By Regulators Drop Proposed Fee Increases
The Oregon Health Authority announced Tuesday that it would not adopt proposed rules that would have doubled the annual licensing fees for businesses across the psilocybin supply chain. The rules would also have eliminated discounts for veterans and low-income people. Regulators had justified the hikes as necessary to cover the cost of managing the first-of-its-kind program, where adults 21 and older take psilocybin under the watch of a trained facilitator.
The proposal would have doubled annual license fees from $10,000 to $20,000 for psilocybin manufacturers and service centers. Nearly a third of Oregon’s roughly 400 psilocybin-related licenses qualify for a reduced fee, according to the health authority’s Erica Heartquist. Those license holders would have seen their fees quadruple to $20,000.
Andreas Met, co-founder of Satya Therapeutics, an Ashland-based service center, celebrated the outcome. “This was an industry fighting for its survival, and it really came together,” Met told the Oregon Capital Chronicle. “This is a profound thing.”
The authority said it dropped the fee increases based on feedback from the Oregon Psilocybin Advisory Board, rule advisory committees and the public comment period. Everyone who spoke during two public comment hearings last week opposed the fee increases. The authority will also post documents on the psilocybin program website in response to questions about the program’s budget.
Documents Reveal Projected Shortfalls
Questions remain about the financial stability of a program that supporters promised would pay for itself. The authority released a document last week in response to a records request from Met showing that increasing fees could worsen the program’s finances.
Under the document’s worst-case scenario, the program would have a $4.2 million shortfall in the current two-year budget cycle as a result of businesses abandoning their licenses instead of paying higher fees. Even without the fee increases, the document projected a $3.8 million shortfall. A third scenario, where licenses held steady despite the increases, still came up $2.9 million short.
The document’s findings appear to contradict the authority’s rulemaking notice that the “overall fiscal and economic impact of the rules cannot be quantified at this time.” The document was dated August, a month after the authority met with an advisory committee about the proposed fee hikes. Met, who leads the Psilocybin Alliance trade group, said the authority released the analysis just days before public comment closed.
Released documents suggest the health authority does not expect lawmakers to support the psilocybin program with money from the state’s general fund in the upcoming budget cycle. Heartquist did not answer follow-up questions and deferred to the authority’s Tuesday statement.
Industry Pressures and Transparency Demands
The fee proposal came after a wave of service center closures that raised doubts about the viability of Oregon’s legal psilocybin experiment, which voters approved in 2020. The state has issued licenses to 39 service centers, about half of which have expired or been surrendered, according to state figures.
