state-regulated psilocybin session in Colorado was conducted in Denver on June 6, 2025.²¹ Colorado’s DOR estimated program operating costs of approximately $5.2 million in budget year 2024–25 and $5.6 million in 2025–26, with revenue from licensing fees expected to cover costs at full implementation.²²

Colorado’s regulatory framework was developed through twenty-two months of public engagement by the 15-member Natural Medicine Advisory Board appointed by Governor Jared Polis. As of October 2024, pre-licensing interest surveys identified approximately 146 entrepreneurs interested in opening a healing center, 96 planning cultivation facilities, 66 interested in processing and manufacturing, and 11 interested in testing facilities.²³ The concentration of planned healing centers in standard clinical settings (64 standard centers) versus micro-healing centers (112) reflects the program’s explicit integration with existing mental health care infrastructure.

C. New Mexico: The Legislative-Medical Model

New Mexico enacted Senate Bill 219, the Medical Psilocybin Act, during the 2025 regular legislative session, passing the Senate 33–4 and the House 56–8 before Governor Michelle Lujan Grisham signed the bill into law on March 18, 2025.²⁴ The law took effect June 20, 2025, and requires full program implementation by December 31, 2027.²⁵

New Mexico’s framework represents a third distinct structural model: a clinician-administered medical program governed by the state Department of Health (DOH), restricting access to patients with qualifying medical conditions — specifically, major treatment-resistant depression, PTSD, substance use disorders, and end-of-life anxiety, with the DOH authorized to add additional conditions.²⁶ Unlike Oregon and Colorado, New Mexico requires a medical diagnosis and a clinician determination of medical appropriateness as conditions of access.²⁷ The bill was enacted through the legislature rather than the ballot initiative process — making New Mexico the first state to legalize psilocybin therapy through direct legislative action.²⁸

The Medical Psilocybin Act appropriated $1 million to the DOH for program development and $500,000 for ongoing research at the University of New Mexico.²⁹ A seven-member Medical Psilocybin Advisory Board was established and convened its inaugural meeting on December 5, 2025.³⁰ DOH officials announced an accelerated implementation timeline at the board’s first meeting, targeting launch ahead of the December 2027 statutory deadline.³¹ The advisory board’s composition reflects explicit attention to equity and cultural sensitivity, including an Indigenous advocate focused on ensuring the regulatory framework honors traditional healing methodologies.³²

D. The National Surge

As of early 2025, nearly thirty state legislatures were actively considering psychedelic-related bills.³³ The diversity of bill types reflects the full spectrum of policy approaches: pharmaceutical-trigger rescheduling bills (Iowa SSB 1177, West Virginia HB 3343) that authorize access only if FDA approval occurs; decriminalization bills removing criminal penalties for personal possession (Maine LD 1034, Massachusetts S 1113, Minnesota HF 2699, Vermont H 452); pilot program bills (Massachusetts HD 4509, Nevada AB 378); state-regulated system bills (New Jersey A 3852); and task force or working group bills (New Mexico HM 58).³⁴

Minnesota’s state-appointed Psychedelic Task Force released its report on January 1, 2025, recommending that legislators consider both decriminalizing psilocybin for personal use and establishing a state-funded regulated therapy program for patients with qualifying conditions.³⁵ Illinois Senate Bill 2184 and House Bill 1143 would allow a regulated market for professional psilocybin services without requiring a mental illness diagnosis, but both failed to advance before the legislature adjourned.³⁶ Arizona Senate Bill 1555 passed the Senate but was never scheduled for a House floor vote after being amended to cover only a pharmaceutical version of synthetic psilocybin contingent on FDA approval.³⁷

These legislative developments confirm that while Oregon, Colorado, and New Mexico are the only operational programs, the national trajectory is toward expanded state-level action, and the design choices embedded in the model framework proposed below will inform programs currently in legislative development.

II. CORE DESIGN QUESTION 1: AGENCY PLACEMENT AND STRUCTURAL INDEPENDENCE

A. The Three Existing Placements

Oregon placed psilocybin oversight within the Oregon Health Authority, a public health agency. Colorado divided oversight between DORA (a professional licensing and consumer protection agency) and the DOR’s Natural Medicine Division. New Mexico placed oversight within the Department of Health with advisory board support.

Each placement carries advantages and disadvantages. Placement within a public health agency (Oregon, New Mexico) signals that the program’s primary purpose is therapeutic access and safety, aligns psilocybin regulation with healthcare workforce standards, and positions the agency to draw on existing public health infrastructure. However, public health agencies typically have limited experience with commercial supply-chain regulation, testing accreditation, and anti-diversion enforcement.

Placement within a commercial licensing agency (Colorado’s DOR component) provides commercial regulatory expertise and established licensing infrastructure, but risks framing the program primarily as a market-access question rather than a health-services question, with corresponding effects on regulatory culture and enforcement priorities.

B. Model Framework Recommendation

The model framework recommends a dual-agency structure with a formal coordination mandate, modeled on Colorado’s split but refined to clarify jurisdictional boundaries. A primary health agency — whether an existing health department, a behavioral health authority, or a new dedicated agency — should hold jurisdiction over facilitator credentialing, service standards, informed consent, client protection, and adverse event reporting. A secondary licensing and supply-chain agency should hold jurisdiction over cultivation, manufacturing, testing, and logistics. Both agencies should be required by statute to adopt joint rules on matters of overlapping jurisdiction (such as product testing standards and labeling requirements) and to maintain a single public-facing licensing portal.

Critically, the model framework recommends against placing psilocybin regulatory authority within an agency whose primary constituency is commercial cannabis operators. The regulatory culture, enforcement philosophy, and stakeholder relationships appropriate for a high-volume consumer product market differ substantially from those required for a supervised therapeutic-access program.

