Psychedelics as a Service: Oregon Update
Hello, and Welcome to The Trip Report for Friday, March 27th, 2020.
Today we’re going to look at Oregon’s Psilocybin Services Initiative in a little more depth. The proposed act is 71 pages long, and you can find it here, but if brevity is your thing, I have extracted the most relevant information from a business perspective.
This is on the heels of an update meeting PSI organizers hosted this week.
I hope you find it helpful.
Oregon’s Psilocybin Services Initiative
A few weeks ago, organizers announced they had surpassed 100,000 signatures of the required 112,000.
Then the lousy trip we all know as COVID-19 set in.
However, organizers, Tom and Sheri Eckert, and Campaign manager Sam Chapman held a Zoom call this week to give volunteers, supporters, and donors an update.
As of Wednesday, they collected 127,730 signatures.
However, these are not yet fully verified. It is common to have non-voters inadvertently sign such petitions. Given the topic, they may have high numbers of invalid petitions.
So they’re going for 145,000 signatures.
But they can’t go the typical route of canvassers accosting people in the streets because there are no people in the streets.
So they’re going digital.
The campaign website has a page that voters can enter their name and address and download a printable petition which can be mailed in.
They will be ramping up advertising, social media campaigns, and soon-to-be-announced help from Dr. Bronners.
If I were a betting man, I would say that they’re going to get the required number of signatures
Then the real work will begin—voters will have a chance to weigh in come November.
With would-be entrepreneurs, clinic operators, and therapists in mind, I wrote up a short overview that will answer some questions.
Hopefully, you can make use of this to understand the landscape and prepare appropriately.
Psilocybin Services Basics
I read through the ballot initiative this week, here are the basics.
The PSI proposes a legal framework for the manufacturing/cultivation, sale, and administration of psilocybin services (therapy, guided trips) in designated “psilocybin services centers.”
Retail sales are not part of this initiative
SECTION 57… A client may purchase, possess, and consume a psilocybin product:
- (1) Only at a psilocybin service center; and
- (2) Only under the supervision of a psilocybin service facilitator.
This is not a decriminalization or de-escalation measure. Personal possession, cultivation, or distribution are not subject to this initiative and would continue to be illegal at the state and federal level. (IP 44 is a simultaneous campaign in Oregon that seeks to decriminalize all drugs in the state. They are only 8,000 signatures shy of their goal.)
If passed, the first step would be the creation of an advisory board that would be responsible for completing the legal framework by 12/31/2022.
Manufacturers, service center operators, facilitators, and product testers will be able to apply for licenses by 1/2/2023.
We’ll start by looking at the licenses that will be available and what each entails.
On or before January 2, 2023, the Oregon Health Authority shall begin receiving applications for
the licensing of persons to:
(1) Manufacture psilocybin products;
(2) Operate a psilocybin service center;
(3) Facilitate psilocybin services; and
(4) Test psilocybin products.
An individual may not have a financial interest in more than one psilocybin product manufacturer; or more than five psilocybin service center operators.
This limitation on manufacturing ownership may give some investors and entrepreneurs pause since this is the most scalable aspect of the psychedelic supply chain.
While you can only have a stake in a single manufacturing license, the provision allows for vertical integration whereby owners can have a manufacturing license and a service center license.
50% of the ownership of companies applying for a license must be in the name of someone who has been an Oregon resident fr at least two years.
I imagine many of the companies forming right now, especially those that come from the cannabis sector, are looking at this route.
Creating pharmaceutical IP, running clinical trials, and bringing a drug to market is a wholly different beast than what is proposed with the PSI.
The PSI framework would allow for the cultivation, processing, and delivery of natural products more amenable to less sophisticated organizations. (I don’t mean that in the pejorative, simply that researching and manufacturing pharmaceuticals is a different ballgame.)
In addition to applying for a license from the state, the advisory board will decide how many products or processes they will allow a manufacturer to produce. So each manufacturer will need to apply to manufacture/process each of the allowable activities:
(1) The Oregon Health Authority shall adopt rules that designate different types of manufacturing activities. A psilocybin product manufacturer may only engage in a type of manufacturing activity if the psilocybin product manufacturer has received an endorsement from the authority for that type of manufacturing activity…
(4) A psilocybin product manufacturer licensee may hold multiple endorsements.
Service Center Operator License
The PSI eschews a consumer/retail model for Psychedelics as a Service.
Service Centers are the points of sale, place of administration, facilitation, and integration.
Again, this bill does not permit products to be consumed at home or in nature but at sanctioned service centers.
The specifications laid out so far are not that descriptive.
Centers simply need to be at least 1000 feet from schools, and the state may demand that for centers that have multiple licenses that they segregate into separate areas.
Applicants for Service Center licenses must be at least 21, no felonies, and other restrictions. The Advisory board is tasked with establishing more concrete regulations and processes.
License to facilitate psilocybin services
The advisory board will approve some form of training and examination. But there is language that indicates facilitators may not need to be licensed professionals like a psychotherapist, social worker, etc.
(3) The authority may not require a psilocybin service facilitator to have a degree from a university, college, post-secondary institution, or other institution of higher education.
While one might be able to become a facilitator without professional licensure, the advisory board will create a framework that applicants will need to adhere to:
The Oregon Health Authority shall:
(1) Determine the qualifications, training, education and fitness of applicants for licenses to facilitate psilocybin services, giving particular consideration to:
(a) Facilitation skills that are affirming, non-judgmental, and non-directive;
(1) The Oregon Health Authority shall adopt by rule minimum standards of education and training requirements for psilocybin service facilitators.
(2) The authority shall approve courses for psilocybin service facilitators. To obtain approval of a course, the provider of a course must submit an outline of instruction to the office and the Department of Education
Product Testing License
The stipulations of what required clinical infrastructure and requirements for labs conducting testing are unclear. However,
(6) The testing of psilocybin products as required by this section must be conducted by a laboratory licensed by the authority under section 97 of this 2020 Act and accredited by the authority under section 100 of this 2020 Act.
Section 97 simply lists many of the aspects the advisory board will have to establish.
However, product testing would include
Solvents or residual solvents
And testing could be required in various ways, at the manufacturing facility for all batches, randomly, upon arrival at service centers, etc. It is unclear.
Packaging, Labeling, and Dosage
Proposed labeling includes:
Health and safety warnings
If applicable, activation time
If applicable, serving size and the number of servings included in a psilocybin product
Content of the psilocybin product;
Tax: 15% at retail point of sale
The below mentions a 15% tax on psilocybin products, but it is unclear how the services (therapy, trip sitting) will be taxed.
- (1) A tax is hereby imposed upon the retail sale of psilocybin products in this state. The tax imposed by this section is a direct tax on the client, for which payment upon retail sale is required. The tax shall be collected at the point of sale of a psilocybin product by a psilocybin service center operator at the time at which the retail sale occurs.
- (2) The tax imposed under this section shall be imposed at the rate of 15 percent of the retail sales price of psilocybin products
You can summarize the PSI as an attempt to create a framework for a natural product in conjunction with therapy. One that complements the forthcoming wave of health-system-based psychedelic medicine. A framework that does not seek to create a consumer market but also does not seek to declassify or decriminalize personal possession.
My personal opinion is that if states, provinces, jurisdictions, etc. can adopt a decriminalization effort AND something like the PSI, that is the optimal way to go. If you disagree, I would love to hear from you.
That’s all for this week. Stay safe, wash your hands, and see you on Monday.
Thanks for reading,