On May 23, 2023, Governor Jared Polis signed the Act legalizing natural plant medicine in Colorado! Our Colorado psilocybin consultants can help you be one of the first to win a state-authorized psilocybin, psilocyn, and psychedelic plant medicine license. Would you like to open a psilocybin business in Colorado? It’s exciting new territory!
The Colorado business license application period is due to open by the end of September 2024. In the article below, you’ll find a step-by-step guide to the application process. If you’d like to discuss Colorado’s natural medicine program, schedule a free consultation today.
Colorado Psilocybin Consultants
Laws and Regulations
Firstly, to prepare to apply for a psilocybin business in Colorado, read the current law:
- An Act (SB23-290), signed by Gov. Jared Polis, May 23, 2023.
Secondly, become familiar with both the original and the newly established regulatory authorities. SB23-290 makes several regulatory changes from the voter-approved Natural Medicine Health Act (NMHA). The NMHA had originally specified that the Department of Regulatory Agencies (DORA) would be responsible for all rule making and implementation, with recommendations from the Natural Medicine Advisory Board (NMAB).
Now, SB23-290 creates the Division of Natural Medicine (DNM) within the Colorado Department of Revenue (DOR). The DNM will now regulate and license natural medicine cultivation, manufacturing, testing, storage, distribution, transport, and transfer, as well as dispensing activities. In other words, the DNM is responsible for the promulgation of the rules, licensing, and regulation, and will hold full investigative and disciplinary authority for these activities. Stay tuned! We’ll update this page as the rules for the natural medicine program develops further.
Thirdly, DORA will still be responsible for the licensing and promulgation of rules regulating facilitators. The Act expands the authority of the NMAB to examine natural medicine and product issues, and to further address equity, tiered facilitator training and other key aspects of the natural medicine regulated access program. Also, the Act tasks NMAB to make recommendations to both the Director of the Division of Professions and Occupations (housed within DORA), as well as the Executive Director of the licensing authority.
Similarly, familiarize yourself with the Department of Public Health and Environment. It will develop the natural medicine testing standards and rules in coordination with DOR.
Read further below regarding the proposed timeline.
The NMAB met for the first time in April 2023. Its proposed timeline is to make recommendations to the licensing authority by September 30, 2023, with a January 1, 2024 deadline for setting facilitator requirements. The State adopts rules for natural medicine implementation and will start accepting business license applications no later than September 30, 2024.
Of importance, the Act (SB23-290, signed in May 2023 and in effect as of July 1st, 2023) extends DNM’s open application period to December 31, 2024. We will update this article in the coming months as the DNM, the Board and DORA define and clarify the application process.
In the meantime, why not get a head start? Follow our guide below with actionable steps you can take now to win a Colorado psilocybin business license.
Types of Psilocybin Licenses in Colorado
The department will issue five types of Colorado natural medicine licenses:
- Healing Center License – Allows establishments to cultivate, manufacture, and dispense psilocybin. It also allows you to provide a location where psilocybin sessions occur.
- Cultivation Facility License – Allows cultivation of regulated natural medicine for transfer and distribution to healing center licensees, product manufacturers or other cultivation facility licensees. The licensed premises may be co-located with healing center licensed premises.
- Products Manufacturer License – Allows manufacture of regulated natural medicine product and cultivation pursuant to a cultivation facility licensee. The licensed premises may be co-located with healing center licensed premises.
- Testing Facility License – Allows testing and research on natural medicine and natural medicine product. A licensee may not have any interest in any of the other types of state-issued natural medicine licenses.
- Facilitator License – Allows a facilitator to provide natural medicine services to participants in preparation, administrative and integrative sessions. The facilitator is essentially the person who will give you the psilocybin and guide you during your experience.
In addition, the Act authorizes the issuance of any additional natural medicine business license as determined necessary by DORA.
Now that you have an overview of the potential types of psilocybin licenses in Colorado, let’s examine the application requirements.
Application Requirements for Psilocybin Business Licenses
The application of a Colorado psilocybin business license requires that the applicant provide plans that fully address the following:
- Environmental, social, and governance criteria,
- Safe provision,
- Refusal of service,
- Testing standards,
- Advertising and marketing standards,
- Health and safety warnings,
- Educational materials,
- Record keeping, including of session completions,
- Patient data privacy,
- Training programs,
- Permissible financial relationships between licensees and other entities, and
- Further requirements as determined.
In addition, the applicant must establish entitlement to possession of the proposed premises by lease, rental agreement, or other arrangement or by virtue of ownership of the premises.
