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Psychedelic industry reacts to FDA’s MDMA decision, study retraction

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The U.S. Food and Drug Administration’s decision to reject MDMA-assisted therapy for post-traumatic stress disorder sent ripples through the psychedelic industry.

The FDA issued a complete response letter to Lykos Therapeutics on Friday for its new drug application for midomafetamine capsules, an MDMA-assisted therapy for PTSD in adults. The agency requested another Phase 3 trial to further study the drug’s safety and efficacy. The decision came just before the August 11 deadline for the agency’s ruling on the application.

The decision follows a contentious FDA Advisory Committee hearing in June, where panelists recommended against approval.

Study concerns

For the most part, official responses from psychedelic companies and other interested parties were relatively diplomatic, ranging from disappointment to cautious optimism about future prospects as the push to legalize continues.

Still, some industry observers have raised concerns about the process, claiming that “unverified accusations” from activist groups and a report by the Institute for Clinical and Economic Review (ICER) may have influenced the committee’s decision. Critics argued that Lykos was not given adequate time to address what they characterize as misinformation discussed during the hearing.

The controversy deepened when a prominent medical journal retracted three MDMA-related studies just a day after the FDA’s decision. The journal cited “protocol violations amounting to unethical conduct” at one of the study sites, as well as issues with disclosure of potential conflicts of interest.

“Several of the authors are affiliated with either the Multidisciplinary Association for Psychedelic Studies (MAPS) or MAPS Public Benefit Corporation (MAPS PBC), a subsidiary that is wholly owned by MAPS,” the notices stated. “As is stated in the Funding declaration, MAPS fully funded and provided the MDMA that was used in this trial, and MAPS PBC organised the trial.”

Allison A. Feduccia, a researcher who contributed to all three studies, accepted the journal’s decision but took issue with “the wording of the retraction notice.” Several other authors, however, openly disagreed with the retractions, including Rick Doblin, founder and president of MAPS.

Lykos also disagreed with the journal retractions. The company in a written response said that it “believes the identified issues should have been addressed through corrections” rather than retractions.

Lykos emphasized that “these are not the efficacy data that was submitted to the FDA, and this was not the basis for their decision to issue a Complete Response Letter.”

The company acknowledged a lapse in disclosure regarding a 2015 Phase 2 study.

“Originally, the publication authors chose to retain these data for sake of completeness, but that should have been disclosed to the journal and was not,” Lykos stated. They added, “We did not disclose the violations to the journal itself, an additional step we should have taken and regret not doing.”

Lykos said it has filed an official complaint with the Committee on Publication Ethics (COPE) “to review the process through which the journal came to this decision.” The company maintains that the articles “remain scientifically sound and present important contributions to the study of potential treatments for PTSD.”

Reactions

Here’s a sampling of how industry leaders responded to the news:

Rick Doblin, founder and president, Multidisciplinary Association for Psychedelic Studies (MAPS)

“MAPS and our supporters have been advocating for the development and supporting the FDA-approved research of MDMA-assisted therapy for more than 38 years; MAPS will continue working towards safe, legal access to this therapy for the more than 350 million people living with PTSD worldwide.

“Our collective commitment to MDMA-assisted therapy remains unwavering. MAPS remains fully focused on supporting culturally appropriate research, rigorous science, and drug policy reform that empowers citizen advocacy in all areas of the world including those with high incidences of trauma and limited resources.”

Amber Capone, CEO and co-founder, Veterans Exploring Treatment Solutions (VETS)

“While this is not the victory for psychedelic-assisted therapy we hoped for, we know that no battle is won without facing adversity. This development is merely another hurdle in our ongoing mission to end the veteran suicide epidemic.

“Roughly 20 veterans die by suicide every day. A recent study estimates the number could be as high as 44. This is unacceptable. The potential of MDMA-assisted therapy to help veterans heal from post-traumatic stress disorder (PTSD) remains paramount. We will not allow bureaucratic processes to deter us from advocating for approval of this transformative treatment.”

