Speaker 1: This is Bloomberg Law with June Bresso from Bloomberg Radio.
Speaker 1: In a few months that Elon Musk has been at
Speaker 1: the helm of Twitter, there's been chaos at the social
Speaker 1: media platform, his laying off more than half of Twitter's workforce,
Speaker 1: quickly issuing rules and policies that have often led to
Speaker 1: lightning fast reversals soon after being made public, suspending people
Speaker 1: from the platform for questionable reasons, tweeting misinformation, posting tasteless jokes,
Speaker 1: and scaring off advertisers with his antics. On Tuesday, Musk
Speaker 1: announce plans to find someone else to run the company
Speaker 1: after his own Twitter poll showed almost fifty eight percent
Speaker 1: of voters wanted him to step down. My guest is
Speaker 1: Eric Cally, professor at Columbia Law School. Musk plans to
Speaker 1: resign as CEO as soon as I find someone foolish
Speaker 1: enough to take the job. Who would be foolish enough
Speaker 1: to take a job when they'll be CEO in name only.
Speaker 1: It's an interesting job advertisement. To be sure, I'm not
Speaker 1: really sure that I think we have the one person
Speaker 1: who is foolish enough to take the job and as
Speaker 1: Elon Busk, but it makes it even harder when he
Speaker 1: has said, yes, I'm gonna find a CEO, but I'm
Speaker 1: still gonna be in charge of a subsidiary part of Twitter.
Speaker 1: So how does that CEO even operate when you're controlling
Speaker 1: shareholder is also running one of your division. Can the
Speaker 1: CEO discipline Mr Bosk for failure to perform? It's it's
Speaker 1: a very very precarious situation. So, you know, managing Twitter
Speaker 1: is already a pretty big ask. Managing it when you
Speaker 1: know you are the boss to the person who is
Speaker 1: your boss is gonna be an even bigger lift. So,
Speaker 1: you know, I'm not really sure he's gonna find a
Speaker 1: lot of takers, or to the extent that he does
Speaker 1: find takers, they are largely going to be sort of
Speaker 1: lieutenant to him in any respect. And that's white, frankly,
Speaker 1: doesn't help with some of the other challenges that Mr
Speaker 1: Busk is facing, particularly from his shareholders and investors at
Speaker 1: other companies, and notably I'll the tesla here. You know,
Speaker 1: they have become much more audibly uppity about you know,
Speaker 1: his travails over at Twitter. Uh, and whether that that
Speaker 1: entire enterprise is not only distracting him but may also
Speaker 1: be you know, sort of contrary to the better interests
Speaker 1: of Tesla in terms of developing its markets and make
Speaker 1: sure it's products are reliable and coming off the production line.
Speaker 1: You know, heading into a very very challenging period of
Speaker 1: time for Tesla. Shareholders are agitated after a drop in
Speaker 1: the company's value this year, and some have urged the
Speaker 1: board to replace Musk. But is that board ever going
Speaker 1: to do anything like that. Possibly it would be quite
Speaker 1: a challenge to do so, give and what a central
Speaker 1: role he has and continues to play at Tesla. It's
Speaker 1: important to realize that that Mr Munk, compared to Twitter,
Speaker 1: Mr Muski, is only about shareholder at Tesla, and that's declining,
Speaker 1: you know, every time I pick up the newspaper. So
Speaker 1: he's you know, selling off more and more shares of Tesla.
Speaker 1: So it's not um completely out of the out of
Speaker 1: the realm of possibility that he might end up being
Speaker 1: moved out as the CEO of Tesla. But you know,
Speaker 1: it's not really clear whose interest ultimately that serves as
Speaker 1: the alternative is to really find someone to take over
Speaker 1: Twitter and for him to sort of concentrate in you know,
Speaker 1: a much more deliberative way on what's happening over at
Speaker 1: at Tesla. That's sort of where he his bread and
Speaker 1: butter and his power alley is anyway, and social media
Speaker 1: has always, you know, seemed to be a bit of
Speaker 1: a sideline for him. So, you know, in many respects,
Speaker 1: if it's one we're sort of thinking, you know, Mr
Speaker 1: Muski needs to be put to his highest and best use,
Speaker 1: and he has to be thinking this as well. You've
Speaker 1: got to figure it is over at Tesla and not
Speaker 1: at Twitter, but it's not clear at least at this stage.
Speaker 1: That's the way that things are going to evolve over time.
Speaker 1: He's you know, put himself into kind of an an
Speaker 1: odd situation where he's made a gigantic, undiversified bet in
Speaker 1: Twitter's future success. It's gonna be you know, quite a
Speaker 1: slog to see how that plays out. He may not
Speaker 1: be able to help himself, but to you know, attend
Speaker 1: to micromanaging things over at Twitter simply because of the
Speaker 1: large stake that he has wrapped up in it. Uh.
Speaker 1: Contrary when you think about Tesla, Yeah, Tesla's lost a
Speaker 1: lot of market value. Uh, it's lost it in part
Speaker 1: because of the crowded base that electric vehicles are increasingly
Speaker 1: becoming Tesla is no longer the only player in this area.