III. CORE DESIGN QUESTION 2: LICENSE TYPOLOGY AND SUPPLY-CHAIN ARCHITECTURE

A. The Four-License Baseline

Both Oregon and Colorado establish four core license types, though with different labels: service center/healing center (the supervised administration venue); facilitator (the individual supervisor); manufacturer/cultivator (the supply source); and testing laboratory. New Mexico’s clinician-and-producer model maps imperfectly to this four-license architecture but retains the same functional components.

B. Additional License Types

Colorado’s framework explicitly creates additional sub-categories: micro-healing centers (allowing licensed mental health practitioners to offer psychedelic-assisted services within existing clinical practices without establishing a standalone healing center); distinguished educator licenses; training licenses; and endorsement pathways for facilitators licensed in other jurisdictions.³⁸ These granular categories allow the regulatory system to accommodate different business models and access pathways without forcing all providers into a single regulatory mold.

The model framework recommends that states authorize at minimum: a standard service center license; a micro or clinical-integration license for licensed healthcare practitioners adding psychedelic services to existing practices; a facilitator license; a clinical facilitator license for credentialed medical or mental health professionals; a cultivator/manufacturer license; and a testing laboratory license. An optional mobile or community-based service license — modeled on mobile health clinic frameworks in other states — should be considered to address the access disparities that result from fixed-site service centers concentrating in urban areas.

C. Location Requirements

Oregon’s prohibition on service centers within incorporated city or town limits and in exclusively residential zones has produced urban-rural access disparities and driven session prices upward by increasing the cost of compliant facilities.³⁹ The model framework recommends eliminating city-limit prohibitions in favor of specific setback requirements calibrated to sensitive uses, consistent with the location restriction frameworks used in analogous on-site supervised-consumption regulatory programs. Nevada’s cannabis consumption lounge framework, enacted through AB 341 (2021) and codified at NRS 678B.250, provides an instructive operational model: Nevada prohibits consumption lounges within 1,000 feet of any public or private school, within 300 feet of community facilities, and within 1,500 feet of establishments holding non-restricted gaming licenses — a setback-based system that operates without reference to municipal incorporation boundaries and has functioned without the urban concentration effect that Oregon’s city-limit prohibition produced.⁴⁰ A psilocybin service center location framework modeled on this setback architecture would permit siting in commercially and industrially zoned areas anywhere within a state’s geography, including rural areas, while still maintaining distance from sensitive uses such as schools and youth-serving facilities. Local opt-in/opt-out authority should be preserved, as in both the Oregon and Colorado frameworks, but local restrictions should be subject to proportionality review to prevent effective nullification of state program access.

IV. CORE DESIGN QUESTION 3: FACILITATOR QUALIFICATION AND TRAINING STANDARDS

A. Existing Standards

Oregon requires facilitators to complete a state-approved training program and comprehensive skills exam, pass a state licensing examination, and pass a criminal background check.⁴⁰ Oregon’s OAR 333-333-3050 establishes a minimum of 160 hours of required training content, including 120 hours of didactic instruction and 40 hours of in-person practicum supervised at a licensed service center; effective January 1, 2025, OHA added 8 additional hours of required instruction to approved training program curricula, and mandated 4 hours of annual continuing education as a condition of license renewal.⁴¹ Colorado’s DORA regulations require a different structure: 150 hours of program coursework, 40 hours of supervised practice with participants, and 40 hours of post-practicum consultation prior to full licensure — a total of 230 hours of structured preparation for a general facilitator license.⁴² The clinical facilitator track reduces the coursework burden for licensed medical and mental health professionals while adding psilocybin-specific competency requirements.

B. Core Competency Requirements

The model framework recommends that all facilitator training programs address, at minimum: psilocybin pharmacology and dose-response relationships; contraindications and medication interactions (including serotonergic agents, lithium, and antipsychotics); set and setting principles; preparation session methodology; administration session support techniques; integration session frameworks; adverse event recognition and response; trauma-informed care; cultural humility and sensitivity; ethics and professional conduct; and emergency medical response.

The model framework recommends a minimum training threshold of 150 hours of structured didactic and experiential instruction for general facilitators — consistent with Colorado’s enacted 150-hour coursework requirement and calibrated to the lower bound of the range across state-approved programs operating in both jurisdictions — plus a minimum of 40 hours of supervised practicum at a licensed facility before independent licensure. This 150-hour floor is not an arbitrary figure: it reflects the enacted minimum embedded in Colorado’s DORA regulations after a 22-month public rulemaking process by a 15-member advisory board with clinical and public health expertise, and aligns with the training structures of accredited programs approved in both Oregon and Colorado.⁴³ Clinical facilitators with existing licensed credentials in mental health, medicine, or nursing should be permitted to apply documented supervised clinical hours toward the practicum component, consistent with the endorsement pathways available in Colorado.

C. Track Assignment and Facilitator Screening Authority

The model framework’s two-tier access structure — a clinical track requiring a qualifying diagnosis and a general wellness track available without diagnosis — requires explicit administrative procedures for assigning clients to the appropriate track and for managing situations in which a contraindication is identified during screening.

Under the model framework, the responsibility for track assignment rests with the facilitator during the preparation session. Each licensed facilitator is required to administer a standardized contraindication screening protocol — approved by the primary health agency and updated as clinical evidence develops — before accepting a client into the general wellness track. The screening protocol must assess, at minimum: current use of serotonergic medications, lithium, antipsychotics, or MAOIs; personal or family history of psychotic disorders, bipolar disorder type I, or first-episode schizophrenia spectrum illness; active suicidal ideation with a plan; and cardiovascular conditions contraindicated by psilocybin’s acute hemodynamic effects.