Social Equity | Preferred Applicant Status
The NMHA’s objective was to establish safe and equitable access to natural psychedelic plant medicines. Still, we didn’t expect as strong of a state emphasis on social equity or a legacy approach as has been the case with cannabis licenses because the use of psychedelics has not historically been prosecuted to the extent that cannabis use has been.
Disproportionately Affected Persons and Communities
Furthermore, 12-170-104(6)(d) stipulates that all procedures and policies must ensure that the program is equitable and inclusive and must promote the licensing and provision of natural medicine services to:
- Persons from communities that have been disproportionately harmed by high rates of controlled substances arrests,
- Persons who face barriers to health care access,
- Persons who have traditional or indigenous history with natural medicines, and/or
- Persons who are veterans.
In addition, while decriminalizing psychedelic plants and fungi, Colorado has also made it possible for an eligible person to file a motion to seal previous conviction records for past psychedelic offenses after the date or final disposition or release from supervision, whichever is later.
Also, 12-170-104(6)(d) states that there must be equitable and inclusive fee structures for these qualifying persons, including reduced fees for licensure and facilitator training. In addition, the final program must incentivize:
- The provision of natural medicine services at a reduced cost to low income individuals, and
- Geographic and cultural diversity licensing, provision, and availability of natural medicine services.
Indigenous Traditions and Protections
Elaborating upon the earlier version of the bill, the newly signed SB23-290 (12-170-107) establishes a Federally Recognized American Tribes and Indigenous Community working group, to be housed within DORA. Its intent is to identify and address issues regarding the legalization and regulated commercialization of natural plant medicine. Basically, its intent is to build trust, prevent religious or spiritual exploitation and misappropriation of indigenous peoples, their traditions, and address conservation issues for the natural plants themselves. We will update this page as the group develops.
Colorado Residency Preference
Of importance, the division will prioritize review of applications from applicants who have established residency in Colorado.
Next, let’s look at how Colorado law handles local control.
For those in more rural areas, transportation across county lines constitutes a hardship and limits access for people in hospice or palliative care. Therefore, Colorado’s Proposition 122 took a more proactive and equitable approach than did Oregon. Colorado’s law does not allow municipalities to “opt-out.”
In other words, Colorado prohibits municipalities and counties from banning psychedelic healing centers and from prohibiting state legal transport across county lines.
However, Colorado does allow local officials control of locations and the hours that the healing centers can be open and also enables existing healthcare centers such as hospital and hospice providers to integrate psilocybin service within those jurisdictions. The division will not issue a license for a location which does not meet applicable zoning laws of the local jurisdiction.
Similarly, the location must not be located within one thousand (1,000) feet of a child care center, preschool, elementary, middle, junior, or high school, or a residential child care facility. The municipality’s governing body may vary the distance restrictions and/or eliminate one or more types of schools or facilities from the distance restriction.
If you have any questions regarding local control, please contact our psilocybin business consultants in Colorado.
Now that we’ve covered the basics of the Colorado psilocybin license application process, read further for our step-by-step guide on how to prepare to win a psilocybin business license.
Tips for Winning Licenses
Below is a step-by-step guide on how to obtain a psilocybin business license in Colorado. Start preparing now to improve your chances of winning a license in this emerging industry.
Step 1: Read the Laws and Regulations
The first step to winning a license in Colorado is to read its Laws and Regulations.
This will give you a good idea of the overall framework Colorado is building for its psilocybin and natural plant medicine market. Also, it will familiarize you with what types of business licenses will be needed for your proposed psilocybin activities.
Step 2: Choose a license type
Next, review the types of licenses. As mentioned above, there will be several types of psilocybin licenses made available in Colorado, with the first being the facilitator licenses and the healing center licenses.
Also, the proposed rules allow for vertically integrated psilocybin license, allowing you to cultivate, produce and administer the sessions, individual and group, through your licensed healing center.
While you explore these options, move to the next step and engage a Colorado psilocybin business consultant. We can help you clarify the license type appropriate for your business goals and intended activities.
Step 3: Engage Colorado psilocybin consultants
Allow us to manage your project from pre-licensure to fully approved and operational. Our psilocybin business license consultants in Colorado can manage all aspects of your application writing, including:
- Team recruitment,
- Facility design,
- Operational support, and
- Employee training.
Step 4: Form a business entity
At this beginning stage, you should form a business entity, such as an LLC or an S-corp. If you are unsure what type of business entity would work best for your proposed operations, engage our consultants or work with an attorney to choose the best structure for your business plans.
