Will Psychedelics Succeed Where Cannabis Has Struggled?

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Plant-based medicines and therapeutics finally are gaining significant traction with the medical establishment. After decades of closed-mindedness, it’s about time.

However, the bright spotlight on psychedelics also highlights lingering concerns about how overregulation may affect consumers’ ability to utilize plant-derived medicines and natural substances. After all, we’ve seen the legalization of cannabis create a complex push-pull of commercialization versus misguided policy-making. This mounting tension began with medical-use legalization in the mid-1990s and increased over the past decade as states began to legalize adult use. Since then, there has been a groundswell of cultural and societal demand for alternative therapeutic and recreational substances to quell physical and psychological ailments.


The trend has continued with recent major psychedelic drug policy reforms in the United States. Fueled by the burgeoning cannabis-industry model, some states are considering creating a regulatory framework for the commercialization of other federally illegal substances. Most recently, Colorado and Oregon made history by becoming the first two states to legalize certain psychedelics such as mushroom-derived psilocybin, ibogaine, and dimethyltryptamine (DMT) for medical purposes and, in limited circumstances, therapeutic personal use. California, New Jersey, New York, and Washington likely will consider legislation on psychedelics this year, and some other politically diverse states (Florida, Oklahoma, Missouri, and Utah) are looking at legislation around clinical trials and/or study bills.

Beyond this, there have been numerous local-level efforts to decriminalize psychedelic and plant-based medicines in Seattle, Washington D.C., and Somerville, Massachusetts, to name a few locations. While these programs do not in themselves create a widespread commercial market, they do beg the question, “How far off is the commercial market?”

Recent events in the cannabis industry indicate wide-scale commercialization is on the horizon. Although the day may come when we see a mushroom dispensary on the corner like we have cannabis dispensaries in most states now, that day is farther away than you think. Some observers draw direct parallels between the cannabis industry and the new psychedelics movement, but there are many differences.

Early cannabis legalization was driven mainly by activists fighting to keep people out of jail. A cultural movement was born around the question, “Should someone be incarcerated for possessing or using an organic substance that grows naturally?”

Like cannabis, the first psychedelics movement in the 1960s was based on a cultural and social revolution against the established norms of the times. In the 1950s, ahead of the rise of the counterculture movement, the scientific community published countless studies about the potential therapeutic uses of psychedelic substances, but the mass politicization of psychedelics stifled research and innovation, leaving this medical breakthrough to lie dormant for decades.

Here we are on the cusp of the second psychedelics renaissance, but this time the movement is not fueled by a countercultural “tune in, turn on, drop out” mantra. Rather, it is based on the growing body of scientific studies and novel technologies for treating various psychological ailments such as post-traumatic stress disorder, severe depression, and even alcoholism and drug dependency.

In recent years, we’ve put a heightened emphasis on studying and treating the mental health crisis affecting all of society. We have seen a rise in clinical research for psychedelic use and therapy as treatment for mental health from well-respected institutions such as Johns Hopkins and Harvard Medical School in addition to independent associations. The Multidisciplinary Association for Psychedelic Studies is in the final phase of seeking U.S. Food and Drug Administration approval for treating PTSD with 3,4-Methyl​enedioxy​methamphetamine, commonly known as MDMA. Similarly, COMPASS Pathways is in Phase 3 clinical trials for psilocybin-assisted therapy as a solution for treatment-resistant depression.

While psychedelics are just stepping out from the shadows, the nascent industry is leaps and bounds ahead of the cannabis industry regarding medical research and FDA approval. The proliferation of today’s psychedelics movement is more reliant on drug development and discovery than it is on state-by-state legalization efforts. However, the legitimate medical model carries a higher cost of entry, a longer path to market, and other risks like those found in traditional biopharma startup companies.

As more states legalize psychedelics and implement regulatory structures, will the heavy emphasis on traditional biotech persist? For the states that have legalized psychedelics, it is clear medical and assisted therapeutic uses are the prevailing impetus. Under both the Oregon and Colorado regulatory structures, recreational “dispensary-style” models are not included. Rather, there is a heavy emphasis on education, assisted therapy, and facilitated treatment—something that has not been included in cannabis legalization programs.

Unlike cannabis, psychedelics cause a more full-body sensory experience, often with a strong visual component. For psychedelics to be integrated into society, proper education about their power and cultural significance will be crucial for broad societal integration and acceptance.

As society moves toward widespread psychedelic integration, the question remains: Can the psychedelics industry find the legitimate and lucrative foothold cannabis has been unable to find, or will this be yet another morass of overregulation stifling innovation?

Only time can answer the question, but in comparing today’s psychedelics movement to the cannabis industry in its infancy, we already can identify stark differences—and some opportunities.

Nico-Pento-Headshot man with beard in suit and maroon tie As an attorney and senior policy advisor for Bianchi & Brandt, Nico Pento calls upon his background in government affairs, traditional private practice, and highly regulated industries to align the law firm’s government affairs division with its business and litigation services. Previously, Pento served as director of government affairs and vice president of external affairs for multistate operator Terrapin Care Station and policy director for the Republican caucus in the Colorado House of Representatives.

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