Top Colorado Senator Files Psychedelics Regulations Bill, Drawing Mixed Reactions

Colorado’s Senate president has filed a bill to enact regulations for the possession, cultivation and use of certain psychedelics for personal, therapeutic and spiritual purposes—giving a preview of the policy landscape that may emerge following voter approval of a legalization ballot initiative last year.

The legislation seeks to set rules on “healing centers” where adults 21 and older could receive psychedelic treatment, tighten up policies on cultivation and facilitators, establish licensing requirements, dictate state agency regulatory responsibilities and impose penalties for unsanctioned activities.

While possession, cultivation and sharing certain entheogenic substances became legal for adults after Gov. Jared Polis (D) signed a proclamation certifying the voter-approved ballot measure late last year, the initiative called for an advisory board to develop regulatory recommendations to inform more holistic legislation covering access to supervised psychedelic services and other issues.

But as that process moves ahead, Senate President Steve Fenberg (D) filed a bill on Tuesday that would establish a separate regulatory framework for psychedelics, including provisions that depart from the ballot measure and others that are opposed by certain advocates.

Mason Marks, a law professor at the Florida State University College of Law and co-founder of the Project on Psychedelics Law and Regulation (POPLAR) at the Petrie-Flom Center at Harvard Law School, said that the legislation proposes some “sweeping changes” to the initiative that voters passed last November.

“A few proposed changes represent clear improvements to the original text,” he said. “Others appear to contradict the voters’ will, potentially recriminalizing some psychedelic-related activities. Some changes appear to add unnecessary complexity and potential for confusion.”

Here are some of the key components of the bill: 

The bill would maintain the voter-approved ballot measure’s policy of placing no limits on personal possession of psilocybin, ibogaine, mescaline (not derived from peyote), DMT and psilocyn by adults 21 and older.

Public consumption of psychedelics and underage use would be punishable by a $100 fine.

Adults could only cultivate natural psychedelics, and that activity would need to be at a private residence in an enclosed space that could not exceed 12 by 12 feet—unless within a locality that enacted a policy allowing larger grows. Cultivating beyond prescribed limits wold be punishable by a $1,000 fine.

There would be a pathway for record sealing for people with prior convictions for psychedelic-related activities that have been made legal.

A new Division of Natural Medicine under the Department of Revenue (DOR) would play a central role in regulating the therapeutic program and issuing licenses for cultivators, manufacturers, testing facilities and healing centers. That’s one difference from the initiative, which gave primary responsibilities to the Department of Regulatory Agencies (DORA).

Facilitators who provide psychedelic services, including community-based healing programs and counseling, could not be compensated or reimbursed if they are operating outside of the licensing framework.

An Indigenous community working group—which was not contemplated in the ballot initiative—would be created within DORA to identify and address unintended consequences of the reform, particularly as it concerns the possible commercialization of psychedelics and religious or spiritual exploitation of native people.

The legislation clarifies that synthetic psychedelics are not permitted. And possessing psychedelics with “hazardous materials” like solvents would be considered a Class 2 felony.

Initially only psilocybin and psilocyn could be administered at healing centers, but regulators could add additional psychedelics. The bill differs from the ballot measure by making it so regulators would be able to authorize the supervised use of ibogaine at the facilities at any time, rather than waiting until at least June 1, 2026, as is the case for mescaline and DMT.

There would be four categories of licenses: healing centers, cultivation facilities, product manufacturers and and testing facilities.

The bill maintain’s the ballot measures provisions to block localities from banning healing centers, but says they may enact rules governing time, place and manner of operations.

The deadline for regulators to start accepting and reviewing license applications would be pushed back from September 30, 2024 to December 31, 2024.

Licensed psychedelic businesses will be able to deduct expenses from their state taxes, in a partial workaround to the federal 280E provision.

The bill’s findings section notes that “although there may be tremendous potential in utilizing natural medicine for managing various mental health conditions, healing, and spiritual growth, this potential must be appropriately balanced with the health and safety risks that it could pose to consumers as well as the cultural harms it could pose to indigenous and traditional communities that have connections to natural medicine.”

