Insights

Colorado Natural Medicine Advisory Bulletin #11: March & April 2024

By Vicente LLP, Psychedelic Alpha

Apr 30, 2024

Vicente LLP is proud to collaborate with Psychedelic Alpha—an independent newsletter and community in the field of psychedelics—on the Colorado Natural Medicine Health Act Tracker, which includes high-level statistics, anticipated recommendations, and regularly published Natural Medicine Advisory Bulletins. The bulletins will provide updates from Natural Medicine Advisory Board meetings, along with other important information related to the implementation of the NMHA and psychedelics reform in Colorado.

It may still be ski season in the Rocky Mountains, but in Colorado’s capitol things are heating up as the state’s regulated natural medicine program prepares for launch on January 1, 2025. Regulators are working at a blistering pace, publishing and revising draft rules, setting dates for final rulemaking hearings, and holding stakeholder engagement meetings. While two regulatory agencies (DOR and DORA) work in parallel to draft rules, the Natural Medicine Advisory Board (NMAB) continues to meet each month, addressing remaining gaps and integrating public feedback. Even the Colorado legislature is pitching in, with a short, but crucial, bill of amendments (Senate Bill 24-198) working its way through the General Assembly.

With so much happening, one can easily get turned around. On that note, it’s important to recognize that draft rules are still subject to revision, and may even have been revised since this Bulletin was written. For the latest draft rules, be sure to check DORA and DOR’s websites and sign up for email alerts. Here’s what’s happened since the events of Advisory Bulletin 10:

This Bulletin covers a lot of ground, and while we aren’t licensed Facilitators (yet), we can certainly be your guide in navigating the complexities of Colorado’s rapidly-evolving regulated natural medicine program. If you’d prefer to microdose just the draft rules, try our short summaries of DORA’s draft rules for Facilitators and DOR’s draft rules for Natural Medicine Businesses, presented without stakeholder comments. For a heftier dose of information, read on.

Part I focuses on DOR’s extensive and ongoing rulemaking activities. It summarizes the two currently-released sets of rules that apply to Natural Medicine Businesses, as well as their associated rulemaking hearings. First, we cover the licensing framework broadly, including Natural Medicine Business license types, qualifications relating to those licenses, and rules regulating financial interests in Natural Medicine Business licenses. We then turn to rules that govern the general operations of Natural Medicine Businesses, such as recordkeeping, reporting, co-location, security, surveillance, sanitation, waste, storage, and transportation. Relevant information from public hearings is provided below each summary in italics.

Part II shifts the focus to the recent activities of the Natural Medicine Advisory Board. First, we cover the initial meeting of the Board’s new Combined Subcommittee, which addressed several outstanding issues and significant pieces of stakeholder feedback. Lastly, we cover the latest meeting of the full Board.

Before we embark on a lengthy journey, a preparation session may be advisable. As one speaker noted in a recent rulemaking hearing, things can get a bit confusing when there are so many 3- or 4-letter acronyms floating around.

The Natural Medicine Advisory Board (“NMAB”) is composed of citizens of varying backgrounds and knowledge. The NMAB makes recommendations based on its own knowledge, advice from outside experts, and public feedback. Those recommendations are considered by two regulatory bodies overseeing Colorado’s Natural Medicine program, which then draft enforceable rules based on the Board’s recommendations.

The Department of Revenue (“DOR”), regulates Natural Medicine Businesses, which include healing centers, testing facilities, cultivation facilities, and manufacturing facilities. Among other things, DOR also regulates Colorado’s retail marijuana market through its Marijuana Enforcement Division (“MED”). The Department of Regulatory Agencies (“DORA”), regulates the training and licensing of natural medicine Facilitators. DORA also regulates a wide range of other occupational licenses in Colorado. To make things just a bit more confusing, within each agency, a specific group is responsible for the agency’s natural medicine-related work. Within DORA, that is the “Office of Natural Medicine.” Within DOR, that group is the “Natural Medicine Division.”

Part I: Natural Medicine Businesses

A. License Types, Qualifications, Procedures, and Financial Interests

The Natural Medicine Division’s first set of draft rules focuses on the overall licensing framework for Natural Medicine Businesses. These rules establish qualification standards for licenses, as well as procedures for renewal, revocation, and appeal. They include several broad rules that apply to all four types of Natural Medicine Business, as well as rules related to permissible financial interests. Per Colorado statute, a person may not hold a financial interest in more than five natural medicine business licenses. However, the statute leaves regulators to decide what qualifies as a financial interest falling within the restriction. Many sections, such as specific rules for the different types of Natural Medicine Businesses, are intentionally incomplete. The Division intends to flesh these sections out over the course of its upcoming work groups, where the Division will hear from stakeholders.

Even in their current form, these rules provide some insight into how the Division is approaching its rulemaking duties under the Natural Medicine Code (“NMC”), primarily in the overall licensing framework the Division is contemplating. Under the proposed structure, owners and employees (which includes facilitators) of Natural Medicine Businesses will require individual licenses, separate from the business license itself. Division officials have justified this additional license requirement as necessary to extend Division jurisdiction over the employees of the businesses it regulates.

A public hearing on these rules took place on March 20th, 2024, the Division’s first official rulemaking hearing. Over the past several months, the NMD has held eleven informal “listening sessions,” where interested members of the public could share any information and considerations for the Division to consider when drafting rules, before the drafting process began.

