Colorado moves to implement legal 'magic mushroom' industry

Colorado lawmakers on Tuesday took another step towards rolling out the state's legal psychedelics industry with the advancement of Senate Bill 290. 

If made law, the bill would help to implement Proposition 122, passed by Colorado voters in November. The ballot measure legalized the “magic mushroom” hallucinogenic compounds psilocybin and psilocin for medicinal use, and decriminalized the personal use, sharing or growing of the compounds and other "natural medicines." 

The Senate passed SB 290 on Tuesday, sending it to the House for further consideration. It will also need approval from the governor to take effect. 

"I'm excited that Colorado is in the forefront of making sure that we provide a safe and responsible manner for people to access these medicines," said bill sponsor Sen. Steve Fenberg, D-Boulder. "Whether you supported (Prop 122) or not, it's on us to make sure it's successful. ... This is something that most states have not ventured to do. It's important that we get it right." 

The passage of Prop 122 made Colorado the second state in the country to legalize and regulate the market for mushrooms, following Oregon in 2020. 

Under the ballot measure, Coloradans 21 years or older can access mushrooms at state licensed healing centers, under rules to be promulgated by the state Department of Regulatory Agencies. SB 290 seeks to move the regulatory authority of the healing centers to the Department of Revenue, which oversees marijuana. 

The bill would also limit the size of home grow operations to a 12-foot-by-12-foot area, and make it a petty drug offense to openly and publicly consume the substances, or to possess or use them at all if under 21 years old.

The most controversial provision of the bill prohibits local governments from banning the mushroom healing centers or from enacting more restrictive regulations and penalties. This doubles down on the same restrictions included in Prop 122, which were denounced by elected officials on both sides of the aisle as violating local control. 

"Not every county voted for mushrooms in their community," said Sen. Barbara Kirkmeyer, R-Brighton, while speaking against SB 290 on the Senate floor. "Local elected officials need to have some ability, more ability than what's in this bill, to mitigate negative impacts and to ensure the safety, health and wellbeing of their community." 

Kirkmeyer proposed two amendments to the bill that would have allow cities and counties to ban or severely restrict the healing centers. Both amendments were rejected by senators. 

Proponents for allowing local control of healing centers pointed out that Prop 122 passed in a narrow margin, receiving 53.6% approval from voters. Most voters in rural counties rejected the ballot measure.

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"I understand that this ballot measure did not pass in every county, but there are a lot of statewide ballot measures that do and don't pass in some counties," Fenberg said in response. "If it's a state law, it's a state law. We still have to all follow it. That's how it works." 

Ultimately, the Senate passed SB 290 in a 25-10 vote. The vote was mostly along party lines, with all Democrats and two Republicans supporting the bill. 

Sen. Kevin Van Winkle, one of the only two Republicans to vote "yes" on the bill, spoke of the medicinal uses for mushrooms, specifically for veterans. Psychedelic therapies can be used to treat mental health issues, such as depression, anxiety, addiction and post-traumatic stress disorder. 

In 2018 and 2019, the Food and Drug Administration granted psilocybin status as a “breakthrough therapy,” accelerating the development and review of using the drug to treat major depressive disorder. New York University researchers also have seen promising results when looking at the effects of using psilocybin to treat alcohol addiction.

Van Winkle, R-Highlands Ranch, also pointed out that many of the issues opponents have with SB 290 were really criticisms of Prop 122, which was already passed by voters. 

"I just want to take the body back to the bigger picture, which is that these things were legalized by the voters in November of last year," Van Winkle said. "SB 290 is trying to put some guardrails on that so it's just not the complete Wild West of the first state to have natural medicine legalized with no rules whatsoever."

Senators amended SB 290 to clarify that unlicensed practitioners can receive compensation for providing services related to natural medicine, though they cannot sell the substances. Another amendment updated the criminal component of the bill to require that offenders knowingly committed the criminal acts and to only apply to offenses committed on or after July 1. These changes addressed concerns frequently raised during public hearings on the bill. 

Fenberg said he expects lawmakers will need to make more adjustments to the bill and to the state's new psychedelics industry, but they have time to figure things out. 

Licenses for the healing centers won't be issued until 2025, as SB 290 pushed the deadline for regulators to begin accepting licensure applications to Dec. 31, 2024 — Prop 122 had set the deadline at Sept. 30, 2024. This means lawmakers have another full legislative session to continue working on any needed bills. 

"I fully expect that this won't be the last bill on natural medicine," Fenberg said. "We likely will have a bill next year based on a lot of the work that is going to happen on the regulated side over the next several months." 

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