“Considerable harm may occur to indigenous people, communities, cultures, and religions if natural medicine is overly commodified, commercialized, and exploited in a manner that results in the erasure of important cultural and religious context,” it says.

—Marijuana Moment is tracking more than 1,000 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.—

A hearing on the legislation is scheduled in the Senate Finance Committee on Thursday. Lawmakers face a tight deadline to get the measure passed through the legislature before the session ends in about two weeks.

The bill has received mixed early reactions, with some advocates tentatively supporting the basic framework and others strongly opposing the proposal because of what they consider to be excessive regulations.

“The biggest concerns right now are the obvious recriminalization of common, traditional uses of natural medicine,” citizen lobbyist David Nadelson told Westword. “The simple act of ceremonial sharing of sacred medicine in a forest is criminalized. Growing plants outdoors is criminalized except for small, fenced-in spaces. Guides and healers cannot be compensated when natural medicine is involved.”

Tasia Poinsatte, director of the Healing Advocacy Fund of Colorado, said in a press release on Wednesday that the legislation “is an important step toward reaching that goal, but more work needs to be done to ensure this bill equitably and effectively implements Prop. 122 in a way that reflects the will of the voters.”

“We’re hopeful that by the end of the legislative process, this bill will complement the strong foundation created by Prop. 122,” Poinsatte said.

Melanie Rose Rodgers, a psychedelics reform advocate who was among those who opposed the ballot proposition, announced a lobby day for interested parties to make their voices heard ahead of Thursday’s committee hearing.

Tomorrow is Lobby Day at the Capitol… this bill still doesn’t have a # yet we’re told it will be heard in the Senate Finance Committee 4/20 mid-morning.. this doesn’t give Coloradans ample time to prep, review 87 pages of the bill draft & stakehold #copolitics#coleg#Prop122pic.twitter.com/ORgNLtCdAM

— Melanie Rose Rodgers (@melanierose) April 18, 2023

She told Healing Maps that activists are “going to have to defend ceremonial use” and that the bill “doesn’t seem natural at all” as drafted.

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Photo elements courtesy of carlosemmaskype and Apollo.

Americans Want Congress To Pass Marijuana Banking Bill, Poll From American Bankers Association Poll Finds

A strong majority of Americans support freeing up banks to work with marijuana businesses without facing federal penalties, according to a new poll released by the American Bankers Association (ABA) on Tuesday.

The survey, conducted by Morning Consult, posed two questions on marijuana banking. The first broadly asked respondents whether they support or oppose allowing cannabis businesses to “access traditional banking services, like a checking account or business loan, in states where cannabis is now legal.” Sixty-five said they favor that policy, with just 15 percent in opposition.

Respondents were then asked about whether Congress should approve legislation that would accomplish that reform. For that question, 68 percent said they agree that lawmakers on Capitol Hill should act.

While the prompt didn’t specifically reference the Secure and Fair Enforcement (SAFE) Banking Act, that bipartisan bill would provide the described banking protections, and it’s passed the House in some form six times at this point only to stall in the Senate.

“Consumers clearly agree that now is the time to resolve the ongoing conflict between state and federal law so banks can serve legal cannabis and cannabis-related businesses,” ABA CEO Rob Nichols said in a press release. “Doing so will help banks meet the needs of their communities while enhancing public safety, increasing the efficiency of tax collections and improving the financial transparency of the cannabis industry.”

The survey involved interviews with 2,210 adults from February 18-19, with a +/- 2 percent margin of error.

Late last year, ABA was among several financial, labor and insurance groups to call on Congress to pass marijuana banking reform as part of a large-scale defense bill. While the SAFE Banking sponsor Rep. Ed Perlmutter (D-CO) got the language attached to the House version, it was ultimately removed following bicameral negotiations.

❗❗ More evidence of the overwhelming support for #SAFEBanking.

In a new poll from @MorningConsult & @ABABankers, 68 percent of respondents say Congress should act on #SAFEBanking. #copolitics#cannabishttps://t.co/GsV8wvl7eV

— Rep. Ed Perlmutter (@RepPerlmutter) March 8, 2022

The problem at hand in the Senate is that leadership has insisted on passing comprehensive legalization first before advancing legislation viewed as largely friendly to the industry.

