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2023 was a momentous year for psychedelics, and it’s not just because we at Budding Trends started writing about them. There were wins for the psychedelic industry at the local, state, and federal levels, as well as in the private sector, particularly for proponents of their potential medicinal and therapeutic uses.

The Food and Drug Administration issued its first-ever guidance providing considerations for those developing psychedelic drugs for the treatment of medical conditions. The guidance describes basic considerations for the drug development process, including trial conduct, data collection, subject safety and drug application requirements. When publishing the guidance the FDA said that,“[p]sychedelic drugs show initial promise as potential treatments for mood, anxiety and substance use disorders… By publishing this draft guidance, the FDA hopes to outline the challenges inherent in designing psychedelic drug development programs and provide information on how to address these challenges. The goal is to help researchers design studies that will yield interpretable results that will be capable of supporting future drug applications.”

In December, President Joe Biden signed into law the 2024 National Defense Authorization Act (NDAA) directing the Department of Defense to begin clinical trials exploring the therapeutic potential of certain psychedelics for active-duty military service members. Obtaining federal funding for research with the support of bipartisan lawmakers is a positive indication of what may be to come.   

The House Veterans Affairs Subcommittee on Health held a hearing in November that focused on how psychedelics – including psilocybin and MDMA – can aid therapy for veterans facing mental health challenges. This was the first-ever congressional hearing on psychedelics. In her opening remarks, Rep. Marianette Miller-Meeks, a Republican congresswoman for Iowa and chair of the Subcommittee, said “psychedelic-assisted therapy is a groundbreaking clinical procedure that has the potential to transform the way we look at mental health care.” Rep. Julia Brownley, a Democratic congresswoman for California and the panel’s ranking member, made similar statements, saying “we are at the brink of a new era in which [psychedelics]—once stigmatize [sic] and misunderstood-are being examined for their potential to address mental health and addiction challenges.”

Federal courts weighed in as well. The Ninth Circuit kept alive a physician’s petition to reschedule psilocybin from Schedule I to Schedule II.

Momentum also continued at the state and local levels. Oregon opened its “first-of-its-kind legal market” for psilocybin, more widely known as magic mushrooms. The first licensed center opened in Eugene, Oregon, in June and at least 16 more service centers have opened since that time. It’s been reported that hundreds of people have used psilocybin legally in Oregon during that time. Hawaii’s Office of Wellness and Resilience announced the establishment of the Breakthrough Therapies Task Force, aimed at expanding therapeutic access to MDMT and psilocybin. In Colorado, Gov. Jared Polis signed a bill in May to “create a regulatory framework for legal psychedelics” under an initiative approved by voters in 2022. More specifically, the bill sets up regulations for the legalization law that focuses largely on regulations for using psychedelics in licensed healing centers under the guidance of facilitators. There’s been movement in other states as well, including in Arizona, Connecticut, Illinois, Iowa, Missouri, Massachusetts, Minnesota, Nevada, New Hampshire, New Mexico, New York, North Carolina, Oklahoma, Texas, Vermont, and Wisconsin.  

The local jurisdictions of Eureka, California, Ferndale, Minnesota, Jefferson County, Washington, Portland, Maine, and Provincetown, Massachusetts all enacted psychedelic decriminalization laws this year.

It’s not just government that’s interested in psychedelics. We are seeing one of the first opportunities to legalize MDMA as a prescribed medicine. In December, the MAPS Public Benefit Corporation submitted a new drug application (NDA) to the Food and Drug Administration for the use of MDMA-assisted therapy for post-traumatic stress disorder. If the NDA is approved, the DEA would then need to reschedule MDMA accordingly. If that happens, MDMA would be the first true psychedelic to obtain FDA approval.  Some sources say FDA approval could be obtained in late 2024.  

And the MAPS Public Benefit Corporation isn’t the only group that pushed forward with research, believing that psychedelics hold significant therapeutic potential. The American Medical Association published the results of a clinical trial this year that “suggest efficacy and safety” of psilocybin-assisted psychotherapy for treatment of bipolar II disorder.” A separate study by the same group “showed that people with major depression experience clinically significant sustained reduction in their symptoms after just one dose.”  Researchers from Johns Hopkins, Ohio State University and Unlimited Findings likewise published the results of a study that they say demonstrates “persisting reductions” in depression, anxiety, and alcohol misuse, as well as “increases in emotional regulation, spiritual wellbeing and extraversion” with the use of psilocybin. This is just a sampling of the many studies that published research this year.

It’s not all roses for industry advocates though. While proponents of the industry were excited about the bill passed by the California legislature to decriminalize possession of “naturally occurring psychedelics,” Gov. Gavin Newsom vetoed the bill in October. And there are certainly other detractors.  As The New York Times reported, the American Psychiatric Association urged caution, saying that treatments should be limited to research studies for the time being. The DEA is trying again to ban two psychedelics — 2,5-dimethoxy-4-iodoamphetamine (DOI) and 2,5-dimethoxy-4-chloroamphetamine (DOC). The next trip around the sun will certainly encounter similar roadblocks.

Public opinion continues to be in favor of the use of psychedelic therapy for therapeutic and medicinal uses, though. And the mental health crisis facing our country is not going anywhere. As reported by USA Today, “[n]early 50,000 people died by suicide in 2022 and 5.8 million emergency department visits were linked to mental, behavioral, and neurodevelopmental disorders in 2021.” While the data for 2023 has not been released, we doubt there will be much of a change. And we do know there is not enough funding or programming in place to combat the growing crisis. In the face of this landscape, we expect the momentum in favor of the psychedelic industry to continue – particularly as it relates to the push to use psychedelics for medicinal uses. We also think the industry will continue to see decriminalization at the local level and more widespread access in states that led the charge on cannabis, such as Colorado and California. 

2023 has been somewhat of a “renaissance” for psychedelics – it’s been one “that’s increasingly being shaped under a bipartisan framework, with Republicans frequently leading on the issue in Congress and state legislatures across the country.” Last year was a good one for supporters of psychedelics, and we predict 2024 will be a good trip for the industry, too.

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We told you it may be coming, though we were admittedly cynical about the ability to pass a bill funding psychedelic research given the current political landscape — a narrowly controlled Democratic Senate that is generally considered more conservative than the House and on the eve of an election year. But, it happened. Just before Christmas, President Joe Biden signed into law the 2024 National Defense Authorization Act to the tune of $886 billion. The NDAA passed through Congress with strong bipartisan support.

You may have read that the NDAA left out certain parts of the act that some in Congress claimed addressed “divisive social issues.” And it certainly left out certain provisions the cannabis industry would have liked to have seen included — including a separate section to create a medical cannabis pilot program for veterans. What you may not have realized, though, is what the NDAA did include, such as funding for psychedelic treatment studies for members of the U.S. military with post-traumatic stress disorder or traumatic brain injuries. 

