Massachusetts Psychedelic Act Analysis. Forming & Funding a Psilocybin Agency
Massachusetts Psychedelic Act Analysis. Forming & Funding a Psilocybin Agency
A 2024 ballot initiative could create a new state agency in Massachusetts, the Natural Psychedelic Substances Commission. What would the agency do and how much will it cost?
*Updated Jan 26, 2024, incorporating comments the Massachusetts ballot campaign sent to Psychedelic Week shortly after publication.
This November, Massachusetts voters may have the opportunity to accept or reject a ballot initiative called the Natural Psychedelic Substances Act.
The thirty-seven-page proposal is multifaceted. One part would legalize the supervised use of five psychedelics. Another would reduce criminal penalties for growing and consuming plants and fungi that contain them. But the lengthy proposal has other features that are often overlooked.
In a series of articles, I’ll analyze sections of the ballot initiative. Today, I discuss the new state agency it would create to regulate psychedelics in Massachusetts, the Natural Psychedelic Substances Commission.
Creating a new agency from scratch is no small task. It requires substantial funding, personnel, and other resources. In 2018, Massachusetts formed the Cannabis Control Commission (cannabis commission). Five years later, its annual expenses exceeded $15 million, and the agency had been plagued by controversy.
In 2023, three top officials were suspended and investigated, including chair Shannon O’Brien, and the agency director resigned. In December, State Senator Michael Moore said, “the agency, is in disarray” and called for an oversight hearing,
The Natural Psychedelic Substances Act is positioned to replicate the costs and controversies of the cannabis commission by forming a similar agency for psychedelics. But the proposal’s appearance on the November ballot is not guaranteed. In Massachusetts, the legislature can choose to enact an initiative as written by proponents, which eliminates it from the ballot. Alternatively, lawmakers can propose a substitute bill, or they can do nothing, and then voters could decide the original initiative’s fate.
At the very least, given the embarrassment caused by the state cannabis commission, lawmakers might consider striking the proposed agency from the ballot initiative. But there’s much more they could do to set Massachusetts psychedelic policy on course.
I’ve previously described the ballot initiative’s history. A political action committee called the New Approach PAC (New Approach) organized and oversees the ballot campaign, which is called Massachusetts for Mental Health Options. Described by the Boston Globe as “a deep-pocketed, out-of-state PAC,” New Approach is based in Washington, DC, and its leadership resides in California. The group has supported psychedelic initiatives in Oregon, Colorado, California, and several other states, as well as cannabis initiatives across the country. A 501c4 organization called the New Approach Advocacy Fund, which has the same leadership as the similar-sounding PAC, is also involved with the Massachusetts ballot initiative.
Some Massachusetts lawmakers and community groups oppose New Approach’s ballot initiative and urge the legislature to adopt a substitute. The proposed state psychedelic agency is a major point of contention.
Previous psychedelic initiatives, including New Approach proposals in Oregon and Colorado, made existing agencies responsible for regulating psychedelics. In Oregon, a ballot initiative called Measure 109 gave this role to the state health authority. In Colorado, Proposition 122 gave oversight to the Department of Regulatory Agencies (DORA). The Colorado legislature later divided those responsibilities between DORA’s and the Department of Revenue.
If approved by voters, the Natural Psychedelic Substances Act would be the first law to create a state psychedelic agency. Last year, a California ballot campaign attempted to form a $5 billion psychedelic agency. But the campaign disbanded when polling showed a majority of voters (60%) opposed state funding of psychedelic treatments.
Psychedelic Week asked the campaign why it chose to form a new state agency. Jen Manley of the public relations firm Dewey Square said, “each state will do things a little differently when it comes to regulating psychedelics. The Massachusetts initiative creates a new regulatory agency to oversee the program.”
Opponents of the Massachusetts initiative worry forming a new agency, with input from New Approach, could allow the PAC to fill the agency with out-of-state friends from the cannabis and psychedelic industries. Notably, the officials who would run the agency, including five psychedelic commissioners, need not live in Massachusetts. When drafting the initiative, New Approach required only that commissioners move to the Commonwealth within 90 days after being appointed. Opponents fear this weak residency requirement is a backdoor for installing candidates from outside Massachusetts.
If the initiative reaches the 2024 ballot, and Massachusetts voters approve it, then state officials would appoint the five commissioners. Specifically, the governor, attorney general, and state treasurer would each appoint one commissioner. They would fill the remaining two seats by majority vote. Each commissioner would serve an initial five-year term, which could be renewed for an additional five years.
Manley told Psychedelic Week the initiative “allows the governor, attorney general, and treasurer to appoint regulators who have specific backgrounds and expertise in areas germane to psychedelics.” Further, “[t]he crucial thing we want to see is the psychedelic community working collaboratively with state leaders to ensure that a diverse group of thoughtful experts are appointed to the regulatory agency.”
Though appointment by state officials might appear fair, it can have limitations. In Oregon and Colorado, New Approach agents work closely with government officials, arranging frequent private meetings to influence their decisions. New Approach already has potential political ties in Massachusetts. For instance, Danielle McCourt, who filed its campaign paperwork, was Governor Maura Healey’s finance director for nearly four years.
