The Controlled Substances Act

In the United States, psychedelic substances are regulated through both federal and state laws. On the federal side, the main governing statute is the Controlled Substances Act (CSA) of the Comprehensive Drug Abuse Prevention and Control Act of 1970. See Gonzales v Oregon, 546 U.S. 243 (2006). The CSA establishes a comprehensive federal scheme to regulate the manufacturing and distribution of controlled substances. To that end, the US Congress recognised that drugs “have a useful and legitimate medical purpose and are necessary to maintain the health and general welfare of the American people”, 21 U.S.C. § 801(1), but that the “illegal importation, manufacture, distribution, and possession and improper use of controlled substances have a substantial and detrimental effect on the health and general welfare of the American people”. Id. § 801(2). The CSA classifies controlled substances into five schedules.

• Schedule I contains substances with the highest risk, deemed to have no accepted medical use, and a high potential for abuse.
• Schedule II contains substances with a similarly high risk, an accepted medical use, and a high potential for abuse.
• Schedule III contains substances with moderate risk, an accepted medical use, and a moderate potential for abuse.
• Schedule IV contains substances with lower risk, an accepted medical use, and a low potential for abuse.
• Schedule V contains substances with the lowest risk, an accepted medical use, and the lowest potential for abuse.

The CSA prohibits manufacturing, possessing, using, and distributing any substances that are classified under Schedule I, absent a DEA registration. The classic psychedelics, which include psilocybin, dimethyltryptamine (DMT), mescaline, methylenedioxymethamphetamine (MDMA), lysergic acid diethylamide (LSD), and ayahuasca, are all classified under Schedule I. Other substances that are not classified as psychedelics but that have psychedelic effects at higher doses, such as ketamine, are classified differently. Ketamine is classified as Schedule III.

Generally, substances in more restrictive schedules are criminalised more strictly, with Schedule I substances such as psychedelics subject to the most severe penalties. See 21 U.S.C. § 841. The CSA singles out LSD for particularly harsh penalties: distributing “1 gram or more of a mixture or substance containing a detectable amount of [LSD]” bears the same penalty as distributing over 500 grams of cocaine or 100 grams of heroin. Id. § 841(b)(1)(B)(v). The US Supreme Court has noted that “there may be little in logic to defend the statute’s treatment of LSD; it results in significant disparity of punishment meted out to LSD offenders relative to other narcotics traffickers”. Neal v United States, 516 US 284, 295 (1996).

The Federal Food, Drug and Cosmetic Act and “Right to Try” Laws

Controlled substances in Schedule I have been deemed to have no “medical use in treatment in the United States” and a high abuse potential. Notwithstanding that designation, multiple psychedelics have proven safe. Both psilocybin and MDMA have been in stage III clinical trials at the US Food and Drug Administration (FDA) and have achieved the designation of “breakthrough therapy”. See the discussion below on beakthrough therapy designation.

The federal statute governing clinical trials is the Food, Drug, and Cosmetic Act (FDCA). 21 U.S.C. §§301–392. The stated purpose of the FDCA is to protect consumers from various risks associated with drugs and biological products. FDA enforces the provisions of the FDCA through administrative proceedings, enforcement actions, and civil and criminal penalties. In general, before a new drug can be introduced into the market, FDA must approve its new drug application or biologics licence application, which must include data from clinical trials. To get this process started, the sponsor of a clinical trial must submit an investigational new drug (IND) application, requiring submission of specific information and compliance with a long list of requirements, to FDA for permission to test the drugs on human subjects. If the application is approved, then the sponsor generally must embark on three phases of clinical trials. An individual may be able to access an IND through a clinical trial.

Investigational new drug laws under the FDCA

While psychedelics are controlled substances, federal law regulating their therapeutic use and study has shifted over the years. In 1987, Congress, FDA, and the medical community at large redefined when certain unapproved developmental medicines could and should be used with seriously ill patients.

In May 1987, FDA released final rules (the “IND Rules”) outlining formal procedures “under which promising investigational new drugs may be made available to desperately ill patients before general marketing begins”. 52 Fed. Reg. 19466-01. These rules, which were the first formal implementation of several initiatives to ease and expand access to certain drugs for the treatment of serious and life-threatening conditions, tracked FDA’s 1982 interpretation of “statutory language of ‘accepted medical use with severe restrictions’”. See 47 Fed. Reg. 28141-01 (29 June 1982) (quoting 21 U.S.C. § 812(b)(2)(B)); 12 FDA Drug Bull. 4, 5 (April 1982). According to FDA, its rules were “intended to facilitate the availability of promising new drugs to patients as early in the drug development process as possible, and to obtain additional data on the drug’s safety and effectiveness”. IND Rules, 52 Fed. Reg. 19466-01.

Since 1987, FDA has refined its IND regulations “to improve access to investigational drugs for patients with serious or immediately life-threatening diseases or conditions who lack other therapeutic options and who may benefit from such therapies” and to “facilitate wider availability of investigational drugs in appropriate circumstances”. 74 Fed. Reg. 40900-01, at 40902 (13 August 2009). While the resulting IND Rules had established regulations for using investigational drugs, they did not establish eligibility criteria for such uses, leading to inconsistent policies and access. Id.