Speaker 1: Now some of the big traditional automakers are coming in
Speaker 1: in both feet into the pool, and that's just going
Speaker 1: to create a much more challenging environment, not to mentioned
Speaker 1: the macro economic environment in which carmakers all find themselves.
Speaker 1: And so this is gonna be a trajectory of of
Speaker 1: Tesla and how to steward it through that coming trajectory
Speaker 1: is going to be a big challenge to whoever is
Speaker 1: at the helm of Tesla. And it sort of makes
Speaker 1: sense from the Tesla shareholders perspectives that they don't want
Speaker 1: someone that is, you know, kind of encumbered with various
Speaker 1: types of of distractions that may be you know, independent
Speaker 1: or possibly antagonistic to the best interests of Tesla. And
Speaker 1: you know, that's another issue that I think is a
Speaker 1: hard one to figure out here. You know, Mr Musk's
Speaker 1: public presence over Twitter and his you know, continued inability
Speaker 1: to to muzzle his own tweets have also you know,
Speaker 1: taken a turn in a fairly political direction in the
Speaker 1: last month and a half, you know, and he has
Speaker 1: he sort of allied himself much more with sort of
Speaker 1: conservative ends of the political spectrum that's not necessarily consistent
Speaker 1: with how Tesla is going to be in a good
Speaker 1: position to further it's market share. You know, generally the
Speaker 1: folks that buy electric cars are not the cat diesel
Speaker 1: power baseball hat wearing truck, right. They tend to be,
Speaker 1: you know, the folks who were, you know, kind of
Speaker 1: worried about carbon footprint and global warming and they want
Speaker 1: to save the planet. And that crew tends to be
Speaker 1: disproportionately drawn from the more sort of centrist to progressive
Speaker 1: wings of the United States, at least as present. So
Speaker 1: by taking what seems to be kind of an antagonistic
Speaker 1: position over Twitter, there's like lots of reasons to believe
Speaker 1: that Mr Musk has actually, you know, not only gotten distracted,
Speaker 1: but he may even have cannibalized some of the best
Speaker 1: sources of loyal customers over at Tesla. Speaking of the
Speaker 1: latest controversy, because it seems like there's one controversy after another.
Speaker 1: He claims that he's a free speech absolutist, and yet
Speaker 1: there have been instances where he suspends the accounts of
Speaker 1: journalists and others where it seems like the reason is
Speaker 1: they said something critical about him. I mean, he can
Speaker 1: do whatever he wants, right, but what's the effect? Well,
Speaker 1: I guess, in fairness to Mr musk when he proclaimed
Speaker 1: himself to be a free speech absolutist, he didn't put
Speaker 1: an important modifier on that, which is who's free speech?
Speaker 1: And evidently he's an absolutist about his own free speech,
Speaker 1: but when it comes to other people's speech, maybe a
Speaker 1: little bit less of an absolutist position. I think this
Speaker 1: is an issue that has long worried people that you know,
Speaker 1: on some level. Once you get deep into the weeds,
Speaker 1: you know, part of a hard challenge that is in
Speaker 1: front of anyone who's doing some type of content moderation
Speaker 1: on platforms like this is how do you do it
Speaker 1: in a completely viewpoint neutral way. It's a big challenge,
Speaker 1: and it's something that probably needs to draw on a
Speaker 1: lot of different inputs. Your Musk has, maybe, you know,
Speaker 1: by necessity, decided that the inputs that he's been drawn
Speaker 1: are his own intuitions, and therefore, you know, many things
Speaker 1: that we never realized were dangerous forms of doxing turn
Speaker 1: out to be doxing from his perspective. You know, reporting
Speaker 1: news about Mr musk um criticizing Mr musk. You know
Speaker 1: that those are the types of things, at least if
Speaker 1: you've got a large following on Twitter or you know,
Speaker 1: in the in the public press, that may be something
Speaker 1: that that he either genuinely feels threatened by and feels
Speaker 1: is dangerous or just sort of doesn't want to give
Speaker 1: it a public airing on the platform that he owns,
Speaker 1: and has decided in a somewhat impetuous and a little
Speaker 1: bit vindictive way to pull the critics off of the platform.
Speaker 1: It's hard to imagine how that then sort of computes
Speaker 1: into a free speech absolutist position. I think he abandoned
Speaker 1: that long ago, and Twitter still, you know, has a
Speaker 1: chance to be what he or whoever is controlling it
Speaker 1: and maybe even owning it makes of it. But he
Speaker 1: is not um thus far in his track record stewarding Twitter,
Speaker 1: he has on acted in a way that seems consistent
Speaker 1: with some of his own proclamations earlier on about how
Speaker 1: much he values the freedom of expression in the marketplace
Speaker 1: of ideas. There's some backlash from lawmakers in the EU.
Speaker 1: A vice president of the European Commission said the arbitrary
Speaker 1: suspension of journalists violated the e use Digital Services Act
Speaker 1: and it's Media Freedom Act. There's a backlash from lawmakers
Speaker 1: in the EU. The Vice President of the European Commission
Speaker 1: said his moves violated the e USE Digital Service Act
Speaker 1: and it's Media Freedom Act. So where he might be
Speaker 1: safe in the US, he might have problems in the EU.
