Lisa Gora, Partner, Epstein Becker Green, and Richard Cheng, Managing Member, Ritter Spencer Cheng, discuss the burgeoning area of psychedelics in the health care industry. They cover some of the driving forces behind the resurging interest in psychedelics, federal and state developments, the contravention between state and federal law, and the future of the psychedelics industry and potential regulatory and legal shifts. Sponsored by Stout.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
Lisa Gora, Partner, Epstein Becker Green, and Richard Cheng, Managing Member, Ritter Spencer Cheng, discuss the burgeoning area of psychedelics in the health care industry. They cover some of the driving forces behind the resurging interest in psychedelics, federal and state developments, the contravention between state and federal law, and the future of the psychedelics industry and potential regulatory and legal shifts. Sponsored by Stout.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
Support for A HLA comes from Stout, a global investment bank and advisory firm , specializing in corporate finance, transaction advisory, valuation, financial disputes, claims and investigations. They serve a range of clients from public corporations to privately held companies and numerous industries. For more information, visit stout.com.
Speaker 2:Hello everyone, and welcome to today's a HLA podcast on the, the psychedelic boom in the healthcare industry. My name is Lisa Gora, and I'm a partner with the National Law Firm of Epstein, Becker and Green, where I lead the firm's psychedelic and cannabis practice areas. And today I'm joined here by my colleague Richard Chang , uh, who's a managing member of Ritter, Spencer and Chang Law Firm, located in, in Texas. And we're excited , uh, to be here and discuss this. Um, interesting and, and now burgeoning area of psychedelics. Um, Richard, if you wanna share a little bit about your background as well, and then I'll , I'll provide a little summary.
Speaker 3:Yeah, sure. Thanks Lisa. Um, as , uh, Lisa previously mentioned , um, I'm a attorney and managing member at Ritter Spencer Chang. It's based in , uh, Addison, Texas. Um, y it's a , it's a law firm of about eight attorneys. Uh , we have a variety of different services, certainly , uh, healthcare and alternative substances , uh, is, are , are two of the probably , uh, bigger and stronger areas of practice in our firm. Um, that's certainly the , um, the term that we've, we we've used at our firm just because , um, as we've seen , uh, alternative substances or some, some people will call it emerging therapies, you're, you're really encapsulating a lot of different types of , um, different types , different industries ranging from cannabis to ketamine, to creto , uh, under one roof, if you will. Um, but I'm excited to be here to talk about how some of these , uh, some of these areas of , um, practice has in incorporated into my le my healthcare practice. Um, and happy to just dive , dive into it and, but just know , while we may mention a cannabis or something, or reference ketamine , uh, the focus today is , uh, on psychedelics , uh, and s psilocybin. And we can , um, certainly have a frank discussion about that. Um , yeah . Great.
Speaker 2:Thanks
Speaker 3:For , so, Lisa, why don't I just kick us off by asking you a few questions. I think this, the format of this , uh, of this podcast is just us , um, having an open dialogue and , and discussion about a , a variety of different things. Um, so, you know, you previously mentioned , um, to me during our conversations over the past decade, psychedelic substances and , uh, efforts to investigate potential new treatment modalities. Um, you know, it , it certainly gained some significant attention and , and publicity. Um, what do you think are some of the driving factors , um, or driving forces behind the resurgence of interest in psychedelics , um, particularly really in the past five to 10 years?