To remedy this issue, Congress amended the FDCA in 1997 to facilitate expanded access (otherwise known as compassionate use). Id. at 40900 (citing 21 U.S.C. § 360bbb). In 2009, the Expanded Access Rule implemented the amended FDCA and amended FDA regulations to make investigational treatments available to patients before FDA approval in three situations: (i) to individuals in emergencies; (ii) to intermediate-size patient populations; and (iii) under an expanded-access treatment protocol. 74 Fed. Reg. 40900-01, 40901 (13 August 2009). According to FDA, these enumerated categories reflect consensus in the medical community and balance competing concerns surrounding expanded access. Id. The regulations give “patients a meaningful and reasonable measure of autonomy over their own healthcare decisions while preserving the integrity of the drug approval process and protecting patient safety”. Id. at 40902. FDA gradually moved away from a hardline stance on developmental drugs and new uses of drugs in favour of the greater flexibility asked for by the medical community and patients. However, in practice, access to psychedelics, as developmental drugs, has been hampered by their Schedule I designation, see infra Sections 1.1(II)(3)–(4).

FDA’s breakthrough therapy designation

Shortly after promulgation of the 1987 IND Rules, FDA established a second pillar to expedite the development of life-saving treatments. See 53 Fed. Reg. 41516-01, 41519 (21 October 1988) (codified at 21 C.F.R. §§ 312.80–.88, 314.125). This rule aimed “to speed the availability of new therapies to desperately ill patients, while preserving appropriate guarantees of safety and effectiveness” and “to facilitate the development, evaluation, and marketing of such products, especially where no satisfactory alternative therapies exist”. Id. at 41516. The rules “reflect the recognition that physicians and patients are generally willing to accept greater risks or side effects from products that treat life-threatening and severely debilitating illnesses, than they would accept from products that treat less serious illnesses”. 21 C.F.R. § 312.80.

In 2012, Congress expanded the expedited-review protocol. Recognising that “[p]atients benefit from expedited access to safe and effective innovative therapies to treat unmet medical needs for serious or life-threatening diseases or conditions”, Food and Drug Administration Safety and Innovation Act, Pub. L. No. 112–144, 9 July 2012, 126 Stat. 1083, Congress statutorily defined a “breakthrough therapy” as a drug intended to treat “a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies”. 126 Stat. at 1086 (codified at 21 U.S.C. § 356(a)).

FDA expounded on this definition in a 2014 Guidance, entitled Guidance for Industry, Expedited Programs for Serious Conditions – Drugs and Biologics (May 2014). There, it explained that for a drug to achieve a breakthrough therapy designation, FDA must identify preliminary evidence sufficient to indicate that the drug may show substantial improvement in effectiveness or safety over available therapies, but in most cases not sufficient to establish safety and effectiveness for approval. 2014 Guidance at 11.

In 2017, FDA designated two psychedelics, psilocybin and MDMA – and in 2024, LSD as well – as breakthrough therapies, expediting the study of psilocybin for depression, MDMA for post-traumatic stress disorder, and LSD for generalised anxiety disorder in clinical trials.

Federal and state right-to-try laws

Between 2014 and 2018, as FDA overhauled its expanded access regulations, 41 states enacted Right-to-Try (RTT) laws, allowing psychedelics to be used in limited situations for medical applications involving terminally ill patients.

In 2018, Congress followed suit by adding § 561B to the FDCA, “establish[ing] national standards and rules by which investigational drugs may be provided to terminally ill patients” and providing an exemption to the statute’s safety/efficacy requirement, permitting therapeutic use of “unapproved” drugs by terminally ill patients under specified conditions and allowing use of unapproved investigational drugs that have successfully completed Phase 1 clinical trials with dying patients.

These RTT laws underscore the paradigm shift that FDA and Congress have recognised since the late 1980s: in certain circumstances, investigational or developmental drugs should be available (with severe restrictions) for patients with life-threatening illness.

Even so, the US Drug Enforcement Administration (DEA) has steadfastly refused all requests to access psychedelics under RTT laws. A bill introduced in 2022, S.B. 4575, would have amended the federal RTT statute to expressly include Schedule I substances, but the bill died in committee.

Recent developments in federal case law

The disconnect between the passage of RTT laws and their application has prompted the need for litigation. A salient example is Advanced Integrative Medical Science Institute PLLC v Garland, 24 F.4th 1249 (9th Cir. 2022). In early 2021, Petitioner Dr Sunil Aggarwal sought to provide psilocybin to his terminally ill patients for therapeutic use under Washington state’s RTT law. Yet, because of psilocybin’s Schedule I status, no supplier would provide Dr Aggarwal with psilocybin without DEA consent. Despite Dr Aggarwal’s multiple proposals to DEA to legally permit him limited access to psilocybin for use under state and federal RTT, DEA rejected each request, claiming that the CSA trumps the RTT. Left with no choice, Dr Aggarwal petitioned the US Court of Appeals for the 9th Circuit to review DEA’s decision. Following oral argument, the case remains pending in the 9th Circuit.

In a related case, in which Dr Aggarwal sought judicial relief related to DEA’s denial of his petition to reschedule psilocybin, the 9th Circuit granted his petition and remanded to DEA to reconsider rescheduling psilocybin. See Aggarwal v US DEA, No 22-1718, 2023 WL 7101927, at *2 (9th Cir. 27 October 2023).

Attorneys from the law firms Perkins Coie LLP, Porter Wright Morris & Arthur LLP, and Yetter Coleman LLP, as well as the National Psychedelics Association, represent AIMS and Dr Aggarwal in these actions.

State Law

While psychedelics remain illegal federally, the story is different in some states. Most notably, Oregon and Colorado have legalised psilocybin for psychedelic-assisted therapy.