Having moved into formal rulemaking proceedings, the Division’s latest round of hearings focus on discussing draft rules. Division officials requested that the public share what they like or dislike about a given rule, and welcomed suggested language changes. These hearings, also called “Work Groups”, are more structured than the previous “Listening Sessions.” Division officials begin with a brief presentation on a subset of draft rules, sharing high-level takeaways, sources upon which the Division drew when drafting the rules, and the intent behind the rules. The public is then invited to share feedback or ask questions, with each speaker allotted three minutes.

Thus far, the public has largely urged the Division to avoid overly broad and rigid rules, and to allow for a wide range of business arrangements, facility uses, and methods of natural medicine administration.

License Types & Qualifications

Draft rules propose three types of licenses to be issued by the Division: Natural Medicine Business; Owner; and Employee. A Natural Medicine Business license is tied to a specific location, and will be issued to Healing Centers, testing facilities, product manufacturers, and cultivation facilities. All owners of a Natural Medicine Business will be required to obtain an “Owner license”, while any person who handles natural medicine or has unrestricted access to natural medicine in a Natural Medicine Business will be required to obtain an “Employee license.” This includes Facilitators, who will need to obtain a license from the NMD to work in, or own, a Healing Center.

Natural Medicine Businesses: General Qualifications for Application

All applicants for Natural Medicine Business licenses must be 21 or older, pay an application fee, be current on any taxes related to the Natural Medicine Business, and submit to a criminal background check. Applicants will be required to disclose the name and address of all owners who are natural persons. If an owner is an entity, the application must also include a certificate of good standing, information of the entity’s registered agent in Colorado, and organizational documents such as Articles of Incorporation, bylaws, operating agreements, or partnership agreements.

Colorado statute mandates that applicants undergo a criminal history background check, but leaves to regulators the discretion to determine which prior convictions would disqualify a person from licensure. Under current draft rules, the Division will not issue a license if a background check reveals previous history of violent, sexual, or fraud crimes; or of violating rules related to natural medicine after 2023.

Disclosure of Owners and Financial Interests

All owners holding a financial interest in more than one Natural Medicine Business license must be disclosed, along with a statement that no owner holds, or will hold, an interest in more than five Natural Medicine Business licenses. Applicants must cooperate with the Division in providing tax documentation, upon request.

Facilities Requirements: All Licensed Natural Medicine Businesses

All applications for a Natural Medicine Business License must provide documentation of the following:

  • Possession, or entitlement to future possession, of the premises to be licensed;
  • A security plan for the security/surveillance of the Licensed Premises;
  • Compliance with local zoning laws;
  • If a Healing Center, the location is not within 1000 feet of a child care center or school (unless waived by the appropriate local government);
  • The proposed location is not shared with an alcohol or marjuana license;

Note: Specific security requirements for licensed premises were released on April 4th, 2024, discussed in Part I.B., below.

Facilities Requirements: Healing Centers

Applicants for Healing Center licenses must additionally demonstrate:

  • The applicant will employ, or contract with, at least one licensed facilitator.
  • If the Healing Center will offer outdoor administration, a detailed description of outdoor administration areas, including their location and verification that the area is free from hazards as required in the security/surveillance plan, is also required.

Additional rules specific to healing centers are expected. The Division will host a work group focused on Healing Center-specific rules on May 1st, 2024.

Several commenters at the March 20th meeting urged the Division to adopt licensing rules that accommodate locations that will not be operating as full-time healing centers. For example, for a retreat-style property that occasionally hosts natural medicine services, or small, existing therapy practices which may offer only a handful of administration sessions per month. Commenters suggested allowing temporary licenses, as well as ensuring restrictions are minimized. Similarly, allowing for part-time designation of administration areas within a licensed premises would accommodate multi-use facilities.

Multiple speakers asked the Division to reconsider requiring a Healing Center to have an owner that is also a facilitator. Given the investment of time and energy required to become a facilitator, such a rule would be overly burdensome and not obviously necessary to the successful operation of a healing center.

Regarding the rule prohibiting healing centers within 1000 feet of a school, one commenter asked if the rule would extend to churches which provide daycare services, and whether the rule applied to Natural Medicine Businesses other than Healing Centers. Division officials clarified that the rule would only apply to healing centers, but that local ordinances may similarly limit other license types under time, place, and manner restrictions. Another commenter urged an exception to the rule for residential facilitation.

Facilities Requirements: Cultivation and Product Manufacturer Licenses

This set of draft rules does not include specific facilities regulations for Cultivation and Product Manufacturing licenses. The Division will address Cultivation and Product Manufacturer Licenses in a specific rulemaking hearing on June 12, 2024.

Facilities Requirements: Testing Facility Licenses

Owners of Testing Facility Licenses may not hold a financial interest in any other Natural Medicine Business license type. The Division may require an inspection of testing facility premises, at no cost to the applicant. The Division will address additional questions related to testing facility licenses in a specific rulemaking hearing on June 24, 2024.

One speaker suggested combining cultivation and manufacturing under one license, given that there may be overlapping knowledge and skill sets. Conversely, one speaker was opposed to allowing dual licensing of healing centers and cultivation, being of the opinion that a healing center operator may not have the technical knowledge to cultivate natural medicine.

Employee and Owner Licenses

Separate from the licensing of the Natural Medicine Business itself, any owner or employee of a Natural Medicine Business must be individually licensed. Applicants for both Employee and Owner licenses must be older than twenty-one, submit to a fingerprint-based criminal background check, and pay licensing and application fees. Applicants may not currently be, nor have been in the previous six months, employed by a regulatory body overseeing the natural medicine industry in Colorado. Applicants must also be in compliance with any child support debts or payments, as required by state law.