Where the screening protocol identifies a contraindication or a condition requiring a higher level of care, the facilitator is authorized — and required — to decline to proceed with general wellness track services and to provide the client with a referral to a clinical facilitator or licensed healthcare provider for further assessment. Facilitators who are themselves operating under the general track license may not override a contraindication identified through screening by characterizing it as a wellness rather than clinical matter; the protocol’s findings are determinative of track assignment. Where a client disputes a track referral, the licensing agency should maintain an expedited administrative review process with a defined timeline. This track-assignment authority is a core component of the facilitator’s scope of practice and should be codified in the enabling statute rather than left to administrative rule, to provide legislative clarity on the facilitator’s gatekeeping function.

V. CORE DESIGN QUESTION 4: ACCESS CRITERIA, EQUITY, AND COST CONTAINMENT

A. The Diagnosis Requirement Debate

The most significant access-design divergence among existing programs is whether a qualifying medical diagnosis is required. Oregon and Colorado do not require any diagnosis — any adult 21 or older may access services for personal growth, mental health, or any other purpose.⁴⁴ New Mexico requires a clinician determination of medical appropriateness and a qualifying diagnosis.⁴⁵

The no-diagnosis model maximizes access but creates potential challenges for integration with health insurance coverage, Medicaid participation, and clinical research frameworks that require defined patient populations. The diagnosis-required model aligns psilocybin services with the medical infrastructure that could eventually support coverage, but restricts access to individuals who may benefit but whose conditions fall outside defined qualifying criteria.

The model framework recommends a two-tier access model: a clinical access track requiring a qualifying diagnosis and clinician referral, which is eligible for integration with future insurance or Medicaid coverage; and a general wellness access track available to any adult 21 or older without a diagnosis requirement, subject to an enhanced screening protocol administered by the facilitator to identify contraindications. This two-tier structure preserves broad access while creating a pathway to medical coverage integration. The administrative mechanics of track assignment and facilitator screening authority are addressed in Section IV.C above.

B. Sliding-Scale Fee Requirements and Equity Provisions

Colorado’s NMHA mandates that administrative rules, where financially feasible, minimize barriers to access for persons from communities disproportionately harmed by high rates of arrest for controlled substances, persons facing barriers to healthcare access, and persons with qualifying mental health conditions.⁴⁶ Oregon’s program, by contrast, has no statutory equity mandate beyond the general principle that services be available to adults 21 and older without a qualifying condition.

Oregon’s Q1 2025 demographic data — showing that a majority of clients who disclosed income earned more than $95,000 per year, against Oregon’s median household income of approximately $88,000 — illustrates the access equity problem that an equity mandate is designed to address.⁴⁷ At the same time, Oregon’s market conditions reveal a structural tension that any such mandate must confront directly: as of Q3 2025, twelve of thirty-five licensed service centers had closed since early 2024, driven in significant part by high operational costs — including $10,000 annual license fees, mandated security infrastructure, and storage requirements — combined with declining product prices and limited client volumes.⁴⁸ A mandatory sliding-scale requirement imposed on service centers already operating at or near the financial margin risks accelerating closures rather than expanding access, unless it is paired with structural revenue support that offsets the cost of subsidized sessions.

The model framework therefore recommends that states enact an equity mandate that is financially anchored from the outset. The mandate should require: (a) that a specified percentage — the model recommends 20 percent, scaling to 30 percent over five years as the equity access fund (described below) reaches operational scale — of service center operating sessions be offered at a sliding-scale fee not to exceed a defined ceiling calculated as a percentage of the client’s annual income; (b) that a dedicated equity access fund, capitalized from a minimum of 15 percent of annual licensing fee revenues and supplemented by any legislative equity appropriation, disburse per-session subsidies to service centers fulfilling the sliding-scale mandate, partially offsetting the revenue differential between market-rate and subsidized sessions; and (c) that the licensing agency conduct an annual financial viability assessment of the equity mandate, with authority to adjust the percentage requirement downward if the aggregate closure rate in the prior year exceeded a defined threshold, and to adjust it upward as program revenues increase. This calibrated structure acknowledges the financial realities of Oregon’s current market while creating a legally and fiscally anchored equity obligation that can strengthen as program scale improves.

VI. CORE DESIGN QUESTION 5: CLIENT PROTECTION AND INFORMED CONSENT

A. Existing Consent Frameworks

Measure 109 directed the OHA to issue a client information form to be completed and signed before any client receives psilocybin services.⁴⁹ New Mexico’s Medical Psilocybin Act requires preparation, administration, and integration sessions and contemplates clinician-administered consent as part of the medical services framework.⁵⁰ Colorado’s framework requires an initial consultation screening to assess whether a prospective participant needs a higher level of care than a general facilitator can provide — a gatekeeping function that screens out individuals whose medical complexity warrants clinical facilitator oversight.⁵¹

B. Model Consent Requirements

The model framework recommends statutory authorization of a comprehensive informed consent process that includes: written disclosure of known risks, benefits, and contraindications; disclosure of the facilitator’s training, credentials, and any relevant professional affiliations; explanation of the three-session structure and what each session involves; identification of emergency protocols; disclosure of data collection practices and confidentiality limitations; explanation of the right to withdraw consent at any time, including during an administration session; and specific consent for any audio or visual recording. Consent forms should be approved by the state health agency and made available in at least the languages represented by 5 percent or more of the state’s population.