Speaker 1: It's a big issue for any global company because you
Speaker 1: are not necessarily, you know, going to be fine simply
Speaker 1: by you know, abiding by the jurisdictional rules and regulations
Speaker 1: of even the largest jurisdiction that you're operating in. Once
Speaker 1: you're operating across jurisdiction, you have a senti many masters
Speaker 1: to figure out and attend to. And with the EU,
Speaker 1: they've long had a much more aggressive position on the
Speaker 1: social media content, the right to be forgotten and so forth,
Speaker 1: and so it's just not surprising that the EU regulators
Speaker 1: are going to be a tougher sell than US regulators,
Speaker 1: you know, on that score as well. It's probably worth
Speaker 1: noting that Senator Warren herself has come out of the
Speaker 1: woodwork to tick the tires not on musk stewardship of Twitter,
Speaker 1: but on whether he's breaching his duties to Tesla and
Speaker 1: Testlas shareholders. Now that's kind of an interesting position for
Speaker 1: Senator Warren, who's you know, much more of a kind
Speaker 1: of a stakeholder identified commentator, to be sort of, you know,
Speaker 1: worried about test La shareholders. But on some level it
Speaker 1: speaks to the complexity of the situation that he's in.
Speaker 1: You know, when you are so heavily connected to two
Speaker 1: companies that are not in the same industry that maybe
Speaker 1: in some cases working across purposes, it's going to be
Speaker 1: hard to stay out of regulators sites. And so the
Speaker 1: European regulators seemed to have a lot more to say
Speaker 1: about decisions made and not made at Twitter. Maybe that
Speaker 1: that US regulators, by the same token, are are going
Speaker 1: to increasingly come down harder on how Mr Musk is
Speaker 1: affecting that the running and the outcomes at Tesla. Well,
Speaker 1: the FTC has apparently expanded its investigation into security concerns
Speaker 1: at Twitter. This was an investigation and a consent decree
Speaker 1: to pre existed his his purchase of the company, and
Speaker 1: uh and Twitter, you know very much, you know, was
Speaker 1: was under ongoing obligations and is under ongoing obligations to
Speaker 1: comply with that consent decree. And and FTC has authority
Speaker 1: and in many ways a duty to ensure that that
Speaker 1: compliance is ongoing. One of the first moves that Mr
Speaker 1: Musk made once he took control of Twitter in late
Speaker 1: October was to lay off, you know, a substantial portion
Speaker 1: of the staff, many of whom were responsible from ensuring
Speaker 1: that compliance was unfolding in a reasonable way with this
Speaker 1: FTC consent decree. So you know, there again, it's in
Speaker 1: a it's another situation where it's proven quite difficult for
Speaker 1: Mr Musk to make managerial moves which he you know,
Speaker 1: seems to have a proclivity to make by shooting from
Speaker 1: the hip and not to arouse lawmakers and regulators, uh
Speaker 1: suspicions and criticism. And you know, I wouldn't expect this
Speaker 1: to abate anytime soon. Uh. You know, the FTC has
Speaker 1: is extremely active these days in a bunch of different realms,
Speaker 1: and you know, in many respects Mr Musk has has
Speaker 1: kind of made their job a little easier. Are in
Speaker 1: some of his more controversial actions protected to a large
Speaker 1: degree because Twitter is a private company. Now not necessarily
Speaker 1: when a company the private company, that means that one
Speaker 1: area of law securities law dealing with the rights of
Speaker 1: public shareholders is at least in part not going to apply.
Speaker 1: But that doesn't mean that you get a hall path
Speaker 1: on every other regulatory constraint that faces companies, and those
Speaker 1: include content restrictions. Those also include employment restrictions. And so
Speaker 1: when when you think about the various lenses that that
Speaker 1: Mr must finds himself under from regulators, they tend, at
Speaker 1: least with respect to what he's doing at Twitter, they
Speaker 1: tend not to be securities regulators as much as former
Speaker 1: employee or you know, FTC regulators that are really about
Speaker 1: not protecting shareholders but protecting users and customers. Simply being
Speaker 1: a privately held company does not get you out of
Speaker 1: the jurisdictional scope of the FTC or any other regulator
Speaker 1: whose purpose is not to regulate your relationship with your
Speaker 1: public shareholds. So yes, the sec doesn't play as larger
Speaker 1: or all here, but just about every other regulator in
Speaker 1: the United States and Europe is going to continue to
Speaker 1: play a role, just like they did before Twitter went private.
