Insights

Colorado Natural Medicine Advisory Bulletin 12: May and June 2024

By Vicente LLP, Psychedelic Alpha

Jul 11, 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.

In November 2022, Colorado voters approved the Natural Medicine Health Act. Nineteen months later, on June 30, 2024, the first official rules for the program became effective. This was a significant milestone in the creation of the state’s regulated Natural Medicine Program. Just days later, applications for Facilitator Training Program licenses opened, the first of many licenses to come. There is still plenty of work to be done, and with just a few weeks left in initial rulemaking proceedings, things are moving fast. In fact, during the week of July 8, there is a Natural Medicine-related meeting every day. By the time you read this post, the rules will most likely have been changed!

While we have covered a handful of significant happenings since Bulletin 11, we’ve mostly been on the ground in Colorado. Since the last full Bulletin, quite a bit has happened.

That’s a lot of rules and meetings. In this Bulletin, we’ve sifted (and sat) through it all, focusing on particularly noteworthy subjects and how the rules around them have evolved over the past two months.

New Advisory Board Recommendations

Following the adoption of the Board’s consolidated recommendations in January, the role of the Natural Medicine Advisory Board (NMAB) in the overall framework has trended toward a more, well, advisory role. The bulk of the work has shifted to regulators, who have issued no less than 200 pages of regulations. As regulators engage with the public through stakeholder meetings, the Board is occasionally asked to weigh in on questions that arise. All that is to say, there aren’t a lot of recommendations coming out of the Board these days, but the few that have are noteworthy.

No Publicly Traded Companies

The original NMHA and the enabling legislation that followed prohibit an individual from owning a financial interest in more than five Natural Medicine Business Licenses. SB24-198 clarified that the limitation applies to natural persons or entities but remained silent on publicly traded companies.

In the June 21 meeting, Department of Revenue (DOR) officials recommended that the Board recommend (see how weird this is getting?) that the Department prohibit publicly traded companies from participating in the regulated Natural Medicine Market. According to DOR, ensuring compliance with the statutory limitation on financial interests would require immense resources, if possible. The Board approved this recommendation without opposition.

Standalone Integration Sessions

The Board also voted to recommend a legislative change to the statutory definition of “Integration Session,” which is necessary to allow standalone Integration Sessions. Under the current definition, an Integration Session must follow an Administration Session that takes place in the regulated market. This change would allow facilitators to offer Integration Sessions to individuals who have consumed natural Medicine under personal use allowances, in addition to increasing facilitator autonomy.

Participant Outcome Database

We discuss the evolution of the data collection conversation in detail below. Still, the short version is that the Board has recommended that the legislature appropriate (or permit the use of private funding) $1M for the creation of a database to track participant outcomes over time.

Authorized Locations Other Than Healing Centers

Another longstanding question for the program: What are the rules for the administration of Natural Medicine outside of Healing Centers? The NMHA included clear allowances for administration sessions, and many stakeholders in the community have been awaiting regulators to take a position. Despite frequent and recurring stakeholder feedback urging regulators to address the issue, both DOR and the Department of Regulatory Agencies (DORA) put it off. Would a private residence need to be licensed as a Healing Center, thus placing regulation into DOR’s purview? Or is residential facilitation more suited to the regulation of facilitator conduct, thus putting the responsibility with DORA? Furthermore, it was initially unclear whether Natural Medicine Businesses could even transfer Natural Medicine to facilitators.

Following a recommendation by the NMAB to amend the law, SB 24-198 was sent to the governor’s desk, with an effective date of June 6. The bill clearly permits the transfer of Natural Medicine directly to facilitators. Anticipating the resolution of this key piece of the puzzle, regulators and the NMAB quickly took up the issue. On May 10, the NMAB subcommittee recommended two general guidelines for residential facilitation:

  1. Unsupervised pets and children should not be present during administration
  2. Participant confidentiality should be protected to the fullest extent possible

DOR rules, which can only govern the operation of Natural Medicine Businesses, limit the amount of product that a Natural Medicine Business may transfer to a facilitator to 750mg of total psilocin content. Additionally, Natural Medicine Businesses must verify the facilitator’s DORA-issued license number prior to transferring Natural Medicine.

The bulk of the rules that will govern administration outside of Healing Centers are found in facilitator Standards of Practice. Interestingly, the rules generally permit administration “ in a location other than a healing center,” leaving open the possibility of a third category of spaces that are not private residences or licensed Healing Centers.

