RN Collins (Series 2) No.6 of 20: Governance Design for Psychedelic Authorities: Lessons from Gaming & Utilities Commissions Policy Reform / Governance / Oversight Series | Cannabis Law Report | Where to buy Skittles Moonrock online

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RN Collins has written a series of 20 new articles for cannabis law report on 2026 Psychedelics & Legal Issues.

This is the sixth

Governance Design for Psychedelic Authorities: Lessons from Gaming & Utilities Commissions

Policy Reform / Governance / Oversight Series

Author RN Collins

Contact: https://www.linkedin.com/in/rn-collins/

EXECUTIVE SUMMARY

How should a state design the institution that governs psychedelic services? This question, which every state implementing a psilocybin program must eventually answer, has not received systematic analysis in the existing psychedelic policy literature. The three operational state programs — Oregon’s Oregon Psilocybin Services section within the Oregon Health Authority, Colorado’s split DORA/Department of Revenue structure, and New Mexico’s Department of Health-administered program — each embedded psilocybin oversight within an existing state agency rather than creating a purpose-built independent regulatory body. This approach was defensible given the early stage of these programs, their small market sizes, and the administrative complexity of establishing new state agencies. However, as the number of jurisdictions with regulated psychedelic programs grows and the programs themselves mature, the institutional design question becomes more pressing.

This article draws on the governance structures of two mature regulatory domains — state gaming commissions and state public utility commissions (PUCs) — to identify structural design principles applicable to psychedelic authorities. Both domains feature a long history of regulating sensitive, politically charged industries that operate at the intersection of public health, criminal law, commercial licensing, and consumer protection. Both domains have developed institutional solutions to the core governance problems that emerging psychedelic regulatory bodies will face: how to insulate regulatory judgment from political pressure; how to separate investigative and adjudicative functions; how to manage conflicts of interest for commissioners and staff; how to integrate consumer advocacy into regulatory proceedings; and how to build transparency mechanisms that allow public accountability without compromising the confidentiality interests of licensees.

The central conclusions of this comparative analysis are: (1) the Nevada two-tier model — a full-time investigative/executive board and a part-time adjudicative commission — offers the most directly applicable structural template for state psychedelic regulatory programs that have reached sufficient scale to warrant institutional independence, with specific trigger criteria proposed below for when that threshold is met; (2) the consumer advocate model developed in PUC regulation provides a critical missing element in all existing psychedotic oversight frameworks; and (3) the post-employment (“revolving door”) restrictions and conflict-of-interest prohibitions developed in gaming and utility regulation should be adapted and enacted for psychedelic authority commissioners and senior staff.

I. THE INSTITUTIONAL DESIGN PROBLEM IN PSYCHEDELIC REGULATION

A. Why Institutional Design Matters

Psychedelic regulatory programs will face sustained, well-organized pressure from multiple directions simultaneously: from the licensed operator community, which will advocate for lower barriers to entry, reduced fees, and relaxed compliance requirements; from public health and safety advocates, who will push for more restrictive standards and more aggressive enforcement; from civil rights organizations, who will monitor equity, access, and disparate enforcement outcomes; from Indigenous communities, who will seek recognition of traditional healing practices and protection against cultural appropriation; and from federal enforcement authorities, whose posture toward state psilocybin programs may shift with changes in administration.

The institutional design of a psychedelic regulatory authority determines whether its decisions in this contested environment will be principled and consistent or vulnerable to capture by whichever constituency has the most political access at any given moment. Gaming regulation’s history offers a cautionary tale: without institutional insulation from political direction, gambling licenses historically went to organized crime figures, corruption was widespread, and public trust was destroyed.¹ The creation of Nevada’s two-tier regulatory structure in 1959, following the federal Kefauver Committee hearings that exposed mob infiltration in Las Vegas operations, transformed gaming regulation and established the institutional model that has governed the industry for over sixty years.² The lesson for psychedelic policy is that institutional design is not a technocratic afterthought; it is a foundational determinant of whether a regulatory program achieves its statutory purposes.

B. The Specific Governance Challenges in Psychedelic Regulation

Psychedelic regulatory authorities face three governance challenges that distinguish them from most other licensing bodies. First, the subject matter — supervised consciousness-altering services — is inherently sensitive and stigmatized, creating political pressure on regulators that will vary significantly across election cycles and gubernatorial administrations. Second, the potential for client harm in the psychedelic services context is primarily relational rather than mechanical: the most serious risks (boundary violations, inadequate screening, coercive facilitation) arise in the facilitator-client relationship rather than in product defects, making inspection-based oversight limited in its protective capacity. Third, the programs are embedded in a context of ongoing federal illegality, which limits banking access, creates tax complications, and introduces the theoretical possibility of federal enforcement action against licensees operating in compliance with state law — a background risk that shapes both the willingness of operators to participate and the willingness of financial institutions to provide services.