Speaker 1: Instead of asking you what he did wrong, I want
Speaker 1: to ask you what do you think he has done
Speaker 1: right since he owned Twitter. Well, a couple of things
Speaker 1: that I think are probably worth noting First of all,
Speaker 1: it was clear that once he took hold of Twitter,
Speaker 1: he was taking hold of a company whose historical revenue
Speaker 1: patterns simply did not match up with what was going
Speaker 1: to be required to service the debt. And so, you know,
Speaker 1: some people criticize Mr Muskin. Look, I've been one of
Speaker 1: them for, you know, in some respects taking you know,
Speaker 1: fairly extreme and and you know, sort of bold and
Speaker 1: quite risky tactics when he was making decisions, and then
Speaker 1: you know, sometimes rolling them back on some level. I
Speaker 1: don't think you can really avoid that simply because you know,
Speaker 1: a company that really needs to pivot um may have
Speaker 1: to pivot using you know, a relatively bold and not
Speaker 1: fully tried out strategy. So I don't really fault Mr
Speaker 1: Musk necessarily for the you know, idea that he's trying
Speaker 1: on a whole bunch of new approaches and policies that
Speaker 1: haven't been tried before. I do fault him a little
Speaker 1: bit for not vetting that a little bit more. They
Speaker 1: seem to be kind of almost management by fever dream
Speaker 1: rather than even having a group of people to sort
Speaker 1: of bounce these ideas off, even if it's in a
Speaker 1: relatively short order. But It doesn't surprise me that anyone
Speaker 1: who's you know, you know, basically trying to keep a
Speaker 1: company afloat that's got a fairly significant debtload isn't going
Speaker 1: to be you know, thinking about different, possibly quite major
Speaker 1: strategy changes that they may undertake. You know, there's probably
Speaker 1: some back room um jockeying right now going on that
Speaker 1: we're not aware of, But I would not be surprised
Speaker 1: at all if Mr Musk isn't negotiating with some of
Speaker 1: the banks that holds at least certain parts of the
Speaker 1: debt that is going to have to start paying off
Speaker 1: interest in the coming months. That has been a particularly
Speaker 1: difficult thing for the banks to sell on to outside investors.
Speaker 1: So a lot of those banks have just kept that
Speaker 1: debt on their own books. And usually the way this
Speaker 1: works is they try to find a syndicate of investors
Speaker 1: who are willing to buy the debt from them, and
Speaker 1: there don't seem to be too many takers at least
Speaker 1: anywhere close to you know, hundred cents on the dollar
Speaker 1: in terms of those obligations. That actually, in some ways
Speaker 1: may create an opportunity for Mr Musk to approach the
Speaker 1: banks and say, well, why don't you let me personally
Speaker 1: buy back this debt. But I'm not going to buy
Speaker 1: it back at a hundred cents on the dollar either,
Speaker 1: But I'll give you, you know, a price thats competitive
Speaker 1: relative to what you can get from someone else. And
Speaker 1: there's almost a sense in which, if that is what's happening,
Speaker 1: then some of the behavior that Mr Musk is engaged
Speaker 1: in right now that I think if I were a
Speaker 1: bank that had lent money to to Twitter, it may
Speaker 1: be very very nervous. Well, that also might make my
Speaker 1: price come down when I when I am bargaining with
Speaker 1: him to try to figure out how much I'm willing
Speaker 1: to basically sell back that debt to him, you know,
Speaker 1: would it be sixty cents on the dollar fifty eight
Speaker 1: cents on the dollars? So there may well be a
Speaker 1: few chapters yet that we have to have to see.
Speaker 1: The other thing that I think is probably worth noting
Speaker 1: is that, notwithstanding the fact that Twitter has, you know,
Speaker 1: it's it's clearly still the most dominant platform out there.
Speaker 1: And you know, even as as Mr Musk has kind
Speaker 1: of engaged in, you know, what seems to be pretty
Speaker 1: erratic behavior, a lot of people have claimed quite publicly
Speaker 1: they're leaving Twitter, and and you know, you sort of
Speaker 1: see him wander back a little bit later on because
Speaker 1: it's still one of the more lively platforms out there.
Speaker 1: And I think, you know, one of the things that
Speaker 1: he is trying to do is some of these other
Speaker 1: competitors that have emerged in the last few years for
Speaker 1: more conservative posters are also you know, not necessarily having
Speaker 1: a feeding frenzy of success, the parlors and the truth socials.
Speaker 1: I think he, you know, is trying to move those
Speaker 1: users back onto Twitter, and I think there's some evidence
Speaker 1: that he's been successful in doing that. So there is
Speaker 1: a sense in which the size of the network on
Speaker 1: Twitter has actually grown a little bit. Their advertising revenues
Speaker 1: haven't haven't reflected that they haven't been very successful at
Speaker 1: monetizing that growth, but at least they have sort of maintained,
Speaker 1: if not slightly shored up their position as a you know,
Speaker 1: kind of a central hub of social networking. It remains
Speaker 1: to be seen whether that can be monetized in any
Speaker 1: successful way. A lot of advertisers have gotten nervous about that,
Speaker 1: simply because they're now quite worried that their own advertisements
Speaker 1: are going to be put up next to you know,
Speaker 1: content that would have been acted with the prior content
Speaker 1: moderation policies, but now it's sort of left out there
Speaker 1: and can be fairly volatile content. So there may still
Speaker 1: be a lot more squeamishness by advertisers, but at the
Speaker 1: very least I think they know that they are, you know,
Speaker 1: seeing a user base that that appears to remain robot.
Speaker 1: Mr Musk's own notoriety might well have played partly a
Speaker 1: role in that as well. Uh, you know, notwithstanding the
Speaker 1: fact that um, you know, he used to be behaving
Speaker 1: in a really erratic way. There are a lot of
Speaker 1: people that still like to tweet about one main topic,
Speaker 1: which is Mr Musk, and to that point, about content
Speaker 1: that advertisers may not want their advertisements next to. The
Speaker 1: New York Times analyze tweets from more than a thousand
Speaker 1: users whose accounts were recently reinstated, and many of the
Speaker 1: users are posting about topics that got them barred in
Speaker 1: the first place, COVID skepticism, election denialism, and Q and on.