Facilitators who will be working in any Natural Medicine Business, including Healing Centers, must obtain an Employee license, or Owner license if applicable.

During the March 20th Rulemaking Hearing, Division officials stated that they intend to provide a streamlined application process for licensed facilitators. Additionally, facilitators will not be subject to fees for Owner and Employee licenses

Owner License

Proposed owners of a Natural Medicine Business must obtain an Owner license from the Division. In addition to the above, applicants for an Owner license must be in compliance with any taxes related to a Natural Medicine Business. 

Employee License

Individuals with “unrestricted access to the Licensed Premises of a Natural Medicine Business,” or who “handle Regulated Natural Medicine or Regulated Natural Medicine Product” will be required to obtain an Employee License from the Division of Natural Medicine.

Members of the public urged a more nuanced consideration of when an employee license should be required. Under the current draft, an employee license would be required for anyone who has unrestricted access to a licensed premises. This could become unwieldy when taken together with the definition of “Licensed Premises”, which includes an entire location. Together, the current draft could be read to require after-hours security or repairman to obtain an employee license. If a multi-use space is designated a licensed premise, anyone who has access to the location, even when natural medicine is not being administered or even on the property, would also need an employee license. A better approach would be to require employee licenses only when natural medicine is present on-site, or only requiring an employee license to access restricted areas, such as natural medicine storage spaces.

Financial Interests

The Natural Medicine Code prohibits a person [including entities] from owning a “financial interest” in more than five Natural Medicine Business Licenses, but leaves to regulatory discretion what qualifies as a “financial interest” contributing to the five-license limitation.

Draft rules require applicants for Natural Medicine Business Licenses to disclose all “Owners” with “any financial interest” in the license, along with the following documents.

  1. A real or personal property lease;
  2. Secured or unsecured promissory notes;
  3. Agreements with a Natural Medicine Business regarding intellectual property;
  4. Management agreement(s) with the Natural Medicine Business; and
  5. Insurance policy(ies) issued to the Natural Medicine Business.

The rules make clear that a single item on this list does not, on its own, constitute a financial interest for the purposes of restriction. However, if a combination of agreements “shift[s] the financial benefit or risk from the Owner to the person or persons with the agreements with the Natural Medicine Business,” the Department may find a restricting financial interest. Licensed businesses must maintain documentation of all funding sources and may not utilize funds generated by illegal activity. 

During the March 20th Work group, a representative from the Colorado Department of Law distinguished the Natural Medicine Divison’s approach to financial interests from similar Marijuana Enforcement Division (”MED”) rules. Unlike MED rules, the NMD will not make a distinction between controlling and passive owners based on percentage of beneficial ownership. The Division is taking a holistic view of what it means to have a financial interest, assessing the totality of the circumstances to determine if a financial interest exists for the purposes of the five-license limitation. The Division also clarified that the Natural Medicine Code defines “person” as including natural-born persons as well as entities.

Multiple attorneys, commenting on their own behalf, urged that the definition of “owner” should be modified to only encompass equity interests. The current definition that includes “any financial interest in a natural medicine business” could deter outside investment by subjecting every investor, no matter how small, to the extensive requirements of an Owner license. By limiting the definition to equity interests, the intent to prevent monopolization of the natural medicine market could be maintained without deterring investment.

The Natural Medicine Code neither expressly permits or prohibits publicly traded companies from participating in the regulated natural medicine market, and DOR has not yet taken a stance on this particular issue. As noted by one commenter, the spirit of the Natural Medicine Health Act is to provide Coloradans access to new mental health treatments in an affordable and equitable manner, which could be at odds with a public company’s fiduciary duty to shareholders. Conversely, permitting public companies to participate in Colorado’s nascent market could help further establish Colorado as a leader in psychedelic business and research, according to a different commenter. Division representatives noted that permitting publicly-traded companies would require a different set of disclosure requirements. Based on the Department’s experience in the cannabis market, requiring disclosure of all beneficiaries of a public company is not feasible.

One commenter urged that real estate trusts should not be barred from owning multiple properties that are licensed as Natural Medicine Businesses. Division representatives clarified that a lease alone would not qualify as a financial interest, and thus a trust owning multiple properties that are leased to Natural Medicine Businesses would not be violating the rules as drafted. One commenter suggested the Division consider whether brands, trademarks, and other intellectual property interests qualify as a financial interest, stating a preference for black-and-white rules.

Priority Review & Community Impact Plans

Regulators are required by statute to prioritize applications for Natural Medicine Business Licenses from applicants with established Colorado residency. Additionally, regulators must establish standards for environmental, social, and governance criteria. In addition to prioritizing applications from Colorado residents, current rules also allow prioritization of applications with one or more owners who have a traditional, tribal, or indigenous history with Natural Medicine; or are veterans. Priority review will also be granted to applicants with a Community Impact Plan showing the business will be located in or serving rural areas; offering discounted or free natural medicine services; or has in place substantial measures to minimize environmental impacts related to the natural medicine market.