Particular attention must be given to the power dynamics inherent in psilocybin administration sessions, which involve non-ordinary states of consciousness during which a client may be substantially vulnerable to influence. The model framework recommends that states enact explicit statutory prohibitions on sexual contact between facilitators and clients at any time, including during integration sessions, with mandatory license revocation as the minimum consequence, consistent with the sexual misconduct frameworks applicable in other therapeutic relationships.

VII. CORE DESIGN QUESTION 6: DATA COLLECTION AND OUTCOME MONITORING

A. Oregon’s Senate Bill 303 Mandate

Oregon’s SB 303, effective January 1, 2025, and codified at ORS 475A.372 and ORS 475A.374, creates the most comprehensive mandatory data collection framework of any state psilocybin program, requiring service centers to document client demographics (race, gender identity, sexual orientation, income level, county of residence), reasons for seeking services, and adverse reactions.⁵² The OHA published its first quarterly data report in mid-2025, revealing that from January through April 2025, 1,509 clients accessed psilocybin services, with most seeking treatment for depression, anxiety, PTSD, or personal growth and self-exploration.⁵³ This data infrastructure is a model that subsequent state programs should adopt from the outset rather than retrofitting years after launch.

B. Colorado’s Public Health Outcome Mandate

Colorado Senate Bill 297, signed by Governor Polis on June 3, 2025, requires the state to collect data on public health outcomes — including hospital discharge data related to psychedelics — with healing centers required to send information on sessions by July 1, 2026.⁵⁴ This outcome-measurement mandate connects psilocybin service data with the state’s broader healthcare data infrastructure, enabling epidemiological analysis of program effects on health system utilization.

C. Model Monitoring Requirements

The model framework recommends that states require mandatory reporting of: the number of administration sessions conducted per reporting period by license type, geographic area, and client demographic; all adverse events occurring during or within 72 hours of an administration session, with standardized severity classification; facilitator conduct complaints and disciplinary actions; and an annual report on program outcomes to be published by the licensing agency and transmitted to the legislature. The annual report should include analysis of equity access metrics against the statutory equity mandate and a recommendation from the licensing agency for any regulatory or statutory adjustments.

VIII. THE FEDERAL PREEMPTION PROBLEM

A. Schedule I Status and Its Operational Consequences

Psilocybin remains classified as a Schedule I controlled substance under the federal Controlled Substances Act, 21 U.S.C. § 812, Schedule I(d).⁵⁵ This classification has the same structural consequences for state psilocybin programs that it has for state cannabis programs: no access to federally insured banking, no deduction of ordinary business expenses under IRC § 280E, no federal trademark protection, and the continuous theoretical exposure to federal prosecution for all participants in the supply chain.⁵⁶

Section 280E of the Internal Revenue Code denies the deduction of ordinary and necessary business expenses to any trade or business that “consists of trafficking in controlled substances” within the meaning of the CSA.⁵⁷ Cannabis operators have been subject to § 280E’s effective tax rate increases — which can result in taxable income far exceeding actual profit — under a substantial body of Tax Court and circuit court doctrine applying the provision to retail cannabis businesses structured around product sales. Whether § 280E applies with equal force to psilocybin service center operators, whose revenue model is fundamentally different from product-based retail, is a distinct question that the existing doctrine does not clearly resolve: the service center’s revenue derives from session fees, not from the sale of a controlled substance as such, and the allocation between cost of goods sold (the psilocybin product) and deductible session-related ordinary expenses may be analyzed differently than in a dispensary context. This distinction is legally significant but unresolved; a full analysis of § 280E’s application to session-fee service businesses and the potential effect of rescheduling on that analysis is beyond the scope of this article and warrants dedicated treatment in the preemption analysis contained in Document 5 of this series.⁵⁸

Colorado’s legal analysis recognized the Schedule I structural constraints explicitly, noting that psilocybin businesses will face the same banking, insurance, and tax challenges as cannabis businesses, with the continuous threat of federal criminal prosecution and asset forfeiture.⁵⁹ New Mexico’s Medical Psilocybin Act specifically exempts FDA-approved products containing psilocybin from its coverage, preserving space for a dual regulatory track should the FDA approve a pharmaceutical psilocybin product.⁶⁰

B. Design Responses to Federal Conflict

The model framework recommends that state psilocybin statutes include: (a) a federal preemption monitoring clause requiring the licensing agency to assess, at least biennially, whether federal enforcement posture has changed in ways that require program modifications; (b) a banking access provision authorizing the state treasurer to designate state-chartered financial institutions as preferred vendors for psilocybin program participants, consistent with state-level SAFE Banking analogues developed in several cannabis jurisdictions; and (c) a federal law change contingency provision specifying how the program’s scope, fee structure, and clinical requirements would be modified in the event of DEA rescheduling or congressional descheduling.

IX. THE MODEL FRAMEWORK ARCHITECTURE: SECTION-BY-SECTION OVERVIEW

The following section describes the structural architecture of a model psilocybin regulatory statute. This section outlines the substantive content and design principles for each component; it describes a governance framework rather than supplying complete draft statutory language. Readers seeking model statutory text for specific provisions should consult legislative drafting resources produced by organizations with active state legislative engagement, including the Multidisciplinary Association for Psychedelic Studies (MAPS) policy team, the Drug Policy Alliance’s model legislation materials, and the state-specific bill text underlying Oregon ORS Chapter 475A, Colorado SB23-290, and New Mexico SB 219 as primary templates for drafting.

1. Purpose and Findings. The statute should include explicit legislative findings acknowledging both the therapeutic research supporting psilocybin-assisted services and the historical racial inequity in drug enforcement, establishing equity and safety as co-equal statutory purposes.