Speaker 1: So is that going to hurt the platform? It may
Speaker 1: well hurt the platform if it's the key goal here
Speaker 1: is to try to monetize the user base at Twitter. Uh,
Speaker 1: you know, advertisers have long been the main source of
Speaker 1: revenue there, and to the extent that they are going
Speaker 1: to continue to be the main source of revenue there,
Speaker 1: I think you have to, you know, put yourself in
Speaker 1: the shoes of an advertiser who is who is you know,
Speaker 1: understandably quite squeamish about whether somehow their product is being
Speaker 1: linked to salacious content that they had no idea it
Speaker 1: would be linked to. And the odds are you know,
Speaker 1: somewhat greater once those posters are back on Twitter. Now
Speaker 1: they have their own following, So possibly for some advertisers,
Speaker 1: Uh that's a plot. But the numbers that I've seen
Speaker 1: coming out of Twitter, the ones that have leaked out,
Speaker 1: sort of suggests that advertisers are quite nervous about this move.
Speaker 1: And so if advertisers are gonna sit on the sidelines
Speaker 1: because of the relaxation of at least this type of
Speaker 1: content moderation, how do they make up for this in
Speaker 1: other ways? And you know that you know, Twitter itself
Speaker 1: is you know, now trying to figure out, you know,
Speaker 1: how to slice, dice and julian every version of a
Speaker 1: verified user that you can pay for that um is
Speaker 1: within the realm of imagination. You know. How much that
Speaker 1: captures people's imaginations I think remains to be seen. I
Speaker 1: think there are a lot of folks for whom the
Speaker 1: the idea of you know, paying for a blue check
Speaker 1: or a green check or a great check or whatever
Speaker 1: color of the check is is it never was the
Speaker 1: real reason to you know, you know, become a you know,
Speaker 1: a verified user on Twitter and just not gonna send
Speaker 1: the same message that it did before. So I have
Speaker 1: some you know, I have some concerns that as Twitter
Speaker 1: loses a lot of advertising revenue, it's gonna have a
Speaker 1: hard time making it up with other services. Now it's
Speaker 1: going to be throwing a few haymakers to try to
Speaker 1: become kind of the central media hub of everything that
Speaker 1: everyone does, making a marketplace, make it a chat tool,
Speaker 1: and and so forth. And it's got some of that
Speaker 1: functionality now, though it hasn't really sort of become dominant
Speaker 1: in a lot of those other areas, and it still
Speaker 1: remains to be seen whether that's going to happen. But
Speaker 1: in the absence of being able to substantially amp up
Speaker 1: advertising dollars, that money's got to come from somewhere, and
Speaker 1: right now, I think you know what we're seeing, and
Speaker 1: you know, kind of on a weekly basis is you know,
Speaker 1: somewhat of a careening set of strategies attempting to figure
Speaker 1: out where he can get some traction to actually increase
Speaker 1: revenue streams to the company. Thanks so much for being
Speaker 1: on the show. Eric. That's Professor Eric Talley of Columbia
Speaker 1: Law School. One who makes you larger and one who
Speaker 1: makes you small and mother, don't do anything. Many people
Speaker 1: associating magic mushrooms with the psychedelic sixties, with hippies and
Speaker 1: rock stars following mystics on the fringes and experimenting. But
Speaker 1: it's a whole different story today as psychedelic drugs are
Speaker 1: being accepted by many in the mainstream. How mainstream. The
Speaker 1: powerhouse lawyer in the paramount series The Good Fight, played
Speaker 1: by Christine Baranski, went through a course of treatment with
Speaker 1: psilocybin in the last season. And what are your services?
Speaker 1: Dr Bettencourt? Is this like ketamine pt one? To wait?
Speaker 1: It's less powerful. You come in here twice a week.
Speaker 1: We offer the option of an ivy, a capsule or spray.
Speaker 1: You lie down in the other room. You were an imask,
Speaker 1: you listen to music of your choosing to focus internally,
Speaker 1: and you have a ninety minute experience. What does that
Speaker 1: mean experience? Well, some people call it a trip, others
Speaker 1: awaking dream. Oregon became the first state to legalize psilocybin,
Speaker 1: the active ingredient in magic mushrooms, two years ago, and
Speaker 1: in November, voters in Colorado passed a similar ballot initiative.
Speaker 1: Decriminalization bills have been introduced in several states for consideration,
Speaker 1: while others are studying the drug for medical use. However,
Speaker 1: the use, sail and possession of psilocymon in the United
Speaker 1: States is still illegal under federal law. Joining me is
Speaker 1: healthcare policy expert an attorney Harry Nelson of Nelson Hardeman.
Speaker 1: What psychedelic drugs are being considered for legalization magic mushrooms
Speaker 1: lsd M, d M A. Well, so there's like a
Speaker 1: kind of a sequence that we're in. The only psychedelic
Speaker 1: drugs that is currently a legally prescribable controlled substance is ketamine,
Speaker 1: which is why there's been such an explosion of kenemine clinics,
Speaker 1: and kenemine has been so popular. But then I would say,
Speaker 1: after ketamine of the psychedelics true like plant based psychedelics,
Speaker 1: because ketamine is synthetic um, you know, psilocybe and psilocybe
Speaker 1: and is clearly out in front as the one that
Speaker 1: has the most research being done, the most pressure for decriminalization.