II. THE NEVADA TWO-TIER MODEL

A. Structure and Functional Separation

Nevada’s gaming regulatory structure, established by the Nevada Gaming Control Act and codified at Nevada Revised Statutes Chapter 463, divides gaming oversight between two distinct bodies: the Nevada Gaming Control Board (NGCB), a three-member full-time agency that functions as the investigative and executive arm; and the Nevada Gaming Commission, a five-member part-time body that functions as the policymaking and adjudicative authority.³

The NGCB’s three members are appointed by the Governor to staggered four-year terms. At least one member must be a certified public accountant with five years of experience; one must have a background in investigation, law enforcement, or law.⁴ Members serve in a full-time capacity and are prohibited from possessing any direct pecuniary interest in gaming activities while serving.⁵ The NGCB conducts background investigations, premises inspections, and financial audits; when it believes discipline against a licensee is appropriate, it files a formal complaint and acts in the prosecutorial capacity.⁶

The Nevada Gaming Commission consists of five members appointed by the Governor to four-year terms, serving part-time. No more than three commissioners may be from the same political party.⁷ The Commission acts as the final authority on licensing matters — it may approve, restrict, limit, condition, deny, revoke, or suspend any gaming license.⁸ When the NGCB files a complaint, the Commission acts in the judicial capacity to determine whether sanctions should be imposed, with authority to conduct formal hearings, issue subpoenas, compel testimony under oath, and admit evidence.⁹

This two-tier structure creates functional separation between the agency that investigates and prosecutes (NGCB) and the agency that adjudicates (Nevada Gaming Commission). This separation is the structural foundation of due process in Nevada gaming regulation: a licensee facing a complaint has not been both investigated and tried by the same body. The Commission, operating in a quasi-judicial capacity, can evaluate the NGCB’s complaint with the same objectivity a court brings to a prosecutor’s case.

B. Enforcement Capacity

The NGCB’s Enforcement Division functions as a law enforcement agency, with 94 sworn enforcement agents who conduct criminal investigations, covert surveillance operations, and coordination with federal and local law enforcement on matters of mutual interest.¹⁰ The Investigations Division, which reviews the background of all gaming license and key employee applicants to determine their viability, business integrity, and suitability for licensure, currently has 64 professional staff and 8 administrative staff as reported in the NGCB’s October 2025 Informational Report — reflecting a reduction from earlier staffing levels as the division has refined its workforce composition.¹¹ Fines for gaming violations range from $25,000 to $250,000 per violation, or up to $1,000,000 for certain serious offenses involving organized crime or financial impropriety.¹²

In 2025, the Nevada Gaming Commission approved a $10.5 million settlement with Resorts World Las Vegas to resolve a 10-count complaint over failures to detect and report suspicious wagering linked to illegal bookmaking — the second-largest fine in Nevada gaming regulatory history.¹³ A $5.5 million stipulated settlement with Wynn Las Vegas, approved by the Commission in May 2025, resolved a six-count complaint related to illegal money transmission schemes used to recruit high-stakes foreign gamblers, with ongoing license conditions imposed.¹⁴ These enforcement actions illustrate that the two-tier structure produces credible, publicly documented enforcement outcomes — a feature that builds industry accountability and public trust simultaneously.

C. The Scalability Question: When Does the Two-Tier Structure Become Warranted?

The Nevada two-tier model is the most directly applicable structural template for state psychedelic regulatory programs — but this conclusion requires a threshold question that the comparative literature has not addressed: at what program scale does the institutional complexity and cost of a two-tier independent authority become justified, as opposed to a single-agency model embedded within an existing state department?

Oregon’s program as of Q3 2025 — 23 operational service centers, approximately 366 licensed facilitators, and an estimated 16,000 cumulative clients since launch — is operating at a scale orders of magnitude smaller than Nevada’s gaming industry, which involves hundreds of major licensees, thousands of key employee applicants annually, and billions of dollars in annual revenues that fund a fully staffed independent regulatory apparatus. Imposing a Nevada-scale two-tier structure on a program of Oregon’s current size would create administrative overhead that the licensing revenue base cannot support.

The model framework therefore recommends that the two-tier independent authority structure be triggered by the attainment of defined program scale thresholds, rather than adopted at program launch. The following criteria are proposed as trigger indicators that, when met, should prompt a statutory review and legislative determination of whether an independent authority is warranted:

— Licensee threshold: 50 or more active service center licenses, or 500 or more active facilitator licenses, within the jurisdiction;

— Client volume threshold: 10,000 or more cumulative clients served under the program;

— Revenue threshold: Annual licensing fee revenues sufficient to fund the independent authority’s operating budget without general fund supplementation, based on a cost estimate prepared by the licensing agency;

— Enforcement complexity threshold: Three or more contested disciplinary proceedings in a single calendar year requiring formal hearing procedures.

States that have not yet reached these thresholds should operate under a simplified single-agency oversight model — as Oregon, Colorado, and New Mexico have done — while building the governance infrastructure (complaint intake systems, documentation audit capacity, advisory board accountability mechanisms) that will support a transition to independent authority status when scale warrants it. The trigger criteria should be written into the enabling statute at program launch so that the pathway to independence is legislative and transparent rather than dependent on future political will.

D. Transparency and Its Limits

The Nevada structure has transparency limitations relevant to psychedelic regulation. Nevada Revised Statutes section 463.120 provides a broad confidentiality exemption for all records involving work conducted by NGCB agents in its Enforcement and Investigations divisions, which has shielded enforcement decisions from public scrutiny in practice.¹⁵ Former Nevada Attorney General Frankie Sue Del Papa has argued that such secrecy undermines public trust in a regulated industry.¹⁶ For psychedelic regulation, where public trust is even more fragile and the political opposition more organized, the transparency limitations of the Nevada model argue for more aggressive public disclosure requirements in any adapted psychedelic governance framework.