For private residences, the following rules apply:

  • No person under 21 may be present
  • At least one participant must have a “legal right to possess and occupy the premises as a residential dwelling”
  • Prior to administration, the facilitator must perform a “reasonable review” of the residence and ensure that it is free from “hazards, weapons, and uncontrolled animals”
  • Natural Medicine must be procured from the regulated market

Additional rules apply to administration in other authorized locations, generally:

  • The facilitator must require and provide, either 1) a second facilitator or authorized representative of a Healing Center or 2) a video recording of the session
  • The participant(s) must provide informed consent as to the location, as well as the presence of additional persons or video recording
  • Facilitators must maintain custody of all Natural Medicine and must return unused Natural Medicine to a Healing Center

Participant Outcome Analysis

Another subject that has only recently been squarely addressed is how Colorado can best measure the success of its program. State authorities are required to request and report specific data and are permitted to collect additional data. Mandatory data collection is generally related to understanding the overall state of the program overall. This includes data points like how many participants have received Natural Medicine Services, demographic information, and adverse events. Regulators are required by statute to report on the status of the program, including:

  • Law enforcement incidents
  • Adverse health events
  • Impacts on health care systems
  • Consumer protection claims
  • Behavioral health impacts related to natural Medicine, natural medicine products, and natural medicine Businesses

However, this data alone cannot answer the biggest question—how effective natural medicine is at treating certain conditions? The most effective way to do that is through participant outcome reporting, which requires collecting follow-up data. By its very nature, an outcome reporting system must store sensitive data—personally Identifiable Information, or PII—in order to check in with someone months or years later.

DOR rules released on May 1 initially required Healing Centers to collect and report a limited set of data to fulfill its statutory requirements. Following significant public feedback on the need to collect outcome data, the Department solicited feedback from the subcommittee on what data should be collected, as well as who should be charged with collection. The subcommittee recommended that facilitators, and not Healing Centers, be responsible for collecting data related to participants. This avoids duplicative data collection while also ensuring data is collected when administration occurs outside of Healing Centers.

More importantly, the subcommittee, followed by the full Board on June 21, adopted a recommendation that the Colorado legislature appropriate $1M in funding to create and operate a “participant outcome database” or clearly permit private funding. The original Natural Medicine Health Act contained allowances for private funding. However, those allowances were subsequently removed when legislators rewrote the Act into SB23-290. Doctors Sue Sisley and Bradley Conner, both accomplished researchers, suggested the $1M price tag as a rough estimate of the cost of building and maintaining the database for a year.

Natural Medicine Businesses

Since Bulletin 11, DOR’s Natural Medicine Division has released five sets of rules, bringing the total to seven sets. Sets have typically focused on a single subject or group of related subjects, with relevant changes from previous sets included. The latest set, 115 pages in total, represents all the rules in their latest revisions. This has been an enormous effort, and our gratitude goes out to the staff at DOR, as well as the members of the public who have helped shape these rules.

ESG Criteria

DOR’s first set of proposed rules, released on March 20, prioritized applications for Natural Medicine Businesses where one or more owners were veterans or of Indigenous or tribal backgrounds. It also prioritized applications that included a “Community Impact Plan” demonstrating that the business will serve rural communities, offer free or discounted services, or implement sustainability measures to minimize environmental impacts.

Stakeholders urged DOR to take its statutory responsibility in this area more seriously, and the Department once again listened. Updated rules now require applications to demonstrate minimum Environmental, Social, and Governance (“ESG”) criteria, and a business must make its ESG plans publicly available. Rules only permit compliance by selecting from a set list of options, which stakeholders have pushed back on. Public stakeholders, as well as NMAB member Dr. Sue Sisley, urged the Department to consider an exemption for small businesses, which may struggle to satisfy all of the requirements. During the June 21 meeting of the NMAB, DOR officials responded that a business does not necessarily have to comply in all three areas and that a business that cannot meet one of the requirements would be expected to compensate in other areas. Stakeholders have also encouraged the Department to encourage benefit-sharing and Indigenous reciprocity under this rule. In rules released on July 3, DOR has responded by drastically expanding pathways to meet ESG criteria, in addition to only requiring a business to demonstrate one of the three categories. 

Healing Centers

As reported in Bulletin 11, initial rules for all Natural Medicine Businesses, including Healing Centers, took a narrow view of what Healing Centers will look like. The rules seemed to assume a single Healing Center model of a large facility providing Natural Medicine Services full-time. As the public pointed out, the rules did not account for multi-use spaces like retreat centers or therapists who want to offer Natural Medicine to the occasional client as an adjunct to their existing therapy practice.

In a laudable example of the regulatory response to public feedback, rules specific to Healing Centers, released on April 25, alleviated many of these concerns.

