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How to (Prepare to) Open a Psilocybin Business in Oregon Under Measure 109

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In November 2020, Oregon voters passed Measure 109, which creates a state-sanctioned program enabling adults over the age of 21 to access lab-tested psilocybin in a controlled setting, under the supervision of a licensed facilitator. The program doesn’t become operational until January 1, 2023, and in the meantime, the Oregon Health Authority and the Psilocybin Advisory Board are busy working on regulations to govern the program, so currently, there are no legal psilocybin businesses operating, and licenses are not yet available.

So what will the legal Oregon psilocybin industry look like? And is there anything that savvy entrepreneurs and others who wish to engage in the industry can do now to prepare for January 1, 2023? (Besides, of course, having been or partnering with Oregon residents for two years as of that date).

Learning Measure 109

The best way to understand what opportunities may exist in the impending Oregon psilocybin industry is first to understand the basic framework of Measure 109. Keep in mind that we haven’t even seen any draft regulations, so all of this could change, but at present, broadly, there are set to be four types of licenses: 1) laboratory testing; 2) products manufacturing; 3) psilocybin service center; and 4) psilocybin facilitator.

The laboratory testing license allows the holder of the license to operate an analytical testing laboratory at which other license holders can have psilocybin products testing pursuant to the rules. Ultimately, the rules will mandate what testing will be required, but Section 96 of Measure 109 provides some examples of tests that could be required: microbiological contaminants, pesticides, other contaminants, solvents and residual solvents, and psilocybin concentration.

A products manufacturing license is required to manufacture any products containing psilocybin. Subject to rule, a manufacturing license may have different endorsements allowing different types of manufacturing activities; however, what those different activities might be is not described in Measure 109; one could speculate, however, that an endorsement might be required to make edible products. The Oregon Health Authority will establish rules creating a production cap that licensees cannot exceed.

A psilocybin service center license is required to operate a facility at which adults can access psilocybin products, under the supervision of a licensed psilocybin facilitator. Service Centers are not considered healthcare facilities under Oregon law but will be subject to health and safety regulation by the Oregon Health Authority. Most service center employees will need to acquire a worker permit issued by the Oregon Health Authority. Service Centers will have restrictions on where they may be situated; they cannot, for example, be located in an area that is within city limits and zoned exclusively for residential use, or located within 1000 feet of a school. Service Centers may also be subject to local regulations relating to time, place, and manner of operation, and some localities may decide to opt out of allowing manufacturing or service centers altogether, although not laboratories (the facilitator license, in contrast, is personal).

A psilocybin facilitator license is required to facilitate a psilocybin administration session (which, as you now already know, can only take place at a psilocybin service center). Facilitator training, licensure, and conduct will all be regulated under Oregon Health Authority. Regulations pertaining to the training required to be undergone by facilitators in preparation for licensure examination are likely some of the first draft regulations we will see from the Oregon Health Authority. A facilitator must also establish that they meet the two year residency requirement, until January 2025.

An individual can only have a financial interest in one manufacturing license, but a manufacturer licensee may hold multiple endorsements. An individual can have a financial interest in up to, but no more than, five psilocybin service centers. However, an individual may hold multiple licenses.

On advertising: Product advertisements are not allowed under M109. Psilocybin service advertisements will be subject to regulation by the Oregon Health Authority.

The Possibilities of Psilocybin

Now that we have developed a basic understanding of the M109 framework, we can begin imagining the industry that it will shape. While the possible business models under this framework are limited only by human imagination, a few seem obvious. First, psilocybin facilitators will be licensed professionals. There will be a limited supply of these licensees in the beginning of the licensing period, and demand is likely to outstrip demand relatively quickly. However, as the ranks of licensed facilitators swell, it will be important for facilitators to distinguish themselves in various ways in order to remain competitive. We are already seeing ancillary companies offering music and other administration session-adjuncts. Personally, given my background as a musician, I wonder if other musicians will decide to become facilitators, and incorporate live performance into their administration sessions. Visual and other performing artists may also be interested in the experiential possibilities in supervised psilocybin administration sessions.

Psilocybin service centers will open, some with their own staff of facilitators, but others probably renting out facilities to independent facilitators, rules permitting. Larger operations will incorporate resort-like retreats, licensed as service centers, with their own manufacturing license, and a staff of licensed facilitators; the largest will max out their ownership of five centers, along with a manufacturing license, and try to supply product to other service centers.

I expect that some small service centers will open, with licensed facilitators as staff/owners, and do well using a small, sustainable business model. The trick will be for Oregon’s regulators to allow those small businesses to survive.

Stepping into Business

So, how can interested parties prepare to open psilocybin businesses when licensure becomes available?

First, people who want to be licensed facilitators should be watching the Oregon Health Authority rule-making progress very closely, to determine when qualified training programs, or other means of qualification to take the license exam, will be available. Our understanding is, that the Advisory Board is advocating that licensees be in place prior to January 1, 2023, so that licensees may begin providing psilocybin services on the first day the program is active. If this was to occur, it would mean that the licensing exam would have to be given in Q4 2022, at the latest, which means training would have to occur prior to that. Given expected demand, anyone who is serious should be locating a qualified training facility now and reserving a spot. Although we don’t yet know what regulations will govern training programs, existing facilitator training companies, such as SoundMind Center Philly, intend to offer training programs to prepare facilitator license applicants.

Second, anyone who wants to open a physical psilocybin facility, either manufacturing, service center, or laboratory, should understand that there is still a great deal of uncertainty in where these facilities will be allowed to be located. In other words, it is risky to start buying up former hotels or medical buildings, or bucolic farms or pastoral ranches, for that matter, before we understand the local regulations that may apply to limit or even prohibit psilocybin service activities conducted within the locality. However, those with a larger appetite for risk might consider whether a local government such as Multnomah or Lane County, or the cities of Portland, Bend, or Eugene, are likely to adopt significant restrictions, and make a wager on promising real estate on which a licensed premises may (or may not) be situated. To be clear, we do not recommend this approach!

Finally, keep abreast of the Oregon Health Authority rulemaking process, and participate in any public-facing events the agency holds, such as the listening sessions set for December 13-15, 2021. And, of course, the best thing you can do is subscribe to this blog for all the latest news on the Measure 109 rollout, but you knew that already.

You can contact Andrew DeWeese at info@gl-lg.com or 503-488-5424.