Admittedly, the psychedelic component of the NDAA is small. But it shouldn’t be discounted. The law requires that the Department of Defense establish a process under which military service members with PTSD or traumatic brain injuries can participate in clinical trials involving psychedelics, including psilocybin and MDMA, as well as any “qualified plant-based alternative therapies.” The 2024 NDAA devotes $10 million to these efforts, which is certainly not an insignificant sum. DOD is also allowed to partner with eligible state or federal agencies and academic institutions to carry out the clinical trials. This could significantly expand the scope of the contemplated studies.

Under the new law, DOD is on a time clock. DOD must facilitate the process within 180 days of enactment. There are also reporting requirements. The secretary of defense is required to provide a report within one year of enactment with information about the trial’s participation and findings, and the secretary must continue to report every subsequent year for three years.

The entire act — including those provisions related to psychedelics — had strong bipartisan support. The bill related to psychedelics was added to the legislation by Texas Republican Morgan Lutrell, a member of the House Armed Services Committee and the NDAA Conference Committee, but co-sponsored by progressive Democrats Ro Khanna of California and Alexandria Ocasio-Cortez of New York. For proponents of the psychedelic industry, a compromise between a Texas Republican and AOC could be seen as a positive step forward for future legislation — at least as it relates to funding research. We think that the country’s continued focus on and concern for mental health will pave the way for even more research for psychedelics.   

Finally, we’d be remiss not to point out what the bill’s passage does not mean. This doesn’t mean that psychedelics will be readily available to veterans, let alone the general public any time soon. Nor does it mean that psychedelics will be legalized. But it does show support for broadening what we know about the medical capabilities of psychedelics.   Stay tuned to this space in the coming days for our recap of 2023 in psychedelics and some predictions about the year ahead.

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As we’ve discussed, the federal government seems to be getting on board with the legal use of psychedelics. So are many states. While states across the country are moving towards expanding legal (or at least decriminalized) access to psychedelics, we doubt it will come as any surprise to those experienced in the cannabis industry that states in the West seem to be leading the charge.  

Prime Time: Colorado and Oregon Lead the Charge

Colorado and Oregon have already legalized the use of certain psychedelics. Oregon was the first state to implement a legal system to obtain and use psilocybin. Oregon Psilocybin Services began accepting applications for licensure (manufacturing, laboratory, service centers, and facilitators) on January 2, 2023, and, according to its latest report, it had issued licenses to six service centers with expectations to issue “many more licenses over the coming months.” Once again at the forefront of legalization, Colorado voters passed a ballot measure – Proposition 122 – that would allow professionals to offer certain psychedelics starting in 2025.

California Dreamin’

California apparently does not intend to get left behind. Earlier this month, the California Legislature narrowly approved a bill to decriminalize the possession of a limited set of “naturally occurring psychedelics,” including psilocybin, DMT, and mescaline (excluding peyote). To be clear, the bill does not fully legalize the use of psychedelics. Instead, it means that police could not arrest people who are in possession of or use certain psychedelics. As we’ve seen with the federal government, the growing belief that psychedelics could help combat the growing mental health crisis seems to be an important motivation behind passing the legislation. To that end, the new bill will also trigger a regulatory process to craft policy proposals for group therapeutic use of psychedelics. Gov. Gavin Newsome has until October 14 to approve or veto the bill. If approved, it would go into effect January 1, 2025.

Hawaii to Research Allowing a Little Aloha

Demonstrating the wide breadth of approaches we can expect to see, Hawaii is taking another path, albeit with a similar goal to California. Hawaii’s Office of Wellness and Resilience recently announced the establishment of the Breakthrough Therapies Task Force, “which aims to assist [Hawaii] in expanding therapeutic access to two key substances: MDMT… and psilocybin.” The task force will address questions relating to supply, licensing for guides and integration coaches, administrative needs, safety, access, and affordability of care. The task force – which is comprised of local physicians, psychiatrists, mental health professionals, and government partners – met for the first time on August 29. Indicating his support for and the basis behind the initiative, the governor’s office specifically referenced the long history of the use of psychedelic plants by indigenous cultures, as well as the research that “has shown that both psilocybin and MDMT have significant and unprecedented efficacy in the clinical treatment of post-traumatic stress disorder (PTSD), addiction, end-of-life anxiety in terminal patients, eating disorders, treatment resistant depression, and more.” The task force will complete a final report by the end of 2023. We’re looking forward to seeing what they have to say.

What’s Next?

The moves by California and Hawaii deepen our beliefs that we are going to continue to see movement towards providing the American public with access to psychedelics for mental health purposes. And it looks like that’s what voters want. UC Berkeley’s psychedelics survey recently confirmed that “[t]he majority of voters are comfortable with psychedelic therapy being used to treat those suffering from terminal illnesses (80%), veterans (69%), and people suffering from treatment resistant depression and anxiety (67%),” though fewer (44%) are comfortable with “the open access to psychedelic therapy for a anyone over the age of 21.” Nearly half of those surveyed would support open access to psychedelic therapy.

A journey of a thousand miles begins with a single step, and the developments in these states represent important first steps. We have miles to go before we sleep, but if this budding trend continues, that sleep may be a little bit better in the future.

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Just as we did, the Food and Drug Administration has recognized the growing enthusiasm for exploring opportunities to use psychedelic medications to treat mental health disorders. In June, FDA issued for the first time draft guidance providing considerations for those developing psychedelic drugs for the treatment of medical conditions. The guidance explicitly focuses on “classic psychedelics,” which are “typically understood” as “5-HT2 agonists” like psilocybin and LSD, as well as entactogens or empathogens like MDMA. Has this put a wedge between psychedelics and cannabis?

The Nuts and Bolts of Psychedelic Research

In the guidance, FDA focuses on the “unusual characteristics” of psychedelic drugs – including the hypotheses that psychedelic drugs have “both rapid-onset and long-term benefits after only one or a few doses,” as well as the recognition that the development of psychedelic drugs in this manner is new and developing. The guidance addresses chemistry, manufacturing, and controls; nonclinical research; clinical pharmacology; and abuse potential.    

