The trial would seek approval of ibogaine as a treatment for opioid use disorder, depression, post-traumatic stress disorder, and other behavioral health conditions, especially those suffered by military veterans. If the FDA approves ibogaine to treat a medical condition, the legislation would allow licensed physicians to prescribe ibogaine administration for a patient under supervision.  

The post Proposed Model Policy: “Veterans Mental Health Innovations Act”  appeared first on Reason Foundation.

State-based research and clinical trials

• After years of advocacy by veterans’ organizations and researchers, a bipartisan coalition of state legislators in Texas voted to fund ibogaine research programs (Texas Senate Bill 2308). In 2025, Texas launched a multimillion-dollar endeavor that will allow any state that enacts the VMHI to join the effort on ibogaine clinical trials.
• The most effective way to ensure those in need benefit from ibogaine is to conduct clinical trials using ibogaine as an investigational new drug. Clinical trials are a costly and lengthy endeavor for any one entity, but through VMHI, multiple states will conduct their own local trials, advancing a single unified application to the Food and Drug Administration (FDA).
• Under the VMHI, each participating state selects and funds a research grantee of their choice to conduct ibogaine clinical trials locally with in-state participants.

Multistate collaboration and shared success

• A multistate consortium allows states with limited resources to take part in what could be nearly a billion-dollar endeavor. This public effort to conduct FDA-approved clinical trials will be in partnership with a private drug developer, which will assume financial risk and responsibility for advancing the treatment through the clinical trial process. 
• Under VHMI, states retain the long-term benefits of the research they fund. Instead of handing over value to pharmaceutical companies, the bill keeps the research and development process rooted locally and ensures states are compensated if an application is successful.

Federal government and the role of the FDA

• Ibogaine is deemed a Schedule I drug by the federal government. Engaging in FDA-approved research is the surest way to prove its medicinal and treatment value.
• Once ibogaine is approved by the FDA to treat a medical condition, the VMHI would allow licensed physicians to prescribe ibogaine administration for a patient under supervision.
• The VMHI leaves direct engagement with the FDA to the drug developer, eliminating the need for states to navigate the complex clinical trial application process.

The model legislation for the Veterans Mental Health Innovations Act is available below. The template is designed to be easily adapted by states, with the sections that need customization highlighted.

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Despite $2.7 trillion in public spending to address the drug overdose crisis, the United States continues to experience alarmingly high death rates, strained emergency systems, and ineffective intervention pathways. Current strategies that are largely centered on enforcement and abstinence-only treatment are not meeting the scale or complexity of the drug problem. Public systems remain reactive rather than preventative, leaving taxpayers to fund a revolving door of crisis care that fails to produce meaningful or lasting outcomes.

This policy brief presents a case for integrating harm reduction into the federal response, not as a replacement for drug treatment, but as a pragmatic complement. Harm reduction includes proven tools like naloxone distribution, syringe service programs, fentanyl test strip access, and supervised consumption sites. These interventions reduce healthcare costs, lower disease transmission, and improve individual and community outcomes without requiring drug abstinence. They represent low-cost, high-impact strategies that support public health and public safety alike.

To assess the current drug policy landscape, the brief includes a 50-state matrix evaluating implementation of five core harm reduction policies, including: syringe service programs (SSPs), naloxone access, legality of fentanyl test strips, Good Samaritan laws, and supervised consumption sites (SCSs). While two states meet all five benchmarks, others fall short due to outdated paraphernalia laws, inconsistent naloxone access, and surveillance practices that discourage participation. These gaps reduce effectiveness, create preventable costs, and deter early intervention by eroding trust in care systems.

Key policy recommendations in this paper include decriminalizing essential health tools, strengthening “Good Samaritan” protection laws, limiting surveillance in service delivery, and funding flexible, community-led initiatives. These policy reforms do not expand federal authority or create new regulatory structures. They promote local autonomy and make room for innovation by empowering the organizations best positioned to serve people on the ground.

Harm reduction is a public health approach that prioritizes safety, dignity, and evidence-based care, aiming to build trust in healthcare systems and ensure public resources are used effectively. It’s a practical path forward that aligns with the core principles of reducing government waste, investing in what works, and protecting individual liberty.

Based on the existing evidence, Reason Foundation concludes that expanding access to harm reduction services may be one of the most cost-effective, community-driven uses of funds designated to reduce the harms of the opioid crisis.

Introduction

The United States is confronting a multifaceted drug crisis that carries not only a significant economic burden but a devastating human toll as well. Opioid overdoses alone are projected to claim between 543,000 and 842,000 lives between 2020 and 2032. Beyond the personal loss, these deaths strain emergency response systems, drive up healthcare costs, and contribute to lost productivity and long-term societal expense.

Although treatment options exist, access remains uneven, and relapse rates continue to hover between 40% and 60%. Despite these challenges, many policies continue to prioritize a one-size-fits-all rehabilitation model—often centered around abstinence—which is not sufficient to meet the diverse needs of individuals struggling with substance use disorders.

Traditional treatments for substance use disorders include psychological therapies such as cognitive behavioral therapy, motivational interviewing, contingency management, and family therapy. Medication-assisted treatments (MAT) like methadone, buprenorphine, and naltrexone also offer effective options, as do mutual support groups. However, psychological therapies have an average dropout rate of 30%, and medication-assisted treatments often suffer from limited accessibility and a lack of coordination with psychological or peer-based support systems.

This current system is inefficient, as it fails to reach or retain many of the individuals most in need at great financial cost. For example, among those who inject drugs, preventable infections like HIV and hepatitis C are common due to unsafe injection practices like sharing needles. The average lifetime medical cost of one HIV infection is over $261,000, while hepatitis C treatment can exceed $38,000 per case. Preventable hospitalizations due to abscesses, infections, or overdoses also drive up costs, with each non-fatal overdose costing thousands in emergency department use alone.

In addition to their limitations in efficacy and accessibility, these approaches can unintentionally reinforce harmful stereotypes about people who use drugs. Abstinence-centered rehabilitation often assumes complete sobriety as the only path to recovery. This misconception perpetuates the false notion that one-size-fits-all treatment is effective for everyone. It shapes public opinion of substance use disorder as a moral failing instead of a health issue. It also drives policy and healthcare decisions that discriminate against people who use drugs and restrict access to harm reduction and treatment programs. The persistent ethical condemnation of drug use exacerbates the challenges of treating substance use disorder and prevents people from receiving or even seeking the assistance they need.