Step 5: Build a team
DORA will scrutinize the background and qualifications of each member of your team in order to ensure proper safety and compliance. With our talent acquisition services, our Colorado psilocybin consultants can help you put together the ideal team for the approval of your business license. Reach out today for more information about our personalized business applications and consulting services.
Step 6: Develop a business plan
A viable business plan is critical for you to raise capital for your psilocybin business.
Although significant business costs differ from a cannabis business model, expect to incur similar costs pre-licensure and post-licensure. During pre-licensure, you can reasonably expect costs associated with any of the following:
- Acquiring or leasing real estate,
- Architectural designs for your facility, including security systems,
- License application fees,
- and more.
Once you obtain your license, you can expect costs to arise from:
- Construction and/or renovations
- Equipment and supplies,
- Security installation and maintenance,
- Wages and payroll,
- Marketing, outreach, and public education,
- and more.
Make sure you have created a viable business model. It shows the Department that your business is well-planned and sustainable. Plus, it will help you to raise capital.
Step 7: Raise capital
First, keep in mind that initial psilocybin business costs are expected to be more expensive than the current cannabis models, due to the nature of the business being more therapeutic service-related than is typical for medical cannabis dispensaries or adult-use retail.
Additional costs and considerations accompany the handling and specifics of psychedelic therapy. These costs include developing the processes in preparation for, during, and after a session.
So, in addition to the cost considerations noted above, keep in mind that a licensed psilocybin business must provide proper supervision during administrative sessions, during the integrative sessions, as well as assurance of safe transportation of participant(s) afterwards.
Step 8: Choose a location
Although Colorado does not allow municipalities to “opt-out” from allowing psilocybin businesses within their jurisdictions, they are allowed control over hours of operations.
You will most likely need a letter of consent from the property owner if you intend to lease the property, as well as a letter of support from the municipality’s governing body.
Since Colorado law enables existing healthcare centers such as hospital and hospice providers to integrate psilocybin service within those jurisdictions, you might want to check out your options for joining with existing entities to provide licensed psilocybin services.
Give us a call to discuss the variety of options depending on your business plans and desired locations. We can help you develop the best options to pursue tailored to your business goals.
Step 9: Garner local support
As stated above, once you’ve identified property for your psilocybin business(es), a letter of support from your city or county government helps tremendously to build strength for your license application to DORA.
In addition, begin building relationships with other local businesses, state and community non-profits. Show how you intend to positively impact your community and how your psilocybin business will support their efforts. Show how you will be a good neighbor.
Step 10: Write and submit an application
Finally, it’s time to write and submit your Colorado psilocybin application. Although the application instructions have not been released yet, trust in our psilocybin consultants who have previously won cannabis licenses in more than 6 countries and over 27 states in the United States.
The application process is a lengthy and technical writing project that requires a great amount of attention to detail. However, we’re here to save you time and money, and increase your chances of success.
We will ensure you submit the paperwork correctly and within the deadlines, as well as writing you the most precise and convincing plans that will most likely need to be included in your application to DORA, including:
- Business Plan
- Financial Plan
- Psilocybin Manufacturing Plan
- Social Equity Plan
- Security Plan
- Operating Plan
- Inventory Tracking Plan
- Quality Assurance and Control Plan
- Education and Outreach Plan
- Community Impact Plan
- Standard Operating Procedures (SOPs)
- and more
Conclusions from our Colorado psilocybin consultants
In summary, the psilocybin-assisted therapy industry is taking shape. Our Colorado psilocybin business consultants have decades of expertise with state licensing of federally scheduled I drugs such as cannabis.
Having won cannabis business licenses for clients in more than 6 countries and over 27 states in the United States, we are doing the same for businesses wanting to offer the benefits of psilocybin mushrooms.
We can provide professional resources, advice, support, and more throughout your entire application process. Our Colorado psilocybin consultants can help you navigate the regulations and logistics to acquire the end result – providing safe, equitable health access for appropriate therapies derived from natural plant medicines.
Start one of the first state-licensed psilocybin businesses in America! In Colorado.
Reach out today to learn more.
Natural Medicine Health Act – FAQs
Ballotpedia: Overview and Measure Design of Colorado Proposition 122
Multidisciplinary Association for Psychedelic Studies (MAPS)
Previous legislative attempts: Title 12, Article 170 (“Natural Medicine Health Act of 2022”).