Regarding Community Impact Plans, several participants encouraged DOR to give weight to businesses demonstrating Indigenous reciprocity efforts or benefit-sharing, which the Natural Medicine Advisory Board is required to report on. One speaker questioned the wisdom of using community impact plans as a proxy for setting standards for Environmental, Social, and Governance (“ESG”) criteria. According to the speaker, the degree to which a business is capable of fulfilling the expectations of a Community Impact Plan varies based on a variety of factors. For instance, a Natural Medicine Business’ location may dictate the extent to which the business can serve a population previously harmed by the war on drugs. The speaker encouraged DOR to instead adopt ESG standards that could easily be measured and tracked, rather than constraining natural medicine businesses to a more amorphous CIP.

B. General Requirements: Operations and Facilities 

On April 4th, 2024, the Division released a second batch of draft rules, this time laying out a framework to govern the operations of Licensed Natural Medicine Businesses. Most of these rules are generally applicable to all Natural Medicine Businesses. They cover recordkeeping and reporting, co-location of licenses, security and video surveillance requirements, waste disposal and sanitation, transportation and storage, and zoning compliance. The rules also outline recall and embargo procedures for unsafe products.

Integral to this set of rules are definitions of “Licensed Premises,” ”Restricted Area,” and “Administration Area.” In short, “Licensed Premises” refers to an entire facility. A “Restricted Area” is any part of a Licensed Premises where natural medicine “is cultivated, manufactured, tested, or stored.” An “Administration Area” is an area of a Healing Center where participants will consume natural medicine and receive facilitation services.

Public comments on this set of rules universally reflected concerns that the rules do not adequately consider the diversity of potential businesses hoping to offer natural medicine services. Instead, comments felt that the rules favor a narrow conception of Healing Centers as standalone businesses offering natural medicine services full-time. Members of the public provided examples of other models needing consideration, such as independently-practicing mental health professionals who would like to add natural medicine services to their existing practices, retreat spaces that may host natural medicine services on occasion, and participant populations unable to travel to a healing center. Some commenters also felt that rules, particularly around security and surveillance, drew too heavily from the marijuana industry. That market, which operates as a retail model, is substantially different from the natural medicine market. Marijuana dispensaries routinely house thousands of dollars or more of product, necessitating stronger security regulations. Comparatively, even a large Healing Center is likely to require much less natural medicine on-hand, and small practices will likely keep only a few doses on hand, if any at all.

Discussing the Division’s process for drafting these rules, NMD officials indicated that they drew on recommendations from the NMAB as well as the Department’s experience regulating adult-use marijuana. As many commenters pointed out, the program approved by Colorado voters differs significantly from retail cannabis and Oregon’s Psilocybin Services program – which many NMAB recommendations around facilities and Healing Centers are based on.

One commenter pointed out that large-scale healing center operations, which rely on natural medicine services as their primary source of income, may have an incentive to encourage participants to get natural medicine services unnecessarily. This could lead to significant harms, while allowing existing mental health professionals to integrate natural medicine, when appropriate, into their existing practices poses a much lower risk in this area. Additionally, as some commenters pointed out, over-regulating will push operators and participants into underground markets, creating risks to participant safety and the economic health of the regulated market. Other commenters urged NMD officials to heed the legislative declaration creating the regulated natural medicine program, which calls for a “Humane, cost-effective, responsible approach” to providing natural medicine services. Others encouraged the NMD to not regulate beyond what is necessary for public safety. Nearly every member of the public who spoke supported rules that offer more flexibility than the proposed draft rules. Frequent suggestions included temporary premises licenses, lighter security requirements for small businesses, and minimizing rules that impose restrictions on how a space may be used.

Thus far, Division staff have been receptive to feedback and continue to encourage public participation in the rulemaking process. Hopefully this process will lead to final rules that are flexible enough to ensure public safety while honoring the spirit of the Natural Medicine Health Act to provide Coloradans equitable access to the healing benefits of Natural Medicine.

General Restrictions

The draft rules contain four broad restrictions that apply to all Licensees.  First, Licensees may not consume natural medicine on the licensed premises. Second, Natural Medicine Businesses may not be co-located with a licensed alcohol or marijuana business. Third, licensees may not sell or give natural medicine to individuals. Finally, individuals under the age of twenty-one are completely prohibited from entering Licensed Premises and Administration Areas.

Blanket rules prohibiting anyone under twenty-one from entering Administration Areas or Licensed Premises proved quite contentious. Multiple commenters noted that the current rules would render a Licensed Premises or Administration Area virtually unusable for anything other than natural medicine services. This prohibition could create unnecessary barriers for many potential Natural Medicine Businesses. By defining “Licensed Premises” broadly as the entire licensed location and prohibiting anyone under twenty-one from entering a Licensed Premises, the draft rules effectively ban multi-use spaces like retreat centers, yoga studios, or the offices of therapists that intend to offer natural medicine services part-time. An independent practitioner working in a shared office building could be forced to choose between offering natural medicine services or discontinuing relationships with existing clients under the age of twenty-one, who would no longer be allowed on the premises at all. Similarly, co-locating a Healing Center license with a healthcare facility would bar the healthcare facility from offering healthcare services to minors. Other issues raised with the age restriction included the need for adult children to be able to pick parents up after an administration, as well as a need to allow for family members of all ages to be present during administration sessions for emotional support, particularly for participants seeking natural medicine services for end-of-life anxiety.

Several speakers suggested changes that would be less restrictive in this area. One proposal would remove the blanket restriction on entering Administration Areas and Licensed Premises, instead prohibiting persons under 21 only during Administration Sessions, in Restricted Areas, or while natural medicine is present on the premises.