Speaker 1: And then behind it, I think, you know, you have
Speaker 1: a whole series of things like um ayahuasca and I
Speaker 1: be gain other plant based psychedelics, and I think it's
Speaker 1: sort of picking up the rear and probably the last
Speaker 1: to be to be criminalized are going to be the
Speaker 1: synthetics like the b M T S and LSC. But
Speaker 1: I think we're heading towards decriminalization for all of it
Speaker 1: over the next ten plus years. I know that some
Speaker 1: veterans organizations even finance trips overseas to treat PTSD with psilocybin.
Speaker 1: How do these drugs work. I'm not a scientist, I'm
Speaker 1: just a lawyer who worked closely with them. I mean
Speaker 1: they all have like intense, uh you know, neurological experiences
Speaker 1: that give people it's almost an out of body feeling
Speaker 1: in different cases, and it's a whole series of physical
Speaker 1: experiences people describe, you know, whole ranges of going from
Speaker 1: complete surrendy of of an ability to you know, to
Speaker 1: be outside their own bodies and be perceiving their surroundings
Speaker 1: and beyond and in all kinds of intense ways, and
Speaker 1: people have very very different reactions to them, right and
Speaker 1: sometimes incredibly transcendent, sometimes scary, which is why there's so
Speaker 1: much emphasis on these being a guided experience where people
Speaker 1: are sort of being watched to make sure that that
Speaker 1: they don't get into a place of dissociation or where
Speaker 1: they could potentially hurt themselves. But there are still studies
Speaker 1: being done to determine how effective and safe they are
Speaker 1: and what they can be used to treat. I mean,
Speaker 1: for for decades, the d e A basically blocked research
Speaker 1: clinical research, and you had very very few studies going on.
Speaker 1: There were a handful I had clients fifteen plus years
Speaker 1: ago that we're doing studies on, you know, p PTSD
Speaker 1: being treated with psilocybin, on using ecstasy, you know m
Speaker 1: b m A. Also likewise, a lot of studies with veterans.
Speaker 1: There was a small stream of studies that were getting
Speaker 1: approval from td A. As you mentioned, there were a
Speaker 1: lot of people, but there's an underground movement of people
Speaker 1: taking these drugs in uh, you know, in ear in
Speaker 1: setting secluded settings privately, or going out of the country
Speaker 1: to do so in places where they are legal or decriminalized,
Speaker 1: and so yeah, so the research is definitely accelerating, and
Speaker 1: now we have mainstream, major research institutions across the country
Speaker 1: who are which are engaging in studies and at least
Speaker 1: anecdotally from the progress that I'm hearing from researchers who
Speaker 1: we are working with, just really unbelievable results with things
Speaker 1: like major depression where there was a resistance to treatment
Speaker 1: through ordinary means, that and PTSD and a whole range
Speaker 1: of conditions where these really do appear to be a
Speaker 1: breakthrough for many people. In Oregon became the first state
Speaker 1: to legalize philoslibin on a protracted timeline, but the regulations
Speaker 1: for its distributions still haven't been worked out by state
Speaker 1: of fish tolls, and unlike cannabis, psilocybin can't be used
Speaker 1: at home, it has to be administered at licensed service
Speaker 1: centers under the direction of trained facilitators. Is that the
Speaker 1: model that other states are going to use, well, so right,
Speaker 1: so Colorado looks like it's going to be the second
Speaker 1: state and to follow kind of an Oregon model, right,
Speaker 1: so at least and if they're very strange, come I
Speaker 1: In my view, it's a very strange model that, um,
Speaker 1: we're developing where you know, we're sort of as we
Speaker 1: did with cannabis, we're having this experiment of state by
Speaker 1: state different rules and at least not home used for philocybin,
Speaker 1: at least in these early states. Personally, I think it's
Speaker 1: a shame that we can't get our federal agencies to
Speaker 1: move because I think that, you know, what we're doing
Speaker 1: is we're really sort of carving out a whole new
Speaker 1: pathway of how these drugs are going to be used
Speaker 1: when we have a very established system, and all we
Speaker 1: really need to do is be criminal as them, give
Speaker 1: them a prescribable status, and allow you know, physicians to
Speaker 1: prescribe them appropriately and manage them carefully as we do
Speaker 1: all the other kinds of control substances where we think
Speaker 1: there's a risk of danger or abuse. Seems to be crazy,
Speaker 1: but at the moment, these drugs are not being addressed federally,
Speaker 1: so therefore doctors can't write prescriptions, and you have states
Speaker 1: coming up with their own schemes, and while I think
Speaker 1: Oregon deserves credit at first seeing creative. I think we
Speaker 1: have a tried in true way to let patients, you know,
Speaker 1: use medications in appropriate safe settings, including at home with
Speaker 1: physician supervision, is illegal at the federal level. Correct. Other
Speaker 1: than ketamine, all of the psychedelics are currently Schedule one
Speaker 1: under the Control Substances Act, which means that they are
Speaker 1: deemed legally to have no medicinal use and therefore are
Speaker 1: illegal UH and it is a crime to possess them,
Speaker 1: distribute them, and doctors can't have anything to do with
Speaker 1: them or they will lose the risks losing their d
Speaker 1: e A UH licenses essentially a medical licenses and worse
Speaker 1: r criminal risks. So then how does it work when
Speaker 1: let's say you go to Oregon if it's illegal federally
Speaker 1: but the state legalized it. I mean, how does that work? So? Right, So,
Speaker 1: what we're doing, effectively, what we're going is doing, and
Speaker 1: what it looks like the other states are going to
Speaker 1: do because we're getting no federal movement here, is to
Speaker 1: treat this again very much like they did cannabis and
Speaker 1: create a sourcing supply because we had cannaba's dispensaries we're
Speaker 1: going to have these clinics that are going to be
Speaker 1: allowed to um receive you know, the plant based psychedelics
Speaker 1: that starting the philocybin, you know, on a regulated basis.
