The DEA’s cannabis rescheduling process is moving forward, with DEA Administrative Law Judge (ALJ) John Mulrooney criticizing the agency’s handling of prehearing preparations and setting clear directives for the proceedings.
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The proposed rule seeks to reclassify marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA). Here's a breakdown of recent developments:
Key Updates
DEA Criticism:
Judge Mulrooney chastised the DEA for failing to provide a complete list of evidence for the hearings despite prior directives.
The agency must now submit the list by December 13, 2024, with no supplemental filings allowed in this formal rulemaking process.
Hearing Timeline:
Merit-based hearings begin January 21, 2025, and run through March 6, 2025. Presentations will alternate between proponents and opponents of rescheduling.
Key participants include government representatives, industry groups like the National Cannabis Industry Association (NCIA), prohibitionist organizations like Smart Approaches to Marijuana (SAM), and various other stakeholders.
Scope of Hearings:
The judge emphasized that the hearings are not about the morality or broad merits of marijuana but will focus on whether it should remain in Schedule I or move to Schedule III based on evidence and expert testimony.
Public Comments Excluded:
Over 43,000 public comments were submitted during the rulemaking process, but these are inadmissible as evidence and will not influence the tribunal's decision.
DEA's Neutral Stance:
The DEA has yet to clarify its official position on rescheduling. While it proposed the rule, it noted that further evidence is required to finalize its decision.
The U.S. Department of Health and Human Services (HHS), which conducted the scientific review supporting the reclassification, declined to provide witnesses for the hearings.
Key Concerns and Criticism
Administrative and Legal Challenges:
Allegations of unlawful communications between DEA and SAM prompted calls for DEA's removal from the proceedings. Mulrooney denied these motions, citing insufficient evidence.
A separate lawsuit seeks DEA records of alleged ex parte communications.
Political Skepticism:
Critics, including GOP lawmakers, have accused the Biden administration of pursuing cannabis rescheduling for political reasons rather than scientific justification.
Attorney General Merrick Garland, rather than DEA Administrator Anne Milgram, signed the rule proposal—a break from precedent that has raised questions.
Veterans’ Exclusion:
A veterans’ group petition to participate in the hearings was denied, leading to accusations of neglecting voices directly impacted by cannabis policy changes.
Potential Impact of Rescheduling
Business and Research Benefits:
Moving marijuana to Schedule III would:
Allow state-licensed cannabis businesses to claim federal tax deductions under IRS code 280E.
Remove some research barriers, facilitating further studies on cannabis.
Remaining Restrictions:
Marijuana would still be federally regulated, with criminal prohibitions on manufacturing, distribution, and possession remaining under the CSA.
The reform stops short of federal legalization.
Market Reactions:
The potential rescheduling has heightened investor interest, with optimism about increased business opportunities in the cannabis sector.
Outlook
The DEA hearings represent a pivotal moment for U.S. cannabis policy. While rescheduling would not legalize marijuana federally, it could significantly change the regulatory and financial landscape for the cannabis industry. However, political scrutiny and administrative hurdles underscore the contentious nature of the process. All eyes are now on the January 2025 merit hearings, which will shape the future of cannabis regulation in the United States.
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