2. Dual-Agency Structure. A health agency holds jurisdiction over facilitator credentialing and client protection; a licensing or revenue agency holds jurisdiction over the commercial supply chain. Both agencies are required to adopt joint administrative rules on matters of overlapping jurisdiction within 180 days of enactment.

3. Six License Types. Standard service center; clinical integration (micro-healing center); facilitator; clinical facilitator; cultivator/manufacturer; testing laboratory. Optional: mobile or community-based service.

4. Two-Tier Access with Facilitator Screening Authority. A clinical track requiring qualifying diagnosis and clinician referral, and a general wellness track available to any adult without a diagnosis requirement, subject to a standardized facilitator-administered screening protocol. The statute should codify the facilitator’s authority and obligation to decline general wellness track services and provide clinical referral when the screening protocol identifies a disqualifying contraindication.

5. Location Framework Based on Setback Requirements. Service center location restrictions based on distance from sensitive uses — schools, youth-serving facilities, and other specified uses — rather than on municipal incorporation boundaries, consistent with the setback-based model demonstrated in Nevada’s cannabis consumption lounge regulatory framework. Local opt-in/opt-out authority preserved with proportionality review.

6. Training Standards. Minimum 150 hours of structured didactic and experiential instruction plus 40 hours of supervised practicum for general facilitators; credit for existing supervised clinical hours for clinical facilitators. Continuing education requirement calibrated to annual license renewal.

7. Equity Mandate with Financial Anchor. Statutory requirement for a sliding-scale session percentage, phased from 20 to 30 percent over five years; a dedicated equity access fund capitalized from a minimum of 15 percent of annual licensing revenues; an annual financial viability assessment with agency authority to adjust the percentage requirement based on market conditions.

8. Comprehensive Consent Framework. Statutory enumeration of required consent disclosures; explicit prohibition on sexual contact between facilitators and clients; mandatory adverse event reporting.

9. Data Collection and Annual Reporting. Mandatory demographic and outcome data collection beginning at program launch; quarterly adverse event reporting; annual legislative report with equity analysis and regulatory recommendations.

10. Federal Conflict Monitoring. Biennial federal preemption assessment; banking access provision; federal law change contingency clause; cross-reference to IRC § 280E analysis in Document 5.

11. Sunset and Review. A five-year program review with a mandatory legislative evaluation of equity outcomes, safety data, and fiscal sustainability, with a default continuation unless the legislature affirmatively acts to modify or terminate the program.

