Rules for Legalized Psilocybin Come Into View

Over the last several decades, the nationwide push for medicinal marijuana saw several resounding successes as state after state began recognizing legitimate medical purposes for the drug. As medical marijuana gained a foothold, public opinion began to sway, and recreational legalization began spreading to more states. More importantly, the successes of medical marijuana have led some states to look more carefully at emerging research into other typically illegal substances.

In Oregon, voters authorized a measure in 2020 to authorize the administration of psilocybin, the active psychedelic ingredient found in "magic mushrooms," in very low doses for therapeutic purposes. Research in this space remains ongoing, but several studies have shown that low doses, even those that produce no noticeable psychoactive effects, may impact conditions such as depression, anxiety, and other mental disorders. 

Set to go into effect in January 2023, the new law means there must be producers and distributors of psilocybin. Patients may only receive the drug within licensed facilities, creating another business space that will require employees. With the deadline fast approaching, the Oregon Health Authority has laid out an extensive array of rules that will govern employers and operators in this space.

Most of these rules concern the specifics of psilocybin production and handling, and the types of licenses businesses will need to acquire. However, the laws will also govern how operators in this industry can conduct their hiring processes. All treatment center employers, distributors, and manufacturers will face a requirement to conduct a criminal background check on all applicants.

Notably, the new rules incorporate a "ban the box" element—likely tied into the state's existing law on the subject. In short, psilocybin industry businesses may not inquire into an applicant's criminal past before conducting an interview. Furthermore, the rules state that the Health Administration cannot consider an applicant's prior controlled substance convictions in some situations. If an applicant had only one such conviction and it occurred two or more years ago, it cannot factor into the hiring process. The OHA plans to use a fingerprint background check for operators.

Such prohibitions are not uncommon in the industries beginning to grow around substances just beginning to enter legal markets. Because the War on Drugs disproportionately affected minority groups across America, reducing the barriers these individuals may face when trying to break into a new industry has been a priority in many states. Just as with the marijuana industry, there have been concerns that those most affected by drug prohibition would be shut out of opportunities to benefit from new legal markets.

For those exploring opportunities in Oregon's new psilocybin market—which does not require a prescription—starting a new business could mean an exciting opportunity to get in on the ground floor. As the OHA continues to review and ultimately finalize its rules, they may change—including the restrictions and regulations surrounding employee background check compliance. Staying up to date to ensure compliance and the best chance of winning a license will be key for businesses and entrepreneurs.