Substance use exists on a spectrum. Research shows that most drug use is occasional, short-term, and not associated with addiction. A clinical diagnosis of substance use disorder requires meeting specific criteria outlined in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5), which classifies most drug use as “transient.” Unfortunately, treatment protocols often fail to reflect this definition, sidelining evidence-based approaches that could better align with actual patterns of use in communities.

Current research also supports the idea that addiction is not solely the result of individual behavior, but a complex condition influenced by biological, psychological, social, and environmental factors—including physical dependence. For many people with opioid use disorder, quitting abruptly can be dangerous. Unlike illnesses such as diabetes or cancer, which manifest with relatively uniform effects, the effects of addiction vary significantly from person to person. This complexity undermines the effectiveness of uniform treatment strategies. It also reinforces the importance of broadening public health responses to include harm reduction—a practical, compassionate approach that prioritizes health, safety, and human dignity without imposing immediate or total abstinence.

Harm reduction offers a pragmatic complement to existing treatment approaches. It prioritizes reducing the negative health consequences of drug use, particularly among individuals who are not yet ready or able to pursue abstinence. These programs include syringe service initiatives, naloxone distribution, and access to medication-assisted therapy—all of which have been shown to reduce emergency room visits, lower disease transmission, and improve long-term outcomes.

One illustrative example is Taiwan’s 2005 needle exchange program, launched during a surge in HIV among intravenous drug users. Despite the country’s strict anti-drug policies, the program reduced new HIV infections by 90% within four years—demonstrating the public health and fiscal power of targeted harm reduction policies. Similar evidence from cities like Vancouver and Lisbon supports this trend, showing how such approaches can relieve public health systems while improving the quality of life for individuals and families.

Despite the extensive data supporting harm reduction in mitigating drug-related harm, ongoing misinformation about drugs and those who use them continues to hinder widespread acceptance of these strategies in the United States.

However, other nations such as Portugal, Uruguay, the Netherlands, Canada, and Mexico have shifted towards more effective policies for mitigating the potential dangers of drug use. An international trend is emerging, with more nations adopting harm reduction approaches that uphold individual freedom and recognize the right of people to make informed decisions about drug use and treatment.

American policymakers should similarly refocus drug policies from the supply to the demand side and work primarily to reduce the harmful effects of drug use.

Full Policy Brief: Harm Reduction: An Evidence-Based Approach to the Drug War

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Marijuana liberalization has proliferated throughout the United States over the past decade. Though still technically illegal under federal law, marijuana is now permitted for medical use in 40 states and recreational use in 24 states and the District of Columbia. Attitudes towards marijuana use have greatly changed throughout the United States over the course of the last twenty years. According to a 2024 Pew Research poll, 88% of Americans now believe that marijuana should be made legal for at least medical use, with 57% of Americans also supporting legalization for recreational use. This sentiment stands in stark contrast to public opinion in 2000, when only 31% of Americans supported recreational legalization.

Additionally, major research organizations have concluded that marijuana can effectively treat a range of medical conditions, including chronic pain, according to a report from the National Academies of Sciences, Engineering, and Medicine (NASEM). Other studies show that marijuana is also effective in treating mental illnesses, such as post-traumatic stress disorder. Amid changing perceptions of recreational use and increased understanding of potential medical applications, the U.S. is now considering an adjustment of marijuana’s current prohibited status under federal law.

Despite these trends towards the general acceptance of marijuana legalization in the U.S., many remain skeptical of marijuana’s alleged benefits and wary of its potential consequences. In his book Tell Your Children: The Truth About Marijuana, Mental Illness, and Violence, journalist Alex Berenson voices concern about the relationship between marijuana use and the increased likelihood of experiencing psychosis and developing schizophrenia. Furthermore, the onset of schizophrenia, he argues, makes one more likely to experience a violent psychotic episode, increasing the risks surrounding marijuana use. He also alleges that medical marijuana use is misguided, given that little medical evidence suggests that the drug has any effectiveness in palliating the medical complications its advocates claim it can treat.

This review examines Berenson’s claims in light of the current literature in epidemiology, public health, and economics by reviewing his research summary and analyzing government data measuring marijuana use, mental illness, and violence. Despite Berenson’s claims, much of the literature he cites concludes that marijuana is effective in treating many conditions, including chronic pain—one of many scientific findings Berenson chooses to omit in his book.

However, there does appear to be an association between mental illness and marijuana use at the individual level, including a rare onset of schizophrenia. Still, the risk of developing mental illness is less associated with marijuana use than other intoxicants, like alcohol, and the risk decreases with lower levels of consumption. Additionally, it is unclear whether marijuana use leads to an increased likelihood of developing mental illness or if people with mental illnesses, like depression, are just more likely to use marijuana. The possibility of self-medication further complicates the understanding of this relationship.

Due to predictive decreases in violence following regulated marijuana access at the state level, we conclude that benefits from further liberalization outweigh public health concerns surrounding mental illness. Additionally, the risk of schizophrenia can be materially eliminated for almost all people with no current mental health issues through reasonable moderation. Furthermore, because marijuana-induced mental illness is so rare, marijuana’s effect on violence through compounding mental illness is not measurable and marijuana legalization appears to reduce the prevalence of violent crime and suicide.

Our analysis finds that at the state level:

• Recreational and medical marijuana legalization are not followed by increases in mental illness.
• Increases in marijuana use are associated with increases in mental illness for all age groups.
• Regulated marijuana access is followed by slight reductions in suicide for young adult men.
• Recreational marijuana access is followed by reductions in homicide.
• Recreational and medical marijuana legalization are associated with reductions in drug crime arrest rates and reductions in racial disparities in drug-sale arrests.
• Recreational marijuana legalization is followed by increases in marijuana use among adults, but stable rates of marijuana use among children.

Berenson’s characterization of the academic literature studying marijuana is limited, periodically inaccurate, and not sufficient to model policy. Despite the claims made in Tell Your Children, marijuana prohibition does not reduce rates of mental illness, while legalization appears to reduce violence by eliminating dangerous illicit markets.

