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Oregon Measure 109

On November 3rd 2020 Oregonian’s voted to pass Measure 109 legalizing the use of psilocybin “magic mushrooms” as a mental health treatment in Oregon. Proponents claim that psilocybin “sessions” can be used to treat, anxiety, depression, and addiction disorders, among others.  Passing the measure starts the over two-year process for the Oregon Health Authority “OHA” to create the processes for regulating the industry.

There are no provisions prohibiting profiting from any of the various activities associated with offering psilocybin as a mental health therapy. Potential activities include producing, processing, transporting, administrating, or selling psilocybin. Specifically, licenses will be issued for manufacturing psilocybin, operating a psilocybin service center, facilitating psilocybin services, and testing psilocybin products.


Federal Regulations

According to the Controlled Substances Act, psilocybin among other “psychedelic” substances is considered a schedule one drug and is federally illegal. Like Marijuana manufacturing, selling, or possessing psilocybin is a federal crime.

Although, at the federal level, there has been a political tug of war to honor and protect state’s rights over their decision to decriminalize, most states have now implemented some sort of marijuana program, if not having legalized it all together. But, one thing remains, congress’s treatment of the tax implications of enterprises profiting from the “trafficking” of these schedule one substances.

Schedule One classification and IRC 280E

Contrary to the definition of a schedule one drug having no medical benefit, cannabis, and now psilocybin, are being legalized for medical purposes at the state level. However, the federal government further penalizes these industries through the implementation and enforcement of a tax code call IRC 280E.

Although, it is too early for businesses to legally profit from psilocybin, if it is not removed as a schedule one substance from the Controlled Substances Act, it will also be subject to 280E. For more information on how psilocybin could also be subject to these tax penalties visit our cannabis tax and accounting page.

Oregon is will begin receiving applications starting January 2nd 2023.

“Calyx CPA has been very helpful in getting our financial records running with QuickBooks along with training, so you don’t feel like you are lost. Even when I need a refresher on the program someone is always there to assist me. Calyx CPA like the calyx of a flower, there to provide that protective covering for your growing business. There has not been an issue or question that the Calyx team has not been able to handle, even with my constant pestering questions.”

Tyler Rolen, Owner of Rolen Stone Farms

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