The Ketamine Compliance Reckoning: A Conviction, a Warning Letter Sweep, and a December 31 Cliff

Ketamine is the only substance in this whole conversation with a lawful clinical pathway in California. It is also, right now, the riskiest place to be operating carelessly — and I do not think most of the people running ketamine practices have registered how much has changed in the last twelve months.

Four developments, in rough order of how much they should worry you.

1. A federal jury convicted telehealth executives, and California’s corporate practice doctrine was part of the proof

In November 2025, Ruthia He, the founder and CEO of the telehealth company Done Global, and Dr. David Brody, its clinical president, were convicted on charges including conspiracy and unlawful distribution of controlled substances. He faced an additional obstruction conspiracy charge.

It was not a ketamine case — the controlled substances were ADHD stimulants. It is, nonetheless, the most important precedent in the country for anyone running a ketamine telehealth platform, and here is why.

According to analysis of the prosecution, the government used California corporate practice of medicine principles evidentially. The theory was not “you violated CPOM.” It was: management influence over clinical decision-making shows that these prescriptions were issued outside the usual course of professional practice — which is the element that turns a prescription into a distribution offense under the Controlled Substances Act. Prosecutors scrutinized compensation structures, workflow design, and platform software features. Not just the written agreements. The actual operating mechanics.

Read that again if you run a platform. The intake flow you built, the auto-approval logic in your software, the way you compensate your clinicians per encounter — those are now evidence. A clean MSO agreement in a drawer does not help you if the product’s design tells a different story about who is really making the clinical call.

If you have never had a lawyer sit down with your actual patient flow — the screens, the timers, the decision points, the escalation logic — as opposed to your contracts, that is the engagement I would prioritize this quarter.

2. The FDA ran a warning letter sweep against online ketamine sellers

On June 23, 2026, the FDA issued a batch of warning letters to online ketamine sellers — Ketamine Store, All Ketamine HCL, ketaminetroches.com, Ketacyn Pharmaceuticals, Buy Keta Online, Ketamine Troche Store, Legit Ketamine Suppliers, and others. Products at issue included ketamine liquid, troches and nasal spray marketed for depression, anxiety and pain.

The statutory violations cited include Federal Food, Drug, and Cosmetic Act §§ 301(a), 301(d) and 301(k); § 502(f)(1), inadequate directions for use; § 503(b)(1), dispensing prescription drugs without a prescription; and § 505(a), unapproved new drug.

I want to be careful not to overstate this. These letters targeted unlawful online sellers, not licensed clinics and not legitimate 503A or 503B compounders. This is not a crackdown on ketamine-assisted psychotherapy. But it establishes that CDER is actively working this space and reading marketing copy, which brings me to something worth flagging.

FDA’s operative compounding-specific statement remains its October 10, 2023 alert, warning about compounded ketamine products including oral formulations for psychiatric disorders. Its language is direct: ketamine “is not FDA approved for the treatment of any psychiatric disorder,” at-home use is singled out because a provider “is not available onsite to monitor for serious adverse outcomes,” and — this is the sentence worth memorizing — “we are not aware of evidence to suggest that it is safer, is more effective, or works faster than medications that are FDA approved for the treatment of certain psychiatric disorders.” An earlier alert on compounded ketamine nasal spray issued February 16, 2022.

Set your website next to those two alerts and read them together. A 2023 cross-sectional study in JAMA Network Open — Crane, DiStefano & Moore, False or Misleading Claims in Online Direct-to-Consumer Ketamine Advertising in Maryland — examined ketamine advertisers in a single state and found that a substantial share failed to disclose addiction risk or off-label status, and that a handful made affirmatively false claims, including that ketamine is not addictive and that it is FDA approved for depression. It is a Maryland sample, not a national one. Nobody has yet brought an enforcement action on those facts. That does not make them safe.

A non-obvious point on the FTC: there is no FTC enforcement action specifically targeting psychedelic or ketamine efficacy claims. What the FTC’s telehealth cases in 2024 through 2026 have been primarily about is billing, cancellation, informed consent to charge, and health data flowing to advertising platforms — the Cerebral order, the NextMed order, and the complaint the FTC and several states filed against Hims & Hers in July 2026 (allegations, not findings, at this stage). The NextMed order does also reach results claims made without competent and reliable evidence, and fake reviews, so efficacy claims are not off the table. But if you run a subscription ketamine model with a tracking pixel on your intake pages, your most probable near-term FTC exposure is your negative-option billing and your adtech, not your marketing copy.

3. A wrongful death case is testing the at-home model

A wrongful death action was filed in October 2025 against Mindbloom by the father of a 27-year-old man who died in October 2023 of ketamine toxicity. What follows comes from press reporting, and everything in it is allegation, not finding.

The allegations, as reported, are a checklist of the things at-home models have been warned about: that the decedent had documented hypertension, tachycardia and substance use disorder that should have disqualified him from unsupervised at-home use of an anesthetic; that he was approved anyway and supplied ketamine troches; that required therapist documentation was not verified; that a blood pressure cuff was provided without monitoring being required; that he missed a mandatory appointment eleven days before his death, was charged a $150 no-show fee, and retained medication access; and that there was no real-time monitoring or emergency protocol.