  • Chemistry, Manufacturing, and Controls: FDA makes clear that sponsors must provide sufficient chemistry, manufacturing, and controls information to ensure proper identification, quality, purity, and strength of the investigational drug substance and drug product. If plant material, algae, macroscopic fungi, or some combination is used, FDA refers readers to its Botanical Drug Development guidance.
  • Nonclinical: While FDA recommends that nonclinical programs for psychedelic drugs should follow recommendations outlined in the guidance Nonclinical Safety Studies for the Conduct of Human Clinical Trials and Marketing Authorization for Pharmaceuticals, FDA also recognizes that there are unique considerations for psychedelics.
    • Recognizing that prior clinical studies may provide sufficient information about the lack of safety concerns with human exposure, it may be reasonable for clinical studies with certain psychedelics to be initiated under an IND. FDA clarifies, however, that psychedelics without an adequate history of clinical exposure should not be tested in humans until the safety has been established in nonclinical studies, which should be used to support further development of the use of psychedelic drugs.  If the treatment effect is not durable and repeat dosing is expected, nonclinical studies should be provided to support chronic or chronic-intermittent dosing.  The particular treatment paradigm will dictate the number and types of nonclinical studies needed to support approval.
  • Clinical Pharmacology: FDA also addresses clinical programs, highlighting the importance of considering the unique properties of psychedelics and their clinical aspects. These aspects include, for instance, the effect of a high-fat meal on the pharmacokinetics of an oral psychedelic drug, drug-drug and drug-disease interactions, long-term exposure to 5-HT2B agonists, and known pharmacodynamic interactions. Additionally, FDA suggests that sponsors take appropriate steps to characterize the dose-response relationship.
  • Clinical: FDA suggests that just like other drugs, the substantial evidence standard applies to psychedelics. But it does highlight the following unique considerations that it recognizes may present challenges and offers some suggestions:
    • The use of a traditional placebo may be difficult for assessing adequacy for psychedelics. Functional unblinding may be inevitable given the “intense perceptual disturbances that can develop.”
    • Blinded researchers and questionnaires should be considered.
    • Complementary trial designs should be considered – including for example “a trial using a low, middle, and high dose without a placebo” with a “placebo-controlled trial.”
    • Particularly unique in this arena is the fact that “[m]any of the psychedelic drug development programs involve administering the investigational drug and then engaging in a psychological support or psychotherapy.”  This additional variable complicates the assessment of effectiveness and presents a challenge for future labeling.
    • Subjects receiving active treatment with psychedelics may remain in a vulnerable state for as long as 12 hours; accordingly, safety-monitoring should be implemented and FDA endeavors to provide additional guidance on this subject.
    • Clear, informed consent should be utilized.
    • Sponsors should address mitigation of adverse events or serious risks during the clinical studies.
  • Abuse Potential Assessment: According to FDA, because psychedelics act on the central nervous system and produce psychoactive effects, abuse potential should be evaluated during drug development. FDA also highlights that activities associated with investigations under an ID for Schedule I controlled substances must comply with applicable DEA regulations.

The Implications of the Draft Guidance on the Cannabis Industry

We previously asked whether the advancement of the psychedelic industry was a zero-sum proposition vis-à-vis the cannabis industry or whether we would see a rising tide phenomenon for both of the new therapies. FDA’s draft guidance on psychedelic research raises that question anew.

In January of this year, FDA issued final guidance for clinical research for the development of human drugs containing cannabis or cannabis-derived compounds. When we compare the two, the draft psychedelic guidance seems to further the perception – right or wrong – that the research on the medical benefits of psychedelics has been more clinical in nature. While the psychedelic guidance focuses largely on parameters for clinical studies, the cannabis guidance focuses much more extensively on sourcing the cannabis. Some sources have attributed the difference in perception to the fact that psychedelics have been shown in some initial studies to have clinical benefits, while cannabis became mainstream largely through legislation as opposed to clinical studies. 

There are certainly positive takeaways for the cannabis industry though. A review of the psychedelics guidelines highlights a concern with respect to psychedelics that we have not seen as much with cannabis – the purported “high potential” for abuse with psychedelics. Additionally, we think much of this guidance could help sponsors and researchers looking for new ways to use cannabis medically (see Medical Marijuana Research Act; Medical Marijuana and Cannabidiol Research Expansion Act; VA Medicinal Cannabis Research Act of 2023). 

We’re bobbing on the surface, and time will tell whether the federal government advances psychedelics or cannabis more quickly as a therapeutic. We continue to think the psychedelic industry has the momentum, but it also faces new challenges that are all too familiar to the cannabis industry. We could have come so very far, but we suspect little will be accomplished in an election year. But stay tuned as we follow the progress of these novel therapies and the government’s acceptance of them, which we believe is a matter of when, not if.

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Avid readers know we have speculated that the legalization of psychedelics as a prescription medicine was “closer than ever.” Unfortunately, for proponents of the legalization of psychedelics like MDMA, progress is rarely a straight line.

As we previously reported, Lykos Therapeutics Inc. sponsored a new drug application for MDMA therapy. That application proposed a new protocol for the treatment of PTSD that combined the dosing of MDMA with multiple sessions of psychotherapy.  In support of its efforts, Lykos cites the backdrop of the “PTSD crisis” and the limited options for effective treatment.

There were reasons to be positive about Lykos’ application. As reported by Yahoo Finance:

Per the results of its phase 3 clinical trials published in the highly influential Nature Medicine Journal, Lykos’ approach helped patients to report fewer symptoms and thereby score lower on a few structured questionnaires that are designed to assess the severity of different aspects of PTSD. The cohort of the study that received only a placebo and psychological support did not experience anywhere near as many positive changes. Safety signals were as expected and as described in earlier-stage trials, with most side effects being mild and transient in nature. 

In other words, on the basis of the data Lykos published, its therapy looks like tis more than merely promising. It’s nearly as close to being proven as a candidate can get before it gets approved for sale by the FDA.

Earlier this month, however, on June 4, the Food and Drug Administration Psychopharmacologic Drugs Advisory Committee voted against the approval of MDMA-assisted therapy for the treatment of PTSD. The Advisory Committee concluded by a 9-2 vote that the data available did not show the proposed drug treatment was effective for patients with PTSD. The nine committee members voting against the drug application criticized the study for having expectation and selection biases, lack of diversity in the sample set, and potential result manipulation. In a 10-1 vote, the Advisory Committee also said there were too many gaps in the data to be able to determine that the benefit of MDMA outweighed the potential risk of using it in treatment, voting no on that question.

Dr. Walter Dunn, assistant clinical director at UCLA’s Department of Psychiatry, cast the lone “yes” vote on the question of whether the benefits of MDMA outweighed the potential risk of using it in treatment. He stated:

As has been stated before, we are in dire need of new treatments for PTSD… This has the potential to make a difference. Now, that’s not without its risks. But as I like to tell all my trainees, there’s no room for free lunch in medicine. And what has the potential for benefit has the potential for harm.”

As Lykos sees it, there are a few key issues raised by the Advisory Committee:

  • Evidence of effectiveness
  • Functional unblinding
  • Prior MDMA use of the study population
  • Psychological intervention in the research protocol and its regulation
  • Cardiovascular and hepatotoxicity risks
  • Sponsor and investigation bias

While each of these issues is something that Lykos (and possibly others seeking approval) will have to overcome to obtain FDA approval, we anticipate that functional unblinding is a challenge that the larger psychedelic industry will have to grapple with if it wants its drugs legalized.  As Lykos concedes, functional unblinding is a “known research challenge for psychiatric drugs with psychoactive effects.” Researchers and applicants are going to need to find solutions to this challenge to be successful.

The stock market certainly saw this as a setback. After the ruling, shares of psychedelics companies such as Compass Pathways, Atai Life Sciences, and Mind Medicine saw a steep drop. Many of those stocks remain down.

To be clear, this is not the final decision. The final decision rests with the FDA. We’ll be on the look out to see what happens later this summer, with an expectation that the FDA will issue a regulatory decision on the application in mid-August.

