Oregon Health Authority Publishes Psilocybin Draft Rules: License Types, Ownership Requirements, and Location Specifics

By Sally Kent Peebles

Sep 9, 2022

Is your business interested in entering the United States’ first regulated psilocybin market? Vicente Sederberg has specialized in cannabis policy for over a decade, and we understand the complexities of transitioning a controlled substance from a prohibition model to a more nuanced system, in which it is decriminalized or regulated for research and other legal purposes. 

Last week, the Oregon Health Authority (the OHA) published the remaining draft rules to implement Measure 109 – the Oregon voter initiative passed in November 2020 which directed the OHA to license and regulate the manufacturing, transportation, delivery, sale, and purchase of psilocybin products and the provision of psilocybin services. The OHA will begin accepting applications for licensure on January 2, 2023.

The program is structured so that psilocybin products will be cultivated and processed by a licensed Oregon manufacturer and may only be consumed by a client at an Oregon-licensed psilocybin service center. Here is a broad overview of the law and the requirements to apply.

License Types

Applicants may apply for four license types:

Manufacturer License. This license will permit its holder to cultivate, extract and/or produce psilocybin products. The rules limit the species that may be cultivated to psilocybe cubensis and prohibit the manufacture by chemical synthesis.

Service Center License. This is the facility where the “psilocybin services” are held. In Oregon, “psilocybin services" refers to preparation, administration, and integration sessions with a licensed facilitator.

Facilitator License. A psilocybin service facilitator is an individual who facilitates and oversees the provision of psilocybin services. Applicants must have a high school diploma, or its equivalent, must be 21 + years of age and have completed the OHA-approved psilocybin facilitator training program and passed the associated exam.

Laboratory Testing License. A psilocybin laboratory will test psilocybin products.

Ownership Requirements and Limitations

Residency Requirement. Applicants for a manufacturing license, service center license or facilitator license must, until January 1, 2025, provide proof of residency in the State of Oregon for two or more years. For manufacturers and service center operators, if the applicant is an entity, more than 50% of the ownership of the entity must comply with the residency requirement.

Ownership Limitation. An individual may only have a “financial interest” in one manufacturer license and up to five service centers.

Location Specifics

Local Regulatory Power. Local jurisdictions are permitted to opt out of allowing psilocybin licenses in their jurisdiction, but if they do allow them, they are permitted to adopt reasonable time, place, and manner regulations on these businesses. Similarly to Oregon’s cannabis industry, applicants will be required to obtain a Land Use Compatibility Statement from the local jurisdiction demonstrating that the proposed use of the property is consistent with the zoning code.

Property Required for Certain License Types. Applicants for a manufacturing license, service center license or testing license must have a property that is located in a proper jurisdiction and is compliant with required setbacks from schools. There is no property requirement for the facilitator license.

If you are interested in learning more or would like guidance with our licensing and pre-licensing services, please reach out to Sally Kent Peebles at sally@vicentesederberg.com. Sally has actively practiced in Oregon for seven years and is excited to help interested individuals learn how to enter this exciting new market.  

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