Drug referee outside college (8)
I believe the answer is:
medicate
'drug' is the definition.
(I know that drug is a more specific form of the action medicate)
'referee outside college' is the wordplay.
'referee' becomes 'mediate' (referee can mean to mediate or moderate).
'outside' means one lot of letters goes inside another (some letters go outside others).
'college' becomes 'c'.
'mediate' enclosing 'c' is 'MEDICATE'.
(Other definitions for medicate that I've seen before include "Give a drug to" , "Administer a drug to" , "Treat (one) with drugs" , "Treat with pills, drugs etc" , "Supply drugs" .)