ENDNOTES

1. Psychedelic Alpha, March 2025’s Psychedelic Policy Momentum: New Bills Filed Across the U.S. as Nearly 30 States Deliberate Reforms (Apr. 9, 2025), https://psychedelicalpha.com/news/march-2025s-psychedelic-policy-momentum-new-bills-filed-across-the-u-s-as-nearly-30-states-deliberate-reforms.
2. Psychedelic Alpha, Oregon Psilocybin Services Tracker: Q1 2025 (Oct. 10, 2025), https://psychedelicalpha.com/news/oregon-psilocybin-services-tracker-q1-2025 (session costs ranging from $1,000 to $5,000; multi-day intensive packages reaching $15,000); see also Willamette Week, Oregon’s Psychedelic Service Centers Are Closing Amid High Costs and Tough Regulation (June 3, 2025), https://www.wweek.com/news/2025/06/03/oregons-psychedelic-service-centers-are-closing-amid-high-costs-and-tough-regulation/ (noting typical session costs of $1,000 to $3,000).
3. Ballotpedia, Oregon Measure 109, Psilocybin Mushroom Services Program Initiative (2020), https://ballotpedia.org/Oregon_Measure_109,Psilocybin_Mushroom_Services_Program_Initiative(2020) (56% approval; directed OHA to license and regulate psilocybin products and services); Oregon Health Authority, Oregon Psilocybin Services, https://www.oregon.gov/oha/PH/PREVENTIONWELLNESS/Pages/Oregon-Psilocybin-Services.aspx (describing OPS’s mandate under ORS 475A).
4. Or. Rev. Stat. § 475A et seq.; Oregon Health Authority, Oregon Psilocybin Services — Development Period (2021–2022), https://www.oregon.gov/oha/ph/preventionwellness/pages/psilocybin-development-period.aspx (describing OPS section within OHA and OPAB advisory role).
5. Oregon Health Authority, Oregon Psilocybin Services, supra note 3 (OPS began accepting applications January 2, 2023, for four license types: service center, facilitator, manufacturer, and testing laboratory).
6. OregonPsychedelics.org, Oregon Psychedelics Information Portal, https://oregonpsychedelics.org/ (noting approximately 31 licensed service centers, 356 licensed facilitators, and approximately 10,000 clients as of early 2025).
7. Oregon Health Authority, Oregon Psilocybin Services Publishes Interactive Data Dashboard (press release, June 2025), https://www.oregon.gov/oha/erd/pages/oregon-psilocybin-services-publishes-interactive-data-dashboard.aspx (1,509 clients received services between January and April 2025; six experiencing adverse reactions); Oregon Health Authority, Oregon Psilocybin Services Data Dashboard, https://www.oregon.gov/oha/ph/preventionwellness/pages/psilocybin-data-dashboard.aspx (primary data source for Q1 2025 figures, codified under ORS 475A.372 and ORS 475A.374).
8. Oregon Health Authority, Oregon Psilocybin Services, supra note 3 (mandatory preparation, administration, and integration sessions; licensed manufacturer and ORELAP-accredited laboratory requirements); Or. Rev. Stat. § 475A et seq.
9. Ballotpedia, Oregon Measure 109, supra note 3 (authorized OHA not to require any particular medical condition for access; any adult 21 or older may seek services).
10. Oregon Health Authority, Manufacturer License Fact Sheet, https://www.oregon.gov/oha/PH/PREVENTIONWELLNESS/Documents/Manufacturer-License-Fact-Sheet.pdf (annual license fee of $10,000 for manufacturers); Catalyst BC, Oregon Psilocybin Facilitator License Essential Guide, https://catalyst-bc.com/oregon-psilocybin-facilitator-license-essential-guide/ (annual facilitator fee of $2,000); Psychedelic Alpha, Oregon Psilocybin Services Tracker: Q1 2025, supra note 2 (training programs ranging from $4,500 to $12,000); Southeast Examiner, Psilocybin Growing Licenses Issued (Apr. 28, 2023), https://www.southeastexaminer.com/2023/04/psilocybin-growing-licenses-issued/ (confirming $10,000 annual fee for manufacturers, laboratories, and service centers; $2,000 for facilitators; training costs up to $12,000).
11. Ballotpedia, Oregon Measure 109, supra note 3 (service centers prohibited within incorporated city or town limits or in areas zoned exclusively for residential use); Reason, New Ruling Moves Oregon Closer to Legal In-Home Psilocybin Use (June 4, 2025), https://reason.com/2025/06/04/new-ruling-moves-oregon-closer-to-legal-in-home-psilocybin-use/ (describing location restrictions and their effect on access).
12. Willamette Week, supra note 2 (no legislative funding for 2025–27; OHA indicating licensing fees may rise to sustain program).
13. Oregon Health Authority, Oregon Psilocybin Services — Senate Bill 303 and Data Collection Information, https://www.oregon.gov/oha/ph/preventionwellness/pages/psilocybin-sb303-and-data-collection.aspx (SB 303 mandating collection of demographic data and adverse reactions beginning January 1, 2025; codified at ORS 475A.372 and ORS 475A.374).
14. Ballotpedia, Colorado Proposition 122, Decriminalization and Regulated Access Program for Certain Psychedelic Plants and Fungi Initiative (2022), https://ballotpedia.org/Colorado_Proposition_122,Decriminalization_and_Regulated_Access_Program_for_Certain_Psychedelic_Plants_and_Fungi_Initiative(2022) (certified results: 53.64% approval, 1,296,992 votes in favor).
15. Vicente LLP, The Ultimate Guide to Colorado’s Natural Medicine Health Act (SB23-290) (updated Aug. 2025), https://vicentellp.com/insights/ultimate-guide-to-sb23290-colorado-natural-medicine-psychedelics-regulation-and-legalization-bill/ (DORA oversees facilitator credentialing and practice standards; DOR Natural Medicine Division regulates commercial supply chain); Colorado General Assembly, SB23-290 Natural Medicine Regulation and Legalization, https://leg.colorado.gov/bills/sb23-290 (enacted May 23, 2023).
16. Ballotpedia, Colorado Proposition 122, supra note 14 (licensed centers limited to psilocybin and psilocyn until June 2026; Natural Medicine Advisory Board may add DMT, ibogaine, and mescaline beginning June 1, 2026).
17. Snell & Wilmer, Colorado’s Magic Mushroom Industry Has Officially Arrived (Oct. 31, 2025), https://www.swlaw.com/publication/colorados-magic-mushroom-industry-has-officially-arrived/ (Natural Medicine Advisory Board voted September 18, 2025 to recommend including ibogaine in the framework).
18. Colorado Sun, Colorado Prepares Rollout of Psychedelic-Assisted Therapies in 2025 (Nov. 19, 2024), https://coloradosun.com/2024/11/19/colorado-psychedelic-assisted-therapies/ (describing clinical facilitator and general facilitator tracks; 150-hour training; 40 hours supervised practice; 40 hours consultation).
