The Oregon Psilocybin Services Act, Measure 109

November 4, 2020 | by John Turner

Measure 109, the Oregon Psilocybin Service Act (the “Act”) was adopted in November 2020 after receiving 56% of Oregon’s popular vote.  

The measure provides for legal access to psilocybin in supervised settings by licensed facilitators.  Facilitators are not doctors and need only complete a high school education requirement.  Until January 2025, facilitators will need to have been Oregon residents for at least two years to apply for a license.  The licensee will be required to complete a yet to be develop educational course, and pass a licensing exam.  

The Oregon Health Authority (the “OHA”) has direct supervision and authority over the act.  Measure 109 also establishes Oregon Psilocybin Advisory Board (the “OPAB”) to assist in the implementation of the measure and its on-going oversight. The measure establishes a two-year phase in period, during which the state will develop rules and regulations to best implement the act. 

Oregon also adopted Measure 110 with 58% of the vote, which decriminalizes personal possession of all drugs, and reclassifies the possession of larger quantity of drugs for non-commercial purposes from a felony to a misdemeanor.  Personal possession remains a civil violation, and could result in a maximum $100 fine. Measure 110 also provides funds for addiction treatment, making Oregon the first state to transition from a punitive model to a wellness-based approach for addressing substance use.

Under Measure 110, possessing under 12 grams of psilocybin mushrooms, or less than forty tabs of LSD would be civil offenses.  Possessing under 2 grams of cocaine or 1 gram or 5 pills of MDMA are also civil offenses.

Below is a summary of the key points of the Oregon Psilocybin Services Act.  This has not been prepared by or reviewed by any attorney, and you should seek legal advice prior to relying upon the provisions of Measure 109.

Overview of How the Act Works

The Act governs the manufacture and sale of psilocybin, and establishes separate license requirements to: manufacture psilocybin, operate a psilocybin service center, run a lab to test psilocybin products or facilitate psilocybin sessions.

A single licensee may hold both a license to manufacture product and a license to operate a service center at which product is consumed. They may also hold multiple service center licenses. Before January 1, 2025, all license holders must be residents of Oregon for a minimum of two years.  

Psilocybin products must be produced indoors. The products may be natural or synthetic (S.8(f)) and will need to be tested by a lab licensed by the OHA for psilocybin testing.  Manufacturers will need to label products, including labeling the potency of the product

Psilocybin is provided by a licensed facilitator, with a minimum of a high school degree, who has completed a state mandated education program and license exam.  No medical diagnosis may be required by the state to receive psilocybin treatments.

Psilocybin treatments consist of up to three sessions:  A preparation session with the psilocybin facilitator, the administration session, and then an integration session, which may be waived by the client.

The administration session must occur at a service center, during which the client purchases, consumes and experiences the effects of the psilocybin, under supervision of the supervisor. The preparation session and integration session (if any) need not be held at a service center.  The Act defers to the rule-making process as to whether group administration sessions may be held.

Note, the Act provides that the client must consume and “experience” the effects of the psilocybin at a service center.  It does not provide whether a micro-dose may be administered at a service center, and these types of details will need to be worked out by the OHA, and addressed by rules and regulations they will adopt during the two-year phase in period.

Service centers cannot be within a specified distance of a school and may be subject to reasonable city and local zoning requirements. All employees must be over 21.  Products sold are subject to a 15% tax. Government assistance programs and private insurance are not required to cover psilocybin treatment.

Cities and localities may only restrict manufacturing or service centers if done via an initiative approved by the local electorate, preventing localities from circumventing the act without popular approval. Localities may not tax psilocybin. 

The Act restricts an individual from having a financial interest in more than one psilocybin product manufacturer or more than five psilocybin service center operators. This will have the practical effect of limiting institutional investment in Oregon’s psilocybin manufacturing or service center operation.  

By operation of Oregon law, the legislature may, at anytime, amend the Act.  Unlike certain other jurisdictions, such as the State of Washington, measures adopted by Oregon citizens are not afforded special protection from legislative change.

The Act in no way changes Federal law.  Psilocybin is a Schedule I controlled substance, along with heroin, crystal meth, and marijuana.  While it is impossible to know with certainty the full implications of this, we can look to marijuana regulation to predict certain implications. 