Download the full study:

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A labor peace agreement generally entitles union representatives to enter the employer’s premises and attempt to organize employees into a union. In exchange, the union promises not to cause a work disruption at the employer’s business. Under federal workplace rules, if union leaders can get a majority of workers within a proposed bargaining unit to support their representation, then the union becomes the “exclusive bargaining agent” for all members in the bargaining unit. In states without Right to Work laws, like Oregon, even workers who do not consent to union membership can be required to join the union and have dues withheld from their paychecks once the union wins majority support. Union leaders can also define the “bargaining unit” to include only a subpopulation of workers at a business if they believe it increases their likelihood of success. 

During the 2023 legislative session, the United Food and Commercial Workers Union (UFCW) requested that lawmakers introduce a bill that would have required any applicant for a state cannabis license or a license renewal to attest that they had signed a labor peace agreement as a condition of licensure. The resulting bill, House Bill 3183, was heard by the Oregon House Committee on Rules, where it received written testimony from 600 individuals. Of these 600, 593 were statements of support after the union organized a support campaign for its bill—substantially all of these support statements were identical except for the authors’ names. Among the seven organizations submitting testimonies opposing the bill were the Oregon Cannabis Association, Oregon Business and Industry, Americans for Prosperity, and Reason Foundation. 

Reason Foundation argued that the National Labor Relations Act (NLRA) grants exclusive jurisdiction to the National Labor Relations Board (NLRB) to regulate private-sector labor relations. States can establish rules for labor relations within state and local government, but any attempt to impose unionization requirements on private entities would unconstitutionally usurp the powers of the NLRB and violate the Supremacy Clause of the U.S. Constitution. In multiple cases, federal courts had upheld this general principle and struck down requirements for a business to enter a labor peace agreement as a condition of licensure. This included a 1987 ruling by the U.S. Supreme Court that the City of Los Angeles could not force a taxicab company to sign a labor peace agreement as a condition of licensure. 

Lawmakers found these arguments compelling and declined to advance HB 3183 out of committee based on the conclusion it would be preempted by the NLRA. UFCW then responded by sponsoring a version of the proposal as a ballot initiative and collected more than 160,000 signatures to qualify the measure for the 2024 ballot as Measure 119. The initiative was approved by 57% of Oregon voters. 

In early 2025, two Oregon cannabis licensees—Bubble’s Hash and Ascend Dispensary—challenged the new law. Ascend Dispensary was denied a renewal of its license by the Oregon Liquor and Cannabis Commission in February 2025 because it had not entered into a labor peace agreement. Bubble’s Hash attempted to contact a union but never received a call back and feared its license would not be renewed. The plaintiffs brought suit, claiming that Measure 119 violated the federal Supremacy Clause and that its wording also violated their First Amendment rights because it restrained employers from presenting their employees with counterarguments to the claims of union leaders.  

On May 20, Oregon Federal District Court Judge Michael Simon ruled that “Measure 119 is preempted by the NLRA in violation of the Supremacy Clause and violates Plaintiff’s First Amendment rights.” A significant unknown during this case was whether a federal court could grant injunctive relief to a federally illegal cannabis business. Simon addressed that issue directly, reasoning, “The NLRA does not limit its jurisdiction to ’lawful commerce’ or ’legal substance’ as some other federal laws do.” Simon cited NLRB’s existing memoranda about the operations of the cannabis industry, as well as the application of other federal laws, such as the Fair Labor Standards Act, as evidence that some federal laws still apply. 

This direct ruling against labor peace agreements as a requirement for licensure of marijuana companies should give pause to other states like Michigan or New Mexico that have considered similar measures, and encourage states like California, New York, and Minnesota that have enacted similar requirements to rescind those requirements. 

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In the face of a national fentanyl crisis and continued skepticism toward the effectiveness of drug-criminalization policies, some U.S. states and municipalities have begun to explore alternatives. The most notable example was in 2021 when Oregon passed Measure 110, which decriminalized the possession of all illicit drugs and attempted to adopt a health-oriented approach to illicit drug policy. While drug decriminalization is more common in Europe, Oregon is the first exposure to the policy for many Americans. This brief is meant to provide a comprehensive review of decriminalization as a policy and research results from varying localities that have adopted a decriminalization model. Decriminalization data discussed include drug treatment, drug use rates and behaviors, criminal activity, and varying economic impacts on labor and housing.

These topics are also examined in the context of criminalization and total legalization. Legalization has yet to be implemented in any large-scale modern context, so our expected results are largely reliant on economic theory. One potential benefit of legalization over decriminalization to note is the elimination of illegal drug trafficking, lowering rates of organized crime, and reducing the presence of adulterants in drug production. Criminalization, however, has been found to be largely ineffective in curtailing the illegal market and actively contributes to negative stigmatization surrounding drug use, users, and treatment.

While research on decriminalization draws on different countries and localities with varying models, there are some consistent outcomes. Decriminalization is generally found to reduce overdose rates, to not lead to greater drug use rates, to improve health outcomes in relation to the spread of disease via intravenous drug use, and leads to more accessible drug and health treatment. However, these outcomes are largely dependent on the effectiveness of coinciding treatment service programs and structures; decriminalization on its own is unlikely to produce such positive results.

The potential impacts on crime and poverty are more inconclusive, as the bulk of research surrounding decriminalization focuses directly on drug use and drug treatment outcomes such as general usage rates, problematic use, treatment effectiveness, and treatment accessibility. The currently available literature and research suggests decriminalization could improve labor-market participation, drive down housing costs, mitigate public health expenditures, and reduce different forms of drug-use-driven crime following decriminalization. While these improvements are largely theoretical and follow-up research is necessary to determine the veracity of these expectations, available data from Oregon during the period of drug decriminalization do not refute these expectations.

Full Brief: Drug decriminalization in Oregon: Measure 110’s impacts compared to other countries’ systems

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HF978 would create a framework for limited, legal access to therapeutic psilocybin services for approved patients, provided by state-licensed qualified medical providers.

