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New York

PSYCHEDELIC REGULATIONS FOR BUSINESSES IN NEW YORK

New York does not currently license commercial psychedelic businesses. The state has no legal framework for psilocybin retailers, cultivation facilities, manufacturers, facilitators, or supervised service centers.

Under Section 3306 of the New York Public Health Law, several psychedelic substances remain classified as Schedule I controlled substances. These include:

  • Psilocybin
  • Psilocin, which New York law spells “psilocyn”
  • DMT
  • Ibogaine, which the statute lists as “ibogane”
  • Mescaline
  • Peyote
  • LSD
  • MDMA

Therefore, businesses cannot legally cultivate, manufacture, sell, distribute, or administer these substances under an ordinary New York business license.

No Commercial Psychedelic Licensing Program

Unlike New York’s cannabis market, the state has not created a regulatory agency or licensing system for psychedelics.

New York currently has no licenses for:

  • Psilocybin cultivation or manufacturing
  • Psychedelic retail sales
  • Supervised psilocybin services
  • Psychedelic-assisted therapy businesses
  • Commercial psychedelic retreats

Advertising a psychedelic service as therapeutic does not make the underlying activity legal. Healthcare providers also cannot prescribe or administer an unapproved psychedelic drug outside an authorized research setting.

Research and Clinical Trials

Psychedelic research may take place through properly authorized clinical trials. Researchers must follow federal and state requirements for controlled substances, institutional oversight, participant safety, and drug handling.

The FDA has published guidance for clinical investigations involving psychedelic drugs. However, authorization to conduct research does not permit public sales or general commercial treatment.

A company supporting a lawful clinical trial may still need specialized registrations, institutional approvals, research protocols, and controlled-substance security procedures.

Religious and Spiritual Use

Religious organizations do not receive an automatic exemption from New York’s controlled-substance laws.

Certain organizations may seek protection under federal religious-freedom laws. However, those protections are narrow and depend on the organization’s beliefs, practices, structure, and specific circumstances.

A church, retreat, or spiritual organization should not assume that describing psychedelic use as ceremonial makes possession, distribution, or administration legal. These organizations should obtain legal guidance before conducting any substance-related activity.

Ketamine Businesses Are Different

Ketamine is sometimes discussed alongside psychedelics. However, it has a different legal status.

Ketamine is an FDA-approved prescription drug and a Schedule III controlled substance. Licensed healthcare providers may use it within applicable medical and controlled-substance rules, including certain off-label uses.

As a result, properly structured ketamine clinics may operate in New York. This does not create a legal pathway for psilocybin, DMT, ibogaine, LSD, or similar Schedule I substances.

Payments and Banking

Businesses working in psychedelic research, education, mental wellness, or legal ketamine treatment may still face additional financial scrutiny. Banks and payment processors will often review the company’s services, marketing claims, licenses, ownership, billing practices, and involvement with controlled substances.

Approval depends on the business model and completed underwriting. A provider should never process illegal psychedelic sales or disguise the nature of a merchant’s activity.

Contact PayRio to discuss payment processing for an eligible psychedelic-adjacent, research, wellness, or alternative-medicine business.

PSYCHEDELIC LEGALIZATION HISTORY IN NEW YORK

New York has historically prohibited psychedelic substances under its controlled-substance laws. However, lawmakers have introduced several reform proposals in recent legislative sessions.

These bills reflect growing interest in decriminalization, medical access, clinical research, and treatment for veterans and first responders. Still, introducing a bill does not change current law.

Natural Psychedelic Decriminalization Proposal

Assembly Bill A628 would legalize certain activities involving natural plant- and fungus-based hallucinogens for adults who are 21 or older.

The proposal covers DMT, ibogaine, mescaline, psilocybin, and psilocin. It would allow personal possession, use, cultivation, gifting, and sharing. It also includes protections for certain supportive, spiritual, and religious services.

A628 remains in the Assembly Health Committee. It has not passed either chamber and has not become law.

Medical Psilocybin Act

Assembly Bill A2142A proposes a regulated medical psilocybin system.

The bill would create psilocybin permits, cultivator licenses, support-service certifications, health-screening requirements, and rules for qualifying medical conditions. It would place the program under the New York State Department of Health.

Lawmakers amended the bill and recommitted it to the Assembly Health Committee on May 8, 2026. It remains a proposal and does not authorize current commercial activity.

Veterans and First Responders Pilot Program

Senate Bill S1801A would establish a psilocybin-assisted therapy pilot program.

The proposed program would focus on New York veterans and first responders. It would also create a dedicated fund to support the pilot.

The bill was amended in January 2026 and remains in the Senate Health Committee. The proposed pilot is not currently operating.

Ibogaine Research Proposal

Senate Bill S1817 would require the Office of Addiction Services and Supports to encourage and assist clinical research involving ibogaine.

The research would focus on treatment for heroin, methamphetamine, and cocaine addiction.

On April 29, 2026, the Senate Alcoholism and Substance Use Disorders Committee approved the bill by a 6-0 vote and sent it to the Senate Finance Committee. It has not passed the full Legislature or become law.

What These Bills Mean for Businesses

These proposals show that psychedelic reform remains active in New York. However, they present different possible models.

A628 focuses on adult possession, personal cultivation, and supportive services. A2142A proposes a broader medical psilocybin framework. S1801A would create a limited pilot program, while S1817 focuses on ibogaine research.

None of these bills currently authorizes a business to sell psychedelic products or offer psilocybin services.

PSYCHEDELIC LEGALIZATION STATUS IN NEW YORK

Current Status: Illegal for general commercial use

New York law currently:

  • Prohibits unauthorized possession of psychedelic controlled substances
  • Prohibits unlicensed cultivation, manufacturing, sale, and distribution
  • Does not authorize psilocybin service centers
  • Does not license psychedelic facilitators or retailers
  • Allows qualifying research only through approved legal channels
  • Permits properly licensed medical use of ketamine under separate rules

New York has several active reform proposals. However, the state has not legalized or decriminalized psychedelics statewide.

Businesses should not begin plant-touching operations based on pending legislation. They should wait until a bill becomes law, regulations take effect, and the appropriate state agency begins issuing licenses or authorizations.

LAST UPDATED 9/4/2026 – Laws can be revised and updated frequently, so please keep this in mind.