A federal health agency has published a new report on recent advances in psychedelic medicine, along with recommendations for state policymakers on how to prepare for formal approval of drugs like psilocybin and MDMA. It also notes how the Schedule I status of many psychedelics has hampered scientific studies on their effects for decades.

“Psychedelic-assisted therapy is moving from research settings toward clinical practice faster than most observers anticipated even 5 years ago,” the report published on Wednesday by the Substance Abuse and Mental Health Services Administration (SAMHSA) says.

The document says that substances such as psilocybin, LSD and MDMA “show potential in clinical studies for treating depression, post-traumatic stress disorder, anxiety, and substance use disorders,” though it cautions that the evidence base “remains uneven and important methodological limitations persist.”

The SAMHSA report notes that President Donald Trump issued an executive order aimed at expanding and expediting research on the potential therapeutic benefits of psychedelics in April with an eye toward federal approval of psychedelic medications by the Food and Drug Administration (FDA).

State officials should “consider planning now for the fiscal, legal, and operational implications of potential FDA-approved psychedelic therapies, including any Medicaid coverage obligations,” it says.

They should also work toward “developing oversight frameworks, including credentialing standards, safety protocols, informed consent processes, and complaint mechanisms proactively, before psychedelic therapies are formally made available for state system service recipients,” the SAMHSA report recommends.

“States should engage with the federal regulatory process and coordinate across agencies so that relevant decision-makers in states are informed and prepared when psychedelic policy proposals arise.”

One methodological issue with most psychedelic research to date, the paper notes, is that clinical trials have largely excluded people with serious mental illness, low incomes and complex trauma histories—”precisely the populations that state mental health systems primarily serve.”

The SAMHSA paper provides an overview of the traditional and cultural use of psychedelics, as well as their legal status in the U.S., noting that their placement in Schedule I of the Controlled Substances Act (CSA) meant that “clinical research into psychedelics was substantially limited” for decades.

“This classification was viewed by many as a response to cultural panic surrounding recreational drug use in the 1960s rather than a science-based assessment,” it says.

Research has picked up in recent years, however, and FDA has granted “breakthrough therapy” status to several psychedelics, including psilocybin, MDMA and a 5-MeO-DMT formulation.

If any psychedelics are approved by FDA, key questions will arise about coverage through Medicaid and other programs—both for the drug itself as well as therapeutic sessions that can last for several hours.

“State Medicaid agencies could theoretically cover the drug but not the associated services. Such an arrangement would create a dilemma because the evidence for benefit appears inseparable from the therapeutic framework,” the report says. “Prescribing psilocybin or other psychedelics for unsupervised home use is not supported by the current evidence.”

But “if states are required to cover both the medication and therapeutic services, the budgetary implications are substantial,” the SAMHSA analysis notes.

In any case, the federal overview says that regardless of whether states approve or cover any psychedelic medicines or services, “access and use are already happening.”

“The question is not whether individuals in a particular state will use psychedelics, but whether they will do so in regulated, safe contexts or in underground networks,” it says. This has implications for what information to gather, what public health communications to develop, and what policies to put in place proactively.”

The report also says that an ongoing “fundamental legal tension is that federal and state laws may not align.”

“A state that permits psychedelic-assisted therapy outside of FDA-approval or authorized right-to-try expanded access creates a situation in which the state is facilitating conduct that remains federally criminal. This is not unprecedented (medical cannabis states face similar tensions), but it represents a real legal risk. State attorney general offices may be able to provide guidance on whether prescribers can legally administer Schedule I compounds under state law even when federal law prohibits them.”

Whatever happens at the federal level, psychedelics are unlikely to recede from public attention,” it says. “The science will continue to accumulate, and state agencies will face questions from service recipients, their families, providers, legislators, and others.”

“State mental health directors do not need to become advocates for psychedelic-assisted therapy, but they must be informed. The evidence base, the regulatory momentum, and the budget implications are all substantive enough to warrant serious attention now. The most prudent course is to stay informed, engage with the evidence critically, prepare for the possibility that FDA-approved psychedelic therapies may arrive soon, and think carefully about how these therapies might fit into the broader mission of serving people with mental health conditions and substance use disorders, including individuals with serious mental illness. These decisions are likely to come whether or not states are ready for them, and it will be easier to develop informed positions in advance than to react under pressure.”

Last month, the Department of Health and Human Services (HHS) and Department of Veterans Affairs (VA) announced a partnership to collaborate on research and development of psychedelic medicines to treat people struggling with serious mental health conditions.