E. The Tribal Gaming Commission Analog

The National Indian Gaming Commission (NIGC) has articulated governance principles for tribal gaming commissions that are directly applicable to psychedelic regulatory design. In its Bulletin No. 2022-5, the NIGC identified independence as the foundational requirement for effective gaming commission oversight: a well-run gaming commission must be “free to regulate without undue interference from the tribe’s leadership or from the gaming operation’s management.”¹⁷ The NIGC requires that a tribal gaming commission’s ordinance or law state explicitly that the commission is “an independent body” and that its purpose is “regulatory, not managerial.”¹⁸ These principles — independence, regulatory purpose clearly distinct from operational management — should be codified in the enabling statutes of all psychedelic regulatory authorities.

III. THE PUBLIC UTILITY COMMISSION MODEL

A. Structure and Governance Norms

State public utility commissions (PUCs), which regulate electric, gas, water, and telecommunications utilities, represent a different institutional tradition from gaming commissions but one equally relevant to psychedelic regulatory design. PUCs are quasi-judicial bodies that must balance multiple public interests — safety, affordability, reliability, environmental sustainability, and equity — across an industry characterized by high capital intensity, long asset lives, and significant public health and safety consequences.¹⁹

Most state PUCs have three to seven commissioners. In thirty-nine states, commissioners are appointed by the governor, typically with Senate confirmation; in eleven states, they are elected.²⁰ Terms range from four to six years, typically staggered to preserve institutional continuity. The California Public Utilities Commission (CPUC), for example, has five commissioners appointed by the Governor to six-year staggered terms with Senate confirmation.²¹ The Minnesota PUC has five commissioners with six-year staggered terms; by statute, no more than three commissioners may be from the same political party, and at least one must reside outside the seven-county metropolitan area.²²

PUC commissioners in most states are subject to financial conflict-of-interest prohibitions analogous to those in gaming regulation: commissioners may not hold a financial interest in any regulated utility. Utah statute prohibits commissioners from any pecuniary interest in regulated utilities and bans utility officers, agents, attorneys, and employees from soliciting or recommending commissioner appointments.²³ Nevada’s ethics rules prohibit post-service utility employment for one year.²⁴ Texas, following the 2021 Winter Storm Uri crisis, revised its PUC appointment criteria specifically to limit industry conflicts of interest.²⁵

B. The Consumer Advocate Model

Perhaps the most significant structural innovation of PUC governance that psychedelic regulation should adopt is the consumer advocate function. During the 1970s, rapidly rising energy prices galvanized state legislatures to create independent consumer advocate offices because individual customers could not realistically participate in the complex legal proceedings before utility commissions.²⁶ Consumer advocates are now established in most states, often as separate agencies, with authority to intervene in regulatory proceedings, present independent expert testimony, and advocate exclusively for ratepayer interests.²⁷

The consumer advocate model is directly applicable to psychedelic regulation — but the analogy requires refinement. PUC consumer advocates were created because ratepayers are captive: they have no practical alternative to the regulated utility and therefore no market exit option when service is inadequate. Psilocybin service clients are not captive in the same sense — they choose to seek services and can decline to return to a particular service center. The power asymmetry that justifies a client advocate function in the psychedelic services context rests on different, though equally compelling, foundations: first, the information asymmetry between facilitators (who understand pharmacology, therapeutic risk, and professional conduct standards) and clients (who do not); second, the vulnerability asymmetry arising from the altered state of consciousness during administration sessions, which temporarily limits a client’s capacity to assess and respond to professional misconduct in real time; and third, the anonymity constraint — clients are unlikely to organize into effective advocacy groups given the stigma associated with psychedelic service use, and they may be reluctant to complain publicly for fear of disclosure. These factors combine to produce a structural power imbalance that justifies a dedicated advocate even absent the utility model’s captivity rationale.

The California PUC’s Public Advocates Office is an independent organization within the CPUC that advocates “solely on behalf of utility ratepayers.”²⁸ Its separation from the commission itself — and its independence from the Governor’s direction — gives it credibility as a genuine representative of consumer interests rather than an administrative formality. A psychedelic client advocate office modeled on the Public Advocates Office would be empowered to investigate complaints, participate as a party in license disciplinary proceedings, conduct independent analysis of proposed fee structures and access standards, and submit annual reports to the legislature on client experience in the psychedelic services program.

C. Staff Independence and Advocacy-Advisory Role Separation

PUC governance literature identifies a significant structural design question — whether staff fulfill advisory roles (counseling commissioners) or advocacy roles (representing public interests as parties in proceedings) — and recommends separating these functions to maintain institutional integrity.²⁹ Some states (Nevada, North Carolina) permanently assign staff to one role or the other; others assign roles case by case (Oregon).

For psychedelic regulatory authorities, the advisory-advocacy distinction is particularly important. The technical staff who advise commissioners on whether to approve a facilitator training program and the staff who investigate complaints against licensed facilitators should not be the same personnel. The potential for confirmation bias — staff who have approved a training program being reluctant to find inadequacies when investigating graduates of that program — argues for distinct staffing structures within even a small regulatory body.

IV. SPECIFIC GOVERNANCE DESIGN ELEMENTS FOR PSYCHEDELIC AUTHORITIES

A. Commission Composition Requirements

Drawing on both the Nevada gaming model and the PUC model, the model psychedelic authority should be composed of five to seven members with the following characteristics: at least one member with clinical background in mental health, psychiatry, or addiction medicine; at least one member with legal or regulatory expertise; at least one member with public health or epidemiology expertise; at least one member representing Indigenous or traditional healing communities; at least one member with lived experience as a consumer of supervised psychedelic services; and no more than a specified majority (e.g., three of seven) from the same political affiliation. Members should serve staggered terms of four to six years to provide institutional continuity across gubernatorial administrations.

