This is Part Four of our Psychedelic Science series. Click here for Part One, here for Part Two, and here for Part Three.

Psilocybin is the active ingredient that puts the magic in "magic mushrooms." And new research suggests it has tremendous potential as a treatment for severe anxiety caused by a serious illness or terminal diagnosis, according to researchers in the field.

But look up psilocybin on the Drug Enforcement Agency's (DEA) website, and you’ll find this natural hallucinogen classified as a "Schedule One" drug. In government speak that means one that's dangerous and "without any accepted medical value."

But patients who have taken psilocybin as part of anxiety studies tell a different story.

"The study has changed everything in my life, everything," says Janeen Delany, one of 44 cancer patients who took part in a Johns Hopkins University study of psilocybin’s effectiveness in treating depression and anxiety related to a cancer diagnosis. "I am more patient. I am more thoughtful. I stop and I take the time. I am present."

Speaking in the documentary, "The Substance," a year after her treatment, Delaney describes her psilocybin therapy session as "so overwhelmingly incredible and beautiful that I had tears falling down my face."

Delany’s experience is a familiar one to modern-day psychedelics pioneer and psychiatrist, Dr. Charles Grob of UCLA.

In 2011, Grob completed the first study in more than 40 years that used psilocybin to treat cancer anxiety. Grob says his patients embraced the experience.

"They reported improved mood and anxiety regulation, improved quality of life, improved relationships with their partners and close family and friends," says Grob. "it was actually quite dramatic."

Grob, a professor of psychiatry and pediatrics at UCLA, is director of the Division of Child and Adolescent Psychiatry at Harbor-UCLA Medical Center. He says his study, funded by the nonprofit Heffter Research Institute, offered another promising result:

"When we crunched the data, we found that indeed the psilocybin treatment model appeared to be quite effective... in reducing anxiety in a sustained manner going for months after the treatment session."

Grob’s pilot study was small, involving only 12 patients. But it paved the way for today's larger psilocybin studies. Among them is the now nearly-complete Johns Hopkins study and another ongoing one at New York University.

The NYU research, led by psychiatry professor Dr. Stephen Ross, is using psilocybin pills to treat anxiety caused by a cancer diagnosis. Ross says initially, he wasn't much of a believer in psilocybin’s potential.

"I was skeptical at first, because these were patients who had cancer and were anxious and psilocybin is known to induce anxiety as one of its side effects, especially when using uncontrolled settings and people who are unprepared," he says.

But after observing the experiences of his 31 patients who were given psilocybin in a warmly decorated, supervised setting, Ross changed his mind.

"To me it’s been some of the most remarkable clinical findings I’ve ever seen as a psychiatrist," he says.

Ross says preliminary evidence found the NYU patients – like their UCLA counterparts — reporting relief of symptoms after just one treatment of psilocybin.

"Anecdotally," he says, "we’re finding that people have acute and sustained reductions in death anxiety or resolution of death anxiety, decreased depression, increased spiritual states and behaviors ... and a kind of reorientation away from cancer as a force that’s ruining their lives."

The results are welcome news to the burgeoning field of palliative medicine, says Dr. Anthony Bossis, Ross’s colleague and co-director of the NYU study.

"For years we’ve gotten better at chemotherapies and pain medicines," said Bossis, "but there’s been a paucity of approaches addressing the targeting of existential and psycho-spiritual angst and confusion and distress that comes with facing the end of life."

Yet despite the potential promise of psilocybin and other psychedelics, researchers still face challenges. First, the stigma caused by the psychedelic 1960s continues to taint the reputation of these substances. And second, while the federal government allows the research, it has yet to pay for any of it. That forces scientists to rely on private donations to keep their work going.

But things are changing, says UCLA’s Grob.

"The generation that grew up in the 60s, … they’re now starting to address that fact that life is limited, we’re not here forever, and [they're] understanding that there may be ways to prepare for the inevitability of one’s demise by working with models such as this," Grob says.

Researchers at UCLA, NYU and Johns Hopkins are now preparing to continue their research into psilocybin and cancer anxiety with a large, phase three trial next year. And if that study proves successful, psilocybin may become the first of these psychedelic drugs to win approval as a legally prescribed medical treatment.

Interview with Janeen Delaney from documentary "The Substance"

Interview from documentary "The Substance" with psychologist Clark Martin, Ph.D., participant in Johns Hopkins psilocybin cancer study.