A Regulated Trip: What New Mexico’s Psilocybin Law Means For Work
New Mexico has legalized medical psilocybin, becoming the first state to launch a clinician-administered program under medical oversight. This landmark law could reshape workplace policies around safety, disability accommodations, and drug testing as psychedelic therapy enters mainstream healthcare.
Magic mushrooms are now medicine in New Mexico. And that shift could have ripple effects in the workplace.
This spring, Governor Michelle Lujan Grisham signed Senate Bill 219, the Medical Psilocybin Act, into law, making New Mexico the third state to legalize psilocybin for medical use. Unlike Oregon and Colorado, which adopted their psilocybin programs through ballot initiatives, New Mexico enacted its law through the legislative process. That distinction is more than procedural. It reflects an institutional shift toward integrating psychedelic therapy into the framework of state-managed healthcare.
The law took effect on June 20, 2025, and requires full program implementation by December 31, 2027. With that, New Mexico becomes the first state to create a clinician-administered psilocybin program governed by medical oversight, not consumer access. As psilocybin therapy enters a regulated medical model, employers must now examine how psilocybin intersects with workplace safety, disability accommodation, and drug policy enforcement.
Psilocybin’s Reintroduction as Medicine
Psilocybin is a naturally occurring psychedelic compound found in certain mushrooms. Once ingested, it metabolizes into psilocin, which affects cognition, mood, and perception. Although it remains a Schedule I substance under federal law, psilocybin has reemerged over the past decade as a potential breakthrough therapy for severe mental health conditions. Peer-reviewed research continues to highlight its therapeutic potential in treating major depression, PTSD, substance use disorders, and end-of-life distress.
New Mexico’s legislation embraces this emerging science by establishing a medical-use program in which licensed clinicians, not dispensaries, administer psilocybin in approved therapeutic settings. The Department of Health is responsible for creating treatment protocols, licensing standards, clinician training, and oversight mechanisms. The Act also establishes both a research fund and a treatment equity fund to expand access and support clinical study.
Psychedelic wellness expert Cesar Marin sees the program as a reflection of how far public understanding has evolved. “We’re not talking about the free‑wheeling psychedelic trips of the 1960s anymore,” Marin says. “We’re seeing most states consider or enact some form of psychedelic policy reform, and that momentum helps people feel more comfortable with the intentional, therapeutic use of psilocybin.”
Qualifying conditions are narrowly defined to include treatment-resistant depression, PTSD, substance use disorder, and terminal illness. All treatment must occur in controlled environments with preparatory and integration sessions surrounding the administration of psilocybin. Psilocybin and psilocin are removed from the state’s list of Schedule I controlled substances when used in accordance with the law, and services provided under the Act are exempt from New Mexico’s gross receipts tax.
Legal Protections Without Workplace Requirements
The Medical Psilocybin Act offers strong protections for individuals operating within its boundaries. Licensed clinicians, producers, and qualified patients cannot be prosecuted under state law, and individuals on probation or awaiting trial may participate in treatment without jeopardizing their legal status. However, the Act stops short of granting any employment-based rights. It does not require employers to accommodate psilocybin use, nor does it prevent adverse action based on lawful participation in the program.
That omission is deliberate and significant. While patients may legally participate in psilocybin-assisted therapy under state law, the federal classification of psilocybin as a Schedule I substance remains unchanged. And unlike medical cannabis laws in some states, New Mexico’s psilocybin law provides no employment protections, no retaliation standard, and no accommodation framework.
Still, employers should not assume the workplace will remain untouched.
A New Compliance Challenge for Employers
“New Mexico legalizing medical psilocybin is a huge step toward bringing these treatments out of the shadows and into mainstream medicine,” says Marin. “When folks see local leaders endorsing these programs, it lowers the fear factor and makes it easier for someone who’s curious to explore them.”