The requirement for at least one member with lived experience as a consumer is grounded in a well-established precedent: the FDA’s Patient Representative Program, which has since its inception incorporated patient and consumer representatives as voting or non-voting members on advisory committees precisely because lived experience surfaces practical considerations — regarding risk tolerance, access barriers, and the impact of proposed regulatory standards on actual users — that technically expert members without that experience are systematically unlikely to raise.³⁰ The FDA requires that its patient representatives have personal experience with a relevant disease or condition, the ability to remain objective while representing community concerns, and the knowledge to engage substantively with scientific evidence presented at committee meetings.³¹ The same criteria are appropriate for a psychedelic authority member with lived experience: the role requires not only having accessed psychedelic services but having the capacity to translate that experience into regulatory judgment that serves the broad population of current and prospective clients.

B. Independence Requirements

The model psychedelic authority should be structured as an independent regulatory body rather than a division of an existing state agency — once scale trigger criteria have been met (see Section II.C). Independence means: (a) appointment with Senate confirmation and fixed terms; (b) removal for cause only, not at will; (c) a budget funded by licensing fees rather than general appropriations, to limit the governor’s ability to defund the authority as a means of indirect control; (d) authority to hire its own legal counsel and experts; and (e) explicit statutory authority to promulgate binding rules and conduct adjudicative proceedings without gubernatorial approval.

Oregon’s OPS section, housed within OHA and dependent on OHA leadership for budget and rule adoption, is structurally vulnerable to direction from OHA’s director and the Governor’s office in ways that an independent commission would not be. The 2025 temporary rule issued by OPS addressing a service center hours-of-operation loophole illustrates that OPS has operational agility within OHA — but an independent authority would have broader authority to address systemic program issues without the layers of OHA approval that currently constrain OPS’s institutional capacity.

C. Conflict of Interest and Revolving Door Provisions

For commissioners, the model governance statute should require: (a) no financial interest in any licensed psilocybin business, including equity interests, debt instruments, and service contracts, during the term of service; (b) a one-year post-service prohibition on employment by or consulting for any entity licensed or regulated by the authority (analogous to Nevada’s one-year post-service utility employment ban); (c) annual financial disclosure requirements applicable to commissioners and designated senior staff; (d) a prohibition on ex parte communications between commissioners and regulated parties, with a publicly posted log of all contacts; and (e) a formal recusal procedure for commissioners with prior relationships with applicants or licensees.

D. Separation of Investigative and Adjudicative Functions

The psychedelic authority should replicate the Nevada gaming structure’s separation of investigative and adjudicative functions. The investigative function — background investigations of license applicants, compliance inspections, complaint investigations, enforcement recommendations — should be housed in a dedicated investigations and enforcement division with its own director and staffing, distinct from the commissioners who adjudicate contested licensing and enforcement matters. When the investigations division believes discipline is warranted, it should file a formal complaint with the commission, which adjudicates the matter in a quasi-judicial proceeding with full due process protections for the respondent.

This structural separation has direct implications for small-state programs like Oregon’s, where OPS has both licensing and enforcement functions within the same small administrative section. As these programs scale, the failure to separate investigative and adjudicative functions will increasingly produce due process vulnerabilities in contested proceedings and undermine public confidence in the agency’s impartiality.

E. Public Meeting and Transparency Requirements

PUC governance literature consistently identifies public participation and transparency as essential to institutional legitimacy. The model psychedelic authority should be required to: (a) hold regular public meetings with publicly posted agendas, live streaming, and archived recordings; (b) publish all proposed rules for public comment with a minimum 30-day comment period; (c) conduct public hearings on proposed rules and significant policy changes; (d) publish an annual report to the legislature describing program activities, licensing statistics, enforcement actions, demographic equity data, and financial performance; (e) maintain a searchable public database of all licensed entities with license status, action history, and ownership information; and (f) publish the text and findings of all final adjudicative decisions, with appropriate redaction for personally identifying client information.

The Pennsylvania Gaming Control Board’s requirement to submit annual reports to the governor and legislature, and comprehensive reports every five years outlining implementation of its mandate, provides a model for psychedelic authority reporting requirements.³²

F. Interagency Coordination Mechanisms

The split-agency model used in Colorado — with DORA overseeing facilitators and the Department of Revenue’s Natural Medicine Division overseeing the supply chain — requires formal interagency coordination mechanisms to function effectively. The model statute should require the two agencies to: (a) adopt joint rules on matters within both agencies’ jurisdiction within a specified period after enactment; (b) maintain a single public-facing licensing portal with information about all license types; (c) designate a permanent liaison position within each agency responsible for coordination; and (d) submit a joint annual report to the legislature covering all aspects of the program.

California’s PUC model — which coordinates among multiple divisions with formal reporting lines to both the Commission and the Legislature — provides a template for the internal coordination structures that a mature psychedelic regulatory authority should develop.³³

V. WHAT THE GAMING AND UTILITIES MODELS DO NOT PROVIDE

A. The Clinical Dimension and Medical Licensing Board Models

Neither gaming commissions nor utility commissions regulate activities that occur in an altered state of consciousness under the close supervision of a licensed professional. The clinical and therapeutic dimensions of psychedelic services regulation — facilitator competency standards, contraindication screening, adverse event response — have no meaningful analog in gaming or utility regulation. The model psychedelic authority must therefore draw on the governance structures of medical licensing boards, pharmacy boards, and behavioral health licensing authorities for the clinical oversight components of its mandate.