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It’s been, like, a whole year since our last 420 blog post, man. And the past year made way for even more of the choicest blog posts about cannabis industry topics ranging from the business of THC, CBD, the Deltas, Medical Marijuana, hemp, and more. Our second annual “Weed Roundup” — featuring our top 10 most read blog posts of the past 12 months — is packed with a hybrid of state and federal law updates, regulatory and compliance legislation, and predictions for what is to come in the cannabis industry. As the industry continues to blaze its own trail state by state, our team of authors has been buzzing to keep the freshest content delivered to you on the stickiest developments. Catch up on what you may have missed with the Budding Trends’ Top 10 Weed Roundup, and for everyone going to the Sphere this weekend, take care of your shoes!

This Will Be Our Year, Took a Long Time to Come: Will 2024 Be the Year for Marijuana Legalization in North Carolina?

By Nathan P. Viebrock & Whitt Steineker

Once hailed by observers as the southern state most likely to legalize marijuana first, North Carolina has not kept pace with its northern neighbors in adopting laws to promote the growth of a vibrant medicinal and personal-use marijuana industry. While 2023 saw a number of bills introduced in the House and Senate that touched on the legalization and regulation of hemp, medicinal and adult personal usage, last month the North Carolina General Assembly adjourned for the year with no bills having passed, leaving open a number of questions regarding the future of cannabis in the Tar Heel State. Let’s use this as a moment to reflect on where things stand in North Carolina and what’s on the horizon for 2024. Continue reading…

Big Tobacco Bets Big On Cannabis

By Slates C. Veazey

Word began circulating a few days ago that tobacco giant Philip Morris has agreed to purchase Israeli cannabis company Syqe Medical for a whopping $650 million if certain future events come to fruition.  While the two companies evidently have some history together, this new deal is reportedly tied to Philip Morris’ interest in acquiring Syqe’s metered-dose, pharmaceutical-grade inhaler that dispenses precise doses of medical cannabis to patients. Continue reading…

Will the Tennessee Legislature Continue to Leave Cannabis to Outlaw Country Music in 2023?

By J. Hunter Robinson & Savannah Kolodziej

Cannabis has long been a source of inspiration for musicians like Willie Nelson and Hank Williams Jr. Outlaws like Willie and Hank paved the way for the next generation of country artists to sing their cannabis praises. Margo Price has openly discussed the benefits of cannabis and released her own line of products containing the hemp-based, non-psychoactive cannabinoid CBG. Continue reading…

Mississippi Department of Health Revises Medical Cannabis Regulations: Feels Like I’ve Been Here Before

By Slates C. Veazey

I sound like a broken record, but I will say it again: To remain compliant in the cannabis industry requires an almost constant state of diligence. This point was reinforced earlier this month when the Mississippi Department of Health (MDOH) released a set of revised medical cannabis regulations. While many of the changes follow what the MDOH proposed last December, several are new.  One such new rule involves the standard symbol that must be placed on edible cannabis product labeling and packaging, effective July 1, 2023.  And, as proposed last December, the maximum quantity of usable medical cannabis that medical cannabis establishments can amass for testing as a “batch” has increased from 10 pounds to 25 pounds.  Further, the testing regulations received perhaps the most significant set of amendments. Continue reading…

Good News, Bad News: Congress Wants to Help the Hemp Industry

By Whitt Steineker

Last week in a small hearing room in a House office building, the House Oversight and Accountability Subcommittee on Health Care and Financial Services held a hearing titled “Hemp in the Modern World: The Years long Wait for FDA Action.” The hearing, billed as a “first-of-its-kind,” allowed lawmakers and hemp industry experts to discuss issues facing the industry today and in the future, and it was an important step in framing the debate about the next Farm Bill (the current Farm Bill expires September 30). In that sense, the hearing was a success. But a close examination of the testimony, the opening statements of the legislators, and the staggering distance between the parties on the appropriate policy solutions was sobering to this author. The main takeaway: The next Farm Bill will determine the future of the hemp industry in America. Continue reading…

Fifth Circuit Upholds Marijuana User’s Second Amendment Rights – Will the Eleventh Circuit Do the Same?

By Slates C. Veazey & Connor M. Blair

A question frequently encountered in the cannabis industry involves a cannabis user’s gun rights. This stems from the ever-present federal and state law tension overlaying marijuana in the United States — thanks to the Schedule 1 status of “marihuana” under the Controlled Substances Act. A Westlaw search quickly reveals that over the past year federal courts across the country have reached varying decisions on this or similar issues. For instance, courts in Texas and Oklahoma have held that, under certain circumstances, the Second Amendment protects marijuana users’ right to own and purchase firearms, while courts in Alabama and Mississippi have held the opposite. Continue reading…

To Reschedule or To Deschedule: That Is the (Marijuana) Question

By Whitt Steineker & Slates C. Veazey

Now that the dust is starting to settle on the recent news that the U.S. Department of Health and Human Services (HHS) has recommended to the U.S. Drug Enforcement Agency (DEA) that marijuana be moved from Schedule I to Schedule III under federal law, it is important to understand the implications of rescheduling marijuana and whether descheduling marijuana would be a preferred course. Continue reading…

Veep Urges DEA to Reschedule Marijuana “As Quickly as Possible”

By Whitt Steineker

In case you missed it, Fat Joe visited the White House late last week to discuss federal marijuana policy. 2024, man.

During a roundtable discussion with Mr. Joe (?), Kentucky Gov. Andy Beshear, and several individuals who have received pardons from President Joe Biden for prior federal marijuana convictions, Vice President Kamala Harris “urged the Drug Enforcement Administration to work as quickly as possible on its review of whether to reschedule marijuana as a less-dangerous drug.” Continue reading…

Will Mississippi’s List of Qualifying Conditions for Medical Cannabis Soon Be Expanded?

By Slates C. Veazey

Pursuant to the Mississippi Medical Cannabis Act, Mississippi residents can petition the state’s Department of Health to add new serious medical conditions or their treatments to the existing list of conditions that qualify a prospective patient for a medical marijuana card (Miss. Code Ann. § 41-137-17). Exercising this authority, the DOH recently made it easier for Mississippi residents to petition the agency to add conditions to that list, which currently includes the following conditions and treatments. Continue reading…

The Great Divide: The Feds’ Differing Approach to Psychedelics and Cannabis

By Hillary Campbell & Whitt Steineker

Just as we did, the Food and Drug Administration has recognized the growing enthusiasm for exploring opportunities to use psychedelic medications to treat mental health disorders. In June, FDA issued for the first time draft guidance providing considerations for those developing psychedelic drugs for the treatment of medical conditions. The guidance explicitly focuses on “classic psychedelics,” which are “typically understood” as “5-HT2 agonists” like psilocybin and LSD, as well as entactogens or empathogens like MDMA. Has this put a wedge between psychedelics and cannabis? Continue reading…

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If you know either of us, you know neither of us would pass up a chance to say, “I told you so.” As we looked ahead to 2024 in January, we speculated that psychedelics could be legalized as a prescription medicine. Now, not even a quarter into 2024, proponents of the psychedelic industry should be more optimistic that federal legalization of psychedelics as medicine is closer than ever.

MM120 is Mind Medicine Inc.’s proprietary, pharmacologically optimized form of LSD, which MindMed is developing for generalized anxiety disorder and other brain-based disorders. This month, FDA granted breakthrough therapy designation to the LSD-like substance MM120 for the treatment of generalized anxiety disorder. A breakthrough therapy designation is “designed to expedite the development and review of drugs that are intended to treat a serious condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint(s).”