Speaker 2:Yeah, that's a great question, Richard, and a great way to, to get us started and kicked off here is , um, I think what I've seen is that there's been just this great interest in psychedelic medicine , um, and it's been soaring over the recent years due to the growing need for access to effective and safer treatment for certain diagnoses. You know, during a time of , uh, increased scrutiny over the dangerous side effects of opioids, you know, we've all heard about the , um, opioid pandemic and epidemic , um, where patients , um, have, have, have been seen to be prescribed opioids to treat certain indications over certain period of time. Um, and, and other just traditional pharmaceuticals that, you know, patients are, are feeling are not really , um, getting them to the end resolution of comfort that they want. Um, so we have that need for safer , uh, access to, to other different types of, like you mentioned earlier, emerging therapeutics. Um, and because of the need to find alternative therapeutic treatments that could hopefully be more effective than existing prescription drugs, you know, some of which that carry the risk of dependence as, as we've heard. Um, and in the time of, you know, mental crisis, that was a result out of , uh, COVID , it's certainly this interest in finding alternative emerging therapies has really risen. Um, and then there's been the expanding body of clinical research that has been developing that's suggested that mind altering substances like MDMA and psilocybin, or effective at treating a broad range of mental health conditions , uh, ranging from depression and anxiety to eating disorders and post-traumatic stress disorder. Um, and so given all of those needs and, and then the interest in having clinical research , um, that has been conducted, you know, we've seen a few noteworthy occurrences over the past 10 years that I just wanted to take a moment to identify from a federal perspective. Um, and that's ranging back to 2018. We had the federal food and and drug administration grants Compass Pathways, a breakthrough therapy designation for its test and use of psilocybin with therapy as a way to help people with treatment resistant de depression. Um, and , and a breakthrough designation granted by the, the FDA is , uh, something where, when evidence suggests that a drug may be a substantial clinical improvement over existing therapies. Uh, and so again, it goes back to the desire for , um, patients now to find emerging therapies outside of the traditional pharmaceutical route. Um, then in 2019, we had FDA approved , uh, a psychedelic drug , uh, called S bravado , which is s ketamine, which we'll talk to a little bit , uh, which is a nasal spray for use in treatment resistant depression. Uh, we had in 2021, the multi Multidisciplinary Association for Psychedelic studies, also known as maps, published its phase three results for a clinical trial using MDMA, which is another psychedelic, and that was in conjunction with psychotherapy to treat post-traumatic stress disorder. Then in 2021, the DEA twice increased its production quota for manufacturing of the schedule one substance psilocybin , uh, for research and, and development requirements and so forth, which , um, also ties into hopefully steps , um, for the FDA to approve certain new drug products. Um, so overall, what I'd like to just , uh, identify in at least this segment of kind of historical development is that there's been various developments from the, the, the clinical , um, research perspective as well as having seen dozens of universities and research centers , uh, all across the United States conduct studies on the safety and efficacy of psychedelic assisted therapies. And it's, it's very well known universities such as John Hopkins that created a center for psychedelic and Consciousness research. We have Mount Sinai , um, NYU Grossman School of Medicine , uh, university of California, university of Wisconsin. So there's been a lot of developments over the past 10 years. Uh, and those are just a few that, that we're capable of highlight highlighting during this podcast. Um, so it's great to see that development from a federal perspective. Um, but what I'd like to also get into next, though is, you know, what about the advances in the psychedelic area as it relates to individual states? Richard, you know, can you speak to some of those advancements and , and shifts of what we've seen from a state perspective rather than just on the federal level?
Speaker 3:Yeah, sure, Lisa , um, you know, I , there's, there's so many ways to unpack this, right? I mean, first of all, the psychedelics as a whole. I , I like to just , um, step back and just tell the audience that whoever's listening to this psychedelics encompasses a lot of different forms of psychedelics. Psych psychedelics as a whole is , is considered hallucinogen and primarily has been primarily , uh, used to , um, address a , a , a myriad of different types of conditions, but really what, such as , uh, PTSD , right? And so some of the effects of s psychedelics, if you will, can produce changes in perception, mood, cognitive processes , uh, and so forth. It can affect , um, you know, one's , uh, individual's , um, level of , um, uh, reflectiveness in , in , in , in both physically and , and , and psychologically and how they process information. But some common forms of psychedelics is , uh, include , uh, D-M-T-L-S-D , um, psilocybin as you as , uh, you know, so some , most of us have heard of which, AKA , uh, magic mushrooms. So there's different forms of psychedelics. Even coyotes consider a psychedelic. And why it's, why it's so individualized on a state by state level is because , um, different states have passed different laws on how the scope of how psychedelics are used. So, as a comparison , um, in Texas , um, which is where I am, the only bill that's been passed, the only, the only , uh, way that psychedelics can really be used is , um, in the form of research. You cannot use it in , uh, in the form of treatment , uh, in, in clinics and so forth, with the exception of ketamine, right? Because, well, part of also is because ketamine is now a schedule three , uh, controlled substance under the Controlled Substances Act, whereas psilocybin is still a schedule one , um, on a state level, you have , uh, different , uh, different licensing structures and different regulatory frameworks. Um, I know that certainly one of the things that we've talked about is , um, if, if , if ketamine, because ketamine is a form of a psychedelic , uh, if, if , if a , if a group of physicians were to launch a ketamine clinic in Texas, it's certainly very different than how they would do it in, say, New Mexico because of corporate practice and medicine laws. So in addition to some of the , um, regulations and rules and both federal and state laws, they have to consider in terms of , uh, psychedelics from, from a compliance and regulatory , uh, consideration. They also have to consider how , uh, if there are any state rules on how it should be delivered. Some states will allow you to use , um, psychedelics in the form of teas , and some other states will not. Some, some states will allow you to use it , um, it by allowing, say, a , a licensed facilitator to administer it. Other states won't. So if it , there's, there's so many different variations , um, on how, how psychedelics can be consumed in administer from state to state , um, in addition to corporate practice of medicine , uh, be , or really because of corporate practice of medicine , um, in states like Texas or California or New York, that also changes the , uh, you know, how, how investments and how businesses are run. Because to the extent that there are any investors or any , uh, investment platforms that want that, that's willing to explore this area , um, such as ketamine clinics , um, how they structure the deal with the investment in Texas may be very different than, say, again, I'm gonna, I'm going to pick on New Mexico because New Mexico does not have a corporate practice medicine laws. In fact, I'm doing a , uh, I'm doing a transaction there right now, and , um, I've never seen this before. But , uh, the physicians' practice that we're acquiring on behalf of my client, one of the owners is actually a personal injury attorney based here in Texas. That sounds a little odd, but it's completely , um, it , it's completely legal in New Mexico, whereas here in Texas, because of CPOM laws , um, you may have to use , um, a couple of different , uh, models that can be con that can, that that's commonly used, that, that complies with C-P-O-C-P-O-M laws , such as a MSO friendly PC model or MPHO model. So it , it , it does vary from state to state, and , um, because of the variation, it also impacts other areas.
Speaker 2:Yeah. And even one thing that I wanna take a step back on is, you know, the designation of a Schedule one drug for those that may not be all too familiar with that , um, Richard just discussed ketamine, which is a Schedule three drug, as opposed to all other psychedelics that are classified as Schedule one . And it psychedelic drugs being categorized as a schedule one is really one of the main obstacles to the, to studying and , and development of psychedelic substances, such as , um, MDMA or psilocybin as , as Richard mentioned , um, and a Schedule one drug as opposed to schedule three , which is what ketamine is. Ketamine as a Schedule three can be prescribed by healthcare practitioners, and it can be, yeah . Uh , prescribed and dispensed through medical practices, right? Yeah . As opposed to , um, uh, uh, psilocybin, which right now, nowhere in the United States can it be just prescribed by a doctor for a specific condition, at least in a illegally valid , um, way . And, and that's because the, the Federal Drug Enforcement Administration through the Federal Controlled Substances Act has classified an entire range of drugs, is Schedule one , um, except again for ketamine. And what this schedule one designation classification means is that the DEA has deemed these drugs as having no currently accepted medical use and, or, you know, having a high potential for abuse and lack of accepted safety for use under medical supervision. So why I highlight that is, even though the , these psychedelic drugs are in the classification of Schedule one being see seemingly not having any recognized medicinal , uh, benefit, you still see, you know, states that are looking to , um, approve certain state legalized frameworks, which Richard and I work with all the time, even from just a cannabis perspective , um, because cannabis is also still a Schedule one drug. Uh, and yet we've seen a slew of states regulate , um, or, or approve state regulated medicinal cannabis markets as well as adult use cannabis markets. Right?