Business Records

Licensed Natural Medicine Businesses are required to maintain business records for the current and preceding calendar year. Licensees are not required to proactively provide business records to the NMD, however the most recent six months of records must be available on-demand, either physically on-premises or accessible electronically. Required records include information related to security and alarm systems, diagrams of the Licensed Premises including Restricted and Administration Areas, security plans, advertising, and license application records. Additionally, Licensees must maintain logs recording access to Restricted Areas,  waste disposal, and access to surveillance systems. Licensees will also be required to maintain “Participant and Administration Documents,” which have yet to be finalized.

One commenter requested clear guidance on what constitutes “advertising” for the purposes of the rule.

Required Reporting

All Natural Medicine Businesses that learn of “Adverse Health Events” related to regulated natural medicine or natural medicine products are required to investigate and report the event to the Division within 48 hours. Licensees must also report crimes occurring on the Licensed Premises and any indication of diversion within 14 days.

Additional Required Reporting for Healing Centers

Healing Centers are subject to additional reporting requirements. Healing Centers must report Adverse Health Events within 24 hours. Healing Centers must additionally report incidents requiring emergency response, participants requiring medical attention, and any participant death that occurs within 30 days of receiving natural medicine services.

On the subject of required reporting, the strongest input came from the Colorado Director of the Healing Advocacy Fund. The Healing Advocacy Fund’s research has shown that a lack of clear reporting requirements has made it difficult to answer basic questions about Oregon’s Psilocybin Services Program, such as how many individuals have accessed services. Ms. Poinsette suggested that the Division look to Oregon’s recently-passed SB-303 as a starting point when considering what reporting should be required of Natural Medicine Businesses in Colorado. A separate speaker cautioned the department to consider the possibility of collected data being subpoenaed. The Division will further explore data collection rules in later rulemaking work groups.

Co-Location of Natural Medicine Businesses

Draft rules permit multiple Natural Medicine Businesses with identical owners to share a location, subject to some restrictions. Testing facilities may not be co-located with any other license type. Healing Centers, but no other type of Natural Medicine Business, may be co-located with healthcare facilities.

Security Standards & Video Surveillance

This set of draft rules includes significant requirements which are intended to prevent theft or diversion of regulated natural medicine. The rules prescribe construction standards of Licensed Premises, alarm systems, and use of restricted storage areas for natural medicine. They also include extensive video surveillance rules, such as camera placements, equipment standards, recording storage and access, and maintenance.

These rules regarding security and video surveillance appear to draw heavily from MED rules. As written, rules apply to all Natural Medicine Businesses, and do not make allowances for Natural Medicine Businesses which may be located within larger structures that contain other businesses unrelated to natural medicine.

Rules prescribing security and video surveillance requirements received significant pushback. Here, the overwhelming majority of commenters again expressed concerns that draft rules are either unworkable or highly burdensome for small-scale businesses. Some felt that security rules draw too heavily on marijuana regulations, or assume that businesses providing natural medicine services will be operating as healing centers full-time, thus disadvantaging all but large, dedicated healing centers. To the contrary, a significant number of solo and small-scale practices, in both the medical and mental health fields, are hoping to offer natural medicine services as a supplement to their existing practices. This segment of the potential market would likely offer only a few administration sessions per week, keeping relatively small amounts of natural medicine on-premises, if at all. Multiple speakers in this segment were concerned that the security requirements would be cost-prohibitive for their businesses, with one sharing that they had been quoted $15,000-$20,000 to comply with the security requirements. Practitioners operating out of shared buildings would face additional challenges, such as needing landlord approval for security modifications and consent from neighboring businesses to install video cameras that would inevitably record customers of other businesses.

A common theme amongst several comments was a need to differentiate the retail marijuana market from the natural medicine market. Unlike retail cannabis businesses, which nearly always have multiple thousands of dollars of product on-site, small-scale practitioners are likely to have negligible amounts of natural medicine on-site at any given time. In light of these differences, commenters suggested either exempting licensed businesses below a certain threshold from security requirements or adjusting the rules to balance the relative cost of compliance with the amount of product a business maintains on-site.

Suggested alternatives to current rules included exceptions or reduced security measures for businesses holding only small amounts of natural medicine on-site, allowing participants to bring their own natural medicine (a common practice in ketamine-assisted therapy), and creating a distribution-type license. According to one commenter, a distributor could house large amounts of natural medicine under tight security, delivering small amounts on demand, thus avoiding the need for every licensed premises to invest in expensive security measures.

Waste & Disposal Of Natural Medicine

Waste products include cultivation and manufacturing byproducts, as well as unused natural medicine and natural medicine products. Cultivation and manufacturing byproducts, such as used substrates, must be disposed of in a manner that prevents spontaneous growth of mycelium or fruiting bodies after disposal. Other waste types, such as liquid and hazardous materials, must be disposed of in accordance with other applicable laws and regulations.

General Sanitary Requirements & Local Safety Inspections

Standard regulatory language requires Natural Medicine Businesses to take “Reasonable Measures and Precautions” regarding sanitation. Division rules require hand-washing and toilet facilities for employees in all Natural Medicine Businesses, and to participants in Healing Centers. Natural Medicine Businesses must also comply with local jurisdiction inspection and zoning requirements related to fire and safety.

Recall and Embargo Procedures

Cultivation and Manufacturing facilities must maintain written recall procedures. Recalls may be initiated voluntarily by licensees as well as at the request of the NMD. When there are “objective and reasonable” grounds for the NMD to believe there is an “imperative risk to public health or Participant well-being”, the NMD may issue an embargo and require immediate recall.