• The Iowa Department of Health and Human Services (HHS) will develop rules, regulations, and licensure requirements for health providers. HHS will establish a licensing board for psilocybin production establishments, with requirements for licensing, operation, and inspections. The board will begin accepting license applications on July 1, 2026.
• Only qualified health professionals, licensed and granted a provider registration card by HHS, may recommend psilocybin services to select patients over 21 years of age. Before being recommended treatment, a patient must be evaluated in person by a registered qualified medical psilocybin provider, who must be a physician, surgeon, physician’s assistant, nurse practitioner, or advanced practice registered nurse who has undergone training specific to psilocybin therapy. Administration of psilocybin may take place only in an approved qualified therapy provider location; patients may never take psilocybin products home.
• HF978 does not legalize or decriminalize psilocybin and would retain current prohibitions on the possession, manufacturing, and sale of other psychedelic compounds.
• Similar programs have already been established or approved in Colorado, Oregon, New Mexico, and Utah.

Promise of psilocybin-assisted therapy

• Over the past decade, the medical and mental health communities have increasingly recognized the potential of psychedelic therapies for the treatment of intractable mental health conditions like post-traumatic stress disorder and others.
  • Psychedelics are demonstrating the potential to be more effective treatments than conventional psychoactive medications
  • Legal and logistical barriers to innovation persist even as the range of potential uses for psychedelic substances has expanded.
• In 2018 and 2019, the U.S. Food and Drug Administration granted a “breakthrough therapy” designation to psilocybin-based treatment for major depressive disorder and severe treatment-resistant depression, and 14 active FDA Phase II or Phase III clinical trials are underway today.
  • Psilocybin has low physiological toxicity, low risk of abuse or addiction, safe psychological reactions, and no linked persistent harmful physiological or psychological effects during or after use, according to years of anecdotal data as well as modern scientific investigations.
• A 2024 article in the academic journal Brain Sciences reviewed a dozen high-quality studies on the therapeutic effects of psilocybin administration, concluding: “A quantitative analysis of the studies indicates that psilocybin is highly effective in reducing depressive symptoms severity among patients with primary [Major Depressive Disorder] or [Treatment Resistant Depression]. Both single-dose and two-dose psilocybin treatments significantly reduced depressive symptoms severity, with two-dose administration sometimes yielding more pronounced and lasting effects.”

Takeaway

HF978 creates a regulated, limited program to access psilocybin, which has shown tremendous promise in the therapeutic treatment of a range of neurological and mental health conditions, with minimal risk to both public safety and public health.

Full Backgrounder: Iowa House File 978 would regulate psilocybin access and benefit veterans’ mental health

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Oregon House Bill 2387 would improve regulations for the state’s professional psilocybin services market. The bill includes important regulatory improvements to Ballot Measure 109, which created the state’s psilocybin services market.

In Oregon, psilocybin services cannot currently be used to treat mental illnesses. Section 4 of HB 2387 would protect licensed medical practitioners who provide advice or oversee legal psilocybin services.

Many consumers may seek psilocybin services to treat a range of mental illnesses, such as depression. Under the current law, consumers of psilocybin must acquire services from someone other than their current therapist or a licensed practitioner to treat their mental illness. Consumers should be allowed to receive psilocybin services from the person they feel is most qualified.

This is why, last year, Colorado health agencies created a separate license for medical practitioners to oversee psychedelic services for their own upcoming psilocybin services market.

HB 2387 would update Oregon’s psilocybin services market with this important improvement.

The post Oregon House Bill 2387 would improve psilocybin services appeared first on Reason Foundation.

Complicated and punitive tax rates on legal marijuana goods create a tax-induced price distortion that favors illicit goods. Legal cannabis goods compete with both illicit goods for which supply chains have been established over decades and with intoxicating hemp-derived cannabinoids. These substitute goods do not face the same regulatory and tax burdens as state-licensed marijuana. Large-scale surveys show that marijuana consumers prefer to buy regulated marijuana goods when the price is comparable, but they will not pay more for these goods than they would for illicit alternatives.

Jurisdictions that assess taxes at multiple levels of the supply chain cause taxes to “pyramid” or accumulate within the price of the underlying good in a way that is non-transparent to consumers. This approach also complicates tax compliance and requires both taxpayers and tax administrators to devote greater time to preparing and reviewing tax filings.  

A particular complication with ad valorem wholesale marijuana taxes emerges when a cultivator or manufacturer transfers inventory to a retail dispensary under common ownership. The owners are incentivized to transfer the inventory at a minimal declared price in order to evade the wholesale tax. To counter this possibility, regulators in Colorado and Nevada conduct quarterly market surveys among licensees to determine a declared “market price” for marijuana goods. They then assess the current 15% tax rate against the declared market price per pound of marijuana transferred to determine a cultivator’s tax liability. This approach obscures the fact that marijuana is produced at different levels of quality and marketability. Low-quality marijuana that would fetch a lower market price is effectively taxed at higher rates, while high-quality marijuana is effectively taxed at lower rates. 

Nearly all states with regulated marijuana markets do not assess an ad valorem wholesale tax, a practice unique to Colorado, Illinois, and Nevada. Alaska and New Jersey assess wholesale taxes at a fixed rate per pound of marijuana produced, but neither of those states imposes a retail excise tax. 

Reason Foundation has always recommended that states with regulated marijuana markets levy a single excise tax at the point of retail sale. Assembly Bill 307 proposes to do this by repealing the existing wholesale tax. However, this change would be coupled with an increase in the retail excise tax rate from 10% to 14.25%. While some states exempt cannabis goods from the general sales tax, Nevada does not. Nevada also authorizes local governments to assess an additional 3% retail excise tax. As a result, the total retail tax on legal marijuana goods could amount to 25.5%, which would be higher than in most states with legal markets. 

The Cannabis Compliance Board has submitted a fiscal note estimating that these tax changes would yield an additional $153 million in tax revenue per biennia. Assembly Bill 307 would be improved if these tax changes were designed to be revenue-neutral so as to minimize the distortive effect of taxes on legal marijuana goods. Nevada lawmakers and regulators have rightly voiced concern over the continued presence of illicit marijuana markets. The best means of displacing these illicit goods is establishing a tax and regulatory environment that allows legal goods to compete on price.