MindMed’s study showed that “a single oral dose of MM120…led to clinically and statistically significant reductions in anxiety scores 12 weeks after administration, with 65 percent of participants showing a clinical response and 48 percent in clinical remission following the treatment.” Clearly excited by the possibilities of the study’s conclusions and its approval, MindMed recently stated: “[t]he FDA’s decision to designate MM120 as a breakthrough therapy for [Generalized Anxiety Disorder] and the durability data from our Phase 2b study provide further validation of the important potential role this treatment can play in addressing the huge unmet need among individuals living with [Generalized Anxiety Disorder]…We are committed to bringing MM120 to people living with [Generalized Anxiety Disorder] and delivering on the potential of our pipeline to treat serious brain health disorders.”

A notable aspect of MindMed’s study and use of MM120 is that it was not coupled with a therapy component. The trials did not include any therapeutic intervention such as talk therapy or psychotherapy. This stands in contrast to many other studies involving psychedelics that incorporate therapy as a component. If granted full approval, the absence of any therapy component may make the drug’s use even more appealing to a broader base of the general public.

Unsurprisingly, industry advocates see this as a very positive first step forward and a potential turning point for the psychedelic sector. FDA approval would almost certainly boost public perception and help to shed the stigma surrounding the industry.  

So, what’s next? MindMed is likely to meet with the FDA shortly and will also start Phase 3 of its trial this year. MindMed will also be busy at the private level. We expect the study’s data analysis to be presented at the American Psychiatric Association’s annual meeting in May and to be published in a leading medical journal. If the FDA ultimately approves the new drug application, DEA would need to reschedule MDMA accordingly. Currently, psilocybin, LSD, and MDMA are classified as Schedule I drugs by DEA. 

This will be seen as a big step forward for the fruiting psychedelics industry. This move by the FDA could be seen as an acknowledgement that psychedelics have the real potential to treat disorders that physicians up until this point haven’t been successful in finding ways to treat. It certainly bolsters our belief that the path forward for legalization of psychedelics will be paved by innovators in the pharmaceutical industry.

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A few weeks ago, the Ninth Circuit Court of Appeals in  Aggarwal v. U.S. DEA directed the U.S. Drug Enforcement Agency (DEA) to reconsider its decision not to transfer psilocybin from Schedule I to Schedule II. 

Since at least 2021, Dr. Sunil Aggarwal has been working to legally obtain psilocybin for terminally ill cancer patients undergoing end-of-life care.  Because psilocybin is a Schedule I drug under the Controlled Substance Act (CSA), obtaining the drug to treat his patients was “practically and legally difficult” according to his lawyers. Aggarwal turned to the DEA, petitioning the agency to transfer psilocybin from Schedule I to Schedule II. The DEA denied the petition in a four-sentence letter. Aggarwal then looked to the Ninth Circuit. 

The Ninth Circuit sided with Aggarwal, at least for now and at least in part. The court held that the “DEA failed to provide sufficient analysis to allow its path to be reasonably discerned” and “failed to clearly indicate that it ha[d] considered the potential problem identified in the petition.” More specifically, the Ninth Circuit noted that the DEA failed to define “currently accepted medical use with severe restrictions,” which was the applicable standard for rescheduling on which Aggarwal relied. The court directed the DEA to clarify or reevaluate its position.  

So, what does this mean?

Rescheduling Psilocybin

The Ninth Circuit’s opinion does not change the legal status of psilocybin.  Hope springs eternal, and the psychedelic industry may take this as a nod from the Ninth Circuit that psilocybin is on the fast track to being rescheduled. But the limitations of the court’s decision can’t be dismissed.  The Ninth Circuit’s order did not tell the DEA what decision to reach. And the chance for the DEA to reconsider (and rewrite) its determination could certainly result in a more robust denial from the DEA – one that would be more defensible by critics of rescheduling.

It, however, certainly keeps the petition to reschedule alive. So, yes, we’re telling you there’s a chance.

Given that our modest blog began as an update exclusively on the cannabis plant, we would be remiss not to direct you to our posts on recent efforts by the Biden administration to consider the rescheduling or de-scheduling of cannabis. If the psychedelic industry can learn anything from the cannabis industry, it’s that the implications of rescheduling could be huge but that the trip can be long.

The DEA’s Five-Part Test – Will It Hold Up?

Since the 90s, the DEA has utilized a five-part test for determining whether a drug has a “currently accepted medical use” and should be rescheduled pursuant to 21 U.S.C. § 812(b)(2)(B). Under the test, a drug is considered to have a “currently acceptable medical use” if it meets five elements:

  1. The drug’s chemistry is known and reproducible;
  2. There are adequate safety studies;
  3. There are adequate and well-controlled studies proving efficacy;
  4. The drug is accepted by qualified experts; and
  5. The scientific evidence is widely available.

(Though it would be fair of you to do so, Budding Trends readers shouldn’t confuse the DEA’s five-part test with the eight-part test utilized by the U.S. Department of Health and Human Services (HHS)). 

One could infer from the DEA’s denial letter that its position is that a drug must meet the five-part test to be rescheduled, but as noted by the Ninth Circuit, the DEA didn’t explicitly say so. And the DEA’s position on that remains to be seen.

The Ninth Circuit in Aggarwal made clear that it was not deciding whether the DEA’s five-part test is a lawful interpretation of 21 U.S.C.  812(b)(2)(B).  We expect that proponents of change will challenge the test in the coming months and years, and the Ninth Circuit’s decision seems to invite new challengers to do so.

Whose Line Is It Anyway? DEA Points to the FDA; Court Points Back to the DEA

Maybe the DEA is sick of always being the one to break up the party. The one thing that was abundantly clear in the DEA’s denial of Aggarwal’s petition was that the DEA was pointing the finger at the FDA. Specifically, the DEA’s position was that a prerequisite to transferring a substance from Schedule I to Schedule II “is for the [FDA] to determine that a substance has a currently accepted medical use in treatment in the United States.”  The Ninth Circuit wasn’t convinced and certainly didn’t bite at the chance to let the DEA shift the blame or the burden. The Ninth Circuit made it clear that the DEA cannot defer to the FDA and its lack of movement. The court’s decision said the DEA’s reasoning was contrary to 21 U.S.C. § 812(b)(2)(B), “which sets as a prerequisite to transfer to schedule II either a currently accepted medical use in treatment in the United States or a currently accepted medical use with severe restrictions.” 

In other words, absent movement by the FDA to determine that psilocybin has a “currently accepted medical use in treatment in the United States,” the DEA is going to have to make its own decision. It’s going to have to consider and assess whether psilocybin has a “currently accepted use with severe restrictions.” This is a distinct question from what the FDA may answer – whether psilocybin has “a currently accepted medical use in treatment in the United States.”

What’s Next?

Research regarding the medicinal use of psilocybin — and other psychedelics — is on the rise. And many studies seem to be seeing positive results for the industry.   