Transport and Storage Between Natural Medicine Businesses

Only licensed Employees or Owners may transport Natural Medicine and Natural Medicine Products. Natural medicine must be transported via a motor vehicle and secured in a locked enclosure that cannot be seen from outside the vehicle. The rules also require an extensive list of information that must be included on a transport manifest. Manifest information must be verified and logged as inventory upon receipt. Specifically, recipient businesses are charged with recording any discrepancies in the quantity of natural medicine received.

Continuing the common thread, public comments reflected concern that extensive transportation rules, which also appear to be modeled closely on marijuana transport rules, would be overly burdensome and unworkable for facilitators transporting small quantities of natural medicine. To assuage concerns around facilitators being subjected to transportation requirements, Division officials clarified that the rules would only be applicable to the transportation of natural medicine between licensed Natural Medicine Businesses. While the Natural Medicine Advisory Board has yet to make formal recommendations around when and how facilitation outside of licensed healing centers will occur, the Division intends to work closely with DORA’s Office of Natural Medicine to develop rules enabling facilitation outside of healing centers, should the NMAB recommend they do so.

Part II: Natural Medicine Advisory Board Updates

A.   Combined Subcommittee Meeting 04.12.2024

Having submitted a substantial body of consolidated recommendations, in January the Natural Medicine Advisory Board amended its bylaws to no longer require each subcommittee to meet monthly. Beginning in April, a “Combined Subcommittee” will meet monthly to develop any remaining recommendations needed, as well as consider changes to draft rules. The first meeting of the combined subcommittee was a March meeting of the full Board, both in process and content. Program Director Lorey Bratten’s hard work behind the scenes to integrate public feedback into Board proceedings was evident. Participating Board members came prepared to discuss public feedback in-depth, and engage in meaningful discussion around some of the programs biggest, and most difficult, open questions. Ahead of the meeting, Assistant Attorney General Brian Urankar prepared alternate versions of contentious rules, based on his extensive reading of stakeholder feedback. Altogether, the meeting marked one of the most efficient, thoughtful, and productive meetings since the NMAB first convened, almost a year ago to the date.

Five subjects were on the agenda for this first meeting of the Combined Subcommittee:

  1. Approved Supervisor
  2. Training Programs
  3. Home Health [Residential Facilitation]
  4. Medical Clearance
  5. Dosage

The subcommittee tackled the dosage question first. Despite having previously selected a 30mg dosage cap, the recommendation was absent from the Board’s consolidated recommendations. Here the subcommittee was presented with three options. 1) Retain the current 30mg maximum; 2) raise the maximum to 50mg; or 3) not set a maximum dose.

Dr. Bradley Conner recounted that the previous recommendation of 30mg had been based in large part on information received from a non-voting participant, indicating an increase in adverse events with no appreciable increase in net positive effects beyond 30mg. Dr. Sue Sisley spoke strongly against such a low dose cap. Not only is available data limited, nearly every study has, to large extent, excluded the very populations of people that could most benefit from natural medicine, such as individuals with depression. Additionally, existing clinical studies, which have exclusively used synthetic psilocybin, may not translate to natural medicine. Dr. Sisley pointed to recent studies showing that individuals on SSRIs, who have historically been excluded from clinical trials, may very well benefit from natural medicine. Due to the blunting effects SSRIs might have on the effects of psychedelics, they may need a dose greater than 30mg to achieve positive outcomes. Dr. Sisley further cited ongoing clinical trials using a 50mg dose without issue. While 50mg would be in line with Oregon’s dosage cap, Dr. Sisley argued fervently that Facilitators should be granted autonomy to experiment with dosage levels to achieve the most beneficial outcomes for Participants. The rest of the subcommittee was persuaded, and ultimately adopted a recommendation without an upper dose limit, subject to “generally accepted standards of practice.” This caveat would bar irresponsibly high dosages, but allows the rule to be easily adapted to the most current research. The recommendation also prescribes the duration of administrations. Doses of 10mg or less require Facilitator supervision for a minimum of three hours, while doses of 11mg or more require a minimum of five hours. In either case, the Facilitator has the discretion to extend the duration of the Administration Session when necessary, such as if adverse effects are present. This recommendation creates a de facto ban on microdosing in the regulated market because few, if any, individuals will be willing to spend three hours under supervision for a dose that should produce no perceivable effects. Hopefully state officials can find a way to provide the safety of regulatory oversight for microdosing, otherwise it will remain in the unregulated personal use space.

Next, the subcommittee addressed two similar controversial rules that would require participants to obtain clearance if they are taking “psychotropic medications” or have one of several risk factors. Public stakeholders were overwhelmingly opposed to this rule, which would impose additional burdens on participants and discourage participation in the regulated market. Many stakeholders urged that a “safety screening” be required in place of actual clearance. Requiring a safety screening would ensure participants and facilitators would be adequately informed of any health risks and ensure participant autonomy, without precluding some participants from accessing natural medicine services completely.

The Assistant Attorney General presented two alternative rules, in addition to the option to keep the existing rule. One option would relax only the rule regarding psychotropic medications, requiring a consultation and risk review with a qualifying professional. A second option would relax both rules, requiring that a Facilitator use an “industry-accepted safety screen” prior to administering natural medicine. When indicated by the safety screen, a Facilitator may not independently provide natural medicine services until the Participant has engaged in a “consultation and risk review” with a medical or mental health professional.

