Countries to Watch: Where Psychedelic Policy Is Moving Fastest – PSYCH: The Psychedelics As Medicine Report 3rd Edition

Key takeaways

• Canada has taken a comparatively liberal approach to drug classification and was the first G8 country to legalise cannabis. The same regulatory route that enabled medical cannabis—Section 56 exemptions—is now being applied to psychedelics.
• The Canadian Securities Exchange (CSE) has emerged as a hub for psychedelic companies, with over US$330 million raised in the first half of 2021.
• China has historically taken a strict stance on psychedelics and has attempted to classify ketamine as a controlled substance, yet has conducted a dozen clinical studies in recent years investigating ketamine’s effectiveness in a population of 1.4 billion people.
• Switzerland permits psychedelic-assisted therapy through compassionate use exemptions and has conducted more than 35 clinical trials, more than any country other than the United States.

Canada: A regulatory frontrunner

Canada has a long history of adopting progressive healthcare policies, including early moves on assisted dying and medicinal cannabis. In 2020, Health Canada granted over 20 exemptions allowing access to psilocybin, and in 2021 approved a clinical trial investigating MDMA-assisted therapy for treatment-resistant PTSD.

The study aims to identify best practices for medical use while generating safety and efficacy data required for regulatory approval.

Canadian political support for drug decriminalisation predates many international frameworks. While the UN published the Convention on Psychotropic Substances, the US enacted the Controlled Substances Act, and the UK passed the Misuse of Drugs Act (1971), Canada’s Le Dain Commission recommended loosening regulations and gradually decriminalising drugs.

Despite this, Canada passed the Controlled Drugs and Substances Act in 1996, classifying substances across eight schedules. The country later reversed course with the federal legalisation of cannabis in 2018, becoming the first G8 nation to do so. This shift influenced a UN Commission vote in 2020 to reclassify cannabis internationally.

Building on this trajectory, Health Canada has issued Section 56 exemptions to researchers, clinicians, drug developers, and patients seeking access to psilocybin. The initial exemptions were granted to palliative care patients to ease end-of-life distress, based on evidence showing psilocybin’s potential to treat depression and anxiety in this group.

The scope of Section 56 exemptions has since expanded, allowing both for-profit and non-profit organisations to cultivate, process, and study psilocybin-producing fungi. In October 2020, Numinus Wellness harvested Canada’s first legal psilocybin mushrooms.

Canada’s favourable regulatory climate has also shaped capital markets. As the Canadian Securities Exchange previously became a gateway for US cannabis companies, it is now serving a similar role for psychedelic firms such as Braxia Scientific. In the first half of 2021 alone, psychedelic companies raised over US$330 million on the exchange.

In parallel, Health Canada approved a clinical trial of MDMA-assisted therapy for treatment-resistant PTSD, alongside reinstating the Special Access Programme, making it easier for healthcare professionals to obtain restricted substances for patients with severe, treatment-resistant conditions.

Given this history and policy direction, many investors and operators believe Canada may become the first country to federally authorise psychedelic medicines, offering a potential first-mover advantage.

China: Restrictive laws, expanding research

Most psychedelic drug development has occurred in North America and Europe, yet China has quietly conducted around a dozen clinical trials investigating ketamine and, more recently, psilocybin. These studies are particularly significant given China’s large and ethnically diverse population, which is underrepresented in Western clinical research.

China enforces some of the world’s strictest drug laws, including the use of capital punishment in severe cases, and has repeatedly urged the UN to classify ketamine as a controlled substance—despite its status as an essential medicine elsewhere.

At the same time, China has carried out a number of tightly controlled clinical studies, placing it on par with Israel and close to the UK in terms of psychedelic research volume. Ketamine has been the primary focus, with a smaller number of studies examining psilocybin.

These trials have major implications for regulators and researchers globally, as they provide data from non-Western patient populations and enable broader generalisation of clinical outcomes.

Notable studies include a 2015 investigation involving over 120 ketamine-dependent patients, examining correlations with psychotic and depressive disorders. In 2018, neuroscientists at Zhejiang Chinese Medical University published findings identifying how ketamine alters brain activity, pointing toward molecular targets for safer, more effective antidepressant development.

In addition, Wuhan General Group, through its subsidiary M2BIO, is exploring psilocybin-based therapies for treatment-resistant depression, anxiety, PTSD, and addiction. These initiatives could eventually support regulated psychedelic treatments in China and across Asia, where healthcare policies often reflect China’s regulatory stance.

Switzerland: A long-standing research hub

Switzerland occupies a unique place in psychedelic history, closely associated with Albert Hofmann, who synthesised LSD in 1938 and later isolated psilocybin and psilocin. Despite its small size, Switzerland has conducted the second-largest number of psychedelic clinical trials worldwide, surpassed only by the United States.

The country passed the Narcotic Drugs and Psychotropic Substances Act in 1951, regulating psychedelic use for medical and scientific purposes. Following a rise in heroin overdoses in the early 1970s, Switzerland adopted a harm-reduction-focused drug policy, shaping its pragmatic regulatory approach.

In 1988, Switzerland legalised psychedelic-assisted therapy, allowing clinicians to prescribe LSD and MDMA. Group therapy models were introduced to reduce costs and increase access. Between 1988 and 1993, nearly 200 patients received treatment under this framework.

From 2007, Switzerland expanded compassionate use programmes for LSD-assisted therapy and in 2012 conducted MDMA trials for treatment-resistant PTSD. Further studies explored optimal dosing, palliative care applications, and therapeutic mechanisms, supported by the Swiss National Science Foundation.

Swiss regulators have since authorised over a dozen patients to access MDMA and LSD in therapeutic settings. While early protocols focused on individual therapy to align with regulatory expectations, group therapy trials were approved in 2017, building on earlier data.

In 2018, Switzerland pioneered fMRI studies examining LSD’s effects on brain activity, identifying changes in the default mode network and increased connectivity in the thalamus and cerebral cortex.

In 2020, MindMed acquired data and patent rights from psychedelic research conducted at University Hospital Basel over a ten-year period. That same year, Switzerland approved MindMed’s phase IIa trial investigating LSD for ADHD and a phase I trial combining LSD and MDMA. The first clinical trial using both compounds together began in 2021.

With over 35 clinical trials completed, Switzerland has established the infrastructure, regulatory clarity, and scientific expertise required to remain a global leader in psychedelic-assisted therapy research.