Most significantly, the updated rules bifurcate security requirements based on the amount of Natural Medicine a Healing Center keeps on hand. Initially set at 250mg, the threshold was increased to 750mg in subsequent updates, again in response to public feedback. Healing Centers storing less than the threshold must store Natural Medicine in a closed, locked space that is not accessible to unlicensed individuals and must maintain video surveillance of the storage location while Natural Medicine is being stored. This change was widely lauded and allowed therapists to store a modest amount of natural medicine to use in their practice occasionally without subjecting them to extensive security and surveillance rules.

The April 25 rules also included welcome changes around Restricted Areas, Administration Areas, and Licensed Premises. This update removed a complete prohibition on individuals under 21 entering Licensed Premises, removed a requirement for small Healing Centers to have a Restricted Area, and modified a third rule so that individuals under 21 are only prohibited from entering Administration Areas during Administration Sessions. Prior rules had completely prohibited individuals under 21 on Licensed Premises and in Administration Areas, which would have made using a location for anything other than Natural Medicine Services problematic.

Additional welcome changes regarding Healing Centers include removing restrictions on who can own Healing Centers, permitting fresh fruits and vegetables during Administration Sessions, and allowances for Healing Centers to serve prepared food if properly permitted.

Cultivation

Proposed rules related to Cultivation were initially released on June 6, 2024. Primarily consisting of common-sense regulations around sanitation and safety, the rules received little feedback during the June 12 stakeholder engagement meeting. However, there was significant support for a “micro-cultivator” license, which would permit a licensee to cultivate a quantity similar to the amount a small Healing Center may store.

At the June 14 meeting of the NMAB subcommittee, DOR and CDPHE officials sought the subcommittee’s opinion on three cultivation recommendations. First, CDPHE felt that the USDA’s Mushroom Good Agricultural Practices should be required by rule, as opposed to suggested best practices, as recommended by the Board. The subcommittee rejected CDPHE’s view as being too costly and requiring things that are ultimately not necessary for the safe cultivation of Natural Medicine.

Second, regarding a recommendation that any use of solvent-free extractions follows Colorado food safety laws, CDPHE pointed out that the recommendation conflicts with a different recommendation, which restricts products to whole fruiting bodies and powdered mushrooms. Further, Natural Medicine would not be considered a food product under the Colorado Pure Food and Drug Law. CDPHE suggested that DOR incorporate relevant food safety rules into its own Natural Medicine rules. The subcommittee accepted the suggestion; however, around this time, it started to become clear that the authors of the initial NMAB recommendations held a different understanding of their impact than regulators and the broader public.

Third, CDPHE sought to understand the Board’s intent in recommending that cultivators be permitted to add ingredients from the FDA’s inactive ingredient list to substrates during cultivation. The subcommittee chair, Dr. Bradley Conner, clarified that the original drafters had intended to allow additives that encourage mushroom growth but not those that affect potency or effects.

Manufacturing

What little pushback was seen in cultivation was more than made up for in stakeholder feedback on manufacturing rules. In this area, NMAB recommendations, stakeholder feedback, and regulatory necessity are all in tension. Initially, proposed rules limited manufactured Natural Medicine Products to just whole mushrooms, powdered mushrooms, chocolates, and tea bags. The regulations also prohibited extractions using anything other than water or fruit juice, as well as any additives that “alter potency, intoxicating effect, duration of effect, toxicity or potential for excessive use.” This handful of rules, effectively kneecapping the market for regulated products, took many of the public by surprise, who had expected holders of a “Natural Medicine Products Manufacturer License” to manufacture products. During the June 12 stakeholder engagement meeting, commenters raised concerns that the proposed rules would restrict access to Natural Medicines for those who cannot swallow, prohibit common and beneficial methods of consumption, make accurate dosing close to impossible, and fuel participation in the unregulated market.

The pushback was so strong that DOR sought clarification from the NMAB in the June 14 subcommittee meeting. During that meeting, which we reported on in-depth, it was brought to light that at least some members of the Board had intended to prohibit all manufactured products in the regulated market for the first year.

In the 115-page consolidated set of rules released on July 3, DOR has tried to balance these tensions. The latest rules permit all licensees to manufacture capsules and tea bags for oral consumption, with an “Extraction Endorsement” available. Endorsement holders are additionally permitted to manufacture chocolate, soft confections, and pressed tablets. Notably, endorsement holders are also able to manufacture tinctures for sublingual administration, a significant win for palliative care advocates. Water, ethanol, and food-grade oils are permitted as solvents.

