LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 3852
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: MAY 8, 2024
SUMMARY
Synopsis: “Psilocybin Behavioral Health Access and Services Act”; authorizes
production and use of psilocybin to promote health and wellness;
decriminalizes, and expunges past offenses involving, psilocybin
production, possession, use, and distribution.
Type of Impact: Annual revenue and expenditure increases and decreases for the State
and local entities.
Agencies Affected: Department of Health; the Judiciary; Department of Law and Public
Safety; Department of Corrections; State Parole Board; Office of the
Public Defender; counties; municipalities.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Expenditure Impact Indeterminate
State Revenue Impact Indeterminate
Local Expenditure Impact Indeterminate
Local Revenue Impact Indeterminate
 The Office of Legislative Services (OLS) anticipates that the bill will both raise and lower the
annual revenues and expenditures of the State and local government entities by indeterminate
amounts. The OLS lacks sufficient information to quantify the fiscal impacts or future trends
in psilocybin use and production as there is currently no regulated market in the State for
psilocybin use and services. Moreover, the fees and penalties authorized under the bill to
regulate psilocybin use and production are to be established by future regulations promulgated
by the Department of Health.
BILL DESCRIPTION
This bill, designated the Psilocybin Behavioral Health Access and Services Act, establishes
a framework under the oversight of the Department of Health for the regulated production and
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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use of psilocybin in connection with behavioral health care and preventative behavioral health
treatment; decriminalizes the production, dispensing, and use of psilocybin by persons over 21
years of age; and expunges past and pending offenses for conduct involving psilocybin that is
authorized under the bill. Under the bill, the governing body of a county or municipality may
adopt reasonable regulations on the operation of psilocybin product manufacturers and psilocybin
service centers located within that county or municipality. The bill also establishes in the
department, the Psilocybin Behavioral Health Access and Services Advisory Board to provide
advice and recommendations to the department, upon request or upon the board’s own
initiative, concerning the implementation of the bill. Psilocybin is a chemical obtained from
certain types of fresh or dried mushrooms.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS anticipates that the bill will both raise and lower the annual revenues and
expenditures of the State and local government entities by indeterminate amounts. The OLS lacks
sufficient information to quantify the fiscal impacts or future trends in psilocybin use and
production as there is currently no regulated market in the State for psilocybin use and services.
Moreover, the fees and penalties authorized under the bill to regulate psilocybin use and production
are to be established by future regulation promulgated by the Department of Health upon the
adoption of the bill. The numerous fiscal impacts are itemized below.
Annual State revenues will grow because of: 1) application, license, and criminal background
check fees to be paid by persons and entities seeking to participate in the regulated production and
use of psilocybin; and 2) penalties and fines to be paid for violations of the regulatory provisions
established under the bill. The annual revenue gain will be somewhat counterbalanced by an
annual State revenue loss arising from the decriminalization of the production, dispensing, and
use of psilocybin by persons over 21 years of age, as collections from court filing fees and
penalties will decline.
Annual State expenditures will rise as a result of the regulation and oversight of the production
and use of psilocybin, the enforcement of the regulations, and the establishment and administration
of both a social opportunity program and an equitable access program. The bill will also lower
annual State expenditures as fewer psilocybin-related acts will enter the criminal justice system.
Further, one-time State expenditure decreases will arise from the dismissal of certain pending
psilocybin-related charges and the vacating of certain current convictions for such offenses.
Local entities will experience a revenue decline due to the loss of annual municipal fine and
court filing fee revenues, as fewer psilocybin-related disorderly persons and petty disorderly
persons offenses will be tried in municipal courts. Consequentially, annual municipal and county
government expenditures will shrink as county and municipal prosecutor’s offices will prosecute
fewer psilocybin-related disorderly persons and petty disorderly persons offenses, municipal
courts will try fewer such cases, and fewer defendants will be convicted to county jail terms.
Further, one-time municipal and county expenditure decreases will accrue from the dismissal of
certain pending psilocybin-related charges and the vacating of certain current convictions for such
offenses.
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Annual municipal and county government expenditures may grow related to the
implementation of optional regulation and oversight, as permitted under the bill, on the operation
of psilocybin product manufacturers and psilocybin service centers located within that county or
municipality.
For reference, two states, Oregon and Colorado, have adopted laws that legalize and regulate
the use of psilocybin. Prior to implementation, the Oregon Secretary of State estimated the state
would incur $7 million over the mandatory two-year development period of the law. Once a
program is established, ongoing costs were estimated at $3.1 million annually, with fees and taxes
assessed under the law expected to cover these costs. Fiscal estimates for the Colorado policy
indicates that annual State spending would increase by up to $4.0 million to develop a regulatory
framework for the law, while annual revenue collected once the program is implemented would
be approximately $3.0 million. As implementation in Oregon began in January 2023 and the
Colorado law is still in development, actual costs are unknown. The OLS notes that these examples
do not provide any fiscal impact for decriminalizing, and expunging past offenses involving,
psilocybin production, possession, use, and distribution.
Section: Human Services
Analyst: Sarah Schmidt
Lead Research Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).