That shift in perception could soon reach the workplace. Employers may begin receiving accommodation requests from individuals participating in medically supervised psilocybin therapy for conditions like PTSD, treatment-resistant depression, or substance use disorder. And while psilocybin remains a federally controlled substance, the conditions it treats are often considered disabilities under the Americans with Disabilities Act (ADA).
That means employers have a legal obligation to engage in the interactive process when an employee discloses a disability and requests accommodation, even if the employee’s treatment involves a Schedule I substance like psilocybin. The ADA does not require employers to accommodate federally illegal drug use, but it does require them to consider accommodations related to the underlying condition.
Employers are not obligated to tolerate on-the-job impairment or excuse safety violations. Still, if an employee reports off-duty participation in a licensed psilocybin program tied to a recognized condition, a flat denial without further inquiry could invite scrutiny under disability discrimination laws.
Testing vs. Impairment: Where Policy Meets Practicality
Psilocybin presents unique challenges when it comes to workplace drug testing. Unlike THC or opioids, psilocin, the active compound after ingestion, is not included in most standard employment drug panels. That means employers may be flying blind when it comes to detecting recent psilocybin use unless they specifically request an expanded panel.
“A person can be actively hallucinating due to psilocybin use and still pass a standard workplace drug test,” says Dr. Todd Simo, Chief Medical Officer at HireRight. “Psilocin, the active compound, doesn’t show up in most drug panels unless an employer specifically includes it. That’s why training managers to recognize signs of impairment and providing a clear path to escalate reasonable suspicion are more effective strategies. For employers especially concerned, developing a reasonable suspicion panel that includes psilocybin and disclosing it to employees in advance can also help mitigate misuse.”
Given that reality, employers may want to prioritize impairment-based enforcement strategies over reliance on traditional drug screening. While testing has its place, especially in post-accident investigations or in regulated industries, training supervisors to recognize signs of real-time impairment and respond consistently under internal policy is likely a more practical approach for most workplaces.
Preparing for Disclosure and Dialogue
Employers should take this opportunity to review and, where necessary, revise internal policies addressing drug and alcohol use, workplace impairment, and reasonable accommodations. Clarity around off-duty substance use and on-duty safety expectations will be essential. HR teams should also ensure that accommodation request procedures are equipped to handle emerging treatment disclosures, particularly where mental health conditions are involved.
Equally important is creating an environment in which employees feel safe discussing mental health. Psilocybin’s path to medical legitimacy mirrors, in many ways, the evolution of medical cannabis and broader mental health parity. For employers, staying ahead of these developments will require not only legal awareness but organizational empathy.
The Bigger Picture
New Mexico’s Medical Psilocybin Act signals more than therapeutic access. It reflects a policy evolution, one where lawmakers, not just voters, are beginning to treat psychedelic medicine as a legitimate part of behavioral healthcare. The state’s approach shifts the narrative from stigma to structure, putting psilocybin in the hands of trained clinicians operating under medical oversight. And while the law places no new obligations on employers, it surfaces a timely question: what does it mean to support mental health in a world where the frontier of treatment is changing?
For employers, that shift invites action. It’s time to revisit drug policies, reconsider testing strategies, and refine accommodation practices. As state-level momentum builds around psychedelics, employers don’t need to endorse these therapies, but they do need to understand them. Because in the modern workplace, curiosity can be a better compliance strategy than surprise.
Release Date: August 21, 2025
Alonzo Martinez
Alonzo Martinez is Associate General Counsel at HireRight, where he supports the company’s compliance, legal research, and thought leadership initiatives in the background screening industry. As a senior contributor at Forbes, Alonzo writes on employment legislation, criminal history reform, pay equity, AI discrimination laws, and the impact of legalized cannabis on employers. Recognized as an industry influencer, he shares insights through his weekly video updates, media appearances, podcasts, and HireRight's compliance webinar series. Alonzo's commitment to advancing industry knowledge ensures HireRight remains at the forefront of creating actionable compliance content.