Testing

Regulators also provided feedback on four NMAB recommendations related to testing. First, the Board recommended that CDPHE develop proficiency testing, which measures the ability of a laboratory’s testing methodology to produce accurate results. CDPHE officials explained that due to DEA restrictions, as well as the significant time and resources needed to develop novel proficiency testing procedures, CDPHE is not in a position to fulfill the request of the recommendation. Instead, the subcommittee amended the recommendation to give CDPHE latitude to implement measures in its best judgment, with an eventual goal of moving towards true proficiency testing.

Second, the Board’s initial recommendations called for annual species testing. CDPHE pointed out that private labs are unlikely to invest the resources needed to develop a novel testing methodology that is only required once a year. The alternative solution, having state-run labs conduct annual surveillance testing, poses an issue because neither CDPHE nor DOR was allocated funding to conduct testing. Additionally, DEA restrictions would require that DOR collect samples rather than CDPHE, which holds a DEA license.

The subcommittee elected to maintain an annual frequency while removing any expectation that the state conduct species testing. This leaves open the possibility that private labs elect not to develop species testing, and none is conducted.

Third, initial recommendations called for annual contaminant testing, which presented similar concerns. Again, CDPHE felt that annual testing would not be economically viable for private labs. Moreover, CDPHE and DOR officials felt strongly that annual contaminant testing is insufficient to protect public health, suggesting that monthly testing would be more in line with regulators’ comfort levels. Subcommittee chair Dr. Bradley Conner recalled that multiple mycologists confirmed that contaminant testing on mushrooms themselves is unnecessary, as contaminants introduced during cultivation almost universally prevent mushroom growth. The bigger concern, according to CDPHE officials, is the introduction of contaminants during manufacturing processes. With no other subcommittee members speaking up, Dr. Conner spoke for the group, stating that the recommendations should be applied to cultivation and that they should be re-evaluated when “we know what production looks like.”

Fourth, CDPHE suggested abandoning a recommendation that products be re-tested for potency after nine months, instead suggesting an expiration date. According to state officials, requiring re-testing introduces complexities to inventory tracking, as well as who bears the cost of re-testing. Subcommittee members rejected the idea of an expiration date, citing anecdotal experience with relative stability, as well as the perspective from the Indigenous, Religious, and Spiritual Use subcommittee that Natural Medicine should be respected and thus not disposed of unless necessary.

During the meeting of the full Board the following week, DOR presented two options for manufacturing licenses. The first option mostly tracks with the Board’s original recommendation, permitting only whole mushrooms, powdered mushrooms, and capsules. The second option introduces a two-tiered manufacturing license model. A “Micro-Manufacturer” would be permitted to produce limited products with minimal modification, such as powdered mushrooms and capsules. A “2nd Tier Manufacturer” would be permitted to manufacture edible products and use limited solvents, subject to increased regulation, such as additional testing and recordkeeping related to solvents.

Colorado Psilocybin Products Manufacturing and Testing Options

While the Board generally supported the two-tiered license model, it universally opposed DOR’s proposed monthly testing requirements. Board members were deeply concerned about the cost implications of monthly contaminant testing – a 1200% increase over the Board’s initial recommendation of once per year.

Ultimately, the Board approved the two-tier model, with the caveat that contaminant testing at the mico-manufacturer level should reflect the Board’s initial annual recommendation. If regulators could provide information supporting the need for more frequent contaminant testing, the Board would accept quarterly testing at most. As Board member Skippy Upton-Mesirow said, “I’m looking for the evidence.”

In rules released on June 26, regulators appear to have partially accepted the Board’s recommendation. Although the rules now reflect two classes of manufactured Natural Medicine Products, regulators seem to be sticking to monthly contaminant testing, which remains unchanged in the latest July 3 rules.

DOR will hold a stakeholder engagement meeting regarding all rules on July 9, with the final rulemaking hearing and final opportunity for public comment set for July 25. The public is invited to provide feedback by attending a meeting virtually or in person or by submitting written comments through a form on DOR’s website.

DORA Updates

DORA’s rulemaking related to facilitator licensing and training is proceeding in three separate but parallel rulemaking segments. This format was chosen to accommodate the need to approve facilitator training programs as early as possible. However, it has created some cause for confusion. Unlike DOR’s rulemaking process, which allows public comment and rule revisions on all rules throughout the entire process, DORA’s approach means that rules close to public comment and become effective at different times.

Facilitator Licensing & Training

DORA’s first set of rules, released in April, marks the first rules for Colorado’s regulated Natural Medicine program to become official. Following a final rulemaking hearing on May 3, 2024, the rules were approved by the Colorado Attorney General’s office on May 30 and are final and effective as of June 30. These rules establish the foundational framework for the profession of facilitation, including license types and qualifications, application and renewal processes, education standards, and procedures for approval of facilitator training programs.

