As we reported earlier this week, 2025’s unprecedented state-level psychedelic policy reform push has extended to nearly thirty states. (See: March 2025’s Psychedelic Policy Momentum: New Bills Filed Across the U.S. as Nearly 30 States Deliberate Reforms.)

With more than 75 psychedelics-related bills introduced this session, there is plenty to stay abreast of. While most bills are still working their way through their respective state legislatures, there are some significant updates to discuss since our most recent round-up (see our January and February 2025 issues for earlier developments).

Here, we discuss several of those more substantial updates to psychedelics-related bills that are in flight…

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In this Article

• As New Mexico’s Medical Psilocybin Act Passes, Questions of Access, Provider Risk, and Industry Influence Loom
• Arizona’s Oregon-Style Psilocybin Services Bill Gutted and Replaced by Compass Pathways’ Crystalline Polymorph Psilocybin Rescheduling Trigger Law
• A Mixed Bag for Compass’ Other Trigger Law Bills
• Idaho HJR 4 Passes, Preventing Voters from Legalising Psychoactive Drugs via Ballot Initiatives
• Arizona Bill Carving Out $5M for Ibogaine Research Passes House, Working Way through Senate

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As New Mexico’s Medical Psilocybin Act Passes, Questions of Access, Provider Risk, and Industry Influence Loom

Yesterday, we reported that New Mexico Governor Michelle Lujan Grisham (D) has signed SB 219, the Medical Psilocybin Act, into law. (See New Mexico Passes Nation’s First Legislature-Driven Psilocybin Access Act.)

The Act creates a state-regulated system through which patients with qualifying medical conditions (‘major treatment-resistant depression’, PTSD, substance use disorders, and end-of-life care, to start with) can access and use non-synthetic psilocybin under the care of a licensed healthcare provider.

As we discussed in yesterday’s coverage, this is distinct from programs in Oregon and Colorado for several reasons, both in its origin—from the legislature, as opposed to popular initiative—but also the person who manages the psilocybin-assisted care—licensed healthcare providers, as opposed to state-licensed psilocybin facilitators.

Now that the Act has been signed into law, the program moves into a development period, with a program launch deadline of December 31st, 2027—nearly one thousand days away. (While that sounds like a very long time, it is not exactly unique: Oregonians voted on Measure 109 in November 2020, and the first service centres began administering psilocybin in summer 2023.)

That is nearly a thousand days worth of consultation, meetings, and rulemaking, in a process that is sure to raise various questions and debates around the program.

Chief among those questions are those related to access and equity.

As in Colorado and Oregon’s systems, it seems a safe bet that payors will not cover psilocybin services accessed through New Mexico’s state-regulated system, despite its more medical sheen.

Indeed, this was noted in an analysis from the state’s Health Care Authority (HCA), which stated: “Until the agent is FDA approved Medicaid will be unable to pay for psylocibin [sic] treatment with federal matching funds.”

The state Department of Health (DOH) concurs, writing in its own analysis: “Until psilocybin is FDA approved, this therapy won’t be eligible for consideration by Medicaid, Medicare, or private insurance for coverage.”

Even if the state were able to finesse reimbursement for psilocybin care, it would likely be uneven in its distribution. The DOH again acknowledges this, stating, “there are likely to be issues with access in many parts of New Mexico given the level of resources needed for the current therapy model.”

The average cost of psilocybin services in Oregon, according to DOH’s analysis (which it used for modelling purposes), is $1,250, paid out-of-pocket by clients.

What’s more, unlike in Oregon and Colorado, there is no decriminalisation element associated with New Mexico’s system. (In Oregon, a separate initiative, Measure 110, decriminalised drugs broadly but has since been overturned. In Colorado, Proposition 122 decriminalised use, possession, growth and transport of personal amounts of certain psychedelics among adults, as part of the same initiative that established the legal Natural Medicine Program.) Thus, without a decrim. provision, the only non-criminal way to access psilocybin in the state is via the out-of-pocket program, for those with qualifying conditions.

That has led some to deride the Act as a medicalisation effort as opposed to legalisation. Rather than derisive, that might simply be descriptive, and reflective of the appetites of lawmakers.

But those lawmakers are clearly aware of equity concerns surrounding this arrangement. In response, the Act establishes a Medical Psilocybin Treatment Equity Fund, which is set to receive $1 million from state general funds in FY’26 and subsequent fiscal years. (The Act also establishes a Medical Psilocybin Research Fund, which is set to receive the same cash injection.)

Access to those funds will be means-tested, with the DOH tasked with deciding upon income thresholds to determine eligibility.

(Interestingly, while FDA-approved psilocybin-containing medicines are exempted from the Act, they are eligible to benefit from both Funds, meaning that—should Compass Pathways, Usona Institute, and/or others receive approval—patients could theoretically access funding from the Treatment Equity Fund for these treatments. Research using those products could also benefit from the Research Fund. These two facts were the product of amendments to the bill during its passage through the legislature.)