Speaker 1: And then there will be people who, again not not
Speaker 1: positions or mental health professionals necessarily, but a whole new
Speaker 1: class of essentially state licensed guide who will be trained
Speaker 1: in how to administer and manage and monitor people we're
Speaker 1: taking the philocybin. So it's like it's gonna be very
Speaker 1: much a repeat of cannabis, except the idea of like
Speaker 1: a lounge where people have to stay on site and
Speaker 1: in jest is just kind of an additional wrinkle here.
Speaker 1: So I mean, technically the d e A could arrest
Speaker 1: someone who has this even in a state where it's legal.
Speaker 1: It's true that in theory the d A could. We
Speaker 1: saw by the way, you know, California was the first
Speaker 1: state to be criminalized cannabis in the nineties, and we
Speaker 1: saw that it took several years before the d e
Speaker 1: A stopped rating Canada's censories and club but two thousand
Speaker 1: and twelves Department of Justice issued a memo called the
Speaker 1: Cole Memorandum. And again this is only cannabis right now,
Speaker 1: but I'm predicting that it will be the identical stories
Speaker 1: for psychedelics because that government has taken the position that
Speaker 1: it has better things to do with three sources, and
Speaker 1: as long as people are operating carefully within state legal framework,
Speaker 1: it will not interfere. And I think that rule has
Speaker 1: been successful. There was a question at the beginning of
Speaker 1: Trump administration whether Attorney General Sessions at the time would
Speaker 1: disrupt it, and we saw very quickly that there was,
Speaker 1: you know, no support on either side of the political
Speaker 1: aisle to go back to the old days. The d
Speaker 1: E a interfering with state law, and so I think
Speaker 1: it's pretty safe to say that as long as people
Speaker 1: are operating in states that decriminalize this will be safe.
Speaker 1: You know, within the parameters that are set in that state,
Speaker 1: there's going to be a ban on interstate traffic. I
Speaker 1: think very parallel to cannabis on a bunch of safety
Speaker 1: issues and trying to keep organized crime out of it.
Speaker 1: You know, it'll be safe for people to follow state
Speaker 1: laws as these states secriminalized. So California had an earlier bill.
Speaker 1: It was opposed by law enforcement, including the California DA's Association,
Speaker 1: that said, hallucinations can be dangerous to users and bystanders alike,
Speaker 1: and it's not clear that the benefit of legalizing these
Speaker 1: drugs outweighs the cost to the common welfare. Well, look,
Speaker 1: it's it's no surprise, um that law enforcement is concerned
Speaker 1: about this. Candidly, I think when we look at the
Speaker 1: Cannaba's example that's played out over the last fifteen years,
Speaker 1: we we have to do there's good reasons to say
Speaker 1: that there are a lot of dangerous and their effects right,
Speaker 1: including what it means for motorists and like for people
Speaker 1: on the road, and the extent to which there's a
Speaker 1: risk that crime organizations can be part of this. And
Speaker 1: so I I think it was it's understandable. Personally, I'm
Speaker 1: I'm an advocate for opening up more therapeutics that will
Speaker 1: help more people. Right that we have serious mental health
Speaker 1: issues in the country and this is an incredibly promising therapy.
Speaker 1: But at the same time, I think law enforcement is
Speaker 1: rightly worried that it be done in the right way
Speaker 1: and in the safe way. I don't think that we
Speaker 1: should let those concerned stifle access, but we should be
Speaker 1: careful to like look for the lessons that we can
Speaker 1: learn from where things went awry, you know, And there's this,
Speaker 1: there's this, there's this underlying tension between a movement of
Speaker 1: people who are just trying to get recreational use, which
Speaker 1: has one set of arguments to make about it, and
Speaker 1: medical use. And I think that if we aren't careful,
Speaker 1: we can almost um make the medical uses more challenging
Speaker 1: because of problems that are so stated with recreational youth.
Speaker 1: I think it's totally understandable that law enforcement and other
Speaker 1: groups are going to be, you know, throwing up concerns
Speaker 1: and urging a ghost low approach, and frankly, I think
Speaker 1: they've been a little bit more organized in the early
Speaker 1: political discussions and then the advocacy community for decriminalization and
Speaker 1: UH again, a lot of different stakeholders in this conversation,
Speaker 1: and it's complicated. So I think we've had a few
Speaker 1: California efforts sales, although it looks like the current one
Speaker 1: has promising level attraction and does seem to be, at
Speaker 1: least for now, on a good footing to UH to enactment.
