Marijuana rescheduling runs into roadblock

A Drug Enforcement Administration (DEA) judge canceled an upcoming hearing on the Biden administration’s marijuana rescheduling proposal pending appeals, effectively kicking the process to the Trump administration.

Advocates of more lenient marijuana laws alleged DEA officials had colluded with rescheduling opponents and are hopeful the process will move ahead under President-elect Trump.

The first hearing to go over the Biden administration’s proposal to reschedule marijuana from Schedule I to Schedule III under the Controlled Substances Act