Dr. Sue Sisley again spoke strongly against the existing rule, expressing doubts that licensed medical professionals would be willing to provide a statement as strong as “clearance” declaring it safe for a participant to consume a schedule one substance.

Dr. Conner initially felt that any participant taking psychotropic medication should be required to work with a Clinical Facilitator, based on an assumption that a person taking psychotropic medication likely has an underlying mental health condition that would require the additional training of a Clinical Facilitator. Mr. Urankar skillfully translated the main points of stakeholder feedback. First, “psychotropic” is a broad term. Second, there is a distinction between a Participant with a mental health condition specifically seeking treatment for that condition and a Participant who happens to have a mental health condition.

Once again Dr. Sisley was outspoken against restricting Participant autonomy, this time in support of Participants who may want to see a particular Facilitator, such as a Facilitator of Indigenous lineage. Dr. Sisley emphasized that forcing Participants to see a Clinical Facilitator would only enliven the underground. Taking these points to heart, the subcommittee opted for the most flexible option. Under the new language of the rule, Facilitators may work with any Participant, provided that Participants with risk factors or medications consult with a qualified professional, and the Facilitator discusses the risks, if any, identified through consultation. The new language also makes it clear that a Clinical Facilitator may provide the necessary consultation.

Regarding approval of training programs, many stakeholders had expressed concern that draft rules, which appeared to be modeled on a university format, would be overly burdensome or unattainable for smaller training programs. The subcommittee opted for a modification that bifurcates programs into those enrolling less than 50 students annually, only requiring a “Named Director” in place of a “Governing Body.” as was previously required of all programs.

The combined subcommittee did not suggest any changes to rule language on supervisor qualifications.

It also did not reach the issue of residential facilitation due to time constraints. It will be the top priority at the next meeting of the subcommittee, which will take place on May 10th, 2024 at 1pm MST. 

B.   Full Natural Medicine Advisory Board Meeting 04.19.2024

DORA Natural Medicine Program Director Lorey Bratten kicked off April’s meeting of the Natural Medicine Advisory Board with three notable updates. First, the Office of Natural Medicine released a second set of draft rules, focused on Facilitator conduct and rules related to Facilitator advertising practices, which the NMAB later discussed in part. Second, DORA anticipates releasing a third and final set of rules outlining disciplinary procedures. Third, the Federally Recognized Tribes and Indigenous Community Working Group, required under Colorado law, has been created. The first meeting of the working group will take place on May 8th, 2024.

Next, the head of the Department of Revenue’s Natural Medicine Division updated the Board on the Division’s latest work and current approach to rulemaking. The Division is continuing to draft rules for Natural Medicine Businesses, prioritizing areas under its mandatory rulemaking duties. The Division shared the current results of its ongoing survey of potential Natural Medicine Business licensees. The results reinforce the need for flexible rules that was evident in the Division’s latest rulemaking hearing. The survey data demonstrates a clear need to accommodate solo practitioners, multi-use facilities, and group administration of natural medicine. Of 56 responses, 26 indicated that they intend to apply for a Healing Center License as a solo practitioner. 36 of 44 Facilitators intend to offer group administration. Only 20% of respondents indicated they would use a Healing Center to provide Natural Medicine Services full-time. 

Dr. Bradley Conner shared a brief update from the previous week’s combined subcommittee meeting, where discussion centered on dosage. This naturally led to the first substantive agenda item, which was full Board discussion on the subcommittee-approved dosage limits. After a minor language change, the Board adopted the following recommendations on dosage.

  • Up to 10mg will require a participant to remain under supervision for at least three hours.
  • Dosages of 11mg or more will require supervision for no less than five hours.
  • No upper dosage limit.
  • A Facilitator may extend the duration of supervision at their discretion, provided no adverse effects are present.

Next, the Board turned to discussing the latest set of draft rules from DORA, governing facilitator conduct and advertising practices. The Assistant Attorney General explained that Rule six (Facilitator Conduct) represents those parts of the Ethical Code that could be codified as enforceable rules. Some parts of the code, such as best practices about what a Facilitator should or should not do, will become policy statements. In addition to being strictly enforceable, rules can only be modified through the official, and lengthy, rulemaking process. On the other hand, policies can be updated at the regulator’s discretion. Essentially, rules are things that Facilitators must do, while policies are things that Facilitators should do.

Rather than address the entire 19 pages of new rules, DORA officials highlighted specific sections that they felt warranted input from the Board.

First up was a pair of definitions declaring “guide” and “sitter” to be synonymous with “Facilitator,” which would have the effect of precluding anyone other than licensed facilitators from using those terms. The Board quickly rejected the proposed definitions as “Guide” and “Sitter” are commonly used in Indigenous traditions, as well as harm reduction settings. Some members expressed support for including clear information to the public to help differentiate between a trained, licensed Facilitator and a guide or sitter. 

Next, the Board engaged in a lengthy and nuanced discussion of a proposed definition of “Supportive Touch.” As drafted, the definition would limit supportive touch to hands, feet, and shoulders. Here the Board was somewhat divided, with some members favoring the more restrictive definition to guard against Facilitator misconduct. On the other side, many members acknowledged the healing power of hugging a person, or placing hands on heads, lower legs, and arms. Universally the board agreed that Supportive Touch of a sexual nature should be permitted, however the wide range of possibilities between clearly inappropriate conduct and no contact made drawing the line a murky task. In theory, negotiating allowable supportive touch prior to an administration session could solve this problem, but the susceptible nature and potential difficulty for a participant under the influence of natural medicine complicate things considerably. The Board debated at length different varieties of hugs, from side hugs, “grandmother’s hugs” and hugging a lying person from behind, illustrating the complexity of allowing hugging as a method of supportive touch. Dr. Joshua Goodwin favored a rule that would state clearly areas of the body or types of touch that are excluded, rather than a limiting list of permitted areas. Some members supported and exception for Facilitators with additional specialized touch training and the associated ethics, such as massage therapists and bodyworkers. Ultimately, a consensus was not reached on this issue. DORA staff and the Assistant Attorney General will attempt to revise the rule.

