Oregon Psilocybin Industry

Service Center Toolkit

Introduction

Interested in starting a psilocybin service center? The Healing Advocacy Fund (HAF) has developed this toolkit to help distill some of the key state, local, and federal rules, regulations, and major considerations as you explore opening a service center. We’ve also included some safety considerations as you begin to launch your center.

Psilocybin remains a schedule 1 controlled substance that is illegal under federal law. The Healing Advocacy Fund highly recommends that anyone looking to open a Psilocybin Service Center in Oregon seek advice from both a lawyer and a certified public accountant (CPA) with expertise in the unique laws and tax codes regulating businesses that are related to schedule 1 substances that remain illegal under federal law. There are estimates  of the opportunity and personal risk tolerance that each person must weigh before entering this field and our goal is to help people have a clear picture of the major considerations from the onset and to help identify resources. 

Your lawyers and CPA should be familiar with either cannabis or businesses dealing with Schedule 1 substances and tax code 280E and should communicate and work together to provide you options for your business structure. 

We understand the cost to hire a lawyer and CPA is significant, but we believe it’s imperative to enlist experts to advise on how to set up your business particularly because it’s a new industry that works with a Schedule 1 controlled substance that remains illegal under federal law. They will also help you understand your legal and financial risk and have a clearer sense of what it will take to be a viable business. 

The information provided by the Healing Advocacy Fund and on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.

Webinar Archive

Find recordings of past webinars sponsored by the Healing Advocacy Fund on a range of issues from psilocybin dosing to tax law.

Webinar: Natural Psychedelic Medicines for Mental Health Session 4 with Mental Health Colorado

In the final session of a 4-part series hosted by Mental Health Colorado and Healing Advocacy Fund, learn how psychedelic assisted therapy can be integrated with existing mental health programs, peer support models and other modalities to maximize safety and outcomes for mental health and wellbeing. Psychedelics are not a panacea, and long-term success with psychedelic therapy depends upon a roadmap of ongoing integration and care.

Webinar: Natural Psychedelic Medicines for Mental Health Session 3 with Mental Health Colorado

In the third session of a 4-part series hosted by Mental Health Colorado and Healing Advocacy Fund, we review draft rules for facilitator training in Colorado's natural medicine program, including the two proposed facilitator license types, Facilitator and Clinical Facilitator, and the didactic and experiential training requirements to become licensed. We also learn from Oregon licensed facilitators about their training experience and beginning to practice in Oregon. This session illuminates some of the subtleties of working with psychedelics and what knowledge and skills are particularly important to develop -- informing considerations around training programs for those interested in pursuing licensure.

Webinar: Natural Psychedelic Medicines for Mental Health Session 2 with Mental Health Colorado

In the second session of a 4-part series hosted by Mental Health Colorado and Healing Advocacy Fund, we hear powerful firsthand accounts from Coloradans who have found healing with psychedelics in the contexts of addiction, anxiety, PTSD and chronic pain. This session dives deeper into the research and the application of psychedelics for specific conditions. The session closes with a description of equity and access provisions in Colorado's psychedelics law, Q&A, and a discussion of the promise of Colorado's Natural Medicine Health Act for shifting paradigms in the mental health and medical fields.

Webinar: Natural Psychedelic Medicines for Mental Health Session 1 with Mental Health Colorado

In this first installment of a 4-part series, Dr. Johnson provides an overview of the research into psychedelics and how it informs the therapeutic process. Dr. Ascani and Dr. Tippett describe elements of Colorado's state-regulated model for psilocybin therapy, set to launch in 2025, and best practices to maximize benefits and minimize risk. The session closes with an exploration of the mechanisms of action that support the therapeutic efficacy of psilocybin therapy.

Webinar: Dosing, Potency and Safety in OR’s Psilocybin Program, a Conversation Led By Bob Jesse

The Healing Advocacy Fund hosted a webinar led by Bob Jesse in October of 2023 on “Dosing, Potency, and Safety in Oregon’s Psilocybin Program.” You’ll hear from Dr. Nicholas Cozzi, a scientist and educator with background and training in pharmacology, chemistry, toxicology, and neuroscience, Steve Elfrink, HAF Safety Committee member, licensed facilitator, and recipient of largest psilocybin dose in a published clinical trial, and the founders of two licensed service centers and licensed facilitators, Dee Lafferty, from Inner Guidance Services, and Ryan Reid of Drop Thesis service center and advisor to Bendable Therapy.

