Decriminalization means that something is not considered a criminal offense. In the context of psychedelics, decriminalization refers to the process of making personal drug possession a civil infraction rather than a crime.
Crimes are potentially punishable with jail time. However, civil infractions do not appear on a criminal record and usually result in a ticket and a small fine.
Since crimes like personal drug possession are prosecuted by local law enforcement, decriminalization is a function of local governments. That means decriminalization happens on a local level rather than a federal level.
When a drug is decriminalized, it is still illegal. For example, the Controlled Substances Act prohibits schedule I controlled substances on a federal level. But local and state governments have the power to decriminalize the possession of certain drugs.
For example, in Oregon, personal drug possession has been decriminalized. As a result, if a person is caught possessing small amounts of drugs, they will receive a small fine. However, the fine can be waived if the person seeks addiction assistance from a state-sponsored program.
Since personal drug possession is not a criminal offense in Oregon, a person will not be arrested by the police or punished with jail time. However, other circumstances—like the intent to sell or the possession of large amounts of controlled substances—can lead to additional, more serious charges.
Decriminalization vs. Legalization
Decriminalization is different from legalization. Because most drugs are illegal on a federal level, they are still technically illegal to possess, even if you are in an area that has decriminalized a drug.
Decriminalization usually means that local law enforcement has been instructed to deprioritize drug possession prosecution. Police officers in areas that have decriminalized certain drugs will not go out of their way to find those who possess small amounts of those drugs.
If a drug were legalized entirely, it would be legal to possess and use.