The DEA-state pharmacy board coordination framework offers an instructive operational model for clinical governance in a context of ongoing federal scheduling complexity. Under the CSA, DEA relies on state licensing boards to determine whether a practitioner is qualified to dispense, prescribe, or administer controlled substances, and DEA registration is explicitly conditioned on the practitioner holding a valid state license — a dual-authorization structure that embeds state professional judgment within federal regulatory authority.³⁴ This design — state boards setting clinical competency standards, federal authority conditioning its own registration on compliance with state determinations — is directly applicable to the psychedelic services context as rescheduling approaches. A state psychedelic authority that establishes facilitator competency standards will increasingly need coordination mechanisms with any future DEA registration requirements triggered by rescheduling, particularly for the clinical facilitator population whose healthcare licenses already trigger DEA registration obligations. Oregon House Bill 2387, introduced in the 2025 legislative session, takes a preliminary step in this direction by providing that medical license holders may not be disciplined by their state medical boards solely for providing psilocybin services as licensed facilitators — a provision that reduces the clinical governance conflict but does not resolve the DEA coordination question.³⁵

The Oregon Medical Board’s independent investigative process for complaints against licensed physicians — with its advisory committee of medical professionals assisting in assessing clinical conduct standards and its range of graduated disciplinary options from private reprimands to license revocation — provides the disciplinary governance template for facilitator conduct proceedings. Psychedelic facilitator discipline involving clinical judgment questions (adequacy of contraindication screening, appropriateness of the facilitator’s conduct during a difficult psychological episode) should draw on this clinical licensing board model rather than the gaming enforcement model, including the use of clinical advisory panels composed of experienced facilitators and mental health professionals to assist the adjudicative body in evaluating standard-of-care questions.

B. Federal Intergovernmental Coordination as Rescheduling Approaches

State gaming regulation has a federal intergovernmental dimension — primarily through the Indian Gaming Regulatory Act compact framework — but gaming is not federally prohibited. State psilocybin authorities face a governance design question with no analog in gaming or utility regulation: how should a state psychedelic authority coordinate with DEA, FDA, and HHS as those federal bodies begin active engagement with psilocybin regulation following the DEA’s August 2025 transmission of the Aggarwal rescheduling petition to HHS?³⁶

The DEA-state pharmacy board coordination model, described above, provides the most directly applicable structural template for this intergovernmental interface. Under that model: (1) state licensing boards set minimum competency and conduct standards for practitioners; (2) DEA conditions registration on valid state licensure, making state board determinations operative within the federal regulatory scheme; and (3) DEA and state boards maintain reciprocal information-sharing on license revocations and disciplinary actions that affect a registrant’s federal authorization.³⁷ A psychedelic authority designed for the post-rescheduling environment should include: a formal protocol for notifying the relevant DEA field office when a facilitator license is revoked or suspended, consistent with the information-sharing model used by state pharmacy boards; a liaison function designated to engage with FDA on clinical oversight standards as psilocybin moves through the Breakthrough Therapy review process; and a trigger mechanism — analogous to Colorado’s HB 25-1063 pharmaceutical trigger bill — that automatically aligns state program elements with any federal scheduling change.³⁸ These intergovernmental coordination mechanisms are design elements that state psychedelic authorities should build into their governance architecture now, before federal engagement intensifies, rather than retrofitting them reactively after rescheduling creates immediate compliance obligations.

C. Equity and Reparative Justice Dimensions

Gaming regulation’s historical focus on preventing organized crime infiltration did not incorporate equity or reparative justice mandates. PUC regulation has only recently begun to incorporate equity considerations into its statutory mandates. Psychedelic regulatory authorities must address equity explicitly and structurally in ways that neither gaming nor utility commissions were designed to do. This includes the sliding-scale fee structures and equity licensing fee reductions described elsewhere in this series, the client advocate function described above, and the Indigenous representation requirements for commission composition.

VI. RECOMMENDED GOVERNANCE DESIGN: THE INTEGRATED MODEL WITH PHASED IMPLEMENTATION

The model psychedelic regulatory authority integrates the most relevant structural features of gaming commissions and utility commissions with adaptations specific to the psychedelic services context. Because program scale varies substantially across jurisdictions and over time, the nine recommended components are organized into three implementation phases tied to the scale trigger criteria described in Section II.C:

Phase 1 — Day One (Required at Program Launch, Regardless of Scale)

1. Scale Trigger Clause. The enabling statute must include explicit trigger criteria (see Section II.C) specifying when the licensing agency is required to initiate a legislative review process to consider transitioning to an independent two-tier authority. This provision must be enacted at program launch so that the pathway to independence is pre-authorized and transparent.

2. Savings Clauses and Non-Nullification Language. Explicit statutory acknowledgment that the state program does not nullify federal law and that federal enforcement authority is preserved — reducing preemption risk from program inception.

3. Interagency Coordination Mechanism. Where oversight is divided among multiple agencies, a formal coordination structure with joint rules, a unified public portal, and a designated liaison function must be operational before the first license is issued. The DEA notification protocol for license revocations should be established at this phase.

4. Conflict-of-Interest Requirements (Basic). Financial interest prohibitions for all agency staff with licensing or enforcement authority, annual disclosure for senior staff, and ex parte communication logging should be implemented from program launch.

Phase 2 — Year One (Required Within 12 Months of First Licensee Operations)

5. Independent Client Advocate. A dedicated client advocacy function — modeled on the PUC consumer advocate — must be operational within 12 months of the first licensed service center opening. This can initially be structured as a position within the licensing agency rather than a fully independent office, with statutory authority to receive complaints and represent client interests in rulemaking proceedings.