• Oregon – in November 2020, Oregon became the first US state to legalise psychedelic-assisted therapy with the passage of Ballot Measure 109, creating an assisted therapy programme for administering psilocybin products to individuals aged 21 and older. Oregon voters also approved Ballot Measure 110, which decriminalised possession of small amounts of all substances, including psychedelics. In 2024, drug possession was recriminalised through House Bill 4002, but the licensed sale and therapeutic use of psilocybin remains legal under Measure 109.
• Colorado – in November 2022, Coloradans voted to pass Proposition 122, which legalised consumption of psilocybin in a service centre with a state-licensed professional. Proposition 122 also decriminalised personal possession, growth, sharing, and use of natural psychedelic substances for individuals aged 21 and over. Colorado’s legalised service centres are expected to become operational in early 2025.

The following states have either passed bills or are considering legislation legalising some therapeutic use of psychedelics.

• Utah – in March 2024, Utah governor Spencer Cox signed into law Senate Bill 266, creating a pilot programme that allows doctors at the University of Utah Health and Intermountain Health the option to treat patients with psilocybin and MDMA. The law went into effect on 1 May 2024, but no patients have been treated because of an inability to access psilocybin. Utah also created a task force to provide recommendations on any “psychotherapy” drug when treating mental illness, but that work is on hold pending federal permissibility.
• Massachusetts – Massachusetts Question 4, titled “Legalization and Regulation of Psychedelic Substances Initiative”, is on the 5 November 2024 ballot. If passed, it would legalise growth, possession, and use of a personal amount of psychedelics and legalise their supervised administration at licensed treatment centres.
• New Jersey – in October 2024, Bill A3862 advanced to the full New Jersey Senate for consideration. If passed, New Jersey would become the third state to legalise supervised psilocybin services, allowing for the therapeutic/clinical use of psilocybin in regulated settings. The bill creates a 15-member advisory board to roll out the programme and a licensing process over an 18-month period.
• Arizona – in June 2024, Arizona governor Katie Hobbs signed Senate Bill 1677, which permits providing workers’ compensation for MDMA-assisted therapy for treatment of post-traumatic stress disorder (PTSD) among firefighters/certified peace officers, should MDMA be federally legalised.
• Nevada – in January 2024, Nevada passed Senate Bill 242, establishing a working group to study issues relating to therapeutic use of entheogens.
• Texas – in June 2021, the Texas legislature enacted House Bill 1802, allowing research at the Baylor College of Medicine and the Michael E. DeBakey VA Medical Center to conduct studies on alternative therapies, including the use of MDMA, psilocybin and ketamine, in treating PTSD.

Other US states are considering bills regarding psychedelic substances or have had cities move to decriminalise psychedelic substances.

• California – while psychedelic substances are not yet legal at the state level, Oakland, Santa Cruz, Arcata and San Francisco have decriminalised entheogens such as psilocybin, by deprioritising enforcement on these psychedelic substances.
• Connecticut – the Connecticut House of Representatives is considering House Bill 5297, concerning decriminalisation of possession of small amounts of psilocybin. Senate Bill 1063 includes provisions for establishing a working group to study psilocybin’s health benefits.
• Hawaii – the Hawaii House of Representatives is considering House Bill 1340, which would establish a Temporary Breakthrough Therapy Designation Advisory Council within three months of certain breakthrough therapy designation approvals by FDA.
• Maryland – Maryland lawmakers are considering several bills that would implement actions related to psychedelic substances, including establishing task forces for making recommendations on psychedelic policies and establishing funding for studying alternative therapies to PTSD treatment. See HB 548, 709, 1009.
• Vermont – the Vermont Senate is considering Senate Bill 114, which would establish a working group to make recommendations on whether to establish a programme similar to programmes in Colorado or Oregon.
• Washington – the Washington Senate is considering Senate Bills 5263 and 5693 to assess the feasibility of enacting a measure similar to Oregon’s Measure 109.

In addition, at the time of this writing, Illinois, Indiana, Maine, Missouri, New York, Oklahoma, Rhode Island, Virginia, and West Virginia are also considering bills related to psychedelic substances, including potentially legalising the therapeutic use of such substances.

The US Drug Enforcement Administration (DEA)

Scope of authority

At the federal level, the regulatory body that implements and enforces the CSA is DEA. DEA designates substances (which include psychedelic substances) for control. That includes substances controlled through formal rulemaking if the substance satisfies the applicable statutory criteria and FDA scrutiny. See 21 U.S.C. § 811(a) and (b). DEA may also designate a substance for control if required by the international treaty obligations of the United States. DEA’s mandate includes two sets of provisions of the CSA.

• Trafficking provisions – establish penalties for the production, distribution, and possession of controlled substances outside the legitimate scope of the registration system. See 21 U.S.C. §§ 841-865, 871-890.
• Registration provisions – require individuals and entities working with controlled substances to register with the federal government, take steps to prevent diversion and misuse of controlled substances, and report certain information to regulators. See 21 U.S.C. §§ 821-832. 

Violations of the registration provisions of the CSA generally do not rise to the level of criminal offences, but DEA may refer serious violations for criminal prosecution, which may yield fines and even prison sentences. Violations of the CSA’s trafficking provisions are criminal offences, carrying large fines and lengthy prison sentences.

DEA’s scheduling authority and FDA’s scope of authority

In addition to enforcement, DEA implements the CSA by making scheduling decisions through an interagency administrative process. DEA may undertake administrative scheduling on its own initiative, at the request of the US Department of Health and Human Services (HHS), or on an interested party’s petition. If DEA denies a petition to begin scheduling proceedings, that denial is subject to judicial review, where the standard for overturning a denial is the “arbitrary and capricious” standard. Ams. for Safe Access v DEA, 706 F.3d 438, 440 (D.C. Cir. 2013).