Speaker 3:Yeah. So , Lisa , um, you bring up a lot of really good points. I do wanna mention that , um, because you talked about how ketamine is being administered, but let's, I mean, let , let's, let's take , uh, MDMA, for example, right? The , the , um, I think the FDA and I only mentioned this because I think they , this gives , um, us and people in the industry some hope in , in , because FDA has agreed to an expedited review, and with their , uh, new drug , um, application for MDMA, which is a , is relatively a good sign. And it looks, it , it's, it's an indication that the, the climate of , um, of how the federal government is viewing , um, psychedelics is , is , is, is, is trending towards , um, a consideration of , of being considered a , a legitimate , uh, form of treatment for patients, particularly with , um, what, what MDMA is really designed to do, is to , um, offer some relief for , um, individuals with PTSD and anxiety and depression. Um, but let , let's, let's shift the discussion over to where you are. I mean, you're in New Jersey and close to Manhattan, you're in the bustling area of the Northeast Coast. What's going on there? Is there anything specific when it comes to psychedelics , um, in your part of the country?
Speaker 2:Yeah, definitely. I mean, it's, it's not as exciting as what's going on in Oregon or Colorado, which I'll, I'll briefly get to. But , um, the , the point is to know that there's been development in multiple states with regards to introduction of bills , um, related to psilocybin use. So I'm located in New Jersey and I practice , um, from kind of a , a , a home state of New Jersey and New York, and in New Jersey in the 20 22, 20 23 legislative session, our Senate president introduced what's called the Psilocybin Behavioral Health Access and Services Act. And it's an act to authorize the production and use of psilocybin to, again, to promote health and wellness. Um, the act also decriminalizes , um, uh, the , the, the possession of psilocybin or , or specific amount of psilocybin and expunges past offenses involving psilocybin production, possession use, and , and distribution. So what, what I like to highlight there is that even though this has only been introduced into the legislative session as of last year , uh, it was actually just reintroduced by the Senate president , uh, earlier this year, January 9th, 2024. And there was an expectation that this act, or some amended version of the, the act will become law in 2024. And the, the regulated framework that this bill , um, has taken, at least in, in its current form, is very, very similar to what's going on in in Oregon. And Oregon, for those that are not aware, is, is one of the most progressive states when it comes to psilocybin. It is , um, one of two states that has fully decriminalized and , um, implemented a re state regulated framework of , um, psilocybin service center model, which is a , a business model whereby any type of individual, not just a healthcare practitioner, would be able to own a psilocybin service center and kind of carry out in, in one way or another, a kind of like a psychiatry practice. Um, they'd be able to dispense psilocybin that they receive from , uh, a state licensed psilocybin manufacturer. And , uh, Oregon right now has that business model. There are psilocybin service centers in operation. Uh, there are psilocybin manufacturers in Oregon that have a license to manufacture those products. And New Jersey has proposed a very, very similar framework at this point in time. So we may very well see something similar to what's going on in Oregon right now. Um, and it's, and, and , and , and so that's exciting for the fact that we at least have Oregon to look to as the, the example. Um, so again, we're looking to see if something like that will be approved and made law within, within this the next 12 months. Um, in New York, which again, is right next door, New York has actually proposed , um, a similar bill from like a rec , uh, an adult use perspective whereby psilocybin can be run through these types of service centers that don't have to be owned by healthcare practitioners. But it also more interestingly, proposed a clinical research bill , uh, that would provide for medical use of psilocybin. And it's that medical bill , um, for p for the use of psilocybin that's actually making more traction in New York as opposed to the adult use , um, recreational type of bill that we see here in New Jersey and is operating in, in Oregon and in New York. It is , uh, uh, an act that is to amend the public health law and allow for the medical use of psilocybin within more a healthcare practice regimen whereby the entities would have to be owned by healthcare practitioners. Um, so it is , it's more looking to set up in, in New York, a medical pathway for patients to access psilocybin coupled with assisted therapies , um, with the, the use of healthcare practitioners. And that's the real distinction between what is going on in Oregon and what we may see on the East coast, is that these psilocybin bills be more medicalized , um, whereby it would affect, you know, my clients and Richard's clients from a healthcare perspective, where the, the , this type of substance would hopefully from, from what I gather, just what