First, we do not anticipate any federal law enforcement against anyone licensed under the Act, and acting in compliance with the Act.  At a minimum, obtaining a criminal conviction in such a context would be extremely problematic. Moreover, the FDA has granted Breakthrough Therapy status to multiple psilocybin products.  And while Joe Biden was slow to the decriminalization bandwagon (opposing cannabis legalization as recently as the democratic primaries), he has changed his tune and now supports decriminalization efforts.  Vice-president elect Harris co-sponsored the Marijuana Opportunity Reinvestment and Expungement (MORE) Act.  It is very difficult to imagine the Biden administration opposing local decriminalization efforts of any type.  Opposing the Act, with its regulatory framework, seems far fetched at best.

Nonetheless, the federal Schedule I designation means most major commercial enterprises will not be able to participate in the psilocybin industry prior to FDA rescheduling, which likely won’t happen for several years.  Moreover, any entity receiving federal grant money will also be practically prohibited from participating under the Act, except to the extent they can do so consistent with federal law, such as in the context of FDA approved clinical studies.  

The Timeline of the Act

On or before: 

February 28, 2021 - The governor appoints the members of the OPAB.

March 31, 2021 - The OPAB hold its first meeting

June 30, 2021 - The OPAB submits findings on available studies and research in treating mental health conditions

July 31, 2021 - The OHA publishes available studies and research in treating mental health conditions

June 30, 2022 - The OPAB submit findings on rules and regulations for implementation of the act, policies for psilocybin access, and regulations at policies at a federal level.

December 31, 2022 - OHA shall prescribes applicable regulations. Development period ends.

January 2, 2023 - OHA accepts license applications to manufacture, test product, operate a center and facilitate services.

Details of the Act

The Purpose of the Act

The primary purposes of the Act include:

Developing a long-term strategic plan for ensuring that psilocybin services will become and remain a safe, accessible and affordable therapeutic option for all persons 21 years of age and older in this state for whom psilocybin may be appropriate. (Section 2)

The primary purposes after the two-year development period include: 

Allowing licensed persons to legally manufacture psilocybin products and provide psilocybin services to persons over 21 years old;

Establishing a comprehensive regulatory framework concerning psilocybin products and psilocybin services under state law.

Medical Assistance and Private Insurance

Act may not be construed to require a government medical assistance program or private health insurer to reimburse a person for costs associated with the use of psilocybin products (S.4)

The Oregon Psilocybin Advisory Board

The OPAB is established within the Oregon Health Authority (the “OHA”) for the purpose of advising and making recommendations to the authority.

The Governor shall appoint the OPAB as follows (S.6):

1. Two non-voting, ex-officio members: 

A designee of the Oregon Health Policy Board

The Public Health Director (or its) designee. 

If the Public Health Director is not the State Health Officer, the State Health Officer or a physician licensed as its designee; 

If the Public Health Director is the State Health Officer, a representative from the OHA who is familiar with the state’s public health programs/activities.

2. Fourteen to sixteen voting members:

Four members, selected from a list of seven possible categories.  Categories include five from state or local health representatives, a representative of an Indian tribe, and a representative of people who provide public health services to the public.  E.g., they could pick four state employees, and no one else or any other combination from the specified categories.

A psychologist.

A physician.

A naturopathic physician.

An expert in the field of public health who has a background in academia.

Any three of the following: Someone experienced in researching psychedelic compounds in clinical therapy, a mycologist, an ethnobotanist, a psychopharmacologist, someone experienced in psilocybin harm reduction, a representative Oregon Liquor Control Commission with tracking marijuana transfer experience.

During the two-year program development period: One of the chief petitioners of this 2020 Act (Tom and Sheri); and one or two at-large members; and 

After the two-year program development period, one, two, or three at-large members. 

The board meets every other month during development period, and quarterly thereafter.  Majority rule.

Role of the OPAB (Section 7)

The board has an advisory function to the OHA.  It will:

Advise on the state current scientific research, proposed guidelines for administering psilocybin (including educational requirements and an ethics code), advise on whether group sessions shall be permitted, advise on requirements to receive a license under the measure, advise on the environment in which sessions shall occur, and coordinate with the state attorney general regarding federal law concerns.