Separately, FDA issued finalized guidance to help researchers studying the therapeutic benefits of psychedelics navigate the “unique challenges” of such investigations. The agency also announced it will be holding a public hearing on psychedelic therapy issues in September.

Previously, FDA and HHS in April announced steps that they say will help with “accelerating” therapeutic access to psychedelics for patients dealing with serious mental health conditions.

In May, a bipartisan coalition of 32 members of Congress sent a letter urging FDA to expedite ongoing reviews of psychedelic therapies.

Lawmakers recently filed a new bill that would require the Department of Defense (DOD) to evaluate how ongoing research on the therapeutic benefits of psilocybin could help members of the military.

A separate recently introduced bipartisan measure is intended to codify Trump’s psychedelics executive order into law.

An amendment adopted as part of the National Defense Authorization Act would extend a psychedelics research effort at DOD for an additional six years.

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The South by Southwest (SXSW) is once again accepting public votes on which panels will be a part of the annual festival—and people can choose from a variety of marijuana- and psychedelics-focused proposals for the 2027 edition of the event.

As in years past, potential SXSW attendees should have plenty of cannabis and drug policy sessions to choose from.

According to a search of SXSW’s panel picker tool, seven proposed sessions mention “cannabis” in the description, while 20 use the word “psychedelic.”

Here are a few of the highlights:

The Rise, Regulation & Retail of Hemp Beverages

Representatives of Willie Nelson’s Juneshine Hemp Beverages and the law firm Vicente LLP “will examine what sustainable growth in this category actually requires.” The panel will look at how THC drinks “have already become a disruptive force at the intersection of the $120 billion alcohol market and the $17 billion legal cannabis market.”

Capitalizing on POTUS Exec Order: Right to Try Psychedelics

An advocate with Veterans Exploring Treatment Solutions (VETS) will lead a panel exploring how the “landscape for psychedelic medicine is changing rapidly”—including in the wake of a psychedelics executive order signed by President Donald Trump this year. Among other questions, it will explore, “What role should the FDA, DEA, state governments, physicians, researchers, and patient advocates play in implementing meaningful access?”

What Happens after FDA Approval: Psychedelic Clinic of 2030

“FDA approval is only the beginning. As psychedelic therapies move from research studies into clinical practice, the biggest challenges become implementation, not efficacy,” the proposed session’s description says. “What will the neuroplastogen/psychedelic clinic of 2030 look like? How will clinicians integrate DMT, MDMA, psilocybin, and future therapies with psychotherapy, neuromodulation, AI, biomarkers, and insurance?”

Hidden Impacts: “Weird Science” Behind the Air We Breathe

This broad-scoped panel featuring federal officials from the National Science Foundation and National Oceanic and Atmospheric Administration will explore things affecting air quality and pollution—”from cannabis farm emissions to daily deodorant to Olympic athletics.”

The future of psilocybin: Matching strains to patients

“Rather than viewing all mushrooms the same, researchers and clinicians are exploring how different strains, cultivation methods and chemical profiles may produce distinct therapeutic effects,” the proposal’s description says. “Through the perspectives of a U.S. veteran/patient, therapist and cultivator, this panel examines how matching specific psilocybin strains to individual needs could improve outcomes for PTSD, depression and other mental health conditions while advancing the future of precision psychedelic medicine.”

How Cannabis Beverages Are Building a New Consumer Category

This session will “explore what it takes to create a stable, consistent and great-tasting product; navigate hemp and regulated markets; and earn consumer trust,” its description says. “Panelists will discuss formulation, dosing, retail access and why beverages may be the most approachable entry point into cannabis. Not everyone knows how to inhale, but everyone knows how to drink.”

Invisible Wounds of War: Inside the Movement to Heal PTSD

Subjects of the Emmy Award-winning documentary In Waves and War will “discuss how sharing their deeply personal stories sparked a movement to expand access to breakthrough PTSD treatments like ibogaine and challenge decades-old stigmas around mental health.”

Psychedelics & AI: Building for Consciousness Expansion

This session will shed light on how “AI and Psychedelics have intertwined, creating new problems and possibilities for developers, deployers, practitioners, and advocates alike.” Participants will “offer their perspectives on AI’s relationship to psychedelic community values, including how data privacy, anti-censorship efforts, and growing compliance concerns should and will impact the deployment of AI in psychedelic medicine, psychedelic community spaces, and businesses built around psychedelic access.”

People can vote on the proposed panels through Sunday. The festival will be held in Austin, Texas from March 15-21, 2027.