Speaker 1: Do you think the problem is the stigma associated with hallucinogenics,
Speaker 1: you know, Timothy Leary, the bad trips and and all that. Certainly,
Speaker 1: I think there's some of that, although I do think,
Speaker 1: you know, my my senses that public attitudes and some
Speaker 1: in stigma really shifted dramatically with regard to cannabis, and
Speaker 1: I think we're in a different era where it's not
Speaker 1: quite as where there's generally public support for more or access,
Speaker 1: you know. I think at the same time, on a
Speaker 1: community level, people are worried about what's going to look like,
Speaker 1: you know, safety issues and communities, and so I think
Speaker 1: a lot of the concerns are gonna be a lot
Speaker 1: more practical to make sure that it rolls out in
Speaker 1: a way that um, that people can feel good about.
Speaker 1: And you know, that has a more again, much more
Speaker 1: of a healthcare therapeutic framework around it as opposed to
Speaker 1: just being you know, another form of vice that for example,
Speaker 1: parents have to worry about kids getting into. Yeah, I
Speaker 1: think that's where the real issues are going to be.
Speaker 1: Tell us about the California Bill and where it stands now,
Speaker 1: at least in the last two lead places essions. There's
Speaker 1: been uh previous stills that ran into opposition, but this
Speaker 1: one was reintroduced by a San Francisco state senator Scott
Speaker 1: Weener in the late summer, and the idea this one
Speaker 1: is focused on only plant based hallucinogen and so that
Speaker 1: would be like philocybin and you know, I begain but
Speaker 1: it would basically it would create a research institute to
Speaker 1: study them and also UM create a framework for for
Speaker 1: individuals to receive direct amounts to them from the centuries.
Speaker 1: So it's again very very similar in my mind too,
Speaker 1: a cannabis model UM, hopefully with some lessons learned to
Speaker 1: be a little bit more specific than some of the
Speaker 1: early directors in California. That's it's sort of a little
Speaker 1: different than oregons in terms of dissensation the individuals anyway,
Speaker 1: So that's where we are right now. As far as marijuana,
Speaker 1: how long before you think it will become legal at
Speaker 1: the federal level. It's a dangerous question. I've I've been
Speaker 1: asked to write white papers on this subject for years,
Speaker 1: and I've gotten it wrong so many times. I think
Speaker 1: the view that I hear most commonly is that we
Speaker 1: are probably in the next decade, and likely within the
Speaker 1: next five years, we will have a critical mass of
Speaker 1: legislators on both sides of the aisle who will support
Speaker 1: a change in federal status for cannabis. So I do
Speaker 1: think that we will see it. The problem is that
Speaker 1: the politics are so messy in our existing political dysfunction.
Speaker 1: So for example, when people thought that President Obama, you know,
Speaker 1: after he was really stuffed the d A from rating
Speaker 1: back in two thousand nine, and that he might go further,
Speaker 1: you know, it became clear that as midterm elections approach,
Speaker 1: he needed to you know, get some law and order
Speaker 1: support from law enforcement, and so that calculus came in,
Speaker 1: and I think, unfortunately, uh, it's too much of a
Speaker 1: political football to be certain, but I do think that
Speaker 1: we are likely five to ten years away from a
Speaker 1: formal change, you know, based on the on the critical
Speaker 1: mass of states that have already legalized it, and just
Speaker 1: just to clean up some of the messiness of state
Speaker 1: by states policies that allowed for a lot of bad
Speaker 1: behavior to flip between the tracts. Any final thoughts on
Speaker 1: the road ahead for a legalization of psychedelics, I think
Speaker 1: this is really exciting. I think that to anybody who's
Speaker 1: skeptical out there, I think there's the data is just
Speaker 1: really it's worth reading some of the literature about the
Speaker 1: breakthrough that people are having to me. You know, I
Speaker 1: think we've lived in an arrow when that's s R. I,
Speaker 1: you know, pharmaceuticals like Prozac and zola. Really we're, you know,
Speaker 1: thirty plus years ago. We're a game changer in UM,
Speaker 1: creating new options for depression and other mental health challenges.
Speaker 1: And I think that we are going to be living
Speaker 1: through the same kind of a wave. And so I
Speaker 1: would encourage people to think about this as really a
Speaker 1: new era and we're really in the very very beginning,
Speaker 1: but we're gonna look back in thirty years at a
Speaker 1: transformed landscape for options for people who are struggling with
Speaker 1: mental health issues. Thank to Psychedelogys. Thanks so much, Harry.
Speaker 1: That's Harry Nelson of Nelson Hardeman. And that's it for
Speaker 1: this edition of The Bloomberg Law Show. Remember you can
Speaker 1: always get the latest legal news on our Bloomberg Law Podcast.
Speaker 1: You can find them on Apple Podcasts, Spotify, and at
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Speaker 1: remember to tune into The Bloomberg Law Show every week night.
Speaker 1: Attend the m Wall Street time. I'm June Grosso and
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