The peyote case was BOTH nation and ceremony. This is a little different. We allow witchcraft but don't allow hanging witches.
First of all I don't see any reason to believe this is a religion made up just as an excuse to use drugs. As is said in this article
Never mind the vomiting. For members of O Centro Espirita Beneficiente Uniao do Vegetal, drinking ayahuasca, a foul-tasting psychedelic tea brewed from two Amazonian plants, involves four hours of recitation, chanting, questions and answers, and religious instruction.The peyote case was BOTH nation and ceremony. This is a little different. We allow witchcraft but don't allow hanging witches.That may help explain why the church has only 130 or so followers in the U.S., despite the drug trips at the center of its rituals.
What nation has to do with it I do not know, but the fact is that the federal government changed the law with the Religious Freedom Restoration Act to allow just this sort of thing. The act, while passed to allow Native Americans to use peyote in religious ritual, is not restricted to peyote. Here is the important part of it.
SEC. 3. FREE EXERCISE OF RELIGION PROTECTED.(a) In General: Government shall not substantially burden a person's exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b).
(b) Exception: Government may substantially burden a person's exercise of religion only if it demonstrates that application of the burden to the person--
(1) is in furtherance of a compelling governmental interest; and
(2) is the least restrictive means of furthering that compelling governmental interest.