In the past, SXSW has designated specific tracks of panels dedicated to cannabis and psychedelics, but that won’t be the case for next year’s event.

Image element courtesy of Kristie Gianopulos.

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The clinical evidence is real. The valuations are not. Compass Pathways: $560 million market cap, zero revenue. MindMed: up to $2 billion, zero revenue. Even Ozempic lost half its value with $49 billion in real sales. When this bubble pops, the casualties won’t be on Wall Street. They’ll be the patients this medicine was supposed to reach.

The clinical evidence for psychedelic-assisted therapy is real, it is growing, and it matters. In the past five years, rigorously designed trials have shown that psilocybin can produce rapid and durable reductions in depressive symptoms that conventional antidepressants often cannot match. 

A dose-response meta-analysis of randomized placebo-controlled trials published in the Journal of Affective Disorders confirmed short-term efficacy for major depressive disorder. A VA-funded pilot study found that 60% of military veterans with severe treatment-resistant depression met response criteria three weeks after a single 25 mg dose, with 40% still in remission at twelve weeks—in a population that had failed multiple prior treatments. 

A Phase 2 trial of COMP360 psilocybin for PTSD showed rapid, durable symptom improvement lasting up to 12 weeks, with no serious adverse events, offering a potential breakthrough in a field with just two FDA-approved medications and persistently high dropout rates from trauma-focused therapy.  

In Germany, the first compassionate-use psilocybin therapy program launched in 2026 for patients with treatment-resistant depression. In the Czech Republic, lawmakers approved therapeutic psilocybin use for severe depression. In New Zealand, the first authorized prescriber began administering clinical doses in 2025.

For people living with conditions that resist everything else in the pharmacological toolkit, psychedelic therapy represents a genuinely novel mechanism—one that works through neuroplasticity, through the disruption of rigid default-mode network patterns, through the creation of psychological flexibility that allows patients to process trauma and break free from depressive loops. 

The need for legal, regulated access to these therapies is not speculative. It is clinical. It is urgent. And it is precisely because these substances have so much potential that the financial ecosystem building up around them demands scrutiny—not to undermine the science, but to protect it.

The Gap Between Science and Spreadsheets

I’m curious about how big this market could actually get. I pulled market-size estimates from ten research firms as of early 2026. For the base year alone—what the psychedelic therapeutics market is supposedly worth right now—estimates ranged from $603 million (Fact.MR) to $4.51 billion (Data Bridge, for the U.S. alone). That’s a sevenfold disagreement about the present. 

The forward projections fan wider: $4.2 billion by 2030 (Grand View Research), $9.6 billion by 2032 (Coherent Market Insights), $11 billion by 2034 (Precedence Research), $12.3 billion by 2035 (Research Nester). A 2021 report from Data Bridge projected $6.86 billion by 2027. We’re in 2026. That number exists nowhere outside the PDF.

Meanwhile, the only functioning regulated psilocybin market in the United States—Oregon’s Psilocybin Services program, launched in 2023, has generated approximately $1.7 million in cumulative revenue over three years, while roughly a third of its licensed service centers have closed. The state had to tap $3.1 million from its general fund to keep the regulatory program operational. 

The Ozempic Check

I want to hold the psilocybin sector’s financial profile against a drug that worked commercially, clinically, at a global scale, and see what it teaches us about what separates market speculative behavior from real-life value.

Novo Nordisk’s semaglutide—the molecule behind Ozempic and Wegovy—is the most successful pharmaceutical story of the past decade. FDA approval for diabetes came in 2017 after extensive Phase 3 trials. Approval for obesity followed in 2021. Revenue went from $21.3 billion in 2021 to $48.6 billion in 2025. The semaglutide franchise alone generated roughly $33 billion last year. Net profits in 2024 were approximately $14.6 billion. The company is spending $9.5 billion this decade on new production capacity in a single Danish town.

This is what a pharmaceutical blockbuster looks like when the science is proven, the trials are complete, the FDA has approved the product, 38 million Americans are in the patient base, the reimbursement infrastructure exists, and the revenue is real. 

Even with all of that, Novo Nordisk’s stock dropped more than 55% from its 52-week high in the past year. Competition from Eli Lilly, pricing pressure from government negotiations, and market saturation among patients who can afford $1,000-a-month drugs deflated even this juggernaut. The company lowered its guidance four times in 2025.

If the most successful drug franchise of the 2020s can lose half its market value despite $49 billion in annual revenue, what exactly is supporting the valuations of psychedelic companies that have never generated a dollar of commercial revenue?