19. Zuber Lawler, 5 Takeaways from Colorado’s Proposition 122, https://zuberlawler.com/5-takeaways-from-colorados-proposition-122-the-natural-medicine-health-act/ (NMHA directs DORA to establish rules for administration at “another location” beyond licensed healing centers, potentially including private residences).
20. Vicente LLP, Ultimate Guide to SB23-290, supra note 15 (DORA began accepting license applications December 31, 2024; 60-day processing requirement).
21. Snell & Wilmer, supra note 17 (first state-regulated psilocybin session conducted in Denver on June 6, 2025).
22. Colorado Blue Book, Proposition 122: Access to Natural Psychedelic Substances 5 (2022), https://content.leg.colorado.gov/sites/default/files/images/2021-2022_58vbb.pdf (DOR estimated program operating costs of approximately $5.2 million in 2024–25 and $5.6 million in 2025–26).
23. Colorado Sun, supra note 18 (pre-licensing survey: 146 interested in healing centers; 96 in cultivation; 66 in manufacturing; 11 in testing; 64 standard centers versus 112 micro-healing centers).
24. Vicente LLP, Psychedelic Policy Reform in New Mexico: Governor Signs Medical Psilocybin Act (Apr. 30, 2025), https://vicentellp.com/insights/psychedelic-policy-new-mexico-medical-psilocybin-act/ (Senate 33–4; House 56–8); New Mexico Legislature, SB 219 (2025), https://www.nmlegis.gov/Sessions/25%20Regular/bills/senate/SB0219.HTML (signed by Governor March 18, 2025, Chapter 73); FastDemocracy, Bill Tracking: NM SB 219, https://fastdemocracy.com/bill-search/nm/2025/bills/NMB00011242/ (confirming March 18, 2025 signing date, Chapter 73).
25. New Mexico Department of Health, Medical Psilocybin Program, https://www.nmhealth.org/about/mcpp/mpp/ (law effective June 20, 2025; full implementation required by December 31, 2027).
26. N.M. S.B. 219, 57th Legislature, 1st Session (2025), § 3(I), https://www.nmlegis.gov/Sessions/25%20Regular/bills/senate/SB0219.HTML (qualifying conditions: major treatment-resistant depression, PTSD, substance use disorders, end-of-life care; DOH authorized to add conditions).
27. Vicente LLP, Psychedelic Policy Reform in New Mexico, supra note 24 (New Mexico requires medical diagnosis and clinician determination of medical appropriateness as conditions of access).
28. Psychedelic Alpha, BREAKING: New Mexico Passes Nation’s First Legislature-Driven Psilocybin Access Act (Apr. 8, 2025), https://psychedelicalpha.com/news/breaking-new-mexico-passes-nations-first-legislature-driven-psilocybin-access-act (New Mexico first state to legalize psilocybin therapy through direct legislative action, not ballot initiative).
29. End of Life Options New Mexico, Medical Psilocybin Act Signed into Law!, https://endoflifeoptionsnm.org/medical-psilocybin-act-signed-into-law/ (legislature appropriated $1 million to DOH; $500,000 to University of New Mexico for research).
30. Filter, New Mexico to Accelerate Launch of Therapeutic Psilocybin Access (Dec. 11, 2025), https://filtermag.org/new-mexico-accelerate-psilocybin-access/ (seven-member Medical Psilocybin Advisory Board inaugural meeting December 5, 2025).
31. Source New Mexico, New Mexico Health Officials Aim to Kick Off Medical Psilocybin Program a Year Early (Dec. 8, 2025), https://sourcenm.com/2025/12/08/new-mexico-health-officials-plan-to-kick-off-medical-psilocybin-program-a-year-early/ (DOH officials announcing accelerated implementation timeline).
32. Filter, supra note 30 (advisory board composition includes an Indigenous advocate focused on ensuring framework honors traditional healing methodologies).
33. Psychedelic Alpha, March 2025’s Psychedelic Policy Momentum, supra note 1.
34. Id. (citing Iowa SSB 1177, West Virginia HB 3343, Maine LD 1034, Massachusetts S 1113, Minnesota HF 2699, Vermont H 452, Massachusetts HD 4509, Nevada AB 378, New Jersey A 3852, New Mexico HM 58).
35. Psychedelic Alpha, 2025’s Psychedelic Policy Surge: A State-by-State, Bill-by-Bill Analysis (Jan. 31, 2025), https://psychedelicalpha.com/news/2025s-psychedelic-policy-surge-a-state-by-state-bill-by-bill-analysis (Minnesota Psychedelic Task Force report released January 1, 2025; recommending decriminalization and state-funded therapy program for patients with qualifying conditions).
36. Reason Foundation, State Psychedelics Legalization and Policy Roundup — June 2025 (updated Nov. 20, 2025), https://reason.org/commentary/state-psychedelics-legalization-and-policy-roundup-june-2025/ (Illinois SB 2184 and HB 1143 failed to advance before legislature adjourned).
37. Id. (Arizona SB 1555 passed Senate but received no House floor vote; amended to cover only pharmaceutical psilocybin contingent on FDA approval).
38. Vicente LLP, Ultimate Guide to SB23-290, supra note 15 (describing micro-healing center license, distinguished educator license, training license, and endorsement pathway for out-of-state facilitators).
39. Reason, New Ruling Moves Oregon Closer to Legal In-Home Psilocybin Use, supra note 11 (OHA cited city-limit and residential-zone prohibitions as barriers to access; Cusker et al. v. OHA challenging program’s exclusion of homebound disabled clients).
40. Nevada Cannabis Compliance Board, Cannabis Consumption Lounge Study (2021), https://ccb.nv.gov/wp-content/uploads/2021/08/CCB-Cannabis-Consumption-Lounge-Study.pdf (recommending prohibition of lounges within 1,000 feet of public or private schools, 300 feet of community facilities, and 1,500 feet of non-restricted gaming licensees under NRS 678B.250); Nev. Rev. Stat. § 678B.250(3)(a)(2)(II) (statutory authority for setback requirements for cannabis consumption lounges); Nevada Legislature, AB 341 (2021) (authorizing CCB to license and regulate cannabis consumption lounges), https://ccb.nv.gov/faq/ (confirming AB 341 enacted in 81st Session as statutory basis for consumption lounge licensing).
41. Oregon Health Authority, Oregon Psilocybin Services — Training Program Information, https://www.oregon.gov/oha/PH/PREVENTIONWELLNESS/Pages/Psilocybin-Training-Program-Approval.aspx; Or. Admin. R. 333-333-3050 (core curriculum requirements; minimum training hours); Emerge Law Group, Oregon Psilocybin Services Rule Changes: Effective January 1, 2025 (Dec. 16, 2024), https://emergelawgroup.com/blog/oregon-psilocybin-services-rule-changes-effective-january-1-2025/ (January 1, 2025 rule changes added 8 hours of required instruction to facilitator training programs and established 4-hour annual continuing education requirement under OAR 333-333-3300); Oregon Training in Psychedelics, https://psychedelicscourses.com/oregon-training (describing OHA minimum of 160 hours, including 120 hours online coursework and 40 hours in-person practicum, as threshold for approved training programs).