Webinar: Fact or Myth? Oregon Psilocybin Services with Emerge Law Group

As the Oregon Psilocybin Program embarks on its transformative journey, it's vital to ensure that the information you receive is accurate and reliable. In this webinar, the Healing Advocacy Fund and Emerge Law Group shed light on common misconceptions around cost of psilocybin services, information for service centers on the status of local/rural jurisdictions, land use compatibility, technical questions around services, and more. This webinar dispels confusion and offers accurate insights directly from experts.

Webinar: 280E and Psilocybin: Understanding and Mitigating the Impacts with Emerge Law Group

This webinar features a panel of speakers including tax and business law experts discussing creative business structuring solutions to help mitigate 280E’s impact, including practical perspectives from CPAs and tax attorneys with deep knowledge concerning the IRS’ approach to 280E.

  • In November of 2020, Oregon voters passed Measure 109 ,licensed and regulated the manufacture, delivery and administration of psilocybin services (read the full text of the measure here). The text of the measure is a broad framework which included a 2 year planning period for the drafting of rules and regulations with the Oregon Health Authority (OHA).

    In addition to the foundation provided by the text of the measure, there are two main places where rules and regulations are being created: 1) The Oregon Health Authority (OHA), and 2) Local Land Use Planning, or Community Development Departments. You will need to apply to OHA and meet the requirements of the rules and regulations to become a licensed premises to operate your service center. Understanding these regulations and ensuring compliance is essential to your service center application and providing psilocybin services.

    Some local municipalities have decided to opt out of the psilocybin therapy program. You can find some information here, but for more specific information, go to your city or county website.

    • The Oregon Health Authority (OHA) has been developing the rules and regulations that will govern psilocybin services throughout the Beaver State. Within OHA is the Oregon Psilocybin Services (OPS), “a new section housed within the Oregon Health Authority Public Health Division’s Center for Health Protection.” The final set of OHA regulations will be codified on December 30th, 2022.

    • Local Land Use Planning or Community Development Department: Local municipalities also have the option to create time, place, and manner (TPM) regulations. Many municipalities are in the process of creating these regulations but municipalities are not required to have TPMs in order for someone to apply for and receive a service center license from OHA. HAF recommends that you reach out to your Local planners to find out if any TPM regulations have been created, and to introduce yourself and help them understand what you plan to do. How to find your Local Planners:

      • Incorporated City: If your planned service center will be in an incorporated city/town, you will need to reference the land use plans at the city/town level. To find your local planners, search for the name of your city, and “land use planning department.

      • Unincorporated area: If your planned service center will be in an unincorporated area, you will need to reference the land use plans at the county level. To find your local planners and their rules, search your county name and “land use planning department.”

  • The Oregon Health Authority has a Psilocybin School Exclusion Map, a map that “was developed by Oregon Psilocybin Services to support applicants with the process of identifying if a proposed location is within 1,000 feet of a school to comply with ORS 475A.310.” Psilocybin Service Centers are not allowed within 1,000 feet of a school.

    The OHA has noted on their website (as of 4/10/23) that the “mapping tool is being updated regularly but may contain inaccuracies.”

    They go on to write, “While the exclusion map tool may be used as a reference to locate possible schools near the proposed location, private schools are not required to register with Oregon Department of Education (ODE), and the information captured by the tool may be incomplete. For more information, the Oregon Department of Education (ODE) Public and Private School Directory can be found below.”

    If you believe that a school listed on the map is not actually a “public elementary or secondary school for which attendance is compulsory under ORS 339.020; or a private or parochial elementary or secondary school, teaching children as described in ORS 339.030(1)(a)” there are several options:

    1) Email the OHA at their general email address (OHA.Psilocybin@odhsoha.oregon.gov) and ask them whether the school in question qualifies under the statute.

    2) Call the local planning department where the school in question is located and ask them whether the school in question qualifies under the statute.

    If your planned service center will be in an incorporated city/town, you will need to reference the land use plans at the city/town level. To find your local planners, search for the name of your city, and “land use planning department.” If your planned service center will be in an unincorporated area, you will need to reference the land use plans at the county level. To find your local planners and their rules, search your county name and “land use planning department.”

    3) Consult a lawyer. If you haven't heard back or are still unsure based on the response from either the OHA or the local planning department, you can also consult a lawyer. And in the event that you do hear back, we still highly recommend that you engage your lawyer to ensure the information you have received is an accurate reflection of what they deem to be the legal definition of a school for the purpose of establishing a psilocybin business.

State And Local Rules And Regulations

  • Because psilocybin is federally illegal, some of the work undertaken by Service Centers will be in violation of federal law. This creates significant challenges in finding banks, financial institutions, insurance providers, and landlords willing to work with psilocybin companies. Doing so may be detrimental to their business as they could face repercussions from the federal government. There are 5 main areas impacted by this: 1) Banking, 2) Financing, 3) Real Estate, 4) Tax Burden and 5) Liability and Business Insurance.