I'm hearing in the political world, is that they, it would be run more as a medical practice as opposed to just a regular business model that we've seen in Oregon. Um, but it's, it's still up in the air , um, for, you know, what would actually be approved. Um , but it's great seeing the layout of the two different types of, of business models. So that's New York and, and New Jersey. And from another statewide perspective , um, I would just like to highlight that Colorado is actually the second state , uh, that approved a state regulated framework to operate a similar business model , uh, as we currently see operational in Oregon. So it's Oregon first corridor second, and then we have a slew of states all over the US that have proposed bills about decriminalizing , uh, the use of psilocybin , um, such as Massachusetts, Michigan, Washington has decriminalized it and selected municipalities , um, dc . So we'll only continue to see this development , uh, very similar to what we saw with cannabis, and that's why we , we are capable of seeing the parallels between the two industries , um, cannabis as opposed to, you know, psychedelics and, and vice versa. Um, so while, while talking about that expansion across the US like we've seen with cannabis and, and having touched on some of the, the federal perspectives , um, Richard , what I wanted to get into next is, you know , if you can speak to a little bit about the , the , the , the contravention between state and federal law, you know, that, that that dichotomy between , um, schedule one substances being illegal to be , um, you know, manufactured, possessed and distributed. However, now we're seeing, you know, the first state Oregon implement an actual program whereby they are manufacturing a schedule one substance. Um, can you talk to, to that a little bit more?
Speaker 3:Yeah, sure. Um, Lisa, as I previously mentioned , um, just a few minutes ago that , um, listen, let's, let's, let's, let's get something out in the open, right? I mean, psilocybin, a KE mushroom magic mushrooms, it's still a schedule one drug , um, psychedelics as a whole , uh, with the exception of ketamine, it , it's, it's still federally illegal , um, and depending on which state you're in, the states have, have their own controlled substances act as well. So you have that correlation where certain states, such as Texas, we have the Texas Controlled Substances Act, that if you're , um, if you're, if you're caught with , um, magic mushrooms on you, it's , uh, I believe they, they , they classify as a, as a penalty , uh, penalty two , um, type penalty or a group , I'm sorry, a group two penalty. And that's, you know, that's defined in the Texas Controlled Substances Act. And of course, as we all know , uh, as a Schedule one substance under the CSA , uh, it's essentially saying that there's a high level of abuse or there's a high , um, chance and risk for abuse, but with almost no medical benefits. Um , that's currently what, what , uh, how they're classified on the federal level. Of course, we've seen states have , um, varying degrees of , um, uh, of opinions on , uh, how they see psilocybin. And as you previously just mentioned, Colorado and Oregon certainly are two states that are on the cutting edge of this. Uh , I believe Colorado , uh, legalized psychedelics , uh, I think I believe five different forms in 2022. And of course, Oregon being kind of the pioneers in 2020. So you're seeing that trend of ever since 2020 , uh, and now we're four year , really three and a half , four years in , uh, you know, more states are either actively producing legislation , um, or they're , uh, the , they're decriminalizing it to some degree. And even some municipalities such as , uh, Minneapolis, the, the mayor , uh, Jacob Fre issuing an executive order , um, just summer of last year, that addresses , um, the natural use of psycho or the , the use of natural psychedelics. I believe it Minneapolis is the first city in the upper Midwest to do that. Um, so you have like this , these different layers of local, state, and federal. And then , so you have , um, you have conflict of laws issues, and we saw that with, with cannabis, right? Cannabis had had very, well, contin really continues to have similar challenges because , um, if you're taking a, if you're taking a Schedule one substance , uh, across state lines , uh, through interstate commerce, that becomes a federal issue. You could be, you could be prosecuted for , um, money laundering under , under Rico. There's some other , uh, uh, state , uh, federal penalties that the DEA and the Department of Justice can get involved with. But then you have these states that , uh, have legalized , um, some of these Schedule one drugs and , um, different states have di their different rules. So some states will , uh, have it written that they will allow , um, these Schedule one drugs to be brought into their states and other states, other states have , uh, uh, legalized it, or in , in the world of cannabis, they've, they, they've created laws to allow adult use. They will not allow that. So you have all these different , uh, states that even have legalized it in certain forms, but , um, it conflicts with other, the , a neighboring state. And so you have to look at all these different