The decision was expected. An independent review board, the Institute for Clinical and Economic Review (an independent institute with outsized influence on the FDA), and an FDA advisory committee all recommended denial out of concern about the reliability of clinical trial data and possible ethics violations. The decision seemed to diminish the perceived momentum for the future of psychedelics.

But the FDA’s decision may ultimately prove to be largely irrelevant. If there is to be safe, responsible, and expansive access to psychedelics, the path will go through various state regulatory agencies. The FDA’s rejection merely clarifies that path.

While federal approval brings scientific legitimacy, insurance coverage, and broader availability, a successful FDA application would have raised difficult questions: Who would be allowed to provide psychedelic-assisted therapy? Would Medicare and Medicaid pay for them? What would the therapy involve, and how would the FDA—an agency that oversees drugs but not the practice of medicine—implement such treatments?

Devolving / States have already demonstrated that they can build alternative frameworks for drug liberalization grounded in harm reduction, the potential of affordability, and personal and religious liberty. Federal approval may offer legitimacy, but devolving such decisions to the states offers freedom.

States have long driven drug policy reform, from cannabis legalization to harm reduction initiatives. Psychedelics should follow the same path.

In Litman 2023a, I argued that supporters of liberalization should resist overreliance on federal agencies, especially when dealing with substances historically criminalized through federal overreach. Despite the Constitution’s Supremacy Clause, the federal government cannot force states to do anything. This reality is illustrated through the Anti-Commandeering doctrine.

Despite the federal illegality of psychedelic drugs under the Controlled Substances Act, there is no federal mandate requiring aggressive federal enforcement of federal drug laws against state-legalized activities. In fact, over time, federal non-enforcement has become the norm, shaped by Justice Department memos and congressional spending limits. The threat and reality of federal enforcement have only waned amid resource constraints and political ambivalence. Recent cases, including Medical Marijuana v. Horn (2025) that broadened consumer protection for users, illustrate that violating federal drug laws does not automatically disqualify individuals from legal relief.

Federal disengagement leaves room for robust state action. Waiting for the FDA to catch up doesn’t just delay reform, it ignores the proven capacity of state governments to lead.

State innovation / Oregon’s 2020 Psilocybin Services Act and Colorado’s 2022 Natural Medicine Health Act provide early blueprints for a future where states lead the way in regulating psychedelics. Oregon has legalized supervised psilocybin consumption under licensed facilitation, while Colorado has combined regulated access with broader decriminalization, which permits personal use, cultivation, and social sharing under defined limits. New Mexico has recently enacted its own medicinally focused psychedelic reform law as well.

These state models show what is possible and what is hard. Facilitated use models face the steepest challenges, not only because of federal illegality and its collateral consequences (such as tax and banking hurdles,) but also because of the high cost of providing extensive on-site psychedelic sessions. Oregon’s pricing reflects these difficulties.

Colorado’s law decriminalizes the personal cultivation, use, and possession of psilocybin, psilocyn, ibogaine, and mescaline (excluding peyote), allows for social sharing of psilocybin, psilocyn, and mescaline, and permits payment for spiritual or harm-reduction services. These provisions empower individuals and protect religious and cultural practices without forcing governments to gatekeep sincerity.

The next evolution in state reform does not entail creating a new regulatory infrastructure from scratch, but in building on what already exists. Instead of creating a new regulatory agency, states should consider authorizing psychedelic cultivation and distribution through the existing cannabis infrastructure. Cannabis dispensaries already operate under detailed compliance structures. Leveraging them to sell psychedelics could minimize startup costs, accelerate implementation, and expand access through familiar retail channels. States could combine these regulated sales (via dispensaries) with personal cultivation and decriminalization protections, minimizing barriers while ensuring safety and quality control.

We are in a moment of federal institutional retreat, not just in drug policy but across regulatory domains. For psychedelic access, states already possess broad authority under the Tenth Amendment to design innovative policies. Rather than lament federal inaction, policymakers should embrace this moment to create localized, responsive, and equitable frameworks for psychedelic access. The future does not need to wait for the FDA; it is already being built from the ground up, state by state.

Readings

• Litman, Victoria Grace, 2023a, “Limiting Federal Regulation of Cannabis,” Regulation 46(3): 2–4.
• Litman, Victoria Grace, 2023b, “Psychedelics, the DEA, and Regulating Religion,” Regulation 46(1): 8–10.
• Litman, Victoria Grace, 2024, “Why We Need to Talk About Psychedelic Dispensaries,” Regulatory Review, April 18.
• Marks, Mason, 2024, “Psychedelic Therapy Scrutinized by FDA Advisory Committee,” JAMA 332(12): 963–964.