Before initiating rulemaking proceedings, DEA must request a scientific and medical evaluation of the substance from HHS, which has delegated this role to FDA. FDA considers many factors in the scientific and medical evaluation, including the substance’s potential for abuse and dependence, scientific evidence of its pharmacological effect, the state of current scientific knowledge regarding the substance, any risk the substance poses to the public health, and whether the substance is an immediate precursor of an existing controlled substance. After evaluating these factors, FDA makes a recommendation to DEA on whether the substance should be controlled and, if yes, where it should be placed on the schedule. DEA is required to defer to FDA and HHS on matters involving scientific and medical use. See Gonzales, 546 US at 265. DEA must defer to FDA’s medical and scientific conclusions, but DEA may place drugs on a different schedule than that recommended by FDA. See Questions Related to the Potential Rescheduling of Marijuana, 48 Op. O.L.C. _, slip op. at 4 (11 April 2024).

Legalised States’ Regulatory Bodies

In states that have legalised psychedelic substances (at the time of this writing, Oregon and Colorado), usage of certain psychedelic substances by people over age 21 is legal under the supervision of licensed providers. In those states, the scope of authority for regulatory bodies focuses on licensure and regulating the manufacturing, transportation, delivery, sale, and/or purchase of the legalised psychedelic medicine. These regulatory bodies include Oregon Psilocybin Services, within the Oregon Health Authority Public Health Division’s Center for Health Protection, and the Colorado Department of Regulatory Agencies and Department of Revenue.

Self-regulating authorities are essentially non-existent in psychedelics.

There is no legal commercial marketplace in psychedelics. The regulated psychedelic-assisted therapy market in Oregon is estimated to be valued between USD2.8–8.8 million (Colorado will not start opening legal treatment centres until 2025). Companies engaged in clinical trials of psychedelics have a combined valuation of around USD600 million, though it is difficult to estimate true market size due to the lack of organised markets for psychedelics. There are no recent, reliable estimates for the scope of the illicit market.

Tensions Between Federal and State Law

There are tensions between federal and state law that currently make it difficult to effectuate real progress. While states move to decriminalise, legalise, or regulate psychedelics, the federal government still treats psychedelic substances as controlled substances with no medical utility and an abuse potential higher than cocaine and fentanyl. This challenge applies to all market participants involved in the possession, sale, or use of psychedelic substances, including federally unregistered research into these substances.

Currently, it appears that DEA and FDA are, for the most part, taking a hands-off approach. But that does not mean that priorities and policies could not change at any moment, particularly with a change in administration. In short, despite Oregon and Colorado legalising the use of psychedelic substances for assisted therapy (and other states considering it), these medicines remain illegal at the federal level and in the vast majority of states, even if federal and state agencies have deprioritised enforcement. 

Licensure Issues Under State Law

Market participants in Oregon and Colorado also face risks associated with licensing laws regarding the sale and use of psychedelic substances. Should market participants not be properly licensed for legal sale and use of psychedelic substances, they may face state penalties if they do not follow procedures to obtain state licences as well as the looming threat of federal enforcement. 

Liquidation and Bankruptcy

The tensions between federal and state law also extend to liquidation and/or bankruptcy procedures that market participants may face. Because psychedelic substances are federally regulated as Schedule I substances, market participants do not have access to federal bankruptcy proceedings and procedures. As such, market participants winding down their businesses may face the risk of having to liquidate and/or distribute assets without the benefit and protection of federal bankruptcy proceedings. This presents a unique legal risk for market participants, particularly in the context of the inherent market volatilities.

Federal Pre-emption – Cannabis Analogue

In the past two decades, 38 states have enacted medical-use cannabis programmes and 24 have enacted recreational programmes, despite cannabis being classified as Schedule I under federal law. This friction between state legalisation and federal pre-emption by the CSA has been resolved, for the most part, by deliberate federal non-intervention. In 2013, the US Department of Justice (DOJ) released what is now known as the “Cole Memo”. The Cole Memo stated that state medical-use cannabis programmes could minimise the risk of federal intervention by self-regulating in accordance with DOJ’s interests in enforcing the CSA.

• Preventing the distribution of marijuana to minors.
• Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels.
• Preventing the diversion of marijuana from states where it is legal under state law in some form to other states.
• Preventing state-authorised marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity.
• Preventing violence and the use of firearms in the cultivation and distribution of marijuana.
• Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use.
• Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands.
• Preventing marijuana possession or use on federal property.

Many states appropriated this guidance to create their medical and adult-use cannabis programmes and have since regulated with minimal federal intervention.

Psychedelics face similar challenges, and the Cole Memo is instructive to practitioners and state governments navigating the legalisation of psychedelic substances. Like cannabis, psychedelic substances are classified as Schedule I. The lessons of state cannabis legalisation and the lack of federal enforcement of the CSA may provide guidance for states and serve as useful models for other experimental medical-use and/or therapeutic use programmes for Schedule I drugs. See also 3.3 Adult-Use Markets.

Still, DOJ’s public stance on the CSA can and has changed with new administrations. For example, in 2018, DOJ under the Trump administration rescinded the Cole Memo’s non-interventionist enforcement of the CSA. However, in the years since, the federal regulatory landscape has remained substantially unchanged. Thus, although the Cole Memo was published more than a decade ago, it nonetheless remains a helpful analogue for minimising potential federal intervention in medical-use psychedelics programmes. To date, there has been no explicit federal guidance on state psychedelics laws, despite two states legalising psychedelic-assisted therapy.