A minor change was made to a rule permitting touch outside of the allowable Supportive Touch to allow a Facilitator to touch a Participant under their “reasonable belief” it is necessary to prevent harm to the patient, such as catching someone from a fall.

A rule that prohibits providing Natural Medicine Services to an individual who is not physically located in Colorado also generated a spirited debate. While it is clear that administration of Natural Medicine may only occur within state lines, the rule precludes offering Preparation and Integration sessions via telehealth to participants in other states. Board members raised a number concerns, chiefly the cost associated with requiring a visiting Participant to remain in-state for all phases of Natural Medicine Services, as well as the potential need to provide long-term integration for some participants. For Clinical Facilitators, the equation is somewhat straightforward because they are prohibited from practicing medicine or mental health in states where they are not licensed. Things are somewhat murkier for a Facilitator who does not hold a secondary license.

Program Director Lorey Bratten pointed out that an adjacent rule regarding an “Initial Consultation or Informal Inquiry” is not subject to the same restrictions. This could allow for a significant portion of pre-and-post administration paperwork and consultation to be performed across state lines, as the statutory definitions of “Natural Medicine Services,” “Preparation Session,” and “Integration Session” leave some room for interpretation.

Some members suggested further limiting definitions of “Preparation” and “Integration” sessions by rule. Another suggestion was to define additional terms like “ongoing support,” as explicitly not psychotherapy. Ultimately, the answer comes down to whether a state would consider telehealth integration or preparation sessions to be “unlicensed practice of psychotherapy,” or an equivalent, under that state’s laws.

The final substantive discussion focused on a rule modification made in response to widespread concern about requiring certain Participants to obtain medical clearance before receiving Natural Medicine Services. Prior draft rules would have mandated that Participants with certain risk criteria obtain “medical clearance” from a medical professional or their treating doctor or therapist. This rule received significant public pushback because it could severely limit a participant’s ability to receive natural medicine services. As Dr. Sue Sisley pointed out, very few medical doctors would be likely to give affirmative clearance, which could subject them to liability. Under the new rule, a Facilitator is only required to provide a participant with a screening tool and discuss the possible risks of natural medicine related to them. This change shows clearly that regulators are listening closely to the public feedback and responding thoughtfully.

The Board suggested some adjustments, such as using the language “Health Safety Assessment.” Board members also favored having the assessment conducted by a medical professional that communicates directly with the Facilitator to avoid the risk of forged documents. Finally, the Facilitator should be required to review the results of the assessment with the Participant to ensure they clearly understand the risks. These modifications strike a balance of ensuring participants understand potential risks of consuming natural medicine, without setting an unreachable bar.

Before adjourning, Skippy Upton-Mesirow raised concerns with a handful of rules prohibiting facilitation services to family members, prohibiting facilitator consumption of natural medicine during facilitation, and limitations on group administration. Hopefully DORA and the Board will address these particular rules in the future. If this week’s events are any indication of DORA’s responsiveness to concerns, those issues will be thoughtfully addressed in the coming weeks.

One outstanding question is whether, and how, residential facilitation will be permitted. This question has enormous impacts on the accessibility of Natural Medicine, impacting a number of populations as well as cost concerns. The Board will address this topic on May 10th, during the next Combined Subcommittee Meeting.

The next meeting of the full Natural Medicine Advisory Board will take place on May 17th at 1:00 MST. 

Upcoming Public Engagement Opportunities

The public may continue to submit written comments on draft rules related to Natural Medicine Businesses by filling out the Division’s form here.

The public may continue to submit written comments on draft rules related to facilitator licensing and training through May 3rd via email to dora_dpo_rulemaking@state.co.us.

As formal rulemaking approaches, there will be increasing opportunities for public engagement. Stay tuned to our Natural Medicine Advisory Bulletin for the latest news on Colorado’s natural medicine program, as well as upcoming opportunities to get involved. Also be sure to check DOR’s rulemaking schedule and DORA’s public notice pages for the most up-to-date information.

Sign up for psychedelic and emerging therapies email updates from Vicente LLP.

Psychedelic Alpha's Colorado Natural Medicine Health Act Tracker webpage and bulletins are dedicated to being a clearinghouse for the implementation of Colorado’s Natural Medicine Health Act, with a focus on the work of the Natural Medicine Advisory Board and its subcommittees.  

Read the Natural Medicine Advisory Bulletin #10.1

View all Colorado Natural Medicine Health Tracker posts

View the Colorado Natural Medicine Health Act Tracker on Psychedelic Alpha

The content and links provided on this page are for informational purposes only and not for the purpose of providing legal or tax advice. Viewing this page does not establish an attorney-client relationship. You should consult with a qualified legal professional for advice regarding any particular issue or problem. The contents of this page may be considered attorney advertising under certain rules of professional conduct.

Colorado, Colorado Natural Medicine Health Act Tracker, NMHA, Psychedelics, Psychedelics & Emerging Therapies