The Valuation Question

COMPASS Pathways: market cap of approximately $560 million. Trailing revenue: zero. Net loss: nearly $288 million. Operating expenses of approximately $157 million per year. Every analyst forecasts $0 revenue for 2026. 

MindMed (now Definium Therapeutics): market cap $1.5–2 billion. Revenue: zero. Quarterly net loss: $42.7 million. Cash runway into 2027 only if current burn rates hold. 

The Valuation Gap: Zero Revenue, Billion-Dollar Market Caps

COMPASS Pathways

2026 Revenue Forecast

$0

MindMed (Definium Therapeutics)

Quarterly Net Loss

$42.7M

Cash Runway

Into 2027 only if burn rates hold

Sources: Company filings. Every analyst forecasts $0 commercial revenue for COMPASS in 2026.

Atai Life Sciences merged with Beckley Psytech after a 40% single-day crash when a trial failed. Cybin, now Helus, secured $500 million in financing but has no product anywhere near market.

In October 2025, AbbVie completed its acquisition of Gilgamesh Pharmaceuticals’ bretisilocin for up to $1.2 billion. Bretisilocin is a synthetic analog designed to retain psilocybin’s antidepressant mechanism while shortening and softening the psychedelic experience. It is, by design, a pill that Big Pharma can route through conventional channels—no facilitators, no service centers, no therapeutic relationship architecture.

Novo Nordisk’s success was built on a molecule backed by a decade of trials, regulatory approval, massive patient populations, and reimbursement infrastructure. AbbVie’s bet follows the same logic, but has nothing to do with psilocybin as the therapeutic community understands it. The question for the movement is whether the path to legalization and access runs through this kind of deal, or gets swallowed by it.

Compare this to cannabis at peak hype: Tilray’s 2018 market cap of $13.4 billion on $43 million in revenue was absurd. But there were revenues. A product was being sold to real people.

Too afraid of letting ancestral therapies lose, politicians, lobbyists, and regulators are making psilocybin climb the pharmaceutical Mount Everest when they should be allowing small producers to actually work with the substance in controlled humanized environments.

But what’s the point of creating the constraints necessary to form a unicorn that can bypass regulations with science if it’s only going to make millions of investors lose money? This looks like a trade for the few, losses for the many.

The cannabis movement taught us what happens when the people who write the rules are the people who profit from them: patients get priced out, small operators get crushed, communities of color absorb the costs of prohibition, and none of the benefits of legalization, and the plant’s therapeutic credibility gets buried.

In psychedelics, there’s an additional layer. Mazatec communities in Mexico have publicly rejected the commercialization of their ceremonial practices. Peru declared ayahuasca knowledge a cultural patrimony in 2008. Brazil restricted legitimate use to religious contexts. 

Meanwhile, corporate firms file patents on compounds derived from these very traditions—strategies that legal scholars have flagged as potentially covering practices in use for centuries. If legalization advances without benefit-sharing frameworks, without indigenous consent structures, and without market architectures that prevent the kind of consolidation that gutted cannabis, then the science’s promise will be captured before patients ever see it. That is not an anti-psychedelic position. It is the most pro-psychedelic position there is.

The Industry These Substances Deserve

A veteran with treatment-resistant depression who found remission after a single psilocybin session at a VA medical center: that is real. 

A PTSD patient in a COMP360 trial who engaged with traumatic material for the first time without retraumatization: that is real. 

A facilitator in Portland running a lean clinic at $900 a session and clearing $10,000 a month doing meaningful work: that is real. 

A multi-billion-dollar industry sustained by market research PDFs that disagree with each other by a factor of seven: that’s BS.

Stock valuations unmoored from any commercial activity: that’s BS. 

Lobbying infrastructure that precedes the market it claims to represent, and a $1.2 billion acquisition of a compound redesigned to bypass the very therapeutic model the movement promised: that’s BS.

Novo Nordisk built the greatest drug franchise of the decade on rigorous science and massive real-world demand, and still lost half its stock value in a year. The psychedelic sector lacks that foundation.

Science is too important to be gambled on a winner-takes-all bet. 

The patients who need these therapies are too important to be overlooked. The path forward is better legalization: evidence-governed, community-accountable, structurally resistant to capture, and honest about what we know and what we don’t. If the cannabis experience taught us anything, it’s that the worst thing that can happen to a medicine is for it to become a financial instrument before it becomes accessible to the people who need it.

This article is reported analysis based on publicly available clinical trial data, SEC filings, institutional market research and on-the-record journalism. Financial figures reflect information available at time of publication and are subject to change. High Times does not endorse or encourage illegal activity of any kind.