State Legalisation and Local Bans

Even after a state legalises psychedelics, the municipalities and cities within that state may have the ability to ban those substances. Oregon and Colorado have taken different approaches to such local bans. In Oregon, Measure 109, which legalised psilocybin use, allowed for cities and municipalities to maintain a ban on psilocybin. Presently, 25 counties and over 100 cities in Oregon maintain a ban and opted out of the state legalisation programme.

On the other hand, Colorado’s Proposition 122 prohibits municipalities and cities from banning access to psychedelic-assisted therapy. In practice, it is important to understand local laws or regulations on psychedelic substances (if any) before taking any action.

Dormant Commerce Clause

The Cole Memo highlights that one of DOJ’s chief concerns about Schedule I substances is interstate diversion. Many states have self-regulated around this issue in cannabis legislation by prohibiting the transportation or sale of cannabis outside the state.

The dormant commerce clause (DCC) limits states’ ability to regulate commerce in their state with regulations that are facially discriminatory against citizens of other states or with regulations that unduly burden interstate commerce. The DCC generally does not allow states to restrict commercial rights afforded by that state to the residents of other states absent congressional approval or a showing of a compelling state interest. For example, durational residency requirements for obtaining a commercial licence, such as a liquor licence, are usually subject to strict scrutiny. See – eg, Tenn. Wine & Spirits Retailers Ass’n v Thomas, 588 US 504, 513-514 (2019). Likewise, a regulation that unduly burdens interstate commerce with negligible benefits to the enacting state violates the DCC, such as a requirement that all trucks driving in a state have uniform mudflaps despite many travelling interstate. See Bibb v Navajo Freight Lines, Inc., 359 US 520, 529 (1959). Federal courts, however, are split on whether to apply the DCC to protect the interstate market for Schedule I substances. See Tommy Tobin & Andrew Kline, A Sleeping Giant: How the Dormant Commerce Clause Looms Over the Cannabis Marketplace, Yale L. & Pol’y Rev., 3 January 2022.

Once again, the cannabis industry provides a useful analogue. Most courts have upheld DCC protection in the cannabis industry by striking down state residency requirements in cannabis programmes. Id. Some jurisdictions, however, such as Oklahoma, have abstained from ruling on the issue, and others, such as Washington, have upheld state residency requirements for cannabis programmes. The reason for the split is the federal illegality of cannabis, so practitioners should expect jurisdictions to have similarly conflicting positions in applying DCC protection to other Schedule I substances, including psychedelics. Practitioners should research the target state’s treatment of cannabis under the DCC to inform their decision-making on psychedelic substances.

United Nations Convention on Psychotropic Substances

The current international framework governing countries’ legal regimes on psychedelic substances is formed by the United Nations (UN) Treaty on Psychotropic Substances (the “1971 Convention”), UN Single Convention on Narcotic Drugs of 1961 (the “Single Convention”), and UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. International Narcotics Control Board (INCB), Annual Report 2023: Chapter II, INCB 17 (2023).

There are currently 184 parties to the 1971 Convention, including the United States. The 1971 Convention contains a similar classification system to the CSA. Like the CSA, Schedule I classification under the 1971 Convention is the most restrictive class, and the treaty “prohibit[s] all use [of Schedule I substances] except for scientific and very limited medical purposes” in designated places either controlled by the government or with specific governmental approval. 1971 Convention, 21 February 1971, 32 U.S.T. 543, Article 7. Further, the 1971 Convention prohibits the “manufacture, trade, distribution and possession” of the substances without prior authorisation or a special licence and requires supervision and recordkeeping. Id. Imports and exports are only permitted when both parties are competent agencies or authorities or are specifically authorised by said authorities. Id. Under the 1971 Convention, DMT, LSD, mescaline, MDMA, psilocybin, and tetrahydrocannabinol (also known as THC) have been classified by the UN as Schedule I substances. See INCB, List of Psychotropic Substances under International Control, INCB 5 (2022).

Importantly, the 1971 Convention framework is not as restrictive as the CSA. The CSA states that Schedule I substances have no currently acceptable medical use, whereas the 1971 Convention finds its designated Schedule I substances to have at least “very little medical purpose”. Additionally, the 1971 Convention does not apply to the plants that contain the psychotropic substances, but the CSA does. Joanna R Lampe, The Controlled Substances Act (CSA): A Legal Overview for the 118th Congress, Cong. Research Serv. Report No R45948, at 1 n.5 (19 January 2023) (“CSA: A Legal Overview”).

International Obligations and the CSA

The 1971 Convention and the Single Convention are not self-executing treaties, meaning they do not hold the force of law in the United States or other countries unless the country passes domestic laws to implement those treaties.

Domestically, the CSA contains a provision that requires the US Attorney General to issue an order remedying any non-adherence to international treaties, conventions or protocols in effect on 27 October 1970, without regard to the fact-finding and formal rulemaking requirements elsewhere in the Act. 21 U.S.C. § 811(d)(1); Joanna R Lampe, CSA: A Legal Overview at 35 n.334. The provision does not apply to substances controlled under the 1971 Convention, including most psychedelic substances. § 811(d)(1). Regardless, whether this CSA provision is enforceable is debatable: it has been posited that this portion of the CSA may be a violation of the private non-delegation doctrine. See Shane Pennington and Matt Zorn, The Controlled Substances Act: An International Private Delegation That Goes Too Far, 100 Wash. Univ. L. Rev. Online 29, 50 (2023).