    Below is an outline of the challenges around federal illegality. HAF is in the process of collecting resources and known vendors for each of these sections.

    HAF recommends that all service centers enlist a tax preparer and lawyer to navigate federal illegality.

  • Most banks, especially large banks and financial institutions, will not provide banking services to businesses engaged in violating federal law. The banks do not want to be exposed to fines and penalties, or assume any risk. Therefore, large banks and financial institutions may not provide banking services to psilocybin businesses. Considerations:

    • Protection: Without banking services, cash businesses may have more difficulty protecting their income.

    • Managing Finances: Managing your finances may be more difficult without the suite of services banks offer.

    • Running Your Business: Will need to think about how to manage your business including paying employees, billing and other business transactions without banking services.

    • Unknown vendors: With Measure 109 being so new, it is currently unknown which banks will work with psilocybin businesses.

  • What kind of financing options are available to help me start my service center? Starting any business requires capital but major providers of traditional business financing, such as banks and financial institutions, may not work with federally illegal businesses (for reasons stated above). It’s important to know your options when seeking capital to start or expand your service center. Considerations:

    • Individual investors may not have the same level of restrictions that banks and financial institutions do.

    • Proposal: Creating a business proposal that investors or financiers can understand.

    • Vendors: New financial vendors may begin to emerge as they did with cannabis.

  • As we discuss in the Banking section, originators from large financial institutions may be unable or reluctant to provide mortgages to federally illegal businesses. Considerations:

    • Any property, whether yours or one you’d like to lease, that has a mortgage on it may be prohibited from leasing to or operating a federally illegal business.

    • If the bank finds out a property is running an illegal business, they may potentially “call the loan” (i.e. demand full payment of the remainder of the loan). Additionally, property used to violate federal law will be subject to forfeiture under federal law.

    • There is the option of purchasing a property upfront (no mortgage) or leasing from a real estate owner who owns their property outright (does not have a bank mortgage).

    HAF understands that this is one of the biggest barriers to entry and is examining alternative solutions and new models.

    NOTE: In addition to mortgage and lending, there are other state and local zoning rules and regulations that should be reviewed before purchasing or leasing any property for a service center.

  • Tax Code Section 280E penalizes “traffickers” of Schedule I or II drugs by prohibiting the deduction of ordinary and necessary business expenses such as the cost of goods sold. As a result, psilocybin businesses may have an increased tax burden, similar to cannabis, because their income tax liability will be calculated on gross income.

    HAF recommends that all service centers enlist a tax preparer and lawyer to navigate 280E.

    • Although we anticipate that there will be liability insurance products available to psilocybin businesses, federal illegality still makes it relatively difficult for these entities to receive inclusive, affordable coverage. That’s why it is prudent to understand what types of policies are available for you, what they cost, what they cover, and what coverage deficiencies you may anticipate.

    • Resources:

      • Oath Insurance: Oath will provide medical malpractice, professional liability, general liability and property coverages for psilocybin service centers.

      • NOTE: HAF is in the process of finding vendors that are offering services related to the implementation of Measure 109. The vendors listed in this document are purely for information purposes and not an endorsement by HAF. If you know of, or are, a vendor please contact Heidi@healingadvocacyfund.org.

Federal Illegality

  • The legal and corporate structures you choose will have important tax implications for your service center. For example, IRS Section 280E significantly impacted cannabis businesses and in some cases represented the difference between financial sustainability and the failure of those businesses, and it has the potential to impact your service center. Before incorporating your business, we highly encourage you to get educated on IRS Section 280E and consult tax and legal professionals on this and other areas of potential impact.

  • Measure 109 was shaped with the intention to serve as a wide-spanning program with flexibility for many different approaches and perspectives. As long as your services fall within the program guidelines, there is room for a lot of creativity. We’ve heard folks talk about building nature walk experiences, community clinics, holistic wellness centers, 1:1 therapy-style offices, end-of-life care, substance use disorder treatment, and traditional group ceremony practices. Different service models will have different implications for how you legally and financially structure your offerings.

Structuring Your Business

Psilocybin therapy is a quickly emerging field and many of the answers to questions are still unknown. We are compiling resources, including vendors, who will be operating in this space. There are many lessons and vendors that emerged out of the cannabis space, and we are looking into whether they will be vendors for similar services in the psilocybin space. The vendors listed in this document are purely for information purposes and not an endorsement by HAF. 

If you have resources you’ve developed, solutions, or know of vendors that would be helpful to others trying to open a service center, we’d love to hear from you. Additionally, if there are other major areas we’ve missed that we should cover please let us know. You can reach out to our Oregon Director Heidi Pendergast, at  heidi@healingadvocacyfund.org.