state laws , um, and federal laws. And of course, even just because you're compliant with state law, it doesn't prevent the, the federal government such as the DEA , uh, from coming in and taking enforcement actions. Now, the question then becomes, what are the chances or what , what are the risks? What are the legitimate risks ? How is the federal government or the state government is prioritizing on , um, on enforcement actions and what type of penalties are, are , are at issue? I think one thing to point out, Lisa, is, you know, if you really take a step back and think about , uh, a comparison between psychedelics and, and , and , and , and cannabis, cannabis had this really interesting, colorful , um, history leading up to it through the 1910s all the way through the twenties, thirties, and so forth. You have , um, you know, you , you have some, some issues with , um, federal enforcement agencies , um, essentially stigmatizing it through , um, the initiatives carried out by Harry Anslinger. And then we have movies on it like such as We for Madness. But psychedelics didn't really have that. Um, to some degree. There was some bad publicity in some ways, but it doesn't have that same rich history that cannabis did. And because of that, I , it , it was , it's EI think it's easier for certain states to , uh, progressively move faster, to pass certain bills to address psychedelic issues than it was for cannabis. Um, not to mention that cannabis kind of set the stage and you already took this control one, or I'm sorry , sorry , schedule one control substance, and different states are legalizing it . So , uh, a , a as , as a society, we look at that and we think, oh my gosh, we can't believe we're doing that. But then after a few years of adult use or me or medical use , um, legislation that's passed, we, we realized , well, this , the world hasn't really changed that much. I mean, yeah, it's changed a little bit, but it , it , it's not like the , um, it , it's not like the world has come to an and just simply because adult use , uh, cannabis was, was legalized. So that kind of set the stage, if you will, to, to tee off on psychedelics, say, okay, well , if we can do this for cannabis, why couldn't we do this for psychedelics? And then you couple that with the fact that it didn't really have all those , um, uh, that rich history, the , the , the , the , the stigma behind it where it was scrutinized , um, more, and as, as evidence , um, you know, in Texas at least, we passed , um, uh, a medical cannabis bill back in 2015, and it's been, what, nine years? And we still only have , uh, eight different qualifying conditions. So it , and it's, it progressed slowly. Um, and i , I , I psych the , a psychedelics bill was passed , um, I believe in 2021 for research, and , and that, that happened pretty quickly almost overnight. And that's an indication that , um, of what I was just talking about that it , it seems like the society as a whole has accepted psychedelics at , at a faster rate than it did with cannabis. Um, and , and so I think I , I think part of that will also play into how , uh, if there is a conflict of laws between state and federal , um, it , it , it , it'll have an impact on how , um, the federal government will take enforcement action, if any.
Speaker 2:Yeah, and I, I agree with you , um, Richard, that I think psychedelics will be taking a similar , um, approach in terms of a state perspective with each state coming up with its own type of regulated framework. Mm-Hmm. <affirmative> and, and like we saw in the cannabis space, right? Each state really started with legalizing cannabis use from the medicinal perspective whereby , uh, businesses would be able to dispense cannabis for first medicinal use. And you had to have, you know, the patients have had medicinal card under their , their state's , uh, medicinal program, whether it's through the Department of Health or, or whatnot. And then once that was accepted, then we saw adult use recreational coming around. Yeah . Um , so , so here we're , we're seeing as though I think psychedelics don't necessarily have to take , start with that medicinal framework from the beginning , um, from what we're seeing in Oregon, which is just a regular business model. Um, but there is more acceptance of that psychedelic , um, area and , and , and need for the use of these types of substances. And , and I think it's, it's kind of, there's the, the legal pathways for, for psychedelic use to be implemented in each state, but there's also then this commercial need for patients , uh, to want to have this different access , uh, to medicines and therapeutics that I think are moving at a faster rate than the legal frameworks can be set up, right? Yeah . You know, you always have public that's asking for, for a access to different types of medicines, but then it just takes longer for the legal side to catch up with that criminal commercialization of psychedelic products and such. Um, so I, I think, you know, we, the world wants to try and see if they can get access to, to different types of psychedelics , um, while us as attorneys, you know, have to make sure that it's being done in an approved manner, whether it's through , um, uh, FFDA approval and, or, you know, state regulated model.