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Another Hawaii House committee has approved a Senate-passed bill that would create a psychedelics task force responsible for studying and making policy recommendations on providing access to breakthrough therapies such as psilocybin and MDMA.

The House Finance Committee advanced the legislation from Sen. Chris Lee (D)  in a 15-0 vote on Tuesday. The measure, which had cleared the Senate in a unanimous vote of 24-0 last month, next heads to the House floor before potentially going back to the Senate for that chamber to consider recent amendments.

The bill would create a Mental Health Emerging Therapies Task Force that would be tasked with spending two years reviewing the current scientific literature, supporting additional clinical research and “developing policy recommendations for safe, ethical, and culturally-informed implementation” of a psychedelics therapy program.

“The legislature finds that addressing the mental health crisis affecting the residents of the State, particularly among veterans, first responders, and trauma survivors, is urgent,” the bill, SB 3199, states. “Suicide continues to be a leading cause of preventable death, and the State must explore all safe and effective treatment options supported by scientific evidence.”

Noting that the federal Food and Drug Administration (FDA) has already designated psilocybin and MDMA as breakthrough therapies in the treatment of serious mental health conditions, which could lend to future rescheduling under the Controlled Substances Act (CSA), the Hawaii legislation says the state “must proactively prepare public health, clinical, and research systems for safe and equitable implementation.”

The state Department of Health said in testimony to the House committee that it supports the bill, noting that in light of FDA’s action on psychedelics, “it is prudent for Hawaii to evaluate research readiness, regulatory implications, workforce development, and culturally informed implementation pathways” in advance of any federal rescheduling of the substances.

The governor’s Office of Wellness and Resilience said the bill “resents an important opportunity to begin to prepare a planful pathway for individuals in need of access to potentially life-saving treatments for trauma and other longstanding mental health challenges.”

“A growing body of research demonstrates that breakthrough therapies (such as MDMA and psilocybin-assisted therapies) show significant efficacy and positive clinical outcomes in treating post-traumatic stress disorder, substance use disorders, end-of-life anxiety in terminally ill patients, eating disorders, treatment-resistant depression, and additional conditions,” it said.

Members of the task force would have to include representatives of the state Department of Health (DOH), the attorney general’s office, the Office of Wellness and Resilience (OWR), the University of Hawaii’s medical school and more.

As drafted, DOH would have overseen the task force, an amendment adopted last month by the House Health Committee makes the John A. Burns School of Medicine (JABSOM) at the University of Hawaii the responsible entity, and designates JABSOM’s appointee as chair of the panel.

The committee additionally adopted amendments suggested by Department of Law Enforcement, to state that its Narcotics Enforcement Division—and not the Board of Pharmacy—would be responsible for changing state scheduling of psychedelics following any federal reclassification, and changing deadline for such action from 90 days to 30 days.

Members also moved to note in the bill report that the State Health Planning & Development Agency has expressed concerns that psychedelics are illegal under federal law and that task force should proceed cautiously.

Finally, the panel made technical amendments for clarity, consistency and style.

If enacted, it appears the bill would build upon prior work conducted by a separate psychedelics task force that convened for the first time in 2023, with a similar goal of exploring pathways for therapeutic access into FDA-approved breakthrough drugs like psilocybin.

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Marijuana Moment is tracking hundreds of cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.

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Meanwhile, although Hawaii senators recently approved a bill to legalize low-dose and low-potency marijuana, the legislation didn’t advance through required steps before a key deadline, and so is dead for the year.

A separate marijuana legalization bill that contained provisions making the reform contingent on changes to federal law or the state Constitution, SB 2421, was deferred for action. Both Senate and House panels additionally deferred action on a measure to allow for the sale of certain hemp-derived cannabinoid products.

Those actions comes after key House lawmakers signaled that cannabis legalization proposals would not be advancing in the 2026 session, citing a lack of sufficient support in their chamber.

Earlier this month, a Hawaii Senate committee separately passed legislation to allow patients to immediately access medical cannabis once their registrations are submitted, instead of having to wait until their cards are delivered as is the case under current law.

A Senate committee also approved resolutions calling on Congress to federally legalize marijuana, support state efforts to clear people’s conviction records and take steps to facilitate access to banking services for companies in the cannabis industry.

Another Senate panel advanced separate resolutions  calling on the state attorney general and health department to request an exemption from the Drug Enforcement Administration (DEA) stipulating that Hawaii is permitted to run its medical cannabis program without federal interference.

Photo courtesy of Wikimedia/Mushroom Observer.

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