Whatever the outcome, the complaint is a roadmap of the duty theories a plaintiff will plead against an at-home model. Every one of those allegations maps to a protocol you either have documented or you do not. If you run at-home ketamine, take that list and audit against it this month.

On the insurance side, understand that this exposure may not be covered the way you assume. Malpractice and errors-and-omissions policies define the “practice of the profession,” and whether ketamine-assisted psychotherapy falls inside that definition varies. Commercial general liability responds to “bodily injury,” and whether pure emotional distress qualifies is state-dependent. And exclusions for intentional wrongful acts and expected-or-intended injury can defeat coverage for battery claims arising from touch during a dissociated state — which is precisely the claim a supportive-touch protocol creates a vector for. Read your actual policy. Have someone who reads policies for a living read it.

4. The December 31 telehealth cliff

This is the structural one, and it has a date on it.

Federal telemedicine prescribing of controlled substances is currently operating under a temporary extension of the COVID-era flexibilities, published December 31, 2025 at 90 Fed. Reg. 61301, effective January 1, 2026 through December 31, 2026. It permits Schedule II–V prescribing by audio-video telemedicine without a prior in-person evaluation. Ketamine, as a Schedule III substance, is covered.

The permanent replacement is not final. The DEA’s proposed rule, Special Registrations for Telemedicine and Limited State Telemedicine Registrations, published January 17, 2025 at 90 Fed. Reg. 6541 (Docket DEA-407, RIN 1117-AB40), would create three registration tiers — Telemedicine Prescribing for Schedule III–V, Advanced Telemedicine Prescribing for Schedule II–V by specialist practitioners, and a Telemedicine Platform registration — plus a state telemedicine registration requirement. Comments closed March 18, 2025 with more than 40,000 submissions. Reporting indicates the final rule entered OMB review on August 25, 2026, with a projected completion later this year.

Absent a final rule or a fifth extension, telemedicine controlled-substance prescribing authority lapses January 1, 2027.

If your practice depends on remote prescribing, you need a contingency plan on the shelf before Thanksgiving, not a scramble in January. That means: an in-person evaluation pathway you could actually staff, a plan for patients mid-course, and a communication plan. If the special registration rule does land, it also means budgeting for registration in every state where you prescribe, which is a materially different cost structure than the one most platforms modeled.

And the California layer on top of all of it

Federal permission is not California permission.

Business & Professions Code § 2242(a) provides that “[p]rescribing, dispensing, or furnishing dangerous drugs as defined in Section 4022 without an appropriate prior examination and a medical indication, constitutes unprofessional conduct.” The section does permit the appropriate prior examination to be asynchronous and conducted by telehealth, “including, but not limited to, a self-screening tool or a questionnaire” — but only where the licensee complies with the standard of care. Section 2290.5 applies the same professional-responsibility and practice standards to telehealth, and the Medical Board puts it plainly on its own telehealth page: “[t]he standard of care is the same whether the patient is seen in-person, through telehealth or other methods of electronically enabled health care.”

So a DEA flexibility that lets you prescribe without an in-person visit does not relieve you of § 2242’s requirement. It only removes the federal obstacle.

Layer on SB 351 — Chapter 409 of the Statutes of 2025, effective January 1, 2026, and so in force for nine months now — which codified California’s corporate practice of medicine doctrine into new Health & Safety Code Division 1.7, barred lay control of clinical hiring, coding and billing, records, referrals, patient volume and provider hours, voided provider noncompetes and non-disparagement clauses, and put enforcement in the Attorney General’s hands.

The five things I would fix this quarter

Have your MSO agreement reviewed against SB 351, not against the pre-2026 doctrine. Noncompete and non-disparagement clauses are the fastest thing to find and the fastest to fix.
Have someone walk your actual patient flow, not your contracts — screens, timers, auto-approvals, compensation logic — with Done Global in mind.
Audit your at-home protocol against the duty theories in the Mindbloom complaint: screening exclusions, documentation verification, monitoring requirements, missed-appointment handling, emergency response.
Read your website against the FDA’s 2023 compounding alert, and read your billing and cancellation flow and your tracking pixels against the FTC’s actual telehealth theories.
Write the January 1, 2027 contingency plan now. In-person evaluation capacity, continuity for patients mid-course, patient communications, and a budget line for state-by-state registration if the special registration rule finalizes.

None of this requires knowing what the FDA does with psilocybin. All of it is inside your control today.

Deja A. Correia, Esq. | The Correia Law Firm | San Diego, California

This post is general information about publicly available legal and regulatory developments. It is not legal advice, it does not create an attorney-client relationship, and it is not a substitute for advice about your specific situation. Matters described as filed complaints or indictments reflect allegations only. Regulatory status in this area is changing quickly; verify current status before acting.