6. Advisory Board Accountability Mechanism. Within 12 months of program launch, the licensing agency must establish a formal public process for responding to advisory board recommendations, including a written-reasons requirement for any deviation (see Document 2 of this series for detail on this mechanism).

7. Clinical Advisory Panel for Disciplinary Proceedings. A roster of qualified clinical advisors — experienced facilitators and licensed mental health professionals — should be established and available to advise on standard-of-care questions in disciplinary proceedings within 12 months of program launch.

Phase 3 — Mature Program (Appropriate After Scale Trigger Criteria Are Met)

8. Two-Tier Structure. A full-time executive board (three to five members) functioning as the investigative and executive arm, plus a part-time commission (five to seven members) functioning as the policymaking and adjudicative authority. The board files enforcement complaints; the commission adjudicates them. Full separation of investigative and adjudicative staffing at this stage.

9. Mandatory Composition Requirements and Strong Conflict-of-Interest Requirements. Statutory specification of expertise requirements (clinical, legal, public health, Indigenous/traditional healing, lived experience) and political affiliation limitations for commission members; one-year post-service employment prohibition; full annual financial disclosure for all commissioners and senior staff; formal recusal procedure.

This phased structure acknowledges the current fiscal and operational realities of state psilocybin programs — Oregon’s documented general fund dependency and the financial fragility of its service center market make a fully independent two-tier authority impractical at present — while pre-authorizing and structuring the governance evolution that program growth will eventually demand.