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• Since the 2018 Farm Bill federally legalized hemp and its derivatives, the hemp cannabinoid market has grown into a $3 billion interstate industry, including both non-intoxicating therapeutic products like cannabidiol (CBD) and intoxicating hemp products that mimic the psychoactive effects of marijuana. Courts have interpreted federal statute to mean that even chemically modified and intoxicating hemp extracts are federally legal hemp products. 
• Consumer demand for these products has surged, in part due to federal marijuana prohibition and restrictive state cannabis laws that limit consumer access. While less than 30% of legal cannabis businesses were profitable in 2024, hemp cannabinoids have proved a lifeline for farmers and other businesses, generating $241 million in farm income in 2023 alone.  

The risk of overregulation or prohibition 

• Despite its economic and consumer benefits, the hemp market faces growing threats from heavy-handed state regulation and outright bans. In the absence of federal product standards, many states have adopted reactionary policies that mimic the burdensome rules stifling the cannabis industry or outlaw intoxicating hemp cannabinoids. 
• Prohibition and excessive restrictions on products consumers want have well-documented consequences, including fueling illicit markets that operate without oversight, compromising public health with unregulated and mislabeled products, increasing youth access due to lax age-verification, burdening law enforcement with low-priority enforcement efforts, undermining legitimate businesses, and depriving states of tax revenue. 

A smarter approach to regulation  

• Intoxicating hemp products pose no greater risk to society than other intoxicating goods, like alcohol or marijuana. With thoughtful regulation, they can be produced safely and sold responsibly, ensuring consumer protection while fostering economic growth. To achieve this, Reason Foundation’s Model Legislation for Optimal State Regulation of Hemp Cannabinoids recommends that states adopt hemp cannabinoid regulations that:  
  • Establish clear, science-based product safety and manufacturing standards; 
  • Regulate, don’t ban, naturally occurring and synthesized hemp cannabinoids; 
  • Ensure age restrictions and responsible retailing;  
  • Mandate reasonable testing and labeling requirements; and 
  • Avoid excessive fees and taxes that undermine legal market viability. 

Full Backgrounder: Optimal framework for the state regulation of hemp cannabinoids

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Senate Bill 219, the Medical Psilocybin Act, would create a regulated system to allow patients with qualifying conditions (PTSD, substance use disorders, and end-of-life care) to access and use psilocybin under the guidance of a licensed healthcare provider. New Mexico would join Colorado and Oregon in authorizing facilitated use programs for innovative therapeutic care.

• The program will be managed by the Department of Health (DOH) and a nine-person Medical Psilocybin Advisory Board. Among other duties, the board will oversee the collection and analysis of program results and will include representatives from a tribe, nation, or pueblo and a veteran of the US armed services, among others.DOH will oversee the program, establish training for clinicians and producers, and license producers to grow mushrooms and process psilocybin. DOH will be responsible for determining program aspects such as dosage, administration, production, and storage. DOH will also have authority to expand upon qualifying conditions for treatment.Under SB 219, psilocybin therapy will require at a minimum a preparation session, an administration session and a follow-up integration session, all in DOH-approved settings. 

• SB 219 would retain current prohibitions on the commercial manufacture and sale of other psychedelic compounds, and prohibits synthetic psilocybin, as well as driving intoxicated.

Full backgrounder: New Mexico Senate Bill 219 would regulate medical psilocybin access

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The emerging regulatory framework governing certain controlled substances across various states—including medical and adult use recreational cannabis and psychedelics—is an area of particular interest. We have advised officials on emerging drug policy transformations in states like Michigan, California, and Nevada. We are also a founding member of the Cannabis Freedom Alliance, which seeks to advance federal cannabis legalization in a manner that respects states’ autonomy to self-design their own policies. We also seek to minimize barriers to market entry for potential entrepreneurs to ensure a competitive and dynamic marketplace in which even Americans of modest means can compete.

We believe there are several legislative approaches that could improve access to psychedelic-based medicine

Pass the Breakthrough Therapies Act

Introduced by Sens. Rand Paul (R-Ky.) and Cory Booker (D-N.J.), the Breakthrough Therapies Act would automatically reschedule any substance recognized by the Food and Drug Administration (FDA) as a “breakthrough therapy” so medical research can be conducted more easily. Currently, this designation applies to analogues of both MDMA and psilocybin that have both advanced to Phase III clinical trials.

The original bill proposed to reclassify such substances from Schedule I to Schedule II so that drug sponsors face fewer barriers in procuring a DEA license to conduct medical research. However, we believe the act should go further by automatically moving psychedelic substances to Schedule III to better facilitate research and data collection. Currently, supervised clinical administration of these substances is available in both Colorado and Oregon through state-licensed facilities. Licensees in Oregon have already administered more than 12,000 clinical doses of psilocybin–more than the total of all federally supervised clinical trials to date. A Schedule III designation would simultaneously allow these centers to collect important research data on the drugs’ effectiveness that could be useful for FDA evaluations of these treatments and remove federal income tax penalties and barriers to financial services for the licensees that offer these clinical services. This approach would also better respect state authority and rebalance the federal system.

The current Schedule I designation has a chilling effect on scientific research and discourages some of the best research institutions, including hospitals and universities, from investigating these treatments. Potential financial supporters are also dissuaded from investing dollars that cannot be used efficiently or, at worst, could implicate them as accomplices to a federal crime.

Expand the use of observational data

Through the 21st Century Cures Act, Congress mandated that the FDA use observational (“real world”) evidence in drug approval decisions. However, the Act did not provide enough specificity to be relevant to psychedelic clinical trials. Many pharmaceutical compounds going through clinical trials are substantially similar to psychedelics that are legal in other parts of the world or have a long history of both safety and efficacy.

MDMA, for instance, was unregulated until 1985 and is currently available for prescription in Australia. Psilocybin is legal to possess in Colorado and is available through authorized providers in Oregon. Multiple companies are currently taking similar versions of MDMA and Psilocybin through clinical trials.

Ibogaine is another psychedelic compound that has shown promise in the treatment of opioid use disorder. Under current regulations, any drug company developing an ibogaine-based compound would need to spend many millions of dollars replicating early trials that have already been documented at foreign clinics.

Other psychedelic compounds have been used for thousands of years by indigenous communities and continue to be used frequently around the world. Congress could require that the FDA develop clear guidelines to specify how observational data alone could be compiled and data mined to meet FDA requirements for demonstrating safety and efficacy.

