California Dreamin’: Golden State Poised to Lift Ban on Psychedelics

California is the world’s largest marijuana market. If the state were a sovereign country, it would rank in terms of gross domestic product as the world’s fifth-largest economy. So when the state latches onto a trend, it influences the entire nation, if not the planet.

California was ground zero for the psychedelics movement of the 1960s. Today, the Golden State is again in the vanguard of psychedelic drugs, but this time in terms of decriminalizing, regulating, and mainstreaming these substances.

Already the legislatures in Oregon and Colorado have decriminalized psychedelics. And lawmakers in several other states are considering the same. If you’re looking for an area that’s an alternative and nascent growth investment, you’ve found it.

Governor Gavin Newsom (D) in 2023 vetoed a psychedelics decriminalization bill, arguing that more study needed to be done. This year, he has come around.

Newsom, influenced by recently published peer-reviewed scientific research and compelling personal stories, has embraced psychedelic medicine. He now calls it a promising frontier in the treatment of various mental health conditions such as depression, post-traumatic stress disorder (PTSD), traumatic brain injury, and addictive tendencies.

Advocating for California to take a leading role in this emerging field, Newsom earlier this year urged the legislature to promptly establish regulated treatment protocols inclusive of dosing guidelines, therapeutic standards, safeguards against exploitation during guided sessions, and medical assessments to ensure the absence of underlying psychoses.

Responding swiftly to Newsom’s call, Republican Assemblymember Marie Waldron, representing a traditionally conservative constituency in San Diego, and Democratic State Senator Scott Wiener jointly introduced SB 1012. Filed in February and currently wending its way through various committees, this legislation aims to authorize adults aged 21 and above to undergo supervised therapy involving psychedelics.

By combining scientific evidence, bipartisan collaboration, and public endorsement, SB1012 signals a progressive step towards integrating psychedelic medicine into mainstream therapeutic practices, underpinned by rigorous oversight and public education efforts. Let’s look at the details.

Understanding SB1012

SB1012, also known as the Psychedelics Decriminalization Act, seeks to remove criminal penalties for the possession, use, and cultivation of certain psychedelics for individuals over the age of 21.

The bill specifically targets substances such as psilocybin (found in “magic mushrooms”), LSD, MDMA, DMT, and mescaline. By decriminalizing these psychedelics, the legislation aims to shift the focus from punishment to public health and harm reduction.

Advocates of SB1012 argue that the criminalization of psychedelics has failed to curb their use while disproportionately impacting marginalized communities. Instead, they propose a more compassionate and evidence-based approach, drawing on the growing body of research highlighting the therapeutic potential of these substances. Psychedelic-assisted therapy is gaining recognition as a legitimate form of treatment.

While the bill decriminalizes psychedelics, it also establishes a regulatory framework for their production, distribution, and sale. This framework includes licensing requirements, quality control standards, and consumer safety measures.

SB1012 promotes access to psychedelic-assisted therapy by allowing licensed therapists to administer these substances in a clinical setting. This provision aims to ensure that individuals can safely explore the therapeutic potential of psychedelics under the guidance of trained professionals.

The bill also allocates funding for public education campaigns to raise awareness about the risks and benefits of psychedelics. This includes efforts to destigmatize psychedelic use and provide accurate information to the public.

By legalizing psychedelics, SB1012 opens the door to innovative treatment options for individuals struggling with mental health disorders. Psychedelic-assisted therapy has shown promising results in clinical trials, offering new hope for those who have not responded to traditional treatments.

Decriminalizing psychedelics can help mitigate the harms associated with the illegal drug trade, such as violence, contamination, and adulteration. Regulating their production and distribution ensures that consumers have access to safe and standardized products, reducing the risk of accidental overdose or adverse reactions.

SB1012 addresses the racial disparities inherent in drug enforcement policies. Communities of color have historically been disproportionately impacted by drug arrests and convictions, perpetuating cycles of poverty and incarceration. By shifting away from punitive measures, the bill takes a step towards reforming the criminal justice system and promoting equity.

SB1012 is expected to pass in 2024 and eventually become law. Public support is strong.

WATCH THIS VIDEO: This Is Your Brain on Money

The UC Berkeley Center for the Science of Psychedelics recently released the first of what will be a long-term tracking poll of public attitudes towards psychedelic medicine and treatment. As the researchers explain, “more than six out of ten (61%) American registered voters support legalizing regulated therapeutic access to psychedelics, including 35% who report ‘strong’ support.”

The following chart tells the story:

According to a recent report by the Business Research Company, the global psychedelics market will reach $8.3 billion in 2027, for a compound annual growth rate between 2024 and 2027 of 14.4%.

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John Persinos is the editorial director of Investing Daily.

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