ENDNOTES

1. See Nevada Legislative Counsel Bureau, Research Division, Policy and Program Report: Gaming Control 1–2 (2007), https://www.leg.state.nv.us/Division/Research/Publications/PandPReport/11-GN.pdf (describing pre-1959 regulatory environment under the Nevada Tax Commission, which focused primarily on revenue collection and proved inadequate against organized crime infiltration); CDC Gaming, How Nevada Became the Gold Standard for Gaming Regulation and Eliminated the Mob (Jan. 2, 2026), https://cdcgaming.com/how-nevada-became-the-gold-standard-for-gaming-regulation-and-eliminated-the-mob/ (describing mob infiltration of Las Vegas casinos and federal pressure that preceded state regulatory reform).
2. Nev. Rev. Stat. § 463.010 (citing the Nevada Gaming Control Act); Nevada Legislative Counsel Bureau, supra note 1, at 1 (“The Nevada Gaming Commission was created by the 1959 Nevada Legislature”); PBS American Experience, Estes Kefauver: The Kefauver Committee and Nevada Gaming, https://www.pbs.org/wgbh/americanexperience/features/lasvegas-kefauver/ (describing 1950–1951 Kefauver Committee hearings and their role in spurring Nevada regulatory reform); CDC Gaming, supra note 1 (noting Governor Grant Sawyer championed the Gaming Control Act following the hearings, creating the Nevada Gaming Commission in 1959 as an independent agency with full funding and staffing).
3. Nev. Rev. Stat. §§ 463.022, 463.030 (creation and membership of Nevada Gaming Commission and Nevada Gaming Control Board respectively); Nevada Legislative Counsel Bureau, supra note 1, at 1–2 (describing NGCB as three-member full-time investigative and executive body; Commission as five-member part-time final licensing authority); Las Vegas Review-Journal, Nevada Gaming Control Board and the Gaming Commission: How Are They Different? (Mar. 12, 2024), https://www.reviewjournal.com/business/casinos-gaming/whats-the-difference-between-the-control-board-gaming-commission-3015656/.
4. Nev. Rev. Stat. § 463.040 (NGCB member qualifications: at least one member must hold a valid CPA license with five years of experience; at least one must have a background in law, law enforcement, or investigations).
5. Nev. Rev. Stat. § 463.060 (prohibiting NGCB members from holding any direct pecuniary interest in gaming activities while serving).
6. Nevada Gaming Control Board, Enforcement Division, https://www.gaming.nv.gov/divisions/enforcement-division/ (describing enforcement agents’ authority to conduct criminal investigations, covert surveillance, and federal law enforcement coordination); Nev. Rev. Stat. § 463.141 (initiation of proceedings to enforce gaming statutes).
7. Nev. Rev. Stat. § 463.023 (Commission member qualifications; political affiliation limitation: no more than three members may belong to the same political party).
8. Nev. Rev. Stat. § 463.022 (creation of five-member Commission); Nevada Legislative Counsel Bureau, supra note 1, at 1 (“The Commission is the State’s final administrative authority and is empowered to accept, deny, or modify the recommendations of the Board on any particular license application. The Commission also has the power to approve, restrict, limit, condition, deny, revoke, or suspend any current gaming license.”).
9. Nev. Rev. Stat. §§ 463.110, 463.141 (Commission hearing authority; Board initiation of proceedings); Nevada Legislative Counsel Bureau, supra note 1, at 1–2.
10. Nevada Gaming Control Board, Enforcement Division, https://www.gaming.nv.gov/divisions/enforcement-division/ (describing 94 sworn enforcement agents, covert surveillance capacity, and coordination with federal and local law enforcement); Nevada Gaming Control Board, Informational Report (Oct. 14, 2025), at p. 2, https://www.gaming.nv.gov/siteassets/content/about/board-informational-report—updated-october-2025.pdf (Enforcement Division: 94 sworn peace officers and 27 administrative staff).
11. Nevada Gaming Control Board, Informational Report (Oct. 14, 2025), at p. 2, https://www.gaming.nv.gov/siteassets/content/about/board-informational-report—updated-october-2025.pdf (Investigations Division: 64 professional staff and 8 administrative staff); Nevada Gaming Control Board, Investigations Division, https://www.gaming.nv.gov/divisions/investigations-division/ (“The Investigations Division investigates all gaming license and key employee applicants to determine their viability, business integrity, and suitability for licensure or approval.”).
12. Nev. Rev. Stat. § 463.310 (civil penalties for gaming violations ranging from $25,000 to $250,000 per violation, or up to $1,000,000 for certain serious offenses); Nevada Legislative Counsel Bureau, supra note 1.
13. Nevada Independent, Gaming Commission Accepts $10.5M Settlement to End Case Against Resorts World (Mar. 27, 2025), https://thenevadaindependent.com/article/gaming-commission-accepts-10-5m-settlement-to-end-case-against-resorts-world (Commission approved 4-0 vote to accept $10.5 million fine resolving 10-count complaint over anti-money laundering failures; second-largest fine in Nevada gaming regulatory history).
14. Nevada Independent, Wynn Agrees to Settle Anti-Money Laundering Violation, Pay $5.5 Million Fine to Nevada Regulators (May 16, 2025), https://thenevadaindependent.com/article/wynn-agrees-to-settle-anti-money-laundering-violation-pay-5-5-million-fine-to-nevada-regulators; Las Vegas Review-Journal, Wynn Third Las Vegas Casino Resort Fined for Money-Laundering Compliance Failure (May 23, 2025), https://www.reviewjournal.com/business/casinos-gaming/wynn-resorts-fined-5-5m-for-illegal-scheme-to-recruit-high-rollers-3376364/ (Commission approved 4-1 vote; $5.5 million fine resolved six-count complaint over illegal money transmission schemes; ongoing license conditions imposed).
15. Las Vegas Review-Journal, Nevada Gaming Control Board Won’t Disclose Investigation Records (May 23, 2024), https://www.reviewjournal.com/business/casinos-gaming/nevada-gaming-control-board-wont-disclose-investigation-records-3055942/ (LVRJ public records request denied; NGCB citing NRS 463.120 confidentiality exemption covering all investigative records of Enforcement and Investigations divisions); see also Nev. Rev. Stat. § 463.120 (governing confidentiality of Board and Commission records).
16. Id. (quoting former Nevada Attorney General Frankie Sue Del Papa on the impact of investigative secrecy on public accountability in gaming regulation).
17. National Indian Gaming Commission, Bulletin No. 2022-5: Independence of Tribal Gaming Commissions (2022), https://www.nigc.gov/wp-content/uploads/2024/12/Bulletin_No_2022_5_-_2018_94-3_99-3_UPDATED_Independence_of_Gaming_Commissions_their_Functions_FINAL.pdf (requiring that a tribal gaming commission be “free to regulate without undue interference from the tribe’s leadership or from the gaming operation’s management”).
18. Id. (requiring tribal gaming commission ordinance to state the commission “is an independent body” and that its purpose is “regulatory, not managerial”).
19. Rocky Mountain Institute, The Untapped Potential of Public Utility Commissions (July 2021), https://rmi.org/the-untapped-potential-of-public-utility-commissions/ (describing PUC mandates to regulate in the public interest by ensuring safe, reliable services at just and reasonable rates).
20. Third Act, Public Utility Commissions 101: A Force to Be Reckoned With, https://thirdact.org/blog/public-utility-commissions-a-force-to-be-reckoned-with/ (commissioners appointed by governor in 39 states; elected in 11 states; terms ranging from four to six years).
21. California Public Utilities Commission, About the CPUC: Commissioners, https://www.cpuc.ca.gov/about-cpuc/divisions (five commissioners appointed by Governor to six-year staggered terms with Senate confirmation).