The relevant CSA provisions on psychotropic substances state that upon notification of a scheduling decision under Article 2 of the 1971 Convention, or upon notice that the CSA and FDCA do not meet the requirements of controlling a psychotropic substance under the treaty, the HHS Secretary must consult with the Attorney General and determine whether existing legal controls are sufficient. 21 U.S.C. § 811(d)(2)–(4). Depending on whether the HHS Secretary believes the controls are sufficient to meet the 1971 Convention’s obligations, the Secretary may initiate formal rulemaking to change the substance to a schedule with more appropriate controls. Id. And if the formal rulemaking process will not be completed in time to meet international obligations, the CSA allows temporary rescheduling of the substance to Schedule IV or V. Id. § 811(d)(4).

In effect, the United States must satisfy its treaty obligations regulating psychedelics. But the United States need not match the 1971 Convention’s Schedules lockstep as evidenced by the government’s guidance on the treaty implications of rescheduling cannabis. The federal guidance on cannabis found that international obligations may be met through scheduling and additional regulations, as opposed to scheduling alone. See below on the Federal Guidance on Cannabis and the Effect on Treaty Obligations. What this means for psychedelic substances is that, because they are classified as Schedule I under the 1971 Convention, any US rulemaking process to reschedule psychedelic substances must be balanced with the international treaty obligations of the United States. 

Federal Guidance on Cannabis and the Effect on Treaty Obligations

The mechanics and associated treaty implications of rescheduling a Schedule I substance under the CSA are on full display with potential rulemaking procedures to reschedule cannabis to Schedule III. See Joanna R Lampe, Legal Consequences of Rescheduling Marijuana, Cong. Research Serv. Report No LSB11105 (1 May 2024); see also Joanna R Lampe, CSA: A Legal Overview at 12, 35, 37. 

Although cannabis is generally governed by the Single Convention, US obligations at the international level are comparable between the Single Convention and the 1971 Convention with slight variations and applicability. If cannabis is successfully rescheduled to Schedule III under the CSA, that could provide an important roadmap for psychedelic substances’ potential rescheduling. DOJ’s Office of Legal Counsel (OLC) determined that both the CSA and the Single Convention allow DEA to satisfy the treaty obligations of the United States through a combination of rescheduling cannabis and implementing additional regulations. See Questions Related to the Potential Rescheduling of Marijuana, 48 Op. O.L.C. slip op. at 28 (11 April2024). Specifically, OLC assessed that placing cannabis in a Schedule III designation under the CSA would not violate the Single Convention’s obligations, so long as additional controls are introduced to close the “modest gap” between CSA’s Schedule III controls and the Single Convention’s Schedule I designation. Id. The federal government had previously believed that US treaty obligations would not allow gap-filling regulations when a Schedule regime itself does not fully meet international obligations. But congressional amendments to the CSA show that a substance can be scheduled lower on the CSA and still be subject to registration regulations and import/export authorisations – which meet international obligations. Id. at 31–34.

Applied to psychedelic substances, OLC’s guidance makes it clear that treaty obligations can be met through a mix of scheduling and supplemental regulations. This means that, like cannabis, psychedelics could be scheduled to a lower CSA schedule, despite being Schedule I under the 1971 Convention. Moreover, the 1971 Convention also does not include regulations on plants containing psychedelic substances, making compliance slightly easier compared to cannabis.

Indigenous and Traditional Use Permitted

Finally, the 1971 Convention contains a carve-out for indigenous plants that contain psychotropic substances when they are traditionally used by “certain small, clearly determined groups in magical or religious rights”. 1971 Convention, 21 February 1971, 32 U.S.T. 543, Article 32. Countries utilising this provision make reservations regarding these wild plants at the time of signing, ratification, or accession and opt out of the Schedule I designation, except for importation and exportation. Id. Because the 1971 Convention also does not apply to plants, there is more opportunity for reform in this space regarding psychedelic substances’ use in magical or religious rights.

The United States has already created a carve-out for Native Americans who use peyote for traditional ceremonial uses. See 42 U.S.C. § 1996. Likewise, in Mexico the indigenous and ceremonial use of peyote and psilocybin are exempted from prosecution. Other countries have embraced psychedelic substances as part of their cultural heritage and legalised their traditional use, such as Peru declaring traditional uses of ayahuasca in native Amazon communities as “Cultural Patrimony of the Nation”, and Brazil’s regulatory regime allowing traditional ayahuasca use. That said, despite other countries’ allowance of psychedelic medicine for ceremonial and traditional use, support in the United States for such non-medical use, beyond the specific carve-out mentioned above, is lagging. DEA is also able to grant religious exemptions when petitioned under the federal Religious Freedom Restoration Act, but the agency rarely grants exemptions to religious groups absent litigation. Iowaska Church of Healing v Werfel, 105 F.4th 402 (D.C. Cir. 2024).

Present State of Psychedelic Medicine

As discussed at length in 1. Regulatory Overview, access to medical psychedelics is currently prohibited by both federal law and most state laws in the United States.

Under the CSA, all classic psychedelics (LSD, psilocybin, mescaline, DMT, etc), as well as MDMA are placed in Schedule I. It is therefore federally illegal in the United States for physicians to prescribe classic psychedelics for any medical purpose. Given the stringent rules governing Schedule I drugs, it is also quite difficult to legally conduct medical research on these substances.

Unlike the classic psychedelics, ketamine is placed in Schedule III. Consequently, although FDA has not approved it for such purposes, physicians may prescribe ketamine off-label for mental health issues. There are currently over 500 legal ketamine therapy clinics in the United States.

