When voters agreed to legalize psilocybin last year, they moved Colorado into uncharted territory and toward a future with some kind of state-regulated psychedelic sector. Six months later, where does that process stand?

One answer is that the psychedelic industry has already arrived. Colorado law changed around the start of the year to remove many criminal penalties related to possessing and using psilocybin mushrooms and some other psychedelic drugs.

Especially for mushrooms, that’s allowed a “gray market” to crop up, with entrepreneurs offering everything from guided psychedelic experiences to “microdosing” advice and supplies in mostly legal arrangements. Many in the scene say that it’s also become easier and cheaper to obtain mushrooms, even though actual sales remain illegal.

At the same time, the state is preparing for the launch of a much more formal, highly regulated psychedelics industry. Starting late in 2024, the state government is set to start accepting licensing applications for “healing centers” staffed by “facilitators” who can provide psilocybin and supervise its use.

Here’s what else you need to know.

Most criminal penalties have been removed for psilocybin in Colorado.

Colorado voters approved Prop. 122 in November 2022. But it’s taking effect in stages, with the full rollout scheduled to take about two years in all.

The first change, decriminalization, began about six months ago. The proposition removed criminal penalties related to the cultivation, possession and consumption of psychedelic mushrooms and three other psychedelic substances, with some limits. It also became legal to give away the drugs, but not to sell them.

Use and sharing of the drugs is limited to people 21 and older.

The state legislature stepped in this spring to tweak implementation of the law, with those changes taking effect on July 1, 2023. Here’s where things will stand under the new law:

• People are allowed to grow and consume psilocybin and psilocybin mushrooms and their derivatives; as well as have ibogaine; mescaline; and DMT for “personal use.” The law does not set specific quantity limits. (Note that the law does not cover LSD, which remains fully criminalized).

• People can give away, or share, most of those substances — but they can’t sell them. Ibogaine also cannot be shared.

• People can sell “bona fide” services for “harm reduction” or “support” related to the use of psychedelic drugs, though the law does not define those terms. Those service providers can also “share” the drugs with clients, free of charge. But if they are providing the drugs, they cannot advertise their services in any way. Unregulated practitioners also must tell clients they’re working without a license.

• People are allowed to cultivate mushrooms within a 12-by-12 foot area on private property.

• It is illegal to “openly and publicly” display or consume psilocybin mushrooms, with a fine of up to $100 and 24 hours of public service.

• It is illegal for people under the age of 21 to possess or consume any of the listed substances. It’s also illegal to share those substances with underage people.

• Psychedelic mushrooms and the other affected drugs remain illegal at the federal level, meaning anyone growing or using them could still face consequences from federal law enforcement

The loosened laws have allowed a gray market for mushrooms to sprout into the light. They are now more commonly available for sale from black-market cultivators, who feel they are less vulnerable to legal repercussions.

A recent search on Facebook Marketplace turned up about three dozen local results for mushrooms, most including photos of what appeared to be psilocybin cubensis mushrooms. (A few sellers did appear to only be offering culinary species like morels and chicken of the woods). The ads often directed customers to contact sellers through a secure messaging app, and listed prices of $100 or more.

“I’ll get you a menu, you’ll choose what quantity you’d need,” one account declared. Another manufacturer described himself as a suburban dad involved in civic life.

“Microdosing was what caught my attention,” one seller in the Denver area wrote in a message to CPR News. “A switch just flipped and I decided to grow my own, and I’m hooked and truly believe in the medicine I am now providing.”

That seller requested anonymity for fear of legal repercussions for violating the ban on selling mushrooms, adding that the money was just an “added bonus” to the satisfaction of sharing psychedelics.

Unlicensed “guides” are also running services where they “share” mushrooms and other substances but charge a fee to accompany clients through psychedelic experiences, which is allowed under state law.

Others have apparently been more flagrant. A man in Dillon was recently arrested after reportedly setting up signs advertising “magic mushrooms” and “free hugs,” according to Summit Daily. He reportedly argued that he was giving the mushrooms away as a “gift” to those who donated to him.

Local authorities said that even if you call it a donation, it’s still generally illegal to take money and give drugs. “Anyone who is soliciting donations for, and then claiming they are not getting remuneration for [mushrooms,] seems to contradict itself,” District Attorney Heidi McCollum told Summit Daily.

The state will later consider removing criminal penalties related to the drugs DMT, ibogaine and mescaline.

Regulated psychedelic ‘healing centers’ are still in the future

Colorado’s new legislation does not allow the retail sale of mushrooms and other drugs. There will not be any psychedelic dispensaries as things stand now.

But, eventually, the state will allow for legal “healing centers.” Consumers will be able to pay for supervised psilocybin experiences at these facilities. Instead of walking home with a canister of mushrooms to use at their leisure, clients will ingest the substance on site and go through the experience under the guidance of a licensed professional.

The healing centers are still a long way out, though. The state has only just started drawing up rules and regulations for these businesses and their employees. The state also will have to define rules for the producers who are allowed to grow mushrooms and sell them to the healing centers.

The state has appointed a Natural Medicine Advisory Board to help set those policies. The board’s 15 members, who include psychedelic researchers, health experts, law enforcement and others, recently began meeting. Eventually, they’ll advise state authorities on topics like how to train and evaluate facilitators. They were originally due to make recommendations by this September, but that deadline has been extended and their initial work won’t likely be committed until next spring or summer, state officials said.

Board members will also consider factors such as how to ensure “affordable, equitable, ethical, and culturally responsible” access to the drugs. State agencies like the Department of Regulatory Agencies and the Department of Revenue will translate those recommendations into final rules.

By Dec. 31, 2024, Colorado will be accepting applications for healing centers, cultivators, testing centers and other related businesses.

Local governments will not have the power to block new healing centers  — unlike with cannabis dispensaries. However, healing centers can’t be placed within 1,000 feet of schools, and local governments can add certain other restrictions.

The state may eventually allow healing centers to offer other drugs besides mushrooms, such as DMT and mescaline.

How much will healing services cost?

There’s only one other state with a similar therapy model for psychedelics: Oregon. The state recently issued its first license for a center. EPIC Healing Eugene plans to serve about 30 people per month in a “boutique” setting,

The Oregon facility opened just a month ago, with prices for a single trip running more than $3,000, according to Willamette Week. 

Those prices are a function of the high costs and strict training requirements involved with entering the business, said Tasia Poinsatte, who was part of the Prop. 122 campaign. They may come down as the industry matures, but official mushroom experiences will likely always be relatively expensive, she said.

“You’re really looking at hours of somebody’s time who is trained and licensed. And that’s a big part of what the cost is. It’s not really the cost for the mushrooms themselves,” she said.

She added: “I would not expect to see access within the therapeutic model under a thousand dollars anytime soon.”

In Colorado, healing services are expected to include a preparation session, an actual trip experience that will likely last six to eight hours, and a followup “integration” appointment.

The hope among some in the new industry is that insurance companies could eventually pick up some of the cost, making these experiences more affordable. That would likely be a long way off and may require the federal government to change its stance on these substances.

“It’s not gonna happen overnight, but it will happen from really continuing to gather evidence that these can be a really powerful treatment option for some people,” Poinsatte said.