Domenic Suppa, COO, Rose Hill

“Although the FDA’s issuance of a CRL for the new drug application for MDMA-assisted therapy may initially present a hurdle, we at Rose Hill will not deviate from our efforts to continue research into these groundbreaking psychedelic treatments. Jamaica has been on the right side of history and permits legal and regulated access to psychedelics. Through our psychedelic-assisted retreats in Jamaica, we have seen the impact of psychedelic medicines and integrated therapy on individuals, particularly veterans.

“Our dedication to ensuring safe access to psychedelic-assisted therapies is as pressing as ever, and we are committed to facilitating access to these therapies for those in need. We are strongly positioned to support the FDA with our research partnerships and practical insights. Our commitment to individuals who are seeking efficacious mental health solutions remains resolute.”

Joe Perekupka, CEO, Freespira

“The FDA’s recent decision on MDMA underscores the complex landscape of mental health treatments. At Freespira, we recognize the urgent need for additional effective PTSD treatments but support the FDA’s commitment to patient safety when reviewing potential new treatments.”

Payton Nyquvest, founder and CEO, Numinus Wellness

“While this is a blow to all the incredibly positive and encouraging work that has been done to advance safe access to psychedelic therapy, which MAPS and Lykos have led the charge for, we remain unwavering and committed to doing all we can to make these important therapies available for all those suffering who need it most. We’re confident that further study will continue to show the efficacy of MDMA, and with many psychedelic compounds at the late stages of research, the pipeline of treatments to address severe conditions remains strong.”

Liam Bedard, executive director, PsyCan

“While the FDA’s decision is a setback for the approach taken by Lykos, this result cannot be generalized to MDMA-assisted therapy or psychedelic-assisted therapies at large. There are dozens of ongoing studies investigating MDMA, novel MDMA formulations, and a range of other psychedelic medicines as therapies for a variety of indications in clinical trials overseen by academic institutions and companies here in Canada and around the world.

“Several psychedelic drugs have received FDA designations enabling additional consultation on clinical design earlier in their respective trial phases, which are not precluded by the issues raised in Lykos’ case.”





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Nebraska medical cannabis regulations stall in legislative committee

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A Nebraska legislative committee voted 5-3 against advancing a bill designed to implement and regulate the state’s medical cannabis program, leaving legislators and advocates searching for alternative paths forward, according to the Nebraska Examiner.

The General Affairs Committee rejected Legislative Bill 677, sponsored by State Sen. Ben Hansen of Blair, during a Thursday vote where committee members declined to offer amendments to the legislation, the publication reported.

“I don’t want to shut all the doors right now, but some doors are closing, and they’re closing fast, and so we have to act,” Hansen told reporters after the vote, according to the Examiner.

Nebraska voters approved medical cannabis in November 2024, with residents legally permitted to possess up to 5 ounces with a healthcare practitioner’s recommendation since mid-December. However, the regulatory commission created by the ballot initiative lacks effective power and funding to regulate the industry.

Hansen described his legislation as “a must” for 2025 to prevent a “Wild West” scenario in the state’s cannabis market. The bill would have expanded regulatory structure through the Nebraska Medical Cannabis Commission and extended deadlines for regulations and licensing to allow more time for implementation, the Examiner noted.

Committee disagreements centered on proposed restrictions. A committee amendment would have prohibited smoking cannabis and the sale of flower or bud products while limiting qualified healthcare practitioners to physicians, osteopathic physicians, physician assistants or nurse practitioners who had treated patients for at least six months.

The amendment also would have limited qualifying conditions to 15 specific ailments including cancer, epilepsy, HIV/AIDS, and chronic pain lasting longer than six months.

State Sen. Bob Andersen of Sarpy County opposed allowing vaping due to concerns about youth drug use, while committee chair Rick Holdcroft suggested selling cannabis flower would be “a gateway toward recreational marijuana,” a claim Hansen “heavily disputed,” according to the Examiner.

Hansen now faces a difficult path forward, requiring at least 25 votes to pull the bill from committee and then needing 33 senators to advance it across three rounds of debate, regardless of filibuster attempts.

