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Ore. Voters OK Legalizing Psychedelic Mushroom Substance

By Daniel Tay · Nov 4, 2020, 12:28 AM EST

Oregon will become the first state to legalize and tax psilocybin, a psychedelic compound found in mushrooms, for therapeutic purposes after voters approved a ballot question Tuesday to establish a framework for its use.

Voters approved Measure 109, which implements a regulatory framework for providing therapeutic psilocybin services to adults over a two-year span. Under the measure's framework, the state will create a retail sales tax of 15% on the price of psilocybin products. The Oregon Health Authority will be in charge of establishing the therapeutic psilocybin service program and regulations governing it.

As of late Tuesday, the measure was was approved 56% to 44% with 86% of the votes reported.

Under Measure 109, the Oregon Health Authority will establish an Oregon Psilocybin Advisory Board, which will make recommendations to the authority. Board members will serve four-year terms.

Under the measure, operators of psilocybin service centers — where patients could buy and consume psilocybin products — can retain 2% of the taxes they collect from retail sales of the products to offset tax collection expenses. Centers must file quarterly returns, regardless of whether any tax is owed, according to the measure.

Additionally, the measure will modify Oregon's statutory calculation of taxable income. The state will allow a subtraction from federal taxable income for any federal deduction for the manufacture or sale of psilocybin products a taxpayer would be allowed to claim if not for federal law barring deductions for amounts related to the trafficking of controlled substances.

Under the federal Controlled Substances Act, psilocybin is listed as a Schedule 1 controlled substance, meaning that federal law considers the drug to have a high potential for abuse and no current accepted medical use in the United States.

Measure 109 prohibits the possession, manufacture or use of psilocybin outside service centers established under the therapeutic framework. However, Measure 110, which voters passed on Tuesday as well, reclassifies personal possession of controlled substances like psilocybin from a misdemeanor to a violation with a maximum fine of $100. As of late Tuesday, Measure 110 was approved 59% to 41% with 86% of the votes reported.

Currently, the cities of Denver; Oakland, California; Santa Cruz, California; and Ann Arbor, Michigan, have decriminalized the personal possession of psilocybin through local ordinances.

Oregon's Measure 109 also will allow city or county governments to adopt ordinances, subject to voter approval, that would ban psilocybin product manufacturers or service center operators from their jurisdictions. Any city or county that adopts such an ordinance will not be allowed to impose a tax or fee on the manufacture or sale of psilocybin products under the measure.

--Editing by Tim Ruel.

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