42. Colorado Sun, supra note 18 (general facilitator training under DORA regulations: 150 hours coursework, 40 hours supervised practice with participants, 40 hours consultation prior to full licensure); Colorado Dept. of Regulatory Agencies, Natural Medicine Rules, https://dpo.colorado.gov/NaturalMedicine; Elemental Psychedelics, Psilocybin Mushroom Facilitator Training, https://www.elementalpsychedelics.com/mushroomtraining (DORA-approved program: 150 educational hours meeting Colorado training program learning objectives, plus 40 hours supervised practicum, plus 40 hours consultation required before full licensure).
43. Colorado Sun, supra note 18 (22-month regulatory development process by 15-member Natural Medicine Advisory Board); University of Colorado Denver, Education and Training in Psychedelic Science and Facilitation, https://clas.ucdenver.edu/psychedelic-research/education-and-training-psychedelic-science-and-facilitation (DORA-approved program offering 160 hours); UC Berkeley Center for the Science of Psychedelics, Psychedelic Facilitation Certificate Program, https://psychedelics.berkeley.edu/facilitation-certificate-program/ (200-hour professional preparation program, including 160 instructional hours); CIIS, Certificate in Psychedelic-Assisted Therapies & Research, https://www.ciis.edu/research-centers-and-initiatives/center-for-psychedelic-therapies-and-research/about-the-certificate (OHA-approved program, Oregon subcohort including 40 hours in-person instruction).
44. Ballotpedia, Oregon Measure 109, supra note 3; Vicente LLP, Ultimate Guide to SB23-290, supra note 15 (neither Oregon nor Colorado requires a qualifying diagnosis for access).
45. N.M. S.B. 219, supra note 26, § 3(I) (requiring clinician determination of medical appropriateness and qualifying diagnosis).
46. Colorado Lawyer, Colorado’s Bold Move to Legalize Psychedelics (July 2, 2024), https://cl.cobar.org/features/colorados-bold-move-to-legalize-psychedelics/ (NMHA mandates that rules, where financially feasible, minimize barriers for communities disproportionately harmed by drug enforcement, persons facing healthcare barriers, and persons with qualifying mental health conditions).
47. OPB, Oregon Psilocybin Therapy Clients Tend to Be Wealthier, New Data Suggests (July 3, 2025), https://www.opb.org/article/2025/07/03/oregon-new-date-shows-psilocybin-therapy-clients-wealthier/ (majority of clients disclosing income earned more than $95,000 per year; majority over age 45); Psychedelic Alpha, The Oregon Psilocybin Services Tracker (updated through Q3 2025), https://psychedelicalpha.com/data/the-oregon-psilocybin-services-tracker (Oregon median household income approximately $88,000).
48. Psychedelic Alpha, The Oregon Psilocybin Services Tracker, supra note 47 (only 23 of 35 licensed service centers operational in Q3 2025; 12 closures since early 2024; key factors including $10,000 annual license fee, mandated security infrastructure, storage protocols, and declining product prices); Willamette Week, supra note 2.
49. Ballotpedia, Oregon Measure 109, supra note 3 (OHA required to issue client information form completed and signed before services).
50. N.M. S.B. 219, supra note 26, § 3(D) (medical psilocybin services include preparation, administration, and integration sessions).
51. Colorado Sun, supra note 18 (initial consultation screening required; general facilitators may only work with participants screened as not needing a higher level of care; persons taking antipsychotic medications must see a clinical facilitator).
52. Oregon Health Authority, Oregon Psilocybin Services — Senate Bill 303 and Data Collection Information, supra note 13 (SB 303 mandating demographic data collection and adverse reaction reporting beginning January 1, 2025; codified at ORS 475A.372 and ORS 475A.374).
53. Oregon Health Authority, Oregon Psilocybin Services Publishes Interactive Data Dashboard, supra note 7 (1,509 clients served January–April 2025; most sought services for depression, anxiety, PTSD, or personal growth and self-exploration).
54. Reason Foundation, State Psychedelics Legalization and Policy Roundup, supra note 36 (Colorado SB 297, signed June 3, 2025; healing centers required to send session data to state by July 1, 2026).
55. 21 U.S.C. § 812, Schedule I(d) (psilocybin and psilocin classified as Schedule I hallucinogenic controlled substances).
56. Zuber Lawler, 5 Takeaways from Colorado’s Proposition 122, supra note 19 (noting banking, insurance, tax, and federal prosecution exposure for psilocybin businesses; IRC § 280E and federal trademark problems apply, identical to cannabis).
57. 26 U.S.C. § 280E (“No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.”).
58. The § 280E question for session-fee service businesses has not been addressed in published IRS guidance or Tax Court decisions as of the date of this article. The core analytical issue is whether a psilocybin service center’s revenue — derived from facilitation session fees rather than from the sale of a controlled substance as such — constitutes “trafficking in controlled substances” within the meaning of § 280E, and how the cost-of-goods-sold versus ordinary-and-necessary expense allocation differs from the dispensary model addressed in existing Tax Court doctrine. See, e.g., Patients Mut. Assistance Collective Corp. v. Comm’r, 151 T.C. 176 (2018) (applying § 280E to cannabis dispensary; distinguishing deductible cost of goods sold from non-deductible ordinary business expenses). A practitioner advising a psilocybin service center operator should analyze whether the session fee is properly characterized as a service fee (with the psilocybin product component representing a de minimis or ancillary input) or as a product sale with service components, and whether rescheduling to Schedule II would remove the § 280E bar entirely for compliant operators. This analysis is beyond the scope of this article and warrants dedicated treatment.
59. Colorado Lawyer, supra note 46 (noting that products approved by FDA for medical use containing psilocybin would be placed in Schedules II–V, but absent FDA approval all remain Schedule I; psilocybin businesses face same banking and taxation challenges as cannabis businesses).
60. N.M. S.B. 219, supra note 26, § 4 (FDA-approved products exempt from Medical Psilocybin Act; such products may be used in research at state universities).