Crista Eggers, executive director of Nebraskans for Medical Marijuana, remained optimistic despite the setback.

“This will not be the end,” Eggers said, according to the outlet. “Giving up has never been an option. Being silenced has never been an option. It’s not over. It’s not done.”

The legislative impasse is further complicated by ongoing litigation. Former state senator John Kuehn has filed two lawsuits challenging the voter-approved provisions, with one appeal pending before the Nebraska Supreme Court. The state’s Attorney General is also trying to do something about the hemp question, akin to other states across the country.



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One of Las Vegas’ cannabis lounges closes its doors

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Nevada’s cannabis lounge experiment faces some expected growing pains, with one of just two state-licensed venues closing its doors after barely a year in business, according to the Las Vegas Weekly.

“The regulatory framework, compliance costs and product limitations just don’t support a sustainable business model,” said Thrive Cannabis managing partner Mitch Britten, who plans to convert the space into an event venue until regulations loosen up.

The closure leaves Planet 13’s Dazed Consumption Lounge as the only operational state-regulated cannabis lounge in Nevada. Dazed manager Blake Anderson estimates the venue attracts around 250 customers daily, primarily tourists. One other establishment, Sky High Lounge, has operated since 2019 on sovereign Las Vegas Paiute Tribe land exempt from state regulations.

Even with Nevada regulators conditionally approving 21 more lounge licenses, potential owners are struggling to meet the $200,000 liquid assets requirement – particularly social equity applicants from communities hit hardest by prohibition.

Recreational marijuana has been legal statewide since 2017, but public consumption remains prohibited. That’s created an obvious disconnect for the millions of tourists who visit Las Vegas annually but have nowhere legal to use the products they purchase. The state recorded roughly $829 million in taxable sales during the 2024 fiscal year.

“It always comes down to money, and it’s difficult to get a space if you can’t afford to buy a building. On top of that, getting insurance and finding a landowner who’s willing to lease to a cannabis business is a challenge in and of itself,” said Christopher LaPorte, whose consulting firm Reset Las Vegas helped launch Smoke and Mirrors, told Las Vegas Weekly.

Many think the key to future success lies in legislative changes that would allow lounges to integrate with food service and entertainment – playing to Las Vegas’s strengths as a hospitality innovator. In the meantime, the industry will continue to adapt and push forward.

“Things take time,” LaPorte said. “There’s a culture that we have to continue to embrace and a lot of education that we still have to do. But at the end of the day, tourists need a place to smoke, and that’s what these places are.”



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Psyence Group consolidates its shares

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Psyence Group Inc. (CSE: PSYG) told investors that it will be consolidating all of its issued and outstanding share capital on the basis of every 15 existing common shares into one new common share effective April 23, 2025 with a record date of April 23, 2025. As a result of the consolidation, the issued and outstanding shares will be reduced to approximately 9,387,695 on the effective date.

This is the second time a Psyence company has consolidated shares recently. In November, its Nasdaq-listed associate, Psyence Biomedical Ltd. (Nasdaq: PBM), implemented a 1-for-75 share consolidation as the psychedelics company worked to maintain its Nasdaq listing.

Psyence Group reported earnings in February when the company delivered a net loss of C$3 million and was reporting as a going concern. At the end of 2024, the company said it had not yet achieved profitable operations, has accumulated losses of C$48,982,320 since its inception.

Total assets at the end of 2024 were C$11,944,478 and comprised predominantly of: cash and cash equivalents of C$10,611,113, other receivables of C$159,808, investment in PsyLabs of C$1,071,981 and prepaids of C$68,243.

Still, the company is pushing ahead. Psyence told investors that it has historically secured financing through share issuances and convertible debentures, and it continues to explore funding opportunities to support its operations and strategic initiatives. “Based on these actions and
management’s expectations regarding future funding and operational developments, the company believes it will have sufficient resources to meet its obligations as they become due for at least the next twelve months,” it said in its last financial filing.

The company said it believes that the consolidation will position it with greater flexibility for the development of its business and the growth of the company.

 



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