  • Insurance

    • Oath Insurance: Oath will provide medical malpractice, professional liability, general liability and property coverages for psilocybin service centers.

    • NFP: Professional and product liability insurance. Contact Adam WIlkins (adam.wilkins@nfp.com) for more information.

    • Assured Partners: Insurance brokerage. Contact Ryan Anderson (ryan.anderson@assuredpartners.com) for more information.

Resources and Vendors

  • Before purchasing a property there are several critical areas to consider including federal and state law, financing/mortgaging, state regulations, and local zoning rules.

    Due to the federal illegality of psilocybin, originators from large financial institutions are not likely going to provide mortgages to federally illegal businesses. If the bank finds out a property is running an illegal business, they can “call the loan” (i.e. demand full payment of the remainder of the loan). Additionally, property used to violate federal law will be subject to forfeiture under federal law. If you are able to purchase your property upfront (no bank mortgage), these restrictions do not apply.

    In addition to the challenge of securing mortgaging, there are state and local rules and regulations around zoning and you would need to check whether the property meets the criteria. You can find the state's administrative rules here (page 24 for service center zoning). Some municipalities opted out of Measure 109 and you can find information on that here. You can also contact your local land use commission (if you're in an incorporated area it'll be your city planning commission, and if you're in an unincorporated area, it'll be your county planning commission) to find out the most up to date information. Real estate agents can also be a good resource.

  • Due to the federal illegality of psilocybin, originators from large financial institutions may be unable to provide mortgages to federally illegal businesses. If the bank finds out a property is running an illegal business, they can “call the loan” (i.e. demand full payment of the remainder of the loan). Additionally, property used to violate federal law will be subject to forfeiture under federal law.

  • Any property, whether yours or one you’d like to lease, that has a mortgage on it may be prohibited from leasing to or operating a federally illegal business. If a property is running an illegal business, they can “call the loan” (i.e. demand full payment of the remainder of the loan). Additionally, property used to violate federal law will be subject to forfeiture under federal law. Properties that are fully paid off do not have these restrictions.

    In addition, there are state and local rules and regulations around zoning and you would need to check whether the property meets the criteria. You can find the state's administrative rules here (page 24 for service center zoning). Some municipalities opted out of Measure 109 and you can find information on that here. You can also contact your local land use commission (if you're in an incorporated area it'll be your city planning commission, and if you're in an unincorporated area, it'll be your county planning commission). Make sure to check all the state and local rules and regulations, and consult with legal counsel, prior to signing a lease.

  • Due to the federal illegality of psilocybin, originators from large financial institutions may be unable to provide mortgages to federally illegal businesses. If a property is running an illegal business, they can “call the loan” (i.e. demand full payment of the remainder of the loan).

    In addition to the challenge of securing mortgaging, there are state and local rules and regulations around zoning and building requirements. You will need to check whether the property meets the criteria. One major criteria is that a service center cannot be within 1000 feet from a school. You can find an interactive map from The Oregon Liquor and Cannabis Commission (OLCC) here, but please note they are in the process of updating it. You can find the state's administrative rules here (page 24 for service center zoning). Some municipalities opted out of Measure 109 and you can find information on that here. You can also contact your local land use commission (if you're in an incorporated area it'll be your city planning commission, and if you're in an unincorporated area, it'll be your county planning commission) to find out the most up to date information.

  • Due to the federal illegality of psilocybin and the challenges it poses with regards to banking and mortgages, we do expect these to be challenges faced by individuals looking to open service centers (see real estate section). A landlord may try to increase the lease rate once they find out it’s a psilocybin business. Engage a licensed broker from the beginning of your leasing search and they can help negotiate the terms to remain as reasonable as possible. HAF understands this is a major area needing support and is working to identify solutions.

  • The Oregon Health Authority (OHA) has a list of schools whose curricula have been approved. We suggest reaching out to these schools directly to connect with licensed facilitators.

    While the Oregon psilocybin ecosystem does not yet have a dedicated job board, Psychedelic Alpha has one for the psychedelic-assisted therapy space at large.

    psilocybinservices.org is starting a directory for Oregon psilocybin facilitators and service centers that will launch in 2023.

    psychedelicsupport.com has a national directory of practitioners as well.

    Interested in starting a Service Center? Complete this brief survey to let us know what you’re working on and stay in the loop

  • The definition of a “health care facility” is set by the state of Oregon and means: a hospital, a long term care facility, an ambulatory care facility, a freestanding birthing center, an outpatient renal dialysis facility or an extended care center” (see Section 12).

Frequently Asked Questions (FAQs)

Measure 109 Documents