Psychedelic commission seats could be highly coveted because they are well compensated. One commissioner would serve as chair and be paid $188,911 annually. The remaining four could earn about $141,000 per year, or up to 75% of the chair’s salary. The agency would hire other paid employees, including a powerful executive director appointed by the commissioners. This official would have significant authority and can be thought of as the agency president or CEO. In addition, the director would automatically become chair of the state psychedelic advisory board. This provision is another departure from other states like Oregon and Colorado, where advisory board members appoint their own chair.
According to the initiative, the director would be paid an unknown salary determined by the commissioners. So, technically this salary is unlimited. However, the director of the Massachusetts cannabis commission currently receives $195,000, which gives some indication of what the psychedelic agency director might earn.
The initiative also requires the director to appoint a chief financial and accounting officer who in turn will hire other employees, including lawyers, consultants, and advisors. When adding everything up, the salaries of commissioners and other agency employees quickly surpass $1 million per year. But the agency will have other expenses.
Past spending of the Massachusetts cannabis commission provides a glimpse of what the psychedelic agency might spend. In 2018, the cannabis commission’s first year, the agency spent $2,237,962. Of this total, $1,143,878 provided wages, salaries, and employee benefits. Other operating costs totaled $1,094,084. However, in its second year, cannabis commission expenses mushroomed to nearly five times its first-year budget.
In 2019, the cannabis commission spent over $10 million dollars. Employee salaries and benefits were over five and a half times higher than in 2018 ($6,391,903), and other operating expenses tripled ($3,847,128). In subsequent years, commission expenses ballooned further. In 2022, the governor allocated over $15.2 million to the agency.
One might ask whether the expenses of a psychedelic agency would be comparable to those of a cannabis commission. So far, the regulation of state cannabis markets differs from oversight of psychedelic industries. One key difference is that cannabis is sold over the counter at storefronts called dispensaries, and psychedelics are sold at licensed facilities called service centers, where clients remain under supervision while they experience the effects of psychedelic products.
For now, the only operating state psychedelic market is in Oregon. Colorado’s market remains in the planning stages and won’t open until 2025. In Oregon, there are fewer licensed psilocybin businesses than in many state cannabis markets. For example, in Oregon there are over 800 licensed cannabis dispensaries and only 19 licensed psilocybin service centers.
That might lead one to believe that with fewer businesses to regulate, a psychedelic agency might spend less than a cannabis agency. However, regulating psychedelic service centers, and the facilitators who monitor clients at those centers, adds significant cost and complexity.
While budtenders who staff cannabis dispensaries may require little or no training, Oregon psilocybin facilitators must complete at least 120 hours of classroom training and 40 hours of hands-on practicum training. State psychedelic agencies must develop and approve training program curricula, as well as facilitator practice standards and ethical codes, which must then be enforced.
Regulating psychedelic service centers is arguably more complex than regulating cannabis dispensaries. In addition to being retail establishments, where controlled substances are stored and sold, service centers require private spaces for clients to remain under facilitator supervision. Unlike cannabis dispensaries, they must have restrooms for clients and spaces for them to store food and belongings.
Some service centers will allow group preparation and administration sessions, and regulators must make and enforce rules for those sessions and facilities. Requirements for client safety screening protocols and transportation plans must also be drafted and enforced. Because state cannabis markets don’t screen clients, and most require off site consumption, they lack comparable regulatory requirements.
These complexities raise the cost of establishing and overseeing state-regulated psychedelic programs. In Massachusetts, the state psychedelic agency would be responsible for drafting and enforcing these and other rules regarding psychedelic business licensure and operation.
But there could be insufficient funds to compensate for the added regulatory complexity. During the 2020 campaign to pass Oregon’s psilocybin law, proponents estimated the program would cost the state about $3 million per year. New Approach’s campaign promised voters it would pay for itself by 2023 with revenue from business license fees. However, in late 2022, Oregon regulators said the program was nearly out of money. In 2023, they asked state lawmakers for $6.5 million to fund program operations for two years. The legislature gave them less than half, or $3.1 million, and the program’s financial future is uncertain.
Creating and operating a Massachusetts psychedelic agency would likely be more expensive. One reason is that Oregon’s Psilocybin Services program is housed within a preexisting agency. Specifically, it’s based at the Center for Health Protection, within the Oregon Health Authority. Creating a branch within an existing agency allows a program to benefit from shared agency resources, including technology and personnel.
André Ourso leads the Center for Health Protection and played a role in establishing Oregon’s psilocybin program. In 2022, the state paid him $160,000. But in addition to implementing Oregon’s psilocybin program, Ourso spread his time across several divisions within the Center for Health Protection, such as Drinking Water Services and Environmental Public Health. In other words, the Oregon public likely got more for the $160,000 it paid Ourso in 2022 than Massachusetts will derive from psychedelic commissioners who would focus solely on psychedelics.