On at least two occasions in recent years, the FDA has designated psilocybin therapy as a “breakthrough therapy.” According to the FDA, a designation of a drug as “breakthrough therapy” is “designed to expedite the development and review of drugs that are intended to treat a serious condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint.”

Results from a study recently published by Johns Hopkins and Ohio State “support the potential for psilocybin to produce lasting improvements in mental health symptoms and general wellbeing.” According to the study, its “results indicate broad therapeutic potential of psilocybin to produce lasting improvements in mental health symptoms related to anxiety, depression, and substance misuse.”

In another recent study led by “a research team from institutions including Yale, Johns Hopkins, NYU Langone, and San Francisco Veterans Affairs Medical Center and published in the Journal of the American Medical Association,” “outcomes reveal that psilocybin was well-tolerated and elicited fast, solid, and long lasting efficacy results” for treating adults with major depressive disorder.

Given what appear to be positive outcomes, we certainly expect there to be continued increases in funding into such studies – both from private and public sources. In the first part of this year, for example, the National Institute on Drug Abuse announced new funding opportunities for studies with a focus on the use of psychedelics to treat substance use disorders and allocated $1.5 million for such studies.

As more medical professionals come to believe there are serious medicinal benefits to the use of psychedelics like psilocybin, we think the pressure will only increase on the government to consider rescheduling.

*        *        *

The Ninth Circuit’s refusal to accept the DEA’s out-of-hand dismissal of a petition to reschedule psilocybin is yet another step in what appears to be faster and faster footsteps towards the future. What that future holds is yet to be determined – though we will monitor closely – but whatever the future is it promises to be quite a ride.

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Now that the dust is starting to settle on the recent news that the U.S. Department of Health and Human Services (HHS) has recommended to the U.S. Drug Enforcement Agency (DEA) that marijuana be moved from Schedule I to Schedule III under federal law, it is important to understand the implications of rescheduling marijuana and whether descheduling marijuana would be a preferred course.

When Budding Trends’ editors first wrote about the topic, we described it as a largely political announcement, rather than a fundamental change in policy from an administration that has never truly championed marijuana reform (something we also predicted before the 2020 presidential election).

I’m not too proud to say I was wrong, and I’m not yet sure if I was. Because let’s be clear: Federal law did not change with the recommendation from HHS. There are a number of hurdles and headwinds standing between that recommendation and a change in the scheduling of marijuana. Just for example, DEA must accept the recommendation and there are treaty obligations impacted by any rescheduling of marijuana. Oh, and if a Republican wins the White House before this gets done, look out. As monumental as the HHS recommendation and recognition that marijuana has medicinal value may be, it is far from certain.

But the point of this post is not to predict whether marijuana will be rescheduled; rather, I want to discuss whether it would be better policy to reschedule or deschedule marijuana.

The Legal Distinctions Between Descheduling and Rescheduling

The consequences between descheduling marijuana and rescheduling are enormous, both legally and practically.

Let’s first discuss the framework of rescheduling marijuana. The rescheduling process is an inter-agency governmental process that normally takes years and is rife with all of the bureaucracy and intra-agency infighting and inter-agency turf battles often associated with the federal government.

In the case of rescheduling a controlled substance under the Controlled Substances Act, HHS was tasked with overseeing a medical and scientific analysis of marijuana. The department coordinated this review with the U.S. Food and Drug Administration (FDA), which considered eight factors before making a control status recommendation.

According to federal statute, these eight factors include:

  1. Its actual or relative potential for abuse;
  2. Scientific evidence of its pharmacological effect, if known;
  3. The state of current scientific knowledge regarding drug and other substances;
  4. Its history of current pattern of abuse;
  5. The scope, duration and significance of abuse;
  6. What, if any, risk there is to the public health;
  7. Its psychic or physiological dependence liability; and
  8. Whether the substance is an immediate precursor of a substance already controlled.

Once HHS makes a rescheduling recommendation, the DEA is responsible for coming up with a final decision as to whether the substance should be rescheduled.

Although the letter from HHS recommending the rescheduling has not yet been released to the public, most observers believe that HHS is recommending that marijuana be moved to Schedule III.

Banking Marijuana Businesses

It’s not entirely certain how rescheduling marijuana would affect marijuana banking, and likely the effects would depend to some degree on whether marijuana products were compliant with Schedule III regulations. Some have expressed skepticism that a move to Schedule III would open the doors of banks to marijuana operators: 

But Vince Sliwoski, an attorney with Harris Bricken, said rescheduling won’t immediately change how cannabis firms do business or expand the universe of banking partners they can choose from. 

“At Schedule III, marijuana would still be a controlled substance and state-licensed businesses would still be ‘trafficking’ in a controlled substance, contrary to federal law,” he wrote in a recent piece. “The analysis for financial institutions won’t fundamentally change.”

In any event, congressional lawmakers could still take up the SAFE Banking Act later this year, and the rescheduling development would likely be a topic of discussion. SAFE, if passed, would exempt financial institutions from liability and penalties for working with marijuana businesses acting in accordance with state law, regardless of whether they serve medical patients or all adults.

280E and the Taxman

One of the most significant impediments to the growth of marijuana operators, and dispensaries in particular, is 26 U.S.C 280E. That one-sentence provision may be the biggest hurdle to the development of the marijuana industry in the United States. It dictates that:

No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.

280E has crippled the marijuana industry, often exacting an effective tax rate north of 60% for operators. “Within the meaning of schedule I and II of the Controlled Substances Act” is the ballgame. If marijuana is rescheduled to Schedule III, 280E would no longer apply and marijuana operations would be taxed as normal businesses – provided that Congress did not specially enact a marijuana tax.

Obviously, state tax laws may still penalize marijuana businesses akin to 280E, but some states proactively exempted licensed cannabis businesses from those impacts – like Mississippi.

Does Rescheduling Make Existing Marijuana Operations Legal?

One question that I have been asked dozens of times since the announcement of the potential rescheduling is whether rescheduling would make marijuana businesses legal under federal law. When it comes to adult use, the answer is an emphatic no. “Schedule III substances—which include ketamine, anabolic steroids and Tylenol with codeine—are still highly regulated and not permitted to be sold without a DEA license or used by consumers without a doctor’s prescription or other authorization.” When it comes to medical use, the answer is much hazier. “[M]ost states would need to overhaul their systems in order to strictly align with Schedule III restrictions.” Existing laws are a hodgepodge of rules and regulations that often do not meet the strident restrictions of the Controlled Substances Act. This would take time but, if successful, it would bring state and federal marijuana into alignment.

International Treaties

One element of DEA’s analysis will be how a Schedule III decision would play under international drug treaties.

It’s a step that might sound tedious for a country that helped put those prohibition-era agreements in place, but experts acknowledge it’s a possible bottleneck the plan would need to get through in order for HHS’s recommendation to become reality. It also has some past precedent: DEA asserted in its 2016 denial of a marijuana rescheduling petition that “in view of United States obligations under international drug control treaties, marijuana cannot be placed in a schedule less restrictive than schedule II.”

“I think it’s certainly possible and something that the industry needs to be very concerned about happening… In fact, they incorporate flexibility, so that countries like the United States can develop regulatory structures and compliance with activities that promote public health and welfare.”