Reform the efficacy requirement

In 1962, Congress reformed the Food, Drug, and Cosmetic Act to require that drug sponsors prove not only that their drugs are safe for human consumption but also their level of efficacy. This ballooned the cost of drug development by many years and hundreds of millions of dollars. The average cost of drug development has been estimated to now exceed $1.7 billion, and development takes more than a decade to complete. A Reason Foundation review of research demonstrates that far more Americans die from potentially treatable diseases due to this expanded timeline than are saved by the FDA’s original mission to ensure safety alone.

Congress could follow Japan’s example and allow the provisional commercialization of drugs once sponsors have demonstrated to regulators they are safe for human consumption (by, for instance, passing Phase I or Phase II trials).

Legislatively reclassify psychedelics

Many psychedelic compounds were initially placed on the list of Schedule I substances without a comprehensive public evaluation. Congress has full discretion to alter the classification of any substance within the Controlled Substances Act that it feels holds medical and scientific value. Reclassifying psychedelic compounds to Schedule III would still give the FDA supervision over these compounds.

As an alternative to reclassifying specific substances through legislation, Congress could also require the FDA and DEA to review their criteria for placing compounds within Schedule I of the Controlled Substances Act. The agencies should apply objective and universal criteria for comparable drugs on Schedules III or below.

Currently, agencies have broad discretionary power within the DEA’s eight-part test to determine the scheduling of a drug, and there is no uniform standard by which drugs are measured. The U.S. Department of Health and Humans Services recently recommended that cannabis be removed from Schedule I out of recognition that it holds medical benefits. Psilocybin is similar to cannabis’ safety profile on many public health indicators and demonstrates a low potential for addiction or as a cause of violent crime.

It is likely that many important psychedelic substances would automatically be reclassified if they were scored on similar metrics to comparable drugs that currently fall within a lower schedule.

Pursue greater cost-effectiveness of existing public health spending

Much of the funding for clinical trials into psychedelic substances currently originates from philanthropic sources. This funding is sporadic and limited. However, psychedelic therapies might more cost-effectively treat many conditions for which Congress currently allocates billions of dollars toward treatment. Psychedelic therapies have shown promise in the treatment of post-traumatic stress disorder, major depressive disorder, treatment-resistant depression, traumatic brain injury, substance abuse, and even neurodegenerative conditions like Alzheimer’s and Parkinson’s Disease. There are multiple state bills or projects considering scientific funding of Ibogaine to help with regional opioid addiction. Public-private partnerships between the state, philanthropy, and manufacturing companies might help reduce the overall cost of opioid-related treatments through Ibogaine-assisted therapy. 

Some of these conditions may be successfully treated through psychedelic therapy after only a single administration, whereas current treatments may require a lifetime of ongoing treatment.

Congress should consider a task force to model the pharmacoeconomics of psychedelic therapy to determine whether these treatments could reduce costs within federal healthcare spending.

Policymakers should note that psychedelic treatment involves more than just substances—it also requires a novel type of therapy. Therefore, a pharmacoeconomic analysis of psychedelic therapy must incorporate the cost of professional care.

Psychedelics-assisted therapy represents a promising treatment for many mental health issues.

The post Legislative approaches that could improve access to psychedelic-based medicine appeared first on Reason Foundation.

We are deeply concerned that House Bill 331 would unconstitutionally usurp the exclusive jurisdiction of the National Labor Relations Board to govern private-sector labor relations. Section 1(c) would require an applicant for a new cannabis license to submit an attestation of intent to enter into a labor peace agreement within 60 days of hiring its tenth employee. Section 1(d) requires a licensee to submit a copy of an executed labor peace agreement to regulators within six months of hiring its tenth employee. Section 1(e) instructs regulators to deny the renewal of any license where the licensee employs ten or more people and has not entered into a labor peace agreement. Section 1(g) clarifies that the intent of these requirements is to facilitate communication between a labor organization and a cannabis licensee’s employees. 

Under the federal National Labor Relations Act, as amended, employers already may not interfere with communications between a labor organization and employees. The Supremacy Clause to the U.S. Constitution elevates federal law above state and local laws that may be in conflict, and federal law reserves to the National Labor Relations Board the sole authority to regulate private-sector labor relations. The New Mexico Cannabis Control Division has no appropriate role nor jurisdiction in determining whether applicants for licensure have complied with provisions of the National Labor Relations Act. 

Further, to the extent the New Mexico Cannabis Control Division would require an applicant to enter into a labor peace agreement as a condition of licensure, the agency would run afoul of relevant federal court precedents. The U.S. Supreme Court ruled in 1987 that the City of Los Angeles could not withhold the license of a taxicab company (a privileged license type similar to those for cannabis) based solely on the condition that the company resolve a labor dispute. The city’s regulation of private-sector labor disputes, noted the Court, was preempted by the National Labor Relations Board’s authority. Therefore, no privileged license can be conditioned on a labor peace agreement. Similarly, a federal Court of Appeals ruled in 2005 that a provision in Wisconsin that would have required contractors with local governments to enter a labor peace agreement ran afoul of the National Labor Relations Act. 

Proponents will likely point to a similar provision within California’s cannabis licensing scheme to support the new proposed rule. California’s rules require a marijuana licensee with more than 20 employees to enter a labor peace agreement. Many legal scholars expect the California rule to eventually be struck down as violating the National Labor Relations Act. In the meantime, many licensed cannabis growers in California have avoided the requirement altogether by contracting with farm labor services or otherwise structuring their operations such that no licensed entity exceeds the threshold of 20 direct employees. 

We believe federal law is clear on these issues and excludes states from enacting requirements such as those contained in House Bill 331. Even where states enact marijuana laws that may conflict with federal interpretation of the Controlled Substances Act, those states still have no leeway within such laws to simultaneously usurp or violate federal labor law. We are concerned that these actions—which have also been proposed elsewhere—could jeopardize state-regulated cannabis markets overall.  

The post New Mexico’s proposed labor peace mandate violates federal law appeared first on Reason Foundation.

