After decades on the fringes, could psychedelics finally be moving closer to the mainstream? A growing number of regulators and policymakers in Washington, D.C. and across the country are converging around the therapeutic potential of psychedelics. Despite the strengthening chorus, though, some roadblocks remain.
Late last year, the Department of Veterans Affairs announced that it would fund a study on Methylenedioxymethamphetamine (MDMA)-assisted therapy for post-traumatic stress disorder (PTSD) and alcohol use disorder (AUD) among veterans. Significantly, this is the first VA-funded study for psychedelic-assisted therapy since the 1960s. Pursuant to the study, VA researchers affiliated with Brown University and Yale University will evaluate the potential of MDMA-assisted therapy as a treatment option for veterans with both PTSD and AUD. Participants will receive psychotherapy sessions enhanced by MDMA, a psychedelic compound believed to increase emotional openness, reduce fear, and promote introspection during therapy. The study is expected to begin in February 2026.
Of course, funding from Congress was key but it is important to understand the significant advocacy undertaken by veterans organizations to start to change the conversation in Washington. Groups such as Veterans Exploring Treatment Solutions (VETS), Heroic Hearts Project, and Reason for Hope have spent years lobbying for expanded access and research into psychedelic-assisted therapies. These organizations have highlighted both the limitations of existing treatments and the potential benefits of psychedelics. Their advocacy helped push legislative proposals and secure appropriated dollars that encouraged VA research.
It is not all good news at the federal level, though, at least not for now. Also last year, the U.S. Food and Drug Administration (FDA or the Agency) rejected a new drug application (NDA) filed by Lykos Pharmaceuticals for MDMA-assisted therapy for individuals with PTSD. It was not until September of this year that FDA's complete response letter (CRL) to Lykos became public. The Multidisciplinary Association for Psychedelic Studies (MAPS) recently held a press conference to discuss the contents of the Lykos CRL. Rick Doblin, PhD, founder and president of MAPS, said in the briefing that FDA changed the goalposts in light of the study design issues the Agency raised in the CRL but not during Lykos' extensive "'discussions with FDA about every single aspect of the protocol design' in the Special Protocol Assessment process." According to Doblin, "researchers had worked with the FDA to create an effective double-blind study design, as the design is notoriously difficult when working with psychedelic drugs." Doblin also noted that the Agency's letter did not address Lykos' amendment that spoke to some of the issues FDA raised in its CRL. While the CRL was not welcome news for Lykos and other stakeholders, per MAPS, "Lykos will continue negotiations with the FDA." The company has one year from the date of the CRL to resubmit or take other actions pursuant to the Agency's regulations. If not, FDA may consider the lack of response a request to withdraw the application. In reviewing the CRL, it is clear that while the Agency raised a number of issues for Lykos to address, the issues are addressable and so it may be a "no for now" rather than a "no forever." We are continuing to monitor developments on this front and will report on updates as they occur.
The mixed bag at the federal level is developing against the backdrop of some positive state-level activity across the country. Just recently, California Governor Gavin Newsom signed into law AB 1103, a bill aimed at fast-tracking psychedelics research for conditions such as PTSD and depression. Among the legislation's backers was a coalition of veterans who believe psychedelic therapies can help address the veteran suicide crisis. In speaking about the bill, Veterans Exploring Treatment Solutions (VETS) co-founder and former Navy SEAL Marcus Capone said, "After 13 years as a Navy SEAL and multiple deployments, I tried every conventional therapy available – none worked for me…Ibogaine gave me my life back. With AB 1103, California is leading – empowering researchers to advance rigorous studies with the urgency this work warrants." AB 1103, which goes into effect on January 1, 2026, will allow Schedule 1 and 2 drugs to be approved without having to wait for a meeting of the full Research Advisory Panel of California. Under the bill, researchers who can show that their FDA-approved study is already compliant with California law will be eligible to have their proposal approved by a smaller group of panel members rather than the full panel within a matter of days. This feature of the bill likely came about in response to an 11-month period last year during which the advisory panel did not meet.
The Texas Senate and House of Representatives approved this May House Bill 3717 and SB 2308, which would provide $50 million for a grant program and a public-private partnership to help bring ibogaine, a plant-derived psychoactive indole alkaloid, through FDA-approved clinical trials for opioid use disorder and other neurological and mental health conditions. Interestingly, former Texas Governor Rick Perry was a key advocate of the ibogaine legislation. Several U.S. combat veterans testified in support of the bills, including Marcus Luttrell, a former Navy SEAL, and Navy Cross and Purple Heart recipient.
New Jersey is not new to the psychedelics conversation, as the state lessened the severity of criminal penalties for the possession of one ounce or less of psilocybin all the way back in 2021. In 2022, State Senator Scutari introduced the "Psilocybin Behavioral Health Access and Services Act" to authorize the production and use of psilocybin to promote health and wellness. The proposal stalled in the Senate Health, Human Services and Senior Citizens Committee. However, Senator Scutari re-introduced "Psilocybin Behavioral Health Access and Services Act" in January 2024. The bill was approved by the Senate Budget Committee.
Another positive state-level development is Maryland's establishment in July 2024 of the Task Force on Responsible Use of Natural Psychedelic Substances, which was authorized by the state's General Assembly. The Task Force is charged with, among other things, studying: (a) existing laws, policies, and practices relating to the use of natural psychedelic substances; (b) the best available science and data on public benefits of responsible access to and use of natural psychedelic substances; and (c) opportunities to maximize public benefits of responsible access to and use of natural psychedelic substances. The task force issued an initial report, and is due to issue a final one in the coming days.
Yet another state exploring the potential of psychedelics is Minnesota. During the 2023 legislative session, the Minnesota Legislature established a Psychedelic Medicine Task Force (PMTF) to advise the body on the legal, medical, and policy issues associated with the potential legalization of psychedelic medicine in the state. Thus far, the PMTF has issued two legislative reports, one in January 2025 and one in February 2024. The more recent report is a staggering 191 pages, significantly longer than the report issued in 2024, possibly suggesting the task force is building the case for the legislature to advance a therapeutic psychedelics program during a forthcoming legislative session.
While the above background is helpful to understand the current policy, clinical, and development landscapes, it is also important to touch on the practical implications for providers, investors, and other stakeholders.
- Research is the immediate opportunity. With VA and state task-force activity, there will be more trials, and potentially public-private partnerships, especially programs that explicitly include veterans. Entities that can run compliant, high-quality trials or partner with academic medical centers are at an advantage.
- Regulatory complexity is a certainty. Federal scheduling, FDA decisions (and prior scrutiny), and a state-by-state mosaic of statutes, task-force recommendations, and ballot measure outcomes mean any business plan must be jurisdiction-aware.
- Reputation and compliance will be a market filter. Public skepticism (and legitimate safety concerns raised during federal advisory reviews) makes ethical protocols, rigorous data collection, credentialed therapists, and transparent consent processes essential. Programs that can demonstrate safety, equity, and good clinical governance will earn regulator trust.
For advisors and clinicians wanting to be front-of-mind as opportunities arise, now is the time to build partnerships with veteran organizations, design institutional review board (IRB)-ready protocols, and map state regulatory pathways. The combination of VA-backed research, state task forces and pilots, and active legislation in a variety of states means the next 12–24 months will be active.
As these developments continue to unfold, stakeholders with questions or an interest in engaging on these issues should contact us. We will continue to monitor legislative, regulatory, and research developments at both the federal and state levels and issue updates as warranted.
