Oregon on Wednesday became the first state to legalize the active ingredient in so-called magic mushrooms on an election night that saw more states ease restrictions on recreational drugs across the country.
Oregon's Measure 109 will give legal access to psilocybin, the main active ingredient in "magic mushrooms," for mental health treatment in supervised settings. As of Wednesday at about 6 a.m. ET, the measure was passing with 55.8% support and over 2 million votes cast, according to Oregon's Secretary of State.
While some cities have moved to legalize and regulate access to the drug, Oregon will become the first state in the country to legalize it on a statewide basis if the measure passes and becomes law. Supporters of the measure point to the medical benefits of the drug, which has been shown in some studies to benefit trauma survivors.
Through Measure 110, which has captured more than 58% of the vote so far, Oregon would also decriminalize the possession of small amounts of some hard drugs, including heroin and LSD. Instead of criminal prosecution, people in possession would face a $100 fine, which can be waived if the person agrees to pursue treatment, according to the measure.
The field of psychedelic-enhanced therapy has increasingly garnered interest among investors, including big names like billionaire investor Peter Thiel.
Ronan Levy, the cofounder of Field Trip Health, a Toronto-based company that provides psychedelic-enhanced psychotherapy, said the ballot wins are "fantastic news" for what he called the psychedelic renaissance. His company went public last month and is traded on the Canadian exchange.
Research is mounting that indicates the benefits of using psychedelic drugs to enhance therapy, Levy said, adding that "there's almost no mental health condition right now that's not being looked at." However, he added that, the drug alone isn't necessarily helpful; it needs to be taken under supervision of trained personnel, which is what Field Trip Health offers.
Levy added that he expects more states to legalize the use of psychedelics in supervised settings in the years to come. He said there would have been more ballot measures up for vote this year, but the pandemic got in their way, making it difficult to garner enough signatures to land on the ballot.
In an election year like no other, Oregon's not alone in the "psychedelic renaissance."
In the District of Columbia, residents voted to decriminalize the use of magic mushrooms and other psychedelic substances, including the active ingredients in ayahuasca and peyote, with the passage of Initiative 81, the Entheogenic Plant and Fungus Policy Act of 2020. As of about 2 a.m. ET, the initiative had passed with a landslide 76.3% of the vote.
The measure doesn't legalize the drugs, it makes possession of the them among the lowest enforcement priorities for D.C. police, according to the initiative, which still faces hurdles before it becomes law. The D.C. Council needs to approve the measure before sending it to Congress for review. Congress then has 30 legislative days to block it or allow it to become law.
A spokesman for the American Psychological Association said the organization does not have a stance on either the legalization or decriminalization of psychedelic drugs.
In addition to psychedelics, a number of states asked voters to choose a path forward for their regulation of marijuana, too. In New Jersey and Arizona, voters legalized the recreational use of marijuana.
In South Dakota, voters passed one measure by a landslide that would make marijuana available on a medical basis across the state. Another South Dakota measure, which would legalize the recreational use of marijuana and tax it, had captured 53% of the vote with 90% of precincts accounted for as of 11:15 a.m. ET.
In Mississippi, a majority of voters approved an initiative that would set up a medical marijuana program for patients with debilitating conditions. And with 70% of precincts reporting as of 12:30 a.m. ET, Montana appeared set to legalize the recreational use of marijuana with a minimum buying age of 21.
Despite the sweeping moves to deregulate, shares of publicly traded marijuana companies took a hit in midday trading Wednesday. Shares of Canopy Growth, which has a market cap of more than $6.5 billion, were down more than 7% in midday trading. Tilray, which has a market cap of less than $1 billion, saw its shares slide more than 8%, and Cronos Group stock traded more than 7% lower to a market value of $1.9 billion just before 1 p.m. ET.
David Culver, Canopy's head of government relations, said in a phone interview that the stock move was perplexing.
"It was a very historic night for cannabis reform," he said, adding that he expects to see more pass in the coming years.
Culver pointed to the coronavirus pandemic, which has left just about every state with a gaping budget hole as the economy came to a near halt in March and is still struggling to rebound. He said states are looking for ways to fill the hole and the taxation of recreational marijuana sales is a great way to do that.
The legalization of the market in places like New Jersey will place pressure on lawmakers in surrounding states such as New York and Pennsylvania to follow suit or miss out on much needed tax revenue.
"The ballooning budget deficits, the need for jobs and tax revenue is really going to be a big driver as we look to next year," he said, "the desperate need that states have right now for tax revenue."