• The Arizona Department of Health Services will develop rules, regulations, and licensure requirements for therapy centers and health professionals, as well as guidelines for psilocybin cultivation, testing, and transport.  
• Administration of psilocybin may take place only on the premises of a licensed facility; patients may never take psilocybin products home.  
• A counseling session from licensed professionals is required before consumers can schedule a subsequent appointment to be administered psilocybin. 
• SB1555 does not legalize or decriminalize psilocybin and would retain current prohibitions on the possession, manufacturing, and sale of other psychedelic compounds. 
• Similar programs have already been established or approved in Colorado, Oregon, and Utah.  

Promise of psilocybin-assisted therapy 

• Over the past decade, the medical and mental health communities have increasingly recognized the potential of psychedelic therapies for the treatment of intractable mental health conditions like addiction, anxiety, depression, PTSD, and other disorders. 
  • Psychedelics are demonstrating the potential to be more effective than conventional drugs now being used to treat a range of mental health disorders. 
  • Legal and logistical barriers to innovation persist even as the range of potential uses for psychedelic substances has expanded. 
• In 2018 and 2019, the U.S. Food and Drug Administration granted a “breakthrough therapy” designation to psilocybin-based treatment for major depressive disorder and severe treatment-resistant depression, and 14 active FDA Phase II or Phase III clinical trials are underway today.  
  • Psilocybin has low physiological toxicity, low risk of abuse or addiction, safe psychological reactions, and no linked persistent harmful physiological or psychological effects during or after use, according to thousands of years of anecdotal data as well as contemporary scientific investigations. 
• A 2024 article in the academic journal Brain Sciences reviewed a dozen high-quality studies on the therapeutic effects of psilocybin administration, concluding: “[…] A quantitative analysis of the studies indicates that psilocybin is highly effective in reducing depressive symptoms severity among patients with primary [Major Depressive Disorder] or [Treatment Resistant Depression]. Both single-dose and two-dose psilocybin treatments significantly reduced depressive symptoms severity, with two-dose administration sometimes yielding more pronounced and lasting effects.” 
• A 2024 meta-analysis published in the medical journal BMJ found that “psilocybin use showed a significant benefit on change in depression scores compared with placebo […] consistent with other recent meta-analyses and trials of psilocybin as a standalone treatment for depression or in combination with psychological support.” 

Takeaway

SB1555 creates a regulated, limited program to access psilocybin, which has shown tremendous promise in the therapeutic treatment of a range of neurological and mental health conditions, with minimal risk to both public safety and public health. 

Full Backgrounder: Regulating legal psilocybin access in Arizona would benefit mental health

The post Legalizing psilocybin access in Arizona would benefit mental health  appeared first on Reason Foundation.

One of the primary challenges in setting up a state marijuana market is to establish the correct tax structure. Taxes lay at the intersection of two competing goals of marijuana legalization. Many advocates for legalization are motivated by the desire to produce new public revenues by collecting excise and other taxes from the newly legal marijuana industry. At the same time, these levies can create a tax-induced price disparity between legal and illegal marijuana products that may dissuade consumers from transitioning to the legal market. 

In a recent large-scale survey of respondents across the United States and Canada, marijuana consumers indicated they prefer legal marijuana products if the prices are comparable to those on the illicit market. However, as the price of legal products increases above that of illegal products, consumers indicate a preference for migrating back to the illicit market. Among the survey’s 50,000 respondents, 17,000 said they had purchased marijuana within the past year. Among these respondents, 12,000 said they had purchased illegal marijuana. The top reason given for purchasing illegal products was the price.

In 2022, Reason Foundation examined the effect state and local cannabis taxes in California have on producer and consumer decisions to participate in the legal marijuana market. The analysis showed that the total effective tax per pound of cannabis ranged from $677 to $1,440, depending on the local jurisdiction. In both cases, the taxes exceeded the cost of wholesale production of marijuana, estimated at $564 per pound. This price disparity resulted in two-thirds of marijuana transactions in California still occurring on the illegal market in 2021, and the state did not receive any tax revenue on illegal transactions. Reason modeled the effect removing California’s statewide cultivation tax would have on market participation and determined that this change would result in faster market growth for legal cannabis retailers, causing more transactions to become subject to retail excise and sales taxes. By December 2024, the study found that revenues from cannabis taxes were projected to grow to 223% of their March 2022 levels despite eliminating the cultivation tax. While a portion of this forecast growth was attributed to ongoing growth in the number of legal retailers, capturing a greater proportion of marijuana transactions on the legal market was a leading factor. California adopted this change, eliminating its cultivation tax in June 2022. 

Alaska’s cultivation excise tax amounts to $800 per pound, which is substantially higher than the per-pound equivalent of all state-level taxes (exclusive of local levies) in California prior to the elimination of its cultivation tax. Alaska’s effective per-pound tax on marijuana is the highest in the country. While Reason Foundation has not completed a deeper market analysis for Alaska, the tax reduction proposed in Senate Bill 73 could induce more marijuana transactions to shift to the legal market. A rate reduction from $50 per ounce to $12 per ounce should reduce revenues on existing transactions substantially but at least partially be offset by the additionally captured transactions.  

This tax reduction would also likely produce benefits that are not purely fiscal by helping to eradicate illicit activity, which breeds violence and consumes resources as authorities work to enforce the law. In short, reducing cannabis tax rates would help Alaska realize cannabis legalization’s full promise. 

The post Lower cannabis taxes can bolster Alaska’s legal market appeared first on Reason Foundation.

Many of these extracts and cannabinoids are non-intoxicating, but some are THC variants that have an intoxicating effect similar to delta-9 THC or can be chemically modified into an intoxicating THC variant. Courts have interpreted the federal statute to mean that even chemically modified hemp extracts are federally legal hemp products because the dispositive factor for this determination is the provenance of the material and not the method of manufacture. 

The rapid growth of hemp-derived cannabinoids, such as delta-8 THC, coupled with federal inaction for regulatory clarity, presents both challenges and opportunities for state governments. Emerging inconsistencies in state approaches to cannabis regulation, product safety concerns, potential access to intoxicating substances by minors, and an uneven playing field for businesses highlight the urgent need for thoughtful, evidence-based policy solutions at the state level. 

Reason Foundation’s model legislation offers a clear and practical framework for states seeking to regulate adult-use hemp cannabinoids effectively. This model balances consumer protection, public safety, and transparency while promoting compliance and fair competition within the industry. By setting forth homogenized standards for products containing intoxicating cannabinoids, it also lays the groundwork for future interstate commerce in other legal cannabis products, including those originating from state-regulated marijuana.   

