Oregon Health Authority Draft Rules for Psilocybin Services Program
September 9, 2022 | Psychedelics Law Updates
Partner Jeff Zuber, Counsel Raza Lawrence, Associate Lizzie Fanckboner, and Associate Terron East.
The Oregon Health Authority released the long-awaited draft rules for its Psilocybin Services Program on September 1st. The draft rules lay out a proposed framework for the first commercial psilocybin licensing program in the nation, and are an exciting step toward the legitimization of the American psychedelics industry. We expect that, as Oregon rolls out its psilocybin licensing program, other states will follow Oregon’s lead, and we will soon see various forms of psychedelic licensing throughout the country.
Oregon’s draft rules cover everything from applicant requirements, financial interest disclosures, advertising restrictions, licensed premises requirements, testing, packaging, and labeling requirements, security requirements, and much more. The rules include numerous details about the expected application requirements and process, providing a useful road map for anyone interested in entering the industry to begin crucial preparation before the state starts accepting applications on January 2, 2023. The draft rules provide that applicants must submit, among other things, a social equity plan, a safety plan, proof that people holding over 50% equity in the business are Oregon residents, disclosure of all financial interest holders, information for criminal background checks, a diagram of the proposed premises, and a statement signed by the property owner. The draft rules also require a land use compatibility statement from the local government having jurisdiction over the proposed premises, and lay out various other location restrictions, including the requirement that licensed premises may not be within 1,000 feet of a school.
It is important to highlight that these are the draft rules and are not the final adopted rules that will eventually govern the program. That said, they still help give an idea of what the final adopted rules will look like. People interested in applying for the licensing can use the draft rules as a guide to start thinking about how they will build their team and comply with the laws, including ownership rules, location restrictions, and social equity requirements.
In the coming months, before the final rules are adopted, there are several important dates to keep in mind.
September: Three Rules Advisory Committees (“RAC”) will discuss proposed rules around (1) packaging, labeling and product transportation, (2) licensing, facilities, and operations, and (3) facilitator conduct, preparation, administration, and integration sessions. The RACs will each meet several times throughout the month.
October: The Oregon Psilocybin Services department, along with the Oregon Secretary of State’s Office of Small Business Assistance will be hosting a Fall Business Forum on October 19th. Also, the Oregon Psilocybin Advisory Board will meet at the end of the month.
November: Updated rules will be released and a new period of public comment will be open until November 21st. Also, watch for the results of the November 8th elections, where we will see which cities and counties will prohibit psilocybin businesses within their borders. All local jurisdictions were automatically opted-in under Measure 109, unless local voters decide otherwise by voting on a ballot measure to opt-out during a statewide election.
December: There will be another meeting of the Oregon Psilocybin Advisory Board on December 9th and the deadline for the adoption of the final rules is December 30th.
We will be keeping abreast of the developments during this final stretch of the development period. Our law firm is a national leader in the emerging psychedelics industry, and we look forward to working closely with applicants to help them navigate the requirements of the Oregon program and build their businesses. Please contact us for more information and to get a jump start on joining this exciting program!
The manufacture, distribution, sale, purchase, acquisition, administration, use, or possession of psilocybin, which is listed in Schedule 1 of the Controlled Substances Act (CSA), is unlawful under federal law. Even though such activity will be permitted in limited circumstances under Oregon’s new psilocybin licensing system, federal law trumps any conflicting state law under the Supremacy Clause to the United States Constitution, and we are obligated to inform you that participation in Oregon’s psilocybin licensing program will constitute a violation of federal law subject to federal criminal prosecution. Legal ethics opinions in numerous jurisdictions have established that attorneys may advise clients on compliance with state commercial cannabis licensing laws, even though cannabis, like psilocybin, is a Schedule 1 substance banned under federal law, as long as attorneys advise clients of the federal illegality, and do not take steps to help clients conceal legal violations. Based upon these authorities, we have concluded that it is ethical and appropriate to advise clients on compliance with Oregon’s psilocybin licensing program if we inform clients of the relevant federal laws and do not take any steps to assist in concealing illegal conduct. We encourage you to contact us to discuss the implications of federal illegality and how this may affect your business activity.