Many state legislatures have contemplated legalisation of psychedelic-assisted therapy, particularly with psilocybin. Although some such efforts are still under consideration, of those that have gone to a vote, most have failed. Oregon and Colorado are notable exceptions. By approving Ballot Measure 109 in 2020, Oregon voters legalised psilocybin-assisted therapy at licensed treatment centres in the state, openly defying federal law. In 2022, Colorado voters did the same with Proposition 122.

As of 2024, Oregon and Colorado remain the only states with access to legal psychedelic-assisted therapy. Several states are also considering similar bills and/or ballot initiatives. See 1.1 Primary Laws and Regulations.

Future Trends

Although psychedelic medicine remains generally illegal, regulators and legislatures have shown keen interest in exploring the drugs’ medical potential.

At the federal level, the 2024 National Defense Authorization Act included a bipartisan provision authorising the Department of Defense to fund research on the use of psychedelics as treatment for PTSD and other mental health issues in veterans.

FDA has granted “breakthrough therapy” status to psilocybin, LSD, and MDMA, fast-tracking the review process. Studies of the use of MDMA for PTSD, led by the Multidisciplinary Association for Psychedelic Studies (MAPS) and Lykos Therapeutics, have reached Phase 3 large-scale human trials – the final hurdle for FDA approval. But in August 2024, FDA declined Lykos’s application to approve MDMA as a treatment for PTSD in psychiatric-assisted therapy, citing insufficient data of safety and efficacy. FDA requested that Lykos conduct additional research. Meanwhile, Compass Pathways is conducting Phase 3 trials of psilocybin for treatment-resistant depression, and MindMed has achieved promising results in its Phase 2 trials of LSD for generalised anxiety disorder.

If FDA were to approve one or more psychedelic substances for a medical purpose, that would contradict the “no accepted medical use” criterion for Schedule I designation. FDA approval would thus put pressure on DEA to consider rescheduling the substances. Although DEA is not obligated to reschedule substances in response to FDA approval, DEA is required to defer to FDA on the questions of medical use and safety. Gonzales, 546 US at 265; Questions Related to the Potential Rescheduling of Marijuana, 48 Op. O.L.C. slip op. at 4. (11 April 2024). For example, in 2016 DEA declined to reschedule cannabis, taking FDA findings regarding safety and medical applications as conclusive. 81 Fed. Reg. 53688-01 (12 August 2016).

On the state level, many state legislatures have created task forces, advisory groups, or pilot research programmes to study psychedelics and recommend policy changes. See 1. Regulatory Overview.

Public Opinion

Although the movement is still in its infancy, there is clearly momentum in the United States toward expanded medical access. One driver of this momentum is public opinion. A 2023 poll conducted by the UC Berkeley Center for the Science of Psychedelics found that 61% of voters supported legalising regulated, therapeutic use of psychedelics.

The same poll found much higher levels of support among voters who had personally used psychedelics or were close to somebody who had. This result suggests a positive feedback loop: as more states legalise therapeutic use of psychedelics, and use becomes more common, more people will have first- or secondhand experience with the drugs. Greater familiarity will likely lead to increased public support.

State Legalisation of Psychedelic Therapy

At present, outright legalisation of psychedelic medicine is unlikely to materialise in most states. Many state legislatures are actively considering bills to legalise psychedelic-assisted therapy, however.

Direct democracy mechanisms, such as ballot initiatives and referenda, seem to be a more promising route than relying on state legislatures to achieve medical legalisation. The two states that have legalised psychedelic therapy, Oregon and Colorado, both did so by ballot measure, and Massachusetts voters will consider a similar ballot initiative in November 2024. See 1.1 Primary Laws and Regulations. This trend is unsurprising: as mentioned in 3.1 Access to Psychedelic Medicines Today, the majority of American voters believe that psychedelics should be legalised for medical use. Democratic voters are especially open to legalisation. Future movement toward legalisation of medical psychedelics is therefore most likely to occur via ballot initiatives in blue states (as was the case for medical cannabis). With that said, certain red states, including Utah and Indiana, are also at the forefront.

Expanding Research

If there is one priority that both proponents and critics of psychedelic legalisation can agree on, it is the need for more research. Although the federal government and most states are hesitant to legalise psychedelic medicine, policies to facilitate or fund basic research have been much more successful, as discussed in 3.1 Access to Psychedelic Medicines Today.

The federal government has the power to expedite research into Schedule I substances, like psychedelics, by reforming the CSA’s labyrinthian permitting process. In 2022, Senators Cory Booker (D-NJ) and Rand Paul (R-KY) attempted to do so by sponsoring S.B. 5123, the Breakthrough Therapies Act. But this bill died in committee and never reached the Senate floor. If Congress eventually succeeds at amending the CSA and streamlining research into Schedule I drugs, that will accelerate the wave of medical research already being promoted at the state level.

The federal government could also facilitate research into psychedelics by establishing a research programme under the Office of the US Attorney General. 21 U.S.C. § 872(a) authorises the Attorney General to “carry out educational and research programs directly related to enforcement of the laws under his jurisdiction concerning drugs”. The Attorney General could use this provision to initiate new psychedelic research programmes and to protect existing ones from the threat of legal sanctions, promoting greater understanding of the risks and benefits of these unique substances.

Changes to Federal Policy

In addition to enabling research, the federal government could expand access to psychedelic medicine in other ways. Full legalisation of psychedelics at the federal level seems unlikely at present. But even minor federal policy changes could facilitate greater shifts at the state level.