22. National Association of Regulatory Utility Commissioners, Engagement Between Public Utility Commissions and State Legislatures 14 (2022), https://pubs.naruc.org/pub/83C8367C-D538-F18E-A92F-DC638F5E07E9 (Minnesota PUC: five commissioners, six-year staggered terms; no more than three from the same political party; at least one commissioner residing outside the seven-county metropolitan area).
23. Utah Code Ann. §§ 54-1-1 to 54-1-9, https://le.utah.gov/xcode/Title54/C54_1800010118000101.pdf (prohibiting commissioners from any pecuniary interest in regulated utilities; prohibiting utility officers, agents, attorneys, and employees from soliciting or recommending commissioner appointments).
24. Gem State Patriot, Who Guards the Gate (Oct. 2, 2025), https://gemstatepatriot.org/ai-datacenter-research/who-guards-the-gate/ (referencing Nevada’s one-year post-service utility employment prohibition).
25. Texapedia, Public Utility Commission of Texas, https://texapedia.info/utility-commission/ (Legislature expanded PUC to five members and revised eligibility requirements to limit conflicts of interest following 2021 Winter Storm Uri crisis).
26. National Association of Regulatory Utility Commissioners, Public Utility Commissions and Consumer Advocates 3 (2022), https://pubs.naruc.org/pub/21475F72-1866-DAAC-99FB-1E3EE0593D06 (energy price increases in the 1970s led state legislatures to create independent consumer advocate offices because individual customers could not realistically participate in complex utility commission proceedings).
27. Id. at 3–5 (describing consumer advocate functions: intervening in rate and regulatory proceedings; presenting independent expert testimony; advocating exclusively for consumer interests before the commission).
28. California Public Utilities Commission, Public Advocates Office, https://www.cpuc.ca.gov/about-cpuc/divisions (Public Advocates Office “is an independent organization within the CPUC that advocates solely on behalf of utility ratepayers”).
29. National Association of Regulatory Utility Commissioners, Public Utility Commissions and Consumer Advocates, supra note 26, at 7–8 (describing advisory versus advocacy staff role separation; noting that Nevada and North Carolina permanently assign staff to one role, while Oregon assigns roles on a case-by-case basis).
30. U.S. Food and Drug Administration, Advisory Committees: Critical to the FDA’s Product Review Process, https://www.fda.gov/drugs/information-consumers-and-patients-drugs/advisory-committees-critical-fdas-product-review-process (describing the FDA’s longstanding inclusion of consumer and patient representatives on advisory committees because they “present ‘real world’ concerns of the patient who is to be the potential recipient of the new medical product”); U.S. Food and Drug Administration, Advisory Committees Give FDA Critical Advice and the Public a Voice, https://www.fda.gov/consumers/consumer-updates/advisory-committees-give-fda-critical-advice-and-public-voice (each committee typically includes a consumer representative and, based on meeting topic, a patient representative who provides the patient or caregiver experience for a particular disease or condition).
31. U.S. Food and Drug Administration, FAQs About the FDA Patient Representative Program, https://www.fda.gov/patients/about-office-patient-affairs/faqs-about-fda-patient-representative-program (requirements for patient representatives: personal experience with the relevant disease or condition; ability to be objective while representing community concerns; knowledge about treatment options and research; ability to comprehend and discuss scientific data presented at committee meetings; patient representatives on drug and biologic committees serve as temporary voting members with full voting privileges).
32. National Association of Regulatory Utility Commissioners, Engagement Between Public Utility Commissions and State Legislatures, supra note 22, at 19 (Pennsylvania Gaming Control Board required to submit annual reports to governor and legislature; comprehensive reports every five years outlining implementation of statutory mandate).
33. California Public Utilities Commission, About the CPUC: Divisions, https://www.cpuc.ca.gov/about-cpuc/divisions (describing coordination among Energy Division, Water Division, Utilities Audits Risk and Compliance Division, Internal Audit, External Affairs, and General Counsel, with formal reporting lines to both the Commission and the Legislature).
34. Drug Enforcement Administration, Pharmacist’s Manual (2022), https://www.deadiversion.usdoj.gov/GDP/(DEA-DC-046R1)(EO-DEA154R1)_Pharmacist’s_Manual_DEA.pdf (“The DEA relies on state licensing boards to determine whether a practitioner is qualified to dispense, prescribe, or administer controlled substances. These boards also determine which drug categories (schedules) can be dispensed, prescribed, or administered.”); 21 C.F.R. § 1301.18 (practitioner registration requirements conditioned on valid state licensure); Wolters Kluwer, Controlled Substance Registration Requirements (July 5, 2024), https://www.wolterskluwer.com/en/expert-insights/controlled-substance-registration-requirements (describing how DEA relies on state board determinations for practitioner qualification and how state controlled substance registration and DEA registration operate as parallel requirements in most states).
35. Reason Foundation, State Psychedelics Legalization and Policy Roundup — June 2025 (updated Nov. 20, 2025), https://reason.org/commentary/state-psychedelics-legalization-and-policy-roundup-june-2025/ (describing Oregon HB 2387, which provides that medical license holders may not be disciplined by certain state medical boards for providing psilocybin services as licensed facilitators, aligning Oregon more closely with Colorado’s clinical facilitator pathway).
36. National Psychedelics Association, DEA Advances Psilocybin Rescheduling (Aug. 11, 2025), https://yournpa.org/dea-petition/; Marijuana Moment, DEA Advances Psilocybin Rescheduling Petition to Federal Health Officials (Aug. 21, 2025), https://www.marijuanamoment.net/dea-advances-psilocybin-rescheduling-petition-to-federal-health-officials-following-years-long-legal-challenge/ (DEA transmitted petition to HHS on August 11, 2025, for scientific and medical evaluation and scheduling recommendation); Westword, DEA Asks Department of Health to Review Psilocybin’s Federal Status (Sept. 13, 2025), https://www.westword.com/news/dea-asks-department-of-health-review-psilocybin-what-to-know-25359755/ (describing the significance of the HHS referral and implications for rescheduling timeline and state program impact).
37. Drug Enforcement Administration, Pharmacist’s Manual, supra note 34 (describing state-DEA information-sharing obligations for pharmacy license revocations and the DEA’s coordination role with state boards); Federal Register, Clarification of Registration Requirements for Individual Practitioners (Dec. 1, 2006), https://www.federalregister.gov/documents/2006/12/01/E6-20334/clarification-of-registration-requirements-for-individual-practitioners (describing how DEA registration is explicitly linked to state license authority, making state board revocations operative within the federal regulatory scheme and requiring separate DEA registrations per state to enable state-specific enforcement actions).
38. Colorado General Assembly, HB25-1063 — FDA-Approved Crystalline Polymorph Psilocybin Use (enacted 2025), https://leg.colorado.gov/bills/hb25-1063 (removing psilocybin from Colorado’s controlled substances schedule for FDA-approved synthesized crystalline psilocybin products upon federal approval — the enacted model for a rescheduling-triggered automatic state law alignment provision).