Senate Majority Leader Chuck Schumer (D-NY), who has been a chief barrier to the banking bill’s passage in his chamber, recently signaled he may be open to passing it if certain equity provisions are attached. Perlmutter said he’d be amenable to revisions but cautioned that putting too much in the bipartisan bill could jeopardize some GOP support.

In any case, Perlmutter recently said that he remains “confident” that the opposite chamber will finally take up his bill before he retires at the end of the session.

Meanwhile, the number of banks that report working with marijuana businesses ticked up again near the end of 2021, according to recently released federal data.

It’s not clear if the increase is related to congressional moves to pass a bipartisan cannabis banking reform bill, but the figures from the Financial Crimes Enforcement Network (FinCEN) signal that financial institutions continue to feel more comfortable servicing businesses in state-legal markets.

Some Republicans are scratching their heads about how Democrats have so far failed to pass the modest banking reform with majorities in both chambers and control of the White House, too. For example, Rep. Rand Paul (R-KY) criticized his Democratic colleagues over the issue in December.

In the interim, federal financial regulator Rodney Hood—a board member and former chairman of the federal National Credit Union Administration (NCUA)—recently said that marijuana legalization is not a question of “if” but “when,” and he’s again offering advice on how to navigate the federal-state conflict that has left many banks reluctant to work with cannabis businesses.

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Marijuana Banking Access Included In House Leadership’s Coronavirus Relief Bill

House leadership unveiled a coronavirus relief bill on Tuesday that includes provisions to protect banks that service marijuana businesses from being penalized by federal regulators.

Advocates, stakeholders and lawmakers have been pushing for some form of cannabis reform to be inserted into COVID-19 legislation. And this round, they were successful, with the language of the Secure and Fair Enforcement (SAFE) Banking Act making the cut.

Rep. Ed Perlmutter (D-CO), chief sponsor of the standalone bill that is being included in the new broad package, previously raised the issue in a Democratic Caucus meeting and said Speaker Nancy Pelosi (D-CA) supported it.

I just learned the #SAFEBankingAct is included in the CARES 2.0 package. I have been pushing for this because the #COVID19 crisis has only exacerbated the risk posed to cannabis businesses & their employees & they need relief just like any other legitimate business. #copolitics

— Rep. Ed Perlmutter (@RepPerlmutter) May 12, 2020

“The purpose of this section is to increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses,” the text of the provision, which is attached to the 1,815-page coronavirus relief package, states.

A summary of the legislation says the banking section would “allow cannabis-related legitimate businesses, that in many states have remained open during the COVID-19 pandemic as essential services, along with their service providers, to access banking services and products, as well as insurance.”

“This section also requires reports to Congress on access to financial services and barriers to marketplace entry for potential and existing minority-owned cannabis-related legitimate businesses,” it continues.

The House passed the SAFE Banking Act last year and it’s since sat in limbo in the Senate Banking Committee. Negotiations over the bill have been ongoing, with the Chairman Mike Crapo (R-ID) recommending a series of changes, but Sen. Cory Gardner (R-CO) saying a deal was “close.” 

Advocates have also been asking lawmakers to add language extending access to federal Small Business Administration (SBA) relief programs to cannabis businesses in coronavirus legislation. That didn’t pan out in this package, however.

Currently, SBA specifically prevents marijuana businesses from receiving COVID-related relief due to federal prohibition. That also includes companies that work indirectly with the industry, such as accounting and legal firms.

Rep. Earl Blumenauer (D-OR) introduced a bill last month that would fix that, calling for SBA access for cannabis businesses and ancillary companies. That came after he led a letter with 34 bipartisan members of the House urging leadership to include the policy change in future coronavirus-related bills.

Sens. Jacky Rosen (D-NV) and Ron Wyden (D-OR) made a similar request to Senate leaders in a separate letter.

The new coronavirus bill does include a section that could help people with prior convictions to become eligible for SBA’s Paycheck Protection Program (PPP).