For example, DOJ could signal that it will not interfere with states that choose to legalise medical psychedelics. Such an announcement could parallel the Justice Department’s 2013 Cole Memo, discussed in 2.1 Common Cross-Jurisdictional Issues. The Cole Memo gave states reassurance that they would not be the target of capricious federal enforcement of the CSA as to cannabis, and it provided valuable guidance for state regulatory regimes. DOJ could signal a similar hands-off approach to embolden states to experiment with psychedelic policy.

Other federal actions would also likely encourage state governments to move toward legalisation, such as FDA approving the use of psychedelics for medical purposes, or DEA reclassifying them to a lower schedule. Colorado, for example, has passed a bill that would automatically legalise MDMA-assisted therapy in the state as soon as it is federally legalised and approved by FDA. Arizona has passed a similar bill relating to workers’ compensation for MDMA-assisted therapy. See 1.1 Primary Laws and Regulations.

Focus on Military and First Responders

Veterans, active-duty military personnel, and first responders suffering from PTSD, depression, and other mental health issues are a highly sympathetic group. Legislatures have therefore been willing to grant these individuals greater access to medical psychedelics than the general public.

For example, in 2023, Congress voted to fund research of psychedelic therapy on active-duty military and veterans suffering from PTSD and depression. Similarly, several states, including Texas, Indiana, and Massachusetts, have passed legislation allowing medical research on psychedelics for veterans and first responders specifically. Virginia is considering a similar law.

Laws permitting medical psychedelic use by veterans, military, and first responders will allow higher-quality research on the drugs’ effects. Depending on results, this could be a stepping stone to broader access in the future.

The Likelihood of a Regulated Adult-Use Market

Although the regulated medical use of psychedelics may not be far off, a legal market for psychedelics for recreational or non-indigenous spiritual purposes is far less likely in the near term.

The American public, although supportive of legalising medical use, is still skeptical of allowing use for other purposes. A 2023 poll conducted by the UC Berkeley Center for the Science of Psychedelics found that only 43% of voters supported legalising psychedelics for spiritual or religious use (beyond the narrow exception for indigenous use already included in the CSA, see 2.2 How Access is Affected by Foreign Law and Regulation). If the question had been asked about recreational use, the approval rate would presumably have been lower.

Thus far, no state legislature has even considered a bill that would outright legalise commercial sales of psychedelics for non-medical use.

Decriminalisation

A potential half-measure on the way to an adult-use market is decriminalisation. Decriminalisation is a far cry from a legal, regulated market. Even in states and cities that have decriminalised psychedelics, the drugs may not be legally sold, and users must resort to the illicit market to obtain them. However, individuals in those jurisdictions will no longer be prosecuted merely for possessing and using psychedelics.

Many state legislatures have considered decriminalisation of psychedelics. However, only Oregon and Colorado have actually done so, and Oregon later reversed course. In 2020, Oregon voters approved Ballot Measure 110, which eliminated criminal penalties for possessing personal amounts of all controlled substances. But in 2024, due to concerns about the state’s fentanyl crisis, this measure was repealed by the state legislature.

Colorado, via Proposition 122 in 2022, decriminalised personal use and possession (but not sale) of several naturally occurring psychedelics: DMT, psilocybin, mescaline and ibogaine. Colorado is currently the only state in which individuals may possess and use psychedelics recreationally without criminal penalties.

Even in states that have not decriminalised psychedelics, some city governments have decided to deprioritise enforcement of laws prohibiting psychedelic possession. Jurisdictions that have unilaterally decided to decriminalise psilocybin or other psychedelics include Denver, CO; Oakland, CA; Santa Cruz, CA; Berkeley, CA; San Francisco, CA; Ann Arbor, MI; Detroit, MI; Seattle, WA; Olympia, WA; and the District of Columbia, among others.

It is possible that other states or cities could decriminalise psychedelics in the near future: Massachusetts currently has a ballot initiative to legalise therapeutic uses of psychedelic substances, and California lawmakers voted to decriminalise psychedelics in 2023 (though the bill was vetoed by Governor Gavin Newsom).

On the other hand, Oregon’s failed experiment with drug decriminalisation has likely dampened enthusiasm for such measures. Even Measure 110’s advocates acknowledge the increase in overdose deaths and homelessness that occurred in Oregon after 2020. It remains an open question whether this surge was caused by decriminalisation, or by external factors such as the wave of fentanyl hitting the market around the same time. But politicians and pundits who favour stricter drug laws have been quick to point to Oregon as a cautionary tale.

Cannabis as a Model for Psychedelic Legalisation

If there were a legal adult market for psychedelics, what might it look like? An obvious analogue is the legal recreational cannabis markets that have been established in dozens of US states.

In states that have legalised recreational cannabis, cannabis may only be sold to individuals 21 and older by state-licensed and regulated dispensaries. These dispensaries must verify the age and identity of their customers and may only sell a limited quantity to each customer. Growers of cannabis must comply with rigorous reporting and testing requirements. Generally, it is illegal for individuals to consume cannabis in public. It is likely that similar rules would govern a legal psychedelic market if one ever emerged.

Cannabis also illustrates the pathway psychedelics might take from criminalisation to legality. In 1996, California became the first state to legalise cannabis for medical use, with several other states quickly following suit. However, it was not until 2012, when over a dozen states had legalised medical cannabis, that Colorado and Washington became the first states to establish legal recreational markets.

Similarly, states may begin to consider legalising the recreational use of psychedelics once medical use is widespread and the safety of the drugs is better established. But in the next decade, policy changes will probably remain limited to medical legalisation and decriminalisation.