It is worth noting that Canada has not yet faced sanctions under international treaty law when it legalized marijuana at the federal level in 2017.

The Practical Distinctions Between Descheduling and Rescheduling

Most current marijuana operators would strongly prefer that marijuana be descheduled as opposed to rescheduled. If marijuana was descheduled, those operators likely would be allowed to operate largely as they currently operate and in a scheme resembling that of alcohol regulation. The rules would be primarily a function of existing state laws, and presumably interstate commerce in marijuana would be legal for the first time in half a century. Also, the federal oversight that would likely exist in a new descheduled marijuana industry could bring a welcomed dose of uniformity and certainty across the country for things like advertising limits, labeling, testing requirements, and how food-related products are regulated. Maybe.

Big Pharma

As noted above, if marijuana is rescheduled such that it remains a controlled substance, marijuana companies may have to comply with much more stringent FDA rules, and physicians may still face the question of whether they are permitted to prescribe marijuana or certify patients as being eligible to use marijuana in a medical program. Given the cost of FDA compliance and the attendant costs for research, development, and testing, existing marijuana operators may find themselves priced out of the market (or find themselves as attractive candidates in the marijuana license sales market). If marijuana was listed as a Schedule III substance, it may be that marijuana will be brought to consumers courtesy of Big Pharma. Just imagine Kush Kontrol, brought to you by your friends at AstraZeneca! I can only imagine the commercials airing on primetime TV (snowboarding events seem like good opportunities).

Big Pharma’s influence over the marijuana industry, depending on who you ask, would have its pros and cons. On the upside, large pharmaceutical companies have the resources to conduct sophisticated clinical trials and develop products that are required to be safe and effective for consumers.  On the other hand – and this is the bad news for existing marijuana operators – placing the marijuana industry in the hands of pharmaceutical companies runs counter to how the industry developed and would pose a serious threat to the survival of many existing marijuana operators.

Relationship to Alcohol

Big Pharma won’t be the only major player in a descheduled or rescheduled marijuana industry. Recently, the Wine & Spirits Wholesalers of America (WSWA) released a public statement proclaiming that “the time has come for Congress to comprehensively legalize and regulate adult-use cannabis at the federal level.” In its memo, the WSWA makes the case for federal legalization and regulation by discussing what it dubs as the “Four Principles of Safe and Responsible Adult-use Cannabis Regulation.” Those four principles are:

  1. The permitting of marijuana producers, importers, testing facilities, and distributors;
  2. The approval and regulation of marijuana products;
  3. The efficient and effective collection of federal excise tax; and
  4. Effective measures to ensure public safety.

While the WSWA’s paper references a “shared state-federal regulatory structure,” its proposed model places much more of the regulatory oversight of a federally legal marijuana industry in the hands of the federal government over individual states.

And, as we discussed in a recent post, Anheuser-Busch and Tilray Brands Inc., a Canadian cannabis and consumer packaged goods company, announced Tilray’s acquisition of eight Anheuser-Busch beer and beverage brands the first week of August. Rest assured, the alcohol (and tobacco) industry is poised to jump head first into the cannabis world – especially if rescheduling occurs.

FDA Control

Others have expressed concern that a relaxation of marijuana’s controlled status could actually inadvertently upend the marijuana industry by potentially incentivizing and emboldening FDA to assume a more hands-on role with respect to marijuana, despite its largely laissez faire approach to hemp products.

If, for example, FDA is required to begin exercising the type of oversight over marijuana that it performs over existing manufacturers of controlled substances, marijuana operators are likely to face far closer scrutiny than they faced under any state regulation and be subject to far more significant operating costs than they already experience.

Advertising

A less obvious result of rescheduling is that advertisements in newspapers, magazines and other media could also more easily travel across state lines:

While not common, USPS has in the past issued warnings about marijuana mailings, noting in a 2015 letter to a congressman that the CSA prohibits placing in “any newspaper, magazine, handbill, or other publications, any written advertisement knowing that it has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance” as well as using U.S. mail to facilitate “the commission of any act or acts constituting a felony.” At least one newspaper subsequently pulled marijuana ads in response to a warning it received.

If marijuana were moved into Schedule III, the obstacle to mailing marijuana advertisements would disappear. (Sending actual marijuana through the mail, of course, would still be subject to tight Schedule III restrictions.)

Others have noted the impact of rescheduling on federal employees and contractors, and the distinction may prove a difference:

[T]he use of Schedule I and Schedule II drugs by federal government workers is prohibited under a 1986 executive order from then-President Ronald Reagan that established the Federal Drug-Free Workplace program. While individual agencies have adopted their own policies regarding drug use, many are rooted in the Reagan order. Because that order defines “illegal drugs” as only those in Schedules I and II, some attorneys believe rescheduling to Schedule III could lift marijuana restrictions that currently apply to all federal workers.

Other legal experts weren’t so sure. Shane Pennington, a partner at the law firm Porter Wright Morris & Arthur, cautioned that “various agencies have their own internal policies that would not necessarily change automatically as the result of cannabis being transferred to [S]chedule III.”

People who work as third-party federal contractors or grantees, however, would likely not see a policy shift as the result of rescheduling. Under federal law governing public contracts, contractors may not possess or use a “controlled substance,” defined as any drug “in schedules I through V” of the CSA.

Marijuana Research

Rescheduling would also mean sweeping changes for marijuana research, removing many of the barriers to obtaining and using marijuana for scientific investigation. A key Senate committee recently noted that the drug’s Schedule I designation means scientists face “limited access to sources” of marijuana, further hobbling research. Of course, the newish Marijuana and Cannabidiol Research Expansion Act has its own provisions and requirements specific to marijuana research that must be complied with – separate and apart from other federal statutes applicable to federal marijuana research.

Schedule III rules would also still stand in the way of researchers trying to study the marijuana available on licensed, adult-use retail markets in legal states.

Existing State Marijuana Laws

DEA putting marijuana into Schedule III of the federal CSA could nevertheless trigger changes in some state laws. That’s because, in some cases, state laws themselves follow the federal CSA.

Essentially, some states have triggering laws that make the state’s scheduling correspond with a schedule change automatically, and then others don’t… So it requires a 50-state analysis of which states do it automatically and then making sure that’s implemented. And then for states that don’t, that legislative and administrative process usually has to happen.

In other words, federal rescheduling would likely spark a cascade of changes at the state level, most related to medical marijuana.

The Political Implications of Rescheduling vs. Descheduling

Aside from the array of formal changes that rescheduling would bring about, it could also embolden lawmakers at the state and federal levels to push for further marijuana reforms. With the federal government formally acknowledging that marijuana has medical benefits and is no longer among the class of the most dangerous drugs, the move could lessen stigma toward marijuana use, especially for medical purposes.

The HHS rescheduling memo is momentous largely because, as Hauser pointed out, it represents the U.S. government recognizing that marijuana, contrary to the definition of a Schedule I substance, has “currently accepted medical use.” Though the acknowledgment comes years or decades after many patients, voters and even elected officials arrived at the same conclusion, it’s nevertheless a historic milestone. But it’s also worth keeping in perspective: The HHS recommendation on its face says essentially that marijuana ought to be classified alongside substances like ketamine and testosterone.

Oh, Marijuana Stocks Are Poppin’

Perhaps to the surprise of no one, marijuana stocks skyrocketed on the news of the potential rescheduling. These stocks, which have suffered declines of between 30% to 80% in the past couple of years, are up double digits in the past few weeks and appear ready to go even higher on the expectation that DEA will follow the lead of HHS. Picking stocks is beyond the purview of the Budding Trends blog, but the influx of money into marijuana companies offers – at least in the short term – huge potential for growth in the industry.

Conclusion

When I first wrote about the potential rescheduling of marijuana, my conclusion at that time was that “[t]here does not appear to be an appetite in Congress or in the White House to change the legal status of marijuana.” I also noted that if I was wrong, “the consequences of any change will be hugely consequential.” As I write this, I stand by both predictions. But the HHS recommendation has rightfully caused marijuana observers to at least consider the (slightly paraphrased) words of The Bard:

To reschedule or to deschedule: that is the question.

Whether ’tis nobler in the mind to suffer

The slings and arrows of outrageous fortune,

Or to take arms against a sea of troubles,

And by opposing end them?

Oh yes, Budding Trends is out here quoting Hamlet.

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We’ve been tossing this idea around in our heads ever since research about microdosing psychedelics entered the mainstream media a few years ago. And the more we think about it, the more we think Congress may allow patient access to psychedelic treatments before it does so for marijuana.

Before you think we’ve been consuming too much of either product, consider this: It now appears that a bipartisan majority of the House of Representatives will pass legislation directing the secretary of defense to conduct a clinical study in military treatment facilities using psychedelics. This is an extraordinary development that could revolutionize medical treatments and will certainly draw strong opposition from those who worry that the government is too quick to legalize products once viewed as taboo.

Wait, What?

You heard that right. Congress appears to be moving more quickly on allowing access to psychedelic medications than it does on medical cannabis. How did that happen?

As an initial matter, concern for mental health is at an all-time high. Patients and the medical community alike are looking for something new to treat a wide range of mental health conditions – ranging from addiction, anxiety, and PTSD to treatment-resistant depression. Couple this need with the increasing enthusiasm among funding sources (private and philanthropic) and researchers to learn more about the medical effects of psilocybin and other psychedelics, and a real opportunity exists to argue in favor of providing broader access.

Further, there is a perception that the research on the medical benefits has been more clinical in nature, whereas the research on cannabis has been more anecdotal. This may not be a fair characterization, and it largely ignores the difficulty in conducting cannabis research under current federal law. Nevertheless, the perception seems to be winning out in current policy debates.

Another subtle difference between the products is that, whereas cannabis is typically associated with a euphoric “high,” with proper dosing, psychedelics arguably do not create a euphoric effect. Instead, advocates of psychedelics position it more as a medicine that simply treats the underlying conditions and symptoms without the need for putting a patient in an obvious mind-altering state. Whether that is true of psychedelics or whether that is a fair characteristic of medical cannabis, it appears to be the tenor of current policy discussions regarding both products.

And here’s a difference that didn’t immediately jump to mind but may be important in swaying public opinion: Americans don’t smell psychedelics when they are being ingested on the street. Don’t underestimate the importance of the little things.

There is also a historical difference between cannabis and psychedelics. While both have been used by humans for centuries, perhaps there is less of a stigma with extremely low-dose psychedelic products than there is with cannabis. After all, cannabis has been closely (and often wrongly and unfairly) associated with certain types of people that become easy targets for lawmakers. In the 1930s, when the Marijuana Tax Act became law, the targets were immigrants, bohemians, and “jazz musicians,” with all of the connotations that came with that term at the time. It was also the victim of industrialists who viewed cannabis (hemp, in particular) as a threat to existing sources of products such as paper. In the 1970s, when the Controlled Substances Act became law, the target was largely inner-city residents and protestors of the Vietnam War.

Psychedelic substances, however, have been less prominent in popular culture and have largely escaped the attention of lawmakers. Proponents of psychedelics, therefore, have less of a stigma to overcome and are well-positioned to argue that the products are well-studied medications as opposed to looking for federal approval of a previously vilified substance.

Next Steps for Psychedelic Medications

Before we get ahead of ourselves, let’s level set. First, the language before the House is relatively modest. “The legislation does not legalize psychedelics or even make them readily available as medicines. It just makes the drugs a little easier to study, and easier to understand.” Second, it may face stronger opposition in the Senate. Even though the upper chamber is (narrowly) controlled by Democrats, it is generally viewed as more conservative on these types of issues. As just one example from the cannabis world, the House of Representatives passed the SAFE Banking Act (allowing financial institutions to bank cannabis proceeds in certain circumstances without implicated money laundering rules), and that legislation has yet to come to the Senate floor for a vote.

The next immediate hurdle for psychedelics is the Senate and then the White House, which may be forced to decide whether to sign such legislation in an election year. If the legislation becomes law, the next hurdle is expanding the use of psychedelics beyond clinical studies and the military. That is a big step, but it will seem a bit smaller if there is already legislation allowing for its use for certain purposes.

And for what it’s worth, lawmakers considering the proposal will learn that the federal government wouldn’t be alone if it allowed for the use of psychedelics. Australia recently announced it will permit the prescription of MDMA for the treatment of post-traumatic stress disorder and psilocybin for treatment-resistant depression beginning July 1. And domestically, the states of Oregon and Colorado have already legalized the use of certain psychedelics.

Impact on Cannabis Reform Efforts

So, what, if anything, does this mean for long-standing and enduring efforts to reform cannabis policy at the federal level? We think it comes down to a simple question: Is this a rising tide phenomenon where psychedelics and cannabis can gain popular and political acceptance as medications, or is it a zero sum game where the success of one means the failure of the other (as the poet wrote, “maybe you’ve had too much too fast”)?

While it’s impossible to know for sure, we think the former is more likely. As the general public becomes more accepting of the use of these products as medicine and as the research on the medicinal benefits grows, we believe Congress is likely to take a less skeptical view of them.

That doesn’t mean the path will be easy for advocates of the products. After all, these developments are taking place against the backdrop of decades of legal and popular opposition. And there may be a desire for the proponents of cannabis to press for progress in that industry at the expense of the psychedelic industry, and vice versa.

Ultimately, however, we believe that if Congress begins to accept the notion that once-illegal products can provide medical benefits to Americans, that is a win for both industries.

Conclusion

Cannabis has long been considered by many to be a gateway drug to other illicit substances. But is it possible that Congress will recognize psychedelics before cannabis? It’s a close call, but we think it just may happen. Stay tuned for much more.

And if you feel like we’re already through the looking glass, we’ll close with a bit of Eastern philosophy on the subject from noted Zen monk and punk rock bassist Brad Warner:

Zen practice is about not getting high on anything and in so doing getting high on absolutely everything. We then find that everything we encounter – bliss or nonbliss – possesses a tremendous depth and beauty that we usually miss.