The Oregon Health Authority (Section 8)

OHA oversees administration of the act and has rule making authority to implement the act.  To adopt rules prohibiting advertising psilocybin products to the public.

The authority may not require that a psilocybin product be manufactured by means of chemical synthesis. 

The authority may not require a client to be diagnosed with or have any particular medical condition as a condition to being provided psilocybin services. 

License Types and Application Process

There are four distinct licenses available.  Licenses to: (1) manufacture psilocybin products; (2) operate a psilocybin service center; (3) facilitate psilocybin services; and (4) test psilocybin products. (S.13)

Applicants for any license must be over 21.  The OHA may be required applicants to undergo training and pass an examination.  Applicants may be disqualified if they habitually use substances to excess, are convicted for a crime relating to the license, are not of good repute and moral character, or fail a variety of other tests of competency or character. (S.15)

Before 1/1/2025 license applicants must have Oregon for at least two years (or for entities, have majority owners that have lived in Oregon for two years).

Applicants may not be disqualified for prior manufacture of psilocybin or marijuana, or the possession of any controlled substance, if conviction is at least two years prior to license application and the person has no more than one conviction.  

An individual may not have a financial interest in more than one psilocybin product manufacturer or more than five psilocybin service center operators. 

A person may hold multiple service center operator licenses.  

A person may hold both a manufacturer license and a service center operator license at the same or different premises. 

Manufacturing

Fees may be imposed on manufacturing, but may not exceed the cost of administering the Act and shall be deposited in a segregated psilocybin fund. (S.23(5))

The OHA will adopted a variety of “endorsements” relating to psilocybin manufacturing, and each manufacturer may only produce products covered by their endorsement. Manufactures may, however, hold multiple endorsements. For example, the OHA may adopted endorsements of the manufacture of synthetic psilocybin, the natural production of psilocybin, and the chemical extraction of psilocybin from plant materials.  Someone who held endorsements to grow natural mushrooms and extract psilocybin from plant material would be able to produce natural, extracted psilocybin, but not synthesize psilocybin. (S.24)

OHA will limit the amount of product on premises, depending on demand and supply within the state. (S.25)

Service Centers

Service centers must be in an area not-zoned exclusively for residential use, and not within 1000 feet of a school, subject to certain exception that allow a 500 foot boundary if there are physical or geographic barriers capable of preventing children from crossing the psilocybin service center property. (S.26-27)

Fees may be imposed, but may not exceed the cost of administering the act and shall be deposited in a segregated psilocybin fund.  (S.26)

Facilitators

Must be licensed, and license holders before 1/1/2025 must meet two year Oregon residency requirement. Must have a high school diploma or equivalent.  Must follow OHA education and exam requirements. (S.30)

Fees may be imposed, but may not exceed the cost of administering the act and shall be deposited in a segregated psilocybin fund.  (S.30)

Services

OHA shall adopt rules for providing services to the client, including holding and verifying the preparation, administration and integration sessions. (S.33)

Before a client participates in an administration session, they must attend a preparation session with a facilitator, which need not be at a service center. The Act does not specify whether the session may be held online or telephonically. (S.34)

An administration session must be held at a psilocybin service center. (S.36)

After a client completes an administration session, the psilocybin service facilitator who supervised the administration session must offer the client an opportunity to participate in an integration session. The client may, but need not, participate in an integration session. (S.37)

Clients must provide a client information form.  Facilitators are entitled to rely upon the forms, unless it would be unreasonable to do so. (S.35,38)

OHA shall determine education, training, etc. that facilitators skills are affirming, non-judgmental and non-directive and skills for administering psilocybin. (S.7,40)

Segregation of Premises

If a licensee holds more than one license for the same premises, OHA may require the premises to be segregated into separate areas for conducting the activities permitted under each license. For example, they may require manufacturing to be segregated from the service center area where psilocybin sessions are held. (S.43)

OHA develop a system for tracking of transfer of psilocybin products. (S.45)

Enter into an agreement with the Oregon Liquor Control Commission to tract the transfer of product among premises.  The system shall include protections to prevent psilocybin being diverted to other states, to avoid tampering and to establish accurate accounting. (S.45)

The system must be capable of tracking, at a minimum, the sale and purchase of psilocybin products between licensees and premises.

