Current drug policy debates often center on whether hallucinogen-related hospital admissions indicate a causal relationship with psychosis. This study examines the extent to which observed associations between hallucinogen use and psychosis are mediated by preexisting psychiatric conditions, providing important evidence for psychedelic policy formulation.We conducted a retrospective analysis using MarketScan Medicaid and commercial claims databases from 2015-2019. The population-based sample included individuals receiving substance use disorder treatment with documented substance-related emergency admissions or hospitalizations. We compared psychosis-related admissions occurring 30 days to 6 months postindex event between individuals with hallucinogen-related admissions versus those with nonhallucinogen substance-related admissions. Cox regression models adjusted for demographics and clinical characteristics to determine whether prior psychiatric history explained observed associations.Among 273,466 individuals with substance-related admissions, psychosis diagnoses were more prevalent following hallucinogen-related admissions (16.4%) compared to nonhallucinogen substance admissions (6.6%,<.001). While unadjusted models showed increased psychosis risk for hallucinogen-related admissions (hazard ratio [HR]=1.22, 95% CI=1.19-1.25), this association became nonsignificant after adjusting for clinical characteristics (HR=0.97, 95% CI=0.95-1.00).Apparent associations between hallucinogen use and psychosis appear largely attributable to baseline psychiatric comorbidities rather than direct causal effects. These findings carry implications for evidence-based policy development, suggesting that observed epidemiologic associations may reflect underlying vulnerability factors rather than hallucinogen-induced psychosis. Policymakers should consider these results when interpreting population-level data regarding hallucinogen safety profiles and regulatory frameworks. Background: Methods: Results: Conclusions: P
