State psychedelics legalization and policy roundup — July 2024

This post is part of an ongoing series summarizing state-based psychedelic reforms intended for policy professional professionals.

Legislative sessions have concluded for the year in most states, but significant action regarding the legalization of psychedelics continues.

Perhaps the most impactful among these is in Massachusetts, where voters will decide this November on Question 4, a ballot initiative that will both legalize the personal possession of some botanical psychedelics and create a regulated professional services market. Proponents collected enough signatures over the summer to qualify the initiative for the ballot. Reason Foundation provided an overview of the context surrounding this initiative in May.

In Colorado, the agencies charged with designing regulations to govern the market for professional psychedelic therapies that voters approved in 2022 have concluded the public hearing process and will soon publish the final rules. Reason Foundation has submitted written comments on the draft rules to assist in improving the final framework.

In Arizona, the Gov. Katie Hobbs has vetoed a regulated access bill, Senate Bill 1570, sponsored by state Sen. T.J. Shope (R-District 8). At a recent panel hosted by the Reason Foundation at the American Legislative Exchange Council (ALEC), Shope promised to press forward again with a version of his proposal in the next legislative session.

However, Hobbs did sign a different bill from state Sen. David Gowan (R-District 14) that allows Arizona police and firefighters to receive workers’ compensation coverage for MDMA treatment of post-traumatic stress disorder (PTSD) in the event MDMA receives pharmaceutical approval from the Food and Drug Administration (FDA). This legislation could significantly impact the economics behind the psychedelic pharmaceutical market by demonstrating initial demand.

Although psychedelic-assisted therapies may be cost effective in the long-run because they may allow many individuals to fully resolve certain mental illnesses, the up-front costs of treatment are substantial because the medication is supplemented with intensive therapy (clinical trials combine MDMA with a novel psychotherapy protocol). These labor costs can escalate overall treatment costs into the tens of thousands of dollars per patient. The American Psychological Association estimates that existing (non-psychedelic) PTSD treatments for military veterans average $25,684 annually despite low success rates of resolving symptoms. For civilians, that figure is $18,640. Yet, manufacturers need to demonstrate a market for their products. Arizona legislation signals that demand may be emerging.

In California, Gov. Gavin Newsom signed into law Assembly Bill 2841, which was sponsored by Assemblymember Marie Waldron (R-Escondido). The bill exempts the Research Advisory Panel of California (RAPC) from the state’s open meetings law that mandates members of the public be allowed to attend. California requires drug researchers to pursue additional approval from this advisory panel to conduct studies using Schedule 1 substances.

The new law does not directly reference any psychedelics but instead grants a blanket exemption from the open meetings law for RAPC.

Some psychedelics advocates believe that state-mandated public disclosure has a chilling effect on researchers’ ability to discuss proprietary information, such as trade secrets. In an investigation of the issue, anonymous sources told the trade industry blog Psychedelic Alpha that the advisory panel had abruptly canceled meetings to approve psychedelic research without providing a detailed explanation. Whatever the reason, it has prevented study sponsors from getting the green light.

As one advocacy group noted, “The panel has been unable to meet since 2023 due to a legal interpretation that prevented it meeting in closed session.”

While the law might benefit psychedelic researchers, the legislation could shield other items of public interest that RAPC discusses from public view.

In New Jersey, Senate Bill 2283, sponsored by Senate President Nicholas Scutari (D-District 22), has been changed significantly. The previous version included rules to legalize the personal possession and home cultivation of psilocybin while also authorizing professional psilocybin-assisted therapies in a regulated marketplace. The current, changed version has removed individuals’ proposed rights to legal possession or home cultivation so that consumers could only procure psilocybin through regulated therapy—like Oregon’s psilocybin marketplace.

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