Speaker 3:Right, right. No, I agree. You know, one thing I'll point out is even , um, you know, we, we brief , both of us briefly mentioned Colorado and , and Oregon, and of course in Oregon in 2020, they passed the , uh, organ psilocybin services , um, act. And in 2022 , um, Colorado passed what's called the Natural Medicine Health Act, both of which addressed their respective psilocybin , um, or, or psychedelics , um, framework in each state. And even within those two states, right? They have, they obviously are the two kind of up and coming and cutting edge states in this particular area. Even within those two states, if you read the language, it , it's, it's interesting. They have some overlap, but then there , there's some distinct differences too. And from what I can tell , um, organ is really driven in this , um, natural healing and wellness. Uh, and, and it's almost like a , it , it's almost like , um, a process of healing and addressing , um, uh, an individual's holistic , uh, approach. And it takes , it takes on a holistic approach in addressing the entire individual. And they use the words like facilitator and , um, and, and , and the facilitator is really the one that, that, that you meet with. And then , um, and they make it a point to point out that , um, it , it's not really like a products focused , uh, program. It's really like a process focused program. And, you know, you meet with the admin , you meet with the facilitator, you, you , you may end up eating whole dried mushrooms or taking an extract or whatever. But then if you look at the language in Colorado, so both , uh, like we said that both states have legalized it, but it , they're taking on somewhat different approaches. Mm-Hmm . <affirmative> . Um , and again, while they're , I think the overlap is that you can't, unlike cannabis, you can't , uh, you can just walk into a dispensary and pick up the products with, with psilocybin, you're really meeting with like the facilitator with a , or the licensed professional in this regulatory framework, and you set an appointment, you actually go through this entire, like, healing process and Right . But in Colorado, they're taking more of a medicinal or healthcare type approach. Uh , at least that's what it seems like to me. But I'd just like to point out that even with these two states that have legalized it, they're, they're taking somewhat different, taking on somewhat different approaches. Um , with that said, Lisa, what do you, what do you see the future , uh, is for psychedelics? Do you see any major changes or any up and coming , um, major shifts in the , in , in the law, or how , how do what , what does it look like in your crystal?
Speaker 2:Yeah, I mean, listen, I think that this is certainly still the start of what we're bound to see in psychedelics. We're going to see so many different types of stakeholders get involved in the psychedelic area, whether it's from a clinical research perspective, whether it's just through , um, a , a business perspective of an investors getting involved. Um, we have healthcare practitioners that will continue to operate medical practices , um, and, and recommend or dispense , um, these types of drugs , um, when they are approved, you know, by the FDA . Um, and, and then obviously just, you know, you have entrepreneurs that will look to get involved in this space. Um, so a lot of different developments that I see in the future. But with all that being said, I do look at it as an area of which, you know, the healthcare , um, practices will be involved in. And, and, and while progress is being made , um, in, in all the different hurdles of legalization and approval, I think that there's still the consideration of who will pay for these treatments using psychedelics. Uh, so I know, you know, at least from my healthcare client perspectives, you know, if they're gearing up to try and use these types of substances in their practices, which they'll certainly want to get involved in, even if it's from an investigational perspective, you know, and , and prescribe it off label like ketamine is currently , um, you know, I think the question for patients and providers will be whether insurance providers will agree to reimburse providers who prescribe psychedelic therapy to patients. Uh, and my hope is that we will see coverage for these substances at some point. So most notably, the, the American Medical Association has approved a temporary set of CPT codes for psychedelic therapies. And the CPT codes that the A MA recently approved, they're actually CCPT three codes. And category three CPT codes are a set of temporary codes that help track the use of emerging technologies services, emerging therapies , uh, but it does not constitute a finding of support or lack thereof , um, by the MAMA with regard to, you know, clinical efficacy and safety and such. And it does not necessarily mean that payers will be providing coverage. Uh, the , the new codes do allow qualified healthcare providers to ask a patient's insurance to re reimburse them for the psychedelic treatment they prescribe. However, again, the approval or publishing of the CCPT three codes does not auto automatically mean that insurance companies will agree to reimburse for psychedelic therapies. Um, I think, you know, in, in that, in that world of the insurances, the experts will say that the food and drug administration approval, if there is approval by the FDA of psychedelics will certainly be key for insurance companies to consider reimbursement. Um, so I think with that being said, there's certainly companies out there that are looking to lead the path for , uh, obtaining reimbursement for these types of medicines. You know, you can look at , uh, a company called Nthe that's a , a third party administrator to , um, provide reimbursement for , uh, self-funded employer plans that are , uh, looking to cover these types of medicines. Uh, there's a company called Benefits Health out there that's looking to provide coverage for , um, plans that want to provide reimbursement for their employer employees who use cannabis. Um, so I think that that's the next wave , um, but only one of many things that we'll see in this, in this industry. Now, what about you, Richard? You know, as final thoughts, what do you see is the future for psychedelics?
