The Winding Road to Psychedelics Legalization
The legalization of psychedelics in the U.S. is a long and winding road, accomplished state by state. At the end of that road is a big pot of investment gold.
According to the Journal of the American Medical Association, there are more than 50 publicly traded companies related to the development or administration of psychedelic drugs in the U.S., with at least three valued at more than $1 billion. The U.S. market for psychedelic substances is projected to grow from $2 billion in 2020 to $10.75 billion by 2027.
But it’s not just America. On February 3, Australian public health regulators announced that drug treatments containing the psychedelic substances psilocybin and MDMA can soon be used “Down Under” to treat post-traumatic stress disorder (PTSD) and treatment-resistant depression. That decision makes Australia the first country in the world to officially recognize the therapeutic benefits of psychedelics.
Federal legalization of psychedelics doesn’t seem feasible in the U.S. anytime soon, given the sharp divisions on Capitol Hill, but the states aren’t waiting for Congress.
In the November 2022 midterms, Colorado and Oregon voters passed initiatives in their states to decriminalize the use of psychedelics such as psilocybin, the psychoactive ingredient in magic mushrooms. Other states are eager to follow suit.
As restrictions get lifted, investors are rushing in. Here’s my latest roundup of the most promising pieces of legislation, from coast to coast.
California. Senator Scott Wiener (D) has reintroduced his bill to decriminalize possession of psilocybin and certain other psychedelic medicines. California would become the third state after Oregon and Colorado to remove criminal penalties for possession. Wiener’s bill passed the Senate last year.
Connecticut. The state House Judiciary Committee is considering legislation that would decriminalize possession of psilocybin. The bill proposes that people found in possession of up to one-half ounce of psychedelic mushrooms would face a civil penalty of $150 for a first offense. For each subsequent offense, the fine would be between $200-$500.
Illinois. A bill introduced by Sen. Rachel Ventura (D) would compel the state’s Department of Financial and Professional Regulation to “authorize the distribution of, and make publicly available, psilocybin for medical, psychological, and scientific studies, research, and other information.”
Iowa. Rep. Jeff Shipley (R) recently filed a bill to remove psilocybin from the state’s list of controlled substances, effectively legalizing the psychotropic substance.
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Maine. The Psilocybin Services Act passed the state Senate last year with bi-partisan support, but ultimately stalled in the House. The bill’s sponsor, Senator Donna Bailey (D), has vowed to reintroduce the bill this session.
The act establishes a regulatory framework to provide psilocybin products to medical clients in Maine. Advocates of the bill are confident that the decisive victories of psychedelics initiatives at the ballot box in Colorado and Oregon in November have changed several minds in the Maine House.
Massachusetts. Sen. Patricia Jehlen (D) and Rep. Lindsay Sabadosa (D) recently introduced legislation that would legalize several types of psychedelic drugs for adults 18 and older, including psilocybin, dimethyltryptamine, ibogaine, and mescaline.
Missouri. The legislature is considering a bill that would allow patients access to a psychedelic treatment (e.g.psilocybin, MDMA, and ketamine) if the U.S. Food and Drug Administration designates that treatment as a “breakthrough” therapy. The patient also must have a qualifying diagnosis.
New Jersey. Senate President Nicholas Scutari (D), a former criminal prosecutor, introduced a bill that is similar to the Oregon model, i.e. regulated access to psilocybin treatment. Scutari successfully championed recreational marijuana in the legislature. He also sponsored a previous bill, reducing criminal penalties for possession of up to an ounce of psilocybin, which Gov. Phil Murphy (D) signed into law in 2021.
New Mexico. Rep. Christine Trujillo (D) has filed a bill to establish an eight-member “psilocybin advisory group” appointed by the governor that would be responsible for studying and making recommendations on the “feasibility” of creating a psilocybin therapy program in the state for patients with mental health conditions that have been unresponsive to conventional treatments.
New York. Pending in the state assembly is legislation to establish a psilocybin Assisted Therapy (PAT) grant program to “provide veterans, first responders, retired first responders, and low-income individuals with the funding necessary to receive psilocybin and/or MDMA assisted therapy.”
Vermont. Rep. Joseph Troiano (D) introduced legislation that would lift criminal penalties for possessing, dispensing or selling psilocybin, while establishing a new “Psychedelic Therapy Advisory Working Group” to study the therapeutic potential of psychedelic drugs.
Washington. The “Psilocybin Services Wellness and Opportunity Act” was filed in January by Sen. Jesse Salomon (D), with 20 cosponsors. It seeks to legalize and regulate psilocybin for adults 21 and older (see the following tweet):
Psychedelics will get integrated into the medical mainstream, sooner than you think. The time for investors to act is now, before this psychotropic revolution becomes the status quo.
Indeed, we could be facing a “break out” year for marijuana and the ancillary industry of psychedelics. New legal markets equal new profits, and higher share prices, for well-positioned companies. That’s why I’ve launched an investment service called Marijuana Profit Alert.
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John Persinos is the editorial director of Investing Daily.
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