It stipulates that the agency’s lending service “shall include a statement that an applicant is not ineligible for assistance under this paragraph solely because of the applicant’s involvement in the criminal justice system.’’

That provision seems responsive to a request that Reps. Joe Kennedy III (D-MA) and Joyce Beatty (D-OH) made in a letter to leadership last month. The pair stressed that the current policy renders even those with cannabis possession convictions ineligible for PPP.

Small business owners should not be denied a lifeline because of past mistakes as minor as marijuana possession.

That’s why @RepBeatty and I fought for this language to be included in this next package to protect those small biz owners, their workers and their communities. https://t.co/5Cyr0x03Xb

— Rep. Joe Kennedy III (@RepJoeKennedy) May 12, 2020

Here’s how advocates are reacting to the news about cannabis banking being included in the COVID legislation:

Blumenauer told Marijuana Moment that the “inclusion of the SAFE Banking Act is recognition that cannabis businesses have been classified as essential.”

“Prohibiting these businesses from banking and forcing cash-only transactions in the middle of a global health crisis is irresponsible and wrong,” he said, adding that he’s encouraged that those with former convictions would be eligible for PPP access under the bill. “The passage of the bipartisan SAFE Banking Act will be a huge benefit, not only to the industry but to our communities and public safety.”

Justin Strekal, political director of NORML, said in a press release that the provision’s inclusion “is a positive development, but one that’s akin to applying a band-aid to a gaping wound.

“In the majority of states, these cannabis businesses have been deemed essential during this pandemic. But at the federal level, they are being cast aside by Congress. Those small cannabis businesses facing tough economic times are essentially being told by Congress to shutter their doors and fire their employees.”

“While larger, better capitalized players may be able to weather this storm, smaller cannabis businesses may not be able to do so absent some economic stimulus,” he added. “By continuing to deny these small businesses eligibility to SBA assistance, it is possible that we could see an acceleration of the corporatization of the cannabis industry in a manner that is inconsistent with the values and desires of many within the cannabis space.”

Aaron Smith, executive director of the National Cannabis Industry Association, said “we commend the congressional leadership for prioritizing public health and safety by including sensible cannabis banking policy in this legislation.”

On behalf of the legal cannabis industry, we commend the congressional leadership for prioritizing public health and safety by including sensible cannabis banking policy in this legislation. #SAFEBankingAct#CannabisIsEssentialhttps://t.co/toYmDYjwy2pic.twitter.com/uh76Tfv8XV

— Aaron Smith (@FAaronSmith) May 12, 2020

“Our industry employs hundreds of thousands of Americans and has been deemed ‘essential’ in most states,” he said. “It’s critically important that essential cannabis workers are not exposed to unnecessary health risks due to outdated federal banking regulations.”

Saphira Galoob, executive director of the National Cannabis Roundtable (NCR), said that “cannabis businesses are dealing with the same hardships as other small business without the same critical financial tools and reliable banking services.”

“Providing access to banking services removes some of the shackles that are holding back the full potential of the fastest growing sector of the US economy,” she said. “NCR applauds the House for acknowledging the legitimacy of cannabis businesses, and especially the work of Congressman Perlmutter who has been a tireless champion for the industry and its thousands of small businesses and workers.”

Kevin Sabet, president of the prohibitionist group Smart Approaches To Marijuana, said cannabis companies “should not be given consideration in a bill designed to help people who are suffering in this country.”

pic.twitter.com/B9FxlGhnuW

— SAM (@learnaboutsam) May 12, 2020

“And while it is encouraging to see Congressional leadership taking serious steps to help mitigate the impact of COVID-19, the inclusion of such a blatant giveaway to Big Marijuana—which would allow cartels and criminal syndicates to potentially access our financial —should be a complete nonstarter as the discussions over this package continue,” he said.

A House floor vote on the COVID-19 package is expected as early as Friday. It remains to be seen whether the Senate will go along with the banking provision’s inclusion.

Read the text of the cannabis banking provisions of the coronavirus relief bill below:

COVID Cannabis Banking Text by Marijuana Moment on Scribd

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