This model legislation would implement the recommendations that Reason Foundation senior policy analyst Michelle Minton and research director Geoffrey Lawrence developed in their joint paper, “A Framework for Federal and State Hemp-Derived Cannabinoid Regulation.” It is designed to foster safety, transparency, and fair competition within the marketplace for cannabis products. It draws from best practices in states with successful programs and incorporates lessons from those facing regulatory pitfalls.  

Key Features

• Establishes a streamlined permitting and registration regime for manufacturers and sellers of hemp cannabinoid products

• Simplifies licensing categories to reduce barriers for small businesses and promote equitable opportunities

• Implements robust product testing and labeling standards

• Restricts sales of hemp cannabinoid products to individuals under the age of 21

• Reduces unnecessary taxation to curb illicit-market competition and level the playing field between “hemp” and “marijuana” businesses

Learn More

To download the full text of the Cannabis Regulatory Reform Act and explore how it can be tailored to your state’s needs, see below: 

Model Legislation: Optimal State Regulation of Hemp Cannabinoids 

The post Model legislation for optimal state regulation of hemp cannabinoids  appeared first on Reason Foundation.

Neurodegenerative disorders, such as Alzheimer’s disease (AD) and Parkinson’s disease (PD), affect millions of people, and no current treatments can effectively stop or reverse disease progression. As these diseases worsen over time and become increasingly more prevalent, they place a growing financial burden on patients, families, and healthcare systems. Current treatments are falling short, and millions of people continue to suffer, underscoring a need for innovative treatments.

Recent research suggests that psychedelics, such as psilocybin and LSD, show strong potential as effective treatments for neurodegenerative disorders. Unlike traditional medications that mainly manage symptoms, psychedelics may offer a pathway to disease modification through mechanisms like enhanced neuroplasticity (the brain’s ability to adapt and reorganize itself), reduction of neuroinflammation, and promotion of cellular regeneration. These effects could be crucial in counteracting underlying disease causes, such as neuron loss and cognitive decline.

Psychedelics have also shown strong potential in treating depression and anxiety, both in terminal illness and potentially in neurodegenerative disorders. Given that neuropsychiatric symptoms are prevalent in AD and worsen the disease’s course, these findings are significant. Although the preliminary results are promising, the small sample sizes, short duration, and the use of healthy or non-AD populations limit the generalizability of these findings to AD. Larger, long-term trials specifically involving AD patients are needed to establish safety, efficacy, and optimal dosing strategies.

Regulated psychedelic-assisted therapy (PAT) centers represent a pivotal opportunity in the development of psychedelic treatments. These centers create a controlled and structured environment for administering psychedelic therapies under clinical supervision. PAT centers allow for both therapeutic practices and rigorous data collection to occur, ensuring that the treatment protocols are consistently monitored and evaluated.

Data gathered from these centers can provide early evidence of the safety and efficacy of psychedelic substances in a therapeutic setting, crucial for addressing regulatory and medical concerns. Insights gained from this early-stage data can accelerate the integration of psychedelics into standard treatment regimens, laying the groundwork for larger and more extensive clinical trials.

The U.S. Food and Drug Administration (FDA) has previously recognized the potential of psychedelics, granting “breakthrough therapy” designations to treatments incorporating substances like psilocybin, MDMA, and LSD for treating various mental health conditions. This designation is designed to expedite the development and review of therapies that may offer significant improvements over existing treatments and could similarly be sought for psychedelic treatments aimed at neurodegenerative diseases.

Implementation of regulated PAT centers could generate early data that may help certain psychedelics achieve breakthrough therapy designation for neurodegenerative disorders. Breakthrough designation will help bridge the gap between early-stage research and large-scale clinical adoption, accelerating the availability of these treatments for patients in need.

Full Policy Brief: Psychedelic Treatment for Neurodegenerative Disorders

The post Psychedelic treatment for neurodegenerative disorders appeared first on Reason Foundation.

This dashboard compiles the key elements of governmental financial statements for fiscal years 2020, 2021, and 2022, covering all 50 states and the top 100 municipalities, counties and school districts.

A historical challenge in comparing the financial health of state and local governments has been that these entities do not prepare their financial statements in a machine-readable format. In some cases, certain reporting entities also fail to adhere to governmental accounting standards generally accepted in the United States.

Reason Foundation has responded to this gap by developing a proprietary automated approach to data extraction of key elements from the financial statements, the results of which are subsequently confirmed by manual human review.

We hope to provide valuable insights for policymakers, journalists, market participants, and other stakeholders by placing their state, municipality, county, or school district in contrast to their peers – and the broader context of the country.

At the end of fiscal 2022, five state governments had more than $200 billion in total liabilities: California, Illinois, New York, New Jersey and Texas.

Massachusetts had over $100 billion in total liabilities, Connecticut and Washington had over $90 billion, and Pennsylvania, Florida and Maryland each had over $60 billion in total liabilities at the end of fiscal 2022.

From the 2020 fiscal year through the 2022 fiscal year, 47 states saw increased revenues. Alaska, Michigan, and Wyoming were the three states that did not increase revenues.

During the same 2020-2022 period, total assets, such as growth in cash, investments, receivables, land, buildings, and infrastructure, increased for all 50 states.

The increase in assets helped 49 states, every state except North Dakota, reduce its state debt ratio, which is defined as the proportion of total liabilities to total assets from fiscal year (FY) 2020 to FY 2022.

At the end of the 2022 fiscal year, the 50 state governments held $1.03 trillion in employee-related debt, including $502 billion in net public pension liabilities and $524 billion in net other post-employment benefit liabilities, such as promised medical benefits for retirees.

For the tool’s full interactivity and options, please visit https://debttrends.transparencyproject.reason.org.

State debt: California, Illinois, New York, New Jersey and Texas each have over $200 billion in total liabilities

County debt: Los Angeles, Philadelphia, Denver, Miami-Dade and Cook counties among worst in nation

City debt: New York has more than four times the liabilities of Chicago, Los Angeles, Houston and other cities

The post Debt trends for state and local governments 2020-2022 appeared first on Reason Foundation.