Criminal History

Psychedelics were used as medical treatments or in recreational activities long before government entities were criminalizing them.  According to “The History of Psychedelics”, psilocybin (magic mushrooms) and peyote appear as far back as 4,000 B.C. in cave paintings, ceremonies, and medicine. According to the “Legal History of Psychedelics” presented by the New York City Bar Association, in the 1950s and 1960s, scientists were researching the effects of psilocybin and saw psilocybin as a phenomenal new potential treatment that allowed “an unprecedented window into brain function”. 

However, the recreational activities associated with psychedelics were their undoing. Governments began criminalizing psychedelics once they saw their recreational use as a threat to civil society.  Here in the U.S., Congress’s criminalization of psychedelics culminated in 1970 with the passing of the Controlled Substance Act (“CSA”).  The CSA placed all drugs into 5 schedules with Schedule 1 containing the drugs Congress claimed presented the most dangers to our societal fabric.  Congress, via Schedule 1, determined that some drugs had (1) no medical value; (2) were highly addictive; and (3) could not be safely used even under medical supervision.  

Drugs on Schedule 1 include heroin, lysergic acid diethylamide (LSD), marijuana, 3,4-methylenedioxymethamphetamine (ecstasy or MDMA), methaqualone, and peyote.  It is worth noting that the driving force behind the CSA was political. (The racial and discriminatory motives that underpin our drug laws are real and complex topics not undertaken here in this brief blog).   Politicians – led by President Nixon’s “war on drugs” – wanted to be seen as “tough on drugs” and pushed for the CSA in an attempt to control criminal and harmful behavior associated with the use of nonregulated pharmaceutical drugs.  A noble goal but without seriously incorporating the current scientific research that was being done on Schedule 1 drugs at the time, the criminalization of these drugs had a devastating effect on their research and our communities. 


Unlike Schedule 1 drugs, Schedule 3 drugs (like opioids) are legally widely prescribed, manufactured, sold, and used in the U.S. However, according to the National Institute on Drug Abuse, opioid deaths in the U.S. have almost doubled over the last several years going from 47,600 in 2017 to 80,411 in 2021. The National Institutes of Health (NIH), American Addiction Centers, and Statista all confirm that there are more than 5,500 deaths from Schedule 3 pharmaceutical anti-depressants alone each year in the U.S.  It should be noted that cannabis, also still a Schedule 1 drug has zero overdose deaths associated with it according to the CDC. 

The U.S. also has the largest prison population related to drug crimes in the world with over 350,000 inmates serving time due to drug possession.  Adding to the damage done from imprisonment for drug possession is the recidivism rate of 77% (re-arrested within 5 years).


It has only been during the last seven years that research has bounced back from the negative impacts of the 70’s war on drugs.   A lion’s share of the current research has been conducted at universities and research institutions where psilocybin has been determined to have significant medical benefits when treating mental health issues while maintaining a low potential for abuse and low physical toxicity. The three areas of recent research concentration in psychedelics generally and psilocybin specifically have been for (1) addiction, (2) depression, and (3) recidivism.

John Hopkins, a leader in psychedelics research, created the first Center for Psychedelic and Consciousness Research in the U.S. in 2019. This research center has conducted studies that have found that “two doses of the psychedelic substance psilocybin, given with supportive psychotherapy, produced rapid and large reductions in depressive symptoms… with half of the participants achieving remission through the four-week follow-up.” In a prior but similar study, patients experiencing depression and anxiety related to their life-threatening cancer diagnoses who were treated with psilocybin, not only showed “persistent benefits for many months” following a single administration but “60% showed remission” in their depression.

3. Psilocybin Use is Associated with Lowered Odds of Crime Arrests in US Adults: A Replication and Extension – Grant M. Jones and Matthew K. Nock – Journal of Psychopharmacology (2022). (findings suggest that the use of psilocybin, peyote, or mescaline reduced the odds of being rearrested for theft, driving under the influence, and drug possession).

The Scottsdale Research Institute Foundation, led by Dr. Sue Sisley was the first to receive DEA approval to grow cannabis for its research on cannabis’s effects on pain, depression, and PTSD in veterans.  Most recently, the Scottsdale Research Institute has also gained DEA licensing to grow mushrooms to study their effects on pain, end-of-life anxiety, and PTSD.  

Two clinical psychology researchers from the Department of Psychology at Harvard University, Grant Jones and Dr. Matthew Nock, reviewed available data on psychedelic substance abuse and arrests.  They published their findings in the Journal of Psychopharmacology on January 28, 2022.  They found that a “lifetime psilocybin use was associated with lowered odds” of repeat arrests.

Last year, Ohio State became the first U.S. university to be granted a DEA license to grow psychedelic mushrooms – for research.  With this licensing, we can see the commercial element seeping into psychedelics as the license was awarded jointly to Ohio State and Inner State Inc., a mental health and wellness research and development company focused on psychedelics.  Inner State, Inc. describes itself as a “public benefit corporation” – an entity that may generate a social or public good but unlike a nonprofit corporation, can make and distribute its profits to its shareholders.

Commercial Future

It is not just Inner State Inc. that is gambling on a commercial future in psilocybin and other psychedelics.  AJNA BioSciences (“AJNA”) is a biotechnology firm that received a DEA license to create and research a hemp/ mushrooms micro dosing product.  AJNA hopes its research will lead to FDA approval of its product to be used to treat depression. 

4. Potential Therapeutic Effects of Psilocybin – Matthew W. Johnson and Roland R. Griffiths. Published online June 5, 2017, in The American Society for Experimental Neuro Therapeutics, Inc.

Perhaps further along in developing a commercial product is a company that recently renamed itself.   Formerly known as MAPS (Multidisciplinary Association for Psychedelic Studies), Lykos Therapeutics, as it is now named, announced at the beginning of January 2024, an oversubscribed Series A financing raising over $100 million.  This boost to its funding will allow Lykos (a Greek word meaning “wolf”) to continue its pursuit of transforming mental health via psychedelics.  Lykos has submitted applications to the FDA on its completed Phase 3 trials for patients with PTSD.  If Lykos gains FDA approval for its MDMA-assisted therapy, it would be the first of its kind to get to market.

Psychedelics are quickly attracting the eye of investors as the next new market.  Mr. Brom Rector was one of the first venture capitalists to recognize the potential of investing in new medicines using old-as-civilization plant materials.  In 2019, at age 31, he formed a hedge fund to raise money to invest in psychedelics.

As psychedelic research continues to show positive results, more states are looking to legalize them just as states did with cannabis.  Via a voter referendum in 2020, Oregon was the first state to legalize psilocybin.  Colorado legalized several psychedelics in 2023.  California’s governor vetoed a bill last year that would have legalized mushrooms saying he wanted to see more regulatory structure around the legalization. Most experts expect California to legalize psilocybin this year. Outside of the U.S., Australia was the first country in the world to approve MDMA for treating PTSD and psilocybin for treating treatment-resistant depression.

With research continuing to demonstrate real medical benefits and an increase in state legalization, psilocybin and other psychedelics are gaining attention in the world of commerce.  In 2024, expect more DEA and FDA approvals, more state legalizations, and more pharmaceutical and venture capital companies getting psyched on psychedelics. 

Psychedelics will likely follow the same regulatory path as cannabis – states will legalize while the federal government will continue to criminalize.  Navigating the varied and multi-state regulatory landscape will require careful planning and legal assistance.