Colorado regulators are tripping as they prepare to roll out ‘magic’ mushroom legalization

The Colorado Department of Regulatory Agencies recently warned state lawmakers that it is unprepared for its assigned job of implementing the state’s new, second-in-the-nation legal “magic mushroom” industry, which voters approved in November.

The department – which normally oversees sectors like insurance and banking – is tasked with quickly adopting a regulatory structure under which psychedelic mushrooms can be legally consumed by people 21 and older at licensed facilities. The facilities are set to open as soon as late 2024. DORA will also be responsible for writing regulations governing the cultivation and manufacturing of psychedelic mushrooms, as well as protecting consumers, developing public education campaigns and making recommendations to the Legislature about how to shape the industry.

There’s just one problem: DORA says it has no idea what it’s doing when it comes to psilocybin, the hallucination-inducing compound derived from psychedelic mushrooms.

“This is an area completely outside the scope of any existing expertise or regulatory history within the department,” DORA wrote in a budget document submitted to the legislature’s Joint Budget Committee. “This is unlike anything else the department regulates. The department has no resources or expertise to begin implementation of this expansive new program involving substances with agricultural, controlled substance, chemical/scientific and facility issues.”

Proposition 122, which legalized magic mushrooms, passed by nearly 8 percentage points. The measure was unique in that it specifically charged DORA with rolling out the psilocybin industry, as opposed to letting the state figure out for itself which of its agencies should be responsible for regulating magic mushrooms. And it doesn’t appear Proposition 122’s proponents reached out to DORA to see if it could handle the responsibility.

“Did they come sit down and say do you want to take this? I don’t think so,” said Katie O’Donnell, a spokeswoman for DORA. “It could have gone in a lot of places. It doesn’t fit perfectly in any of them.”

(Patty Salazar, who leads DORA, declined an interview request as her agency works to determine who will take on the psilocybin assignment.)

The Colorado Department of Revenue, for instance, regulates the cannabis industry. Hemp is handled by the Department of Agriculture.

DORA? It houses the Colorado Civil Rights Division and Broadband Deployment Office. To put it simply: DORA isn’t synonymous with psychedelics.

“It just doesn’t fit in the mold of what we regulate,” said O’Donnell, who explained that DORA is preliminarily planning to handle regulations for psilocybin and the other plants through its Division of Professions and Occupations.

Tasia Poinsatte, who leads the Healing Advocacy Fund, an offshoot of the group that funded the passage of Proposition 122, said supporters of the measure thought DORA was an appropriate place to regulate Colorado’s new psychedelic mushrooms endeavor because of its licensure work.

“Proposition 122 was designed to provide breakthrough therapies to Coloradans for mental health and wellness,” Poinsatte said. “At the heart of this new regulated program are the licensed facilitators who supervise the preparation sessions, the natural medicine administration session, and the integration sessions. We believe it’s appropriate for the agency that regulates other health professions, such as therapists, addiction specialists and nurses, to also regulate this new profession of licensed facilitators.”

Still, Poinsatte said she recognizes DORA may need help creating a “program that works for all Coloradoans and is a model for the rest of the country.” Oregon is the only other state where psychedelic mushrooms are legal, and that only happened Jan. 1.

Proposition 122 allows people 21 and older in Colorado to grow and share psychedelic mushrooms. Sales, however, are not allowed.

Where DORA comes in will be the state-regulated centers OK’d by Proposition 122, where people will be able to make appointments to consume psilocybin.

Gov. Jared Polis last month appointed 15 people to serve on the state’s “Natural Medicine Advisory Board,” which is tasked with advising DORA on implementing the regulations. 5280 magazine reported there were more than 200 people who applied to be on the board.

But DORA says it still needs more help.

In its budget request to the Legislature, DORA said it wants to spend $700,000 this year and next to “contract resources and expertise” to get its trip down the rabbit hole going. It says the speed at which it’s expected to implement rules is unprecedented, and it’s still figuring out the fee structure for legal-use facilities under which it will fund its work.

And once DORA gets its psychedelic mushroom regulations squared away, the work may be just beginning.

Proposition 122 gives the Natural Medicine Advisory Board the option to similarly legalize and regulate a number of other naturally derived psychedelics, including dimethyltryptamine (known as DMT), ibogaine and mescaline, which is found in the San Pedro cactus.