Colorado Announces Start Date for Psychedelic Business Applications

Colorado will be open for commercial mushroom applications just before 2024 ends, according to a recent announcement from the state Natural Medicine Division.

According to the NMD, which is part of the Colorado Department of Revenue, the state will begin accepting applications for psychedelic healing centers, cultivations and testing labs on Tuesday, December 31.

The NMD was created by the state legislature after Colorado voters passed a law that decriminalizes certain natural psychedelics and legalizes the clinical and therapeutic use of psilocybin mushrooms. The same 2023 law that created the NMD also mandated that the new agency craft rules for would-be psilocybin operators by October and be ready for applications by December 31 of this year.

Prospective psychedelic business owners must undergo background checks, and all licensees must be located 1,000 feet from a school or child-care facility and comply with local time, place and manner regulations.

In a November meeting with psychedelic stakeholders and prospective applications, NMD officials said they couldn't predict how long the application process would take because of the unknown number of applications and how new state-legal psychedelics are. The NMD won't inspect businesses until after issuing them licenses, either, though local jurisdictions can conduct their own.

The NMD is largely made up of Marijuana Enforcement Divison staffers who also work in the regulation of commercial cannabis. Much as the state did with marijuana, the NMD has been holding stakeholder meetings over the past two years to go over issues such as psilocybin growing limits, testing procedures, licensing fees and more.

"As a new division, we are grateful for what we have learned from the diverse perspectives of stakeholders who participated in our listening sessions and rulemaking meetings,” NMD and MED senior director Dominique Mendiola says in a statement. “We are only the second state in the nation to legalize natural medicine — after Oregon — so we are committed to standing up a regulatory framework that reflects both the will of the voters and the direction of the Colorado General Assembly through proactive collaboration with stakeholders.”

The same voter-approved law that legalized medical psilocybin gave the Colorado Department of Regulatory Agencies the power to legalize the three other natural psychedelics currently decriminalized in Colorado — DMT, ibogaine and mescaline that isn't derived from peyote — by 2026. All four substances are also decriminalized for personal use and cultivation for people 21 and older.