Denver has become the first US city to decriminalise psilocybin, the psychoactive ingredient in magic mushrooms, following a public vote.
Decriminalisation led by a slim 51%, according to preliminary figures on Tuesday’s election released by Denver’s Election Division.
Although using, possessing or selling the mushrooms will still technically be illegal, restrictions will be drastically loosened for personal use.
Police officers will now be instructed to treat magic mushroom users as their lowest priority.
Magic mushrooms contain a psychedelic chemical, psilocybin, which under US federal law belongs in the same group of banned drugs as heroin or LSD.
The NHS says magic mushrooms are a hallucinogenic, "making people see, hear and experience the world in a different, 'trippy' way".
Users have described seeing vivid colours and geometric patterns and experiencing powerful spiritual connections and emotions.
Magic mushrooms have been used in religious practices for decades because of their powerful effect on perceptions and spiritual experiences.
Tuesday's referendum, which was the first US public vote on magic mushrooms, asked voters if the personal use and possession of the drug should be the city's "lowest law enforcement priority".
As many as 1,300 votes still remain to be counted, but that figure was not enough to swing the vote the other way, division spokesperson Alton Dillard said.
Final election results will be released on May 16, he added.
“I think today’s outcome really demonstrates that the conversation is going to continue, and the world is ready for it,” said Cindy Sovine, chief political strategist for the campaign to decriminalise the drug.
“Psychedelics are already here.
"Now we can start to have the conversation about using them mindfully,” she added.
Psychedelics are already here. Now we can start to have the conversation about using them mindfully
Psilocybin has been outlawed since the 1960s, when it was widely known as a recreational drug.
The ban stymied medical research, but small studies in recent years have found the substance had positive effects on anxiety and depression for cancer patients.
Campaigners said their only goal in the mushroom measure is to keep people out of jail in Denver for using or possessing the drug to cope with depression, anxiety, post-traumatic stress and other conditions.
“We’re not talking about legalisation, we’re talking about not putting people in jail,” Ms Sovine said.
Dr Kevin Matthews, who led the campaign to decriminalise magic mushrooms, told the Denver Post that certain mushrooms "may be helpful in the treatment of cluster headaches, PTSD [Post Traumatic Stress Disorder] and OCD [Obsessive-Compulsive Disorder]".
Meanwhile the federal government argued that psilocybin - and all Schedule I classification drugs - have high abuse potential and no accepted medical value.
Denver Mayor Michael Hancock and District Attorney Beth McCann also opposed the initiative, but there was no organised campaign against decriminalisation.
Decriminalize Denver - a group calling for magic mushrooms to be decriminalised - turned to the same strategy that marijuana activists used to decriminalise possession of the drug in the city in 2005.
That move was followed by statewide legalisation in 2012, and a number of other states have since broadly allowed marijuana sales and use by adults.