Oregon Consolidates Psilocybin and Medical Cannabis Under One Regulator

PORTLAND – The Oregon Health Authority (OHA) officially completes its administrative consolidation of Oregon Psilocybin Services (OPS) and the Oregon Medical Marijuana Program (OMMP), giving rise to a unified oversight body formally called the Oregon Psilocybin and Medical Cannabis Section (PMCS). The newly combined body brings together two programs that, for years, operated on separate regulatory tracks under the same agency, sharing one increasingly common problem:

They were both spending more than they were taking in.

OHA first announced the consolidation in a July 1 email to Oregon Psilocybin Services industry partners. Angela Allbee, the current OPS manager, will lead the new combined section. Megan Lockwood, who managed OMMP, transitions to head the OHA Health Licensing Office. Allbee, who first communicated the change directly to industry figures, wrote that the two divisions will work closely over the transition to ensure continuity and stability for all regulated partners.

The OHA’s financial squeeze doesn’t exist in isolation. The budget shortfalls affecting both programs are driven in part by a statewide fiscal gap tied to federal Medicaid cuts that have rippled through Oregon’s broader public health infrastructure. OPS, which operates primarily on licensing fee revenue rather than general tax appropriations, has had limited room to absorb those pressures on its own.

That structural constraint sits squarely behind a parallel controversy now drawing sharp industry pushback. Concurrent with the merger announcement, OHA proposed doubling annual licensing fees: service center, manufacturer, and testing lab fees would climb from $10,000 to $20,000, while facilitator fees would rise from $2,000 to $4,000.

Heidi Pendergast, Oregon Director of the Healing Advocacy Fund, called the proposed increases “unprecedented” and out of line with comparable health licensing costs elsewhere in the state. She noted that individual psilocybin sessions already run between $850 and $3,000 – a price point that has tilted access toward wealthier, predominantly white clients. Pendergast also argued that it is common for new programs to require additional funding before becoming self-sustaining, and called for greater budget transparency before any fee hikes take effect.

OMMP, for its part, brings its own challenges to the consolidated structure. At its peak, the medical Cannabis program enrolled roughly 80,000 patients; that figure has declined to approximately 15,000 today – a steady contraction that accelerated after Oregon legalized adult-use Cannabis.

The structural strain shows up in operational specifics as well. Daniel Huson, head of Rose City Laboratories [Oregon’s only accredited psilocybin testing facility] told that his lab’s revenues last year didn’t even cover costs or the existing $10,000 annual licensing fee, and he indicated the lab would likely exit psilocybin testing by 2029 if the proposed doubling goes through, potentially leaving Oregon without any licensed testing facility at all.

The formal stand-up of the Oregon Psilocybin and Medical Cannabis Section is, at its core, a triage decision – two programs that cannot independently sustain themselves are being asked to find savings through shared overhead. That is defensible administrative thinking. What’s harder to reconcile is pairing structural consolidation with fee increases that operators say could force closures across the board. Oregon remains the only state where legal psilocybin services have operated at commercial scale for more than two years. What its regulators decide to do under fiscal pressure will serve as a reference point for Colorado, California, and every other jurisdiction watching from the sidelines.