If DOH is successful in appropriating a full $1 million for the Equity Fund, that’s not to be sniffed at, especially when compared to DOH’s budget of $2 million a year in running costs that it would appropriate to devise and administer the program. (That would cover 11 FTE staff, according to the budget, and $600k per year would go towards office space alone.) Taking the Department’s $1,250 per session estimate at face value, that would see around 800 low-income patients provided access to psilocybin treatment in the state per year.

However, the $1,250 estimate might be conservative, given that New Mexico’s program aims to have licensed healthcare providers at its core. (And it would be even more conservative if it were used to cover psilocybin-based treatments from the likes of Compass or Usona, which will likely cost at least ten times more.) Even still, the Equity Fund is an interesting addition with a tangible amount of funding, which can also be topped-up with ‘gifts, grants, and donations.’

Aside from questions of access, another glaring question on our mind is whether licensed healthcare providers will actually get involved in the program.

Sure, the bill removes psilocybin, when used in the context of the Act, from Schedule I placement in New Mexico, but that does nothing to change federal illegality. That might mean that providers, especially those who also work with federal bodies like the VA or Indian Health Service, might be wary of participating in the program.

The case of Utah’s psychedelics program might be indicative. Last March, SB 266 became law and created a pilot program for two healthcare systems to offer MDMA and psilocybin treatments. We interviewed one of the sponsors, Senator Kirk Cullimore, who was brimming with optimism.

But that pilot program never got off the ground, likely due to incongruencies between state and federal law. Those incompatibilities could, in theory, put providers and healthcare systems at odds with federal law enforcement, but also other federal bodies and programs like Medicare, Medicaid, and so on.

Just how New Mexico’s medical psilocybin program will navigate these challenges and provide licensed healthcare providers with the assurances they need to participate in it will be an interesting thread to follow.

Finally, it will be interesting to see how psilocybin drug developers respond to the bill.

Given that Compass Pathways is increasingly lobbying state governments as it marches toward a potential approval (see the next headline, below, for more), might we see it focus its efforts on New Mexico?

Prior to this legislature-driven program being established, those in Oregon and Colorado were, at least in name, not medical. While they drew on the medical literature around psychedelics, Oregon’s system has facilitators and clients rather than healthcare providers and patients, for example.

But New Mexico’s system is aspiring to be delivered firmly within the medical model, which will surely raise the hackles of Compass and co. This, too, will be an interesting thread to follow.

State lawmakers are aware of this conflict, with a Senate Floor amendment seeing FDA-approved products containing psilocybin clearly exempted from the Act.

In its analysis of the Bill, DOH pointed out that using “whole mushroom products in a state regulated model has the potential to be significantly less expensive than the use of synthesized psilocybin marketed by pharmaceutical companies.”

The very last sentence of its analysis revisits this theme, stating that, should the Act not pass, “[f]uture psilocybin options may be minimized due to lack of research data on cheaper and more equitable options like ‘whole mushroom psilocybin’ as opposed to synthetic versions.”

But it might go both ways. As New Mexico’s HCA pointed out in its analysis, if a synthetic form of psilocybin scores FDA approval, “it is unclear what the role of natural occurring psylocibin [sic] will play in therapy, including if the Medicaid can cover natural occurring psilocybin.”

A few years ago, the potential for state-regulated models to cannibalise much of the demand for a product like Compass’ synthetic psilocybin seemed to be a valid concern, but the failure of Massachusetts’ Question 4 last November suggested that progress of that sort was slowing to a sputter.

But a roaring start to 2025 in the form of dozens of state-level policy reform efforts, the successes of which now include a decidedly medical psilocybin access model in New Mexico, might re-up those cannibalisation questions.

November also delivered a Trump victory, which—while many are pointing to potential positives—could also cause headaches for psychedelic drug developers. While there are more mundane potential roadblocks like FDA backlogs and inefficiencies, there is also the spectre of a wild card, unpredictable action like federal rescheduling or a type of Cole Memo for psychedelics, which could majorly shake up the landscape.

Even still, the out-of-pocket costs associated with these state-legal models make them prohibitive for the average patient or client, meaning psychedelic drug developers have a clear point of differentiation, if they can crack the reimbursement question. (Of course, there are other points of differentiation, too. There are many patients, for example, that may not feel comfortable accessing psychedelic care outside of the medical model, there are those that do not live in or near a state with a legal model, and so on and so on.)

With a launch deadline of December 31st, 2027, New Mexico’s program would be getting off the ground right as Compass hopes its COMP360 crystalline polymorph psilocybin product would be gaining traction, too.

We will be following this story closely over the coming weeks, months, and years.

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Arizona’s Oregon-Style Psilocybin Services Bill Gutted and Replaced by Compass Pathways’ Crystalline Polymorph Psilocybin Rescheduling Trigger Law

Arizona’s SB 1555, which we discussed in our February round-up, called for the establishment of an Oregon-style psilocybin services model in the state. Rep. T.J. Shope (R), the bill’s sponsor, had introduced an identical bill in 2024 that was ultimately vetoed by Governor Hobbs, but was hopeful that this second shot on goal might be a success.

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