Facilitator Training Programs

Having received the Attorney General's signoff on rules related to facilitator licenses and training programs, DORA has prioritized procedures for appraising facilitator training programs.

During the June 21st meeting of the NMAB, Program Director Lorey Bratten shared a preview of DORA’s online application portal for training programs, which officially opened on July 2. Ms. Bratten also shared an initial checklist of documents that will be required when applying for approval. Initial application fees for a facilitator training program are set at $10,000 for the first year. In response to some NMAB concerns regarding costs, DORA officials indicated they would explore the feasibility of an installment or payment-over-time option.

Vicente has created a helpful guide for those interested in applying for approval as a training program.

Standards of Practice and Advertising

Initially released on May 15, 2024, this second set of rules primarily codifies portions of the Facilitator Code of Ethics, as recommended by the NMAB. A final rulemaking hearing on these rules was held on June 20, 2024. During the hearing, multiple members of the public urged DORA to streamline disclosure requirements, minimize duplicative paperwork, and provide more flexibility for facilitators to employ touch in certain populations, such as participants seeking Natural Medicine Services for pain relief.

Standards of Practice

In general, Standards of Practice rules prescribe certain aspects of a facilitator’s conduct, including:

  • Required documentation and disclosures
  • Confidentiality and storage of participant records
  • Informed consent processes and disclosures
  • Permitted and prohibited use of physical touch
  • Prohibitions on discrimination and exploitation
  • Prohibitions on sexual, romantic, financial, or otherwise conflicting relationships with participants and participants’ immediate family
  • Prohibitions on accepting fees for referrals
  • Requirements around a Facilitators state of mind, including a prohibition on consuming Natural Medicine while providing Natural Medicine Services
  • Maintaining competency as a facilitator
  • Administration session duration, based on dosage

Rules also establish a facilitator’s responsibilities with regard to preparation, administration, and integration sessions, including group administration and integration. Notably, these rules permit administration outside of Healing Centers, as well as group administration. Additional regulations regarding administration outside of licensed Healing Centers are anticipated based on recommendations from the Natural Medicine Advisory Board.

Following an initial stakeholder engagement meeting on May 14, 2024, DORA removed a prohibition on providing Natural Medicine Services to individuals with whom the facilitator has a “close personal relationship.” The modified language now restricts the provision of Natural Medicine Services to individuals and their immediate family with whom a facilitator has had a sexual, romantic, or intimate relationship within the past year.

Advertising

Rules regarding advertising of Natural Medicine Services prohibit false, misleading, or deceptive advertisements, as well as solicitation of testimonials.

Disciplinary Procedures & Unlicensed Practice

By far the shortest, DORA’s third set of rules defines grounds for disciplinary action against a licensed facilitator, including certain felonies and misdemeanors, abuse of alcohol or controlled substances, violations of laws or regulations related to Natural Medicine, misrepresentation and deception, unprofessional or dishonest conduct, unlicensed practice of facilitation, aiding or abetting the unlicensed practice of facilitation, and failure to report certain required events. Licensees are required to report criminal convictions and any instance of unprofessional or dishonest conduct. “Unprofessional or dishonest conduct” encompasses crimes involving dishonesty or willful misrepresentation, crimes related to the practice of facilitation, and disciplinary actions taken against a facilitator by another jurisdiction or licensing board.

A final hearing on these rules is set for Monday, July 8, 2024. The public is invited to provide feedback in person during the hearing or submit written comments to dora_dpo_rulemaking@state.co.us.

With both DOR and DORA aiming to complete rulemaking by August, the window for public comment on proposed rules is coming to a close. To participate in the rulemaking process, submit your written comments to DOR or DORA or attend one of the following final meetings! 

  • Monday, July 8 at 11 am MT: DORA Final Hearing – Facilitator Discipline, Unlicensed Practice, and Data Collection. Register here.
  • Tuesday, July 9 at 9 am MT: DOR Work Group – Cultivation, Manufacturing, Testing, and Inventory Tracking. Join here.
  • Tuesday, July 9 at 1 pm MT: DOR Work Group – Enforcement, discipline, and general rules. Join here.
  • Thursday, July 11, at 3 p.m. MT: CDPHE Stakeholder Meeting—Natural Medicine Laboratory Certification and Testing. Register here.
  • Thursday, July 25 at 9 am MT: Final Hearing on all DOR Natural Medicine Business rules. Join here.

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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.  

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