Speaker 3:You know , um, I think a co a couple things will happen, right? I think different states will still continue to look at , um, look at opportunities for more research and gathering more data, and to have some , um, quantitative and quantitative data to, to, to show the efficacy of , um, of psychedelics. Um, so as more states jumped on the research aspect, the r and d , um, I think more opportunities will be created from that. Uh, I , uh, potentially even some investments, right? Um, and, you know, because of that , um, and because of the collective data, I think that makes a very compelling argument for , um, for different , um, advocacy groups that could impact , um, the, the perspectives of , uh, health and human services , uh, or the Department of Health and Human Services, which as you know, has an impact on , um, whether or not , um, a substance is rescheduled under the Controlled Substances Act, as we've seen with cannabis , uh, because , uh, health and HU HHS made a recommendation after its studies on cannabis, it , as of last year, they made a recommendation to the DEA for cannabis to be rescheduled from a, from a one to a three. Um, I think, you know, there's going to be more money involved. Um, you know, based on, my understanding is that , um, more than $560 million , uh, have been raised through , uh, venture capital firms. At least this is what I, what I saw according to PitchBook Magazine. And as of right now, NDMA and psilocybin, they, they both , uh, have obtained quote , breakthrough status , uh, from the FDA . And as I said earlier , um, the md uh , the MDMA , uh, has already ex has already been , uh, granted , uh, an expedited review on their new drug application. Um, I think furthermore that there's, there's some other , there's some other interesting data that I found , um, on the , uh, uh, through the , uh, maps public , uh, benefit Corporation. They've, they've actually raised more than $130 million on , um, on the study and, and , and the focus of MDMA since 1986. So you do see some money and some, some research going on. Uh, and because of that, I think it has an overall impact on what the federal government will do. Uh, I think it's a matter of time. I do think it's, it'll take a, it'll be on a faster track than , um, uh, than cannabis. And, you know, as, as this, as this industry grows, you're, you're going to naturally see a progression of it bleeding into healthcare, as we've seen with not only with cannabis, but also with , with , uh, with , with ketamine. And part of that is also because he got rescheduled two A three. And, and of course, there , there's a trickle down effect , um, and , uh, it's going to impact , uh, clinicians and how , um, different licensing boards are going to have to change their, some of their guidance and some of their rules and regulations on , um, their licensed professionals, their scope of practice, and whether or not , um, they're going to regulate how they prescribe or how they recommend some of these substances. Um, we've seen in California developing , uh, new laws that addresses , uh, anti-kickback issues and , and , and physician self-referral laws that , that's specific in that state now will happen with , uh, psychedelics. Um , I think so I , I I think it's going to be more of treated more of a, like, like a medicine, and it's going to be more and more incorporated into , um, the lives of physicians and how healthcare is , is delivered and how , um, how medicine is going to be viewed.
Speaker 2:Yeah. I, I agree. Those are all great , um, projections and thoughts. Uh, so thank you so much, Richard, for joining me today. And thank you for everyone out there , uh, for joining us and examining the history of psychedelic substances and allowing us to discuss the evolving, legal and regulatory landscape in the area of psychedelic substances, which will only continue. So thank you so much. Have a great day.
Speaker 3:Thank you.
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