EXCLUSIVE: Social Equity, Adult-Use, Commercialization & Regs For Psychedelics, Lessons From Cannabis

(Part three of a three-part series)

See previous stories:

Fox Rothschild Cannabis Attorney Analyzes Psychedelics Regs And Changing Public Perceptions
Psychedelics Education, Rescheduling & Decriminalization As Seen By Fox Rothschild's Cannabis Partner

Part one of our series discussed the growth and specificity of psilocybin therapy as it becomes legalized, potential parallels with cannabis legalization and the need to educate people on what psychedelics actually do and don't do.

In part two, we went through the decriminalization model and its relation to rescheduling on a state level for both psilocybin and cannabis, and the differences they pose.

What about the social equity extracts we can find in the psychedelics bills?

“Using marijuana as the context, most states that have recently taken up an adult use program –Illinois to the East- they all have requirements of some social equity, meaning a preference for people who get licensed at cannabis dispensaries or grow facilities,” Fox Rothschild’s cannabis practice attorney Joshua Horn told Benzinga. “And I get it. Because typically those social equity programs are focused on the individuals unfairly prosecuted historically. And I think we’re seeing that for psilocybin, too.”

Nonetheless, he warns that the issue with these programs is whether the state actually gives enough assistance to the applicants for them to be successful.

“‘You have to have a license, you figure it out’, we might hear, while lots of these people, unfortunately, due to their circumstances don’t have the knowledge or the sophistication to make finances work.”

Horn’s concern, then, is whether social equity programs are name-only, as opposed to reality. “There’s no point in having these programs if they’re not built to succeed,” adding that his skepticism arises from the fact that many of them are not designed to succeed.

An example: “When Illinois rolled out its adult-use program, the legacy medical marijuana had based the option, and either they paid –something like $100- to a regulator or they based their service in an incubator for social equity applicants,” Horn said.

So, the legacy and new social equity program applicants can coexist, but it needs to be done “thoughtfully and correctly” in order to succeed. 

“Illinois looks like that’s the case, it’s succeeded better than other states,” he added. “And now, many of these social equity winners are selling their licenses and making a lot of money. The system in the state was built so they could do that.”

Other states’ adult-use programs, such as New Jersey’s, do not allow a social equity applicant to sell their license until two years after it has been operational, because the state doesn’t want people to get the licenses just to sell them right away.

“So there’s merit and lack of merit to both systems. And I think time will tell whether they work,” concludes the specialized cannabis lawyer.

Predicting Which States Will Follow The Reform Path

“I think we’re going to see Washington state, Michigan, ultimately states that have a pre-existing cannabis adult use program, not just medical,” Horn says. “I think those states are going to be more on the forefront of developing psilocybin programs, just because they’ve seen the way it’s worked in all things.”

In his home state of Pennsylvania, Horn says he was skeptical there would ever be medical cannabis, and now it does. But still, he doesn't see psilocybin being added to the list of legal medicines. “It’s too conservative for it.”

Outside of New Hampshire, Horn sees a possibility in Vermont as well. 

“I don’t necessarily think states in the Northeastern part of the US –and certainly not in the South- will introduce these measures. You’ll see it more in California, Washington state, Michigan and probably Nevada.”

Commercialization And Regulation Across The Country

Horn believes it will happen either one of two ways, be it through companies that have federally-approved drugs or through clinics. Further, the federal level will ultimately see changes too, “like psilocybin being provided in clinics throughout the country in the next 10 to 15 years.”

He expects psilocybin will work out similar to the way medical cannabis did once the educational threshold is surpassed, that is, once it is proven to have beneficial effects, people will most likely be receptive to it. 

“Also, if Oregon deploys its program and it works, I think it’ll have much quicker chances.”

Key points for successful implementation include existing documented evidence that people are getting a real, medical benefit from psilocybin therapy and that the instances of abuse are minimal. 

“Because it’s perception: perception is reality, unfortunately,” says Horn. “And if the perception is ‘This is just an excuse for people to get whacked out on psychedelics’, it’s not going to go anywhere. If the perception is ‘People are getting significant benefits for treating psychological disorders,’ it’ll take hold quickly.”

Photo: Benzinga edit with photo by Flametric, aiyoshi597, Gisele Yashar, Bacsica and Freedomz on Shutterstock.

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Posted In: CannabisNewsPsychedelicsExclusivesMarketsInterviewFox RothschildJoshua Hornmedical marijuanaPsilocybin programPsychedelic-Assisted TherapiesPsychedelics Investing
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