The Oregon Health Authority also employs at least one official devoted full time to psychedelic regulation. Angela Allbee is Section Manager of Oregon Psilocybin Services. In 2022, the state paid her $135,000, near the low end of what Massachusetts would pay most psychedelic agency commissioners. However, Allbee performs many functions of the proposed five-person Massachusetts commission (and its director), at significantly lower cost. Albee receives support from other staff like policy analyst Jesse Sweet who Oregon paid $106,440 in 2022.
Even with a relatively lean staff and shared agency resources, Oregon Psilocybin Services anticipated spending over $3 million per year and could not remain solvent without an infusion of taxpayer funds. There’s no evidence a Massachusetts program would be more successful or sustainable, especially if it forms a new agency with highly paid employees and a lack of shared infrastructure and resources. Further, unlike Oregon, Massachusetts would regulate several psychedelics, including ibogaine, which raises additional regulatory complexities.
According to the ballot initiative, the Massachusetts psychedelic agency would deposit license revenue and monetary penalties collected into a Natural Psychedelic Substances Regulation Fund. The fund would be bolstered by a fifteen percent tax on psychedelic product sales. The Fund’s primary use would be supporting the agency’s operations.
Using tax revenue to fund regulation is one benefit of the Massachusetts proposal over Oregon and Colorado laws, where regulation must be entirely supported by license fees. However, it is unclear how much revenue a tax could generate. Since psychedelic services last several hours, centers cannot serve the volume of clients that one sees at cannabis dispensaries, and as demonstrated in Oregon, there would be far fewer psychedelic centers than cannabis dispensaries.
Campaign representative Jen Manley confirmed this, telling Psychedelic Week, “the regulation of cannabis is very different from regulating psychedelic facilitators. With cannabis there is a high volume of sales that take place at retail storefronts. The scale of production for psychedelics will be far less than cannabis. It is difficult to say with any precision how much the regulatory structure of the psychedelic program will cost and what the state will collect from fees and taxes related to the program.”
With this lower expected sales volume compared to cannabis, and related uncertainty regarding tax and license revenue, the Massachusetts public could be stuck paying for psychedelic agency costs directly, like Oregonians.
Some opponents of the ballot initiative urge Massachusetts lawmakers to adopt a substitute bill drafted by Representative Nicholas Boldyga. This proposal would give the state Department of Health responsibility for regulating psychedelics. Its supporters include the Provincetown, Massachusetts Select Board, which voted last month to promote a substitute bill. A coalition of community groups also backs the proposal, including Bay Staters for Natural Medicine, New England Veterans for Plant Medicine, Parents for Plant Medicine.
In addition to basing oversight within an existing agency, which could reduce program costs, supporters believe a substitute bill would reduce the chances for New Approach to exert hidden influence. That could be the case. But regardless, Boldyga’s proposal would also streamline regulation for the supervised psilocybin program.
According to Bay Staters’ founder James Davis, psilocybin facilitators would undergo criminal background checks and complete a “very small amount of accredited training that would be approved by the Department of Health.” They would pay $155 biennially, “the same way that licensed counselors do.”
State lawmakers have additional options. They could amend the Natural Psychedelic Substances Act, for instance, by retaining its decriminalization provisions and tabling the supervised use program. They could replace supervised use with a task force to study its ideal design, anticipated cost, and implementation. Governor Healey proposed a psychedelic work group in November.
Massachusetts currently leads the nation in local psychedelic decriminalization. Eight cities in the state have made the enforcement of criminal penalties associated with psychedelics their lowest law enforcement priority. Further, state lawmakers, including Senator Patricia Jehlen, have proposed a decriminalization bill. Retaining the ballot initiative’s decriminalization sections would reflect a growing Massachusetts policy trend. It would also have no associated regulatory costs.
Blindly pursuing the ballot initiative’s supervised use program, while most details remain unresolved, and questions from Oregon unanswered, could be a risky gamble of Massachusetts tax revenue. Last month, state tax revenue was down $82 million from the previous year.
Replacing the initiative with a homegrown blend of decriminalization and policy research could be a good solution. It would marry the proposal from Governor Healey with existing legislative proposals and local reforms enacted across the state from Provincetown, Somerville, and Salem to Amherst, Northampton, and Easthampton.
*The views expressed on Psychedelic Week do not represent the views of Harvard University, POPLAR at the Petrie-Flom Center at Harvard Law School, Florida State University, or Yale University. Psychedelic Week is an independent project unaffiliated with these and other programs and institutions.
Mason Marks, MD, JD is a Visiting Professor of Law at Harvard Law School. He is also the Florida Bar Health Law Section Professor at Florida State University, senior fellow and project lead of the Project on Psychedelics Law and Regulation (POPLAR) at the Petrie-Flom Center at Harvard Law School, and an affiliated fellow at the Information Society Project at Yale Law School. Marks teaches drug law, psychedelic law, constitutional law, and administrative law. Before moving to Florida, he served on the Oregon Psilocybin Advisory Board where he chaired its Licensing Subcommittee. Marks has drafted drug policies for state and local lawmakers. His forthcoming book on psychedelic law and politics will be published by Yale University Press. He tweets at @MasonMarksMD and @PsychedelicWeek.