Conduct of Licenses

Psilocybin products must be  produced indoors. (S.52) The products may be natural or synthetic (S.8(f)) and will need to be tested by a lab licensed by the OHA for psilocybin testing (S.97).  Manufacturers will need to label products, including labeling the potency of the product (S.105) 

Manufacturers and service centers may only deliver psilocybin products to manufacturing facilities or service centers.  And may only receive psilocybin product from another manufacturer.  This may be waived by the OHA. (S.53)

The sale of psilocybin products to a client by a psilocybin service center operator that holds a license must be restricted to the premises for which the license has been issued. This may be waived by the OHA. (S.53)

Clients must be 21 or older. (S.54)

Service center operators and facilitators must keep client identity and communications confidential, subject to customary exceptions. (S.56)

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. (S.57)

A psilocybin service facilitator may not consume a psilocybin product during an administration session that the psilocybin service facilitator is supervising. (S.58)

All employees must be 21+ years of age. (S.59)

The OHA may revoke a license if the license violates the act, has mislead the OHA, is insolvent, habitually excessively uses alcohol or controlled substances, or, since the issuance of the license, is convicted of a felony, of violating any Oregon psilocybin products laws, or of any misdemeanor or violation of any municipal ordinance committed on the premises for which the license has been issued. (S.64)

Anyone who performs work for a license must have an OHA permit, if the work includes provision of psilocybin service, the possession, manufacturing, securing or selling psilocybin products, and certain other tasks. (S. 65-66)

Anyone under 21 who enters a service center is guilty of a Class B violation (max fine $1,000, presumptive fine $265).  A person under 21 is not in violation of the section if they contacted law enforcement or emergency service for themselves or another person, or a third party sought medical attention for them. (S.70-71)

It is a class A violation ($2,000 max fine) to use false ID, give psilocybin to someone visibly intoxicated, to award psilocybin as a prize, premium or consideration for a lottery or game of skill or chance. (S.73)

Local Regulation and Taxation

In general, local laws are preempted by this statute, and as a result no local city or county can pass laws that are more inconsistent with the act. However, localities may impose reasonable restrictions on manufacturing procedures, center operation, hours of operation, public access and premise locations. (S.79)

No local licenses may be required for the manufacture or sale of psilocybin. However, reasonable regulations of the businesses may be imposed. (S.80-81) 

No local taxes are permitted. (S.82)

Federal Law

The Oregon Health Authority, the State Department of Agriculture and the Oregon Liquor Control Commission may not refuse to perform any duty under the act on the basis that manufacturing, distributing, dispensing, possessing or using psilocybin products is prohibited by federal law. (S.87)

Psilocybin-producing fungi is defined as a crop for the purposes of certain agricultural regulations. The operation of a psilocybin service center may be carried on in conjunction with a psilocybin-producing fungi crop.  A county may allow the manufacture of psilocybin products as a farm use on land zoned for farm or forest use.  (S.91)

Testing of Psilocybin

OHA shall establish standards for testing product, including identifying appropriate tests for psilocybin products, depending on the type of product and manner of manufacturing.  These may include tests for contaminants, pesticides, solvents. (S.96)

OHA shall establish procedures for determining batch sizes and for sampling psilocybin products. (S.96)

Testing must occur in a licensed lab. (S.97)

Packaging, Labeling and Dosage

OHA shall adopted labeling requirements that include potency, serving sizes, contents, and standard food labeling information. (S.105)

OHA shall adopt rules establishing the maximum concentration of psilocybin and the number of servings permitted in a package. (S.105)

Taxation; Record Retention

A 15% tax is imposed on retail sales. (S.113)

Service operators must keep records for a minimum of five years. (S.118)

A Oregon Psilocybin Account will be established from the state, separate from the General Fund. (S. 126)

Authority of Cities and Counties to Prohibit Psilocybin-related Businesses

Localities may adopt ordinances to be referred to the electorate that prohibit or allow the establishment of psilocybin manufacturers or service centers.  Between the date the city adopts the ordinance and the date of the next election, OHA shall not grant new permits to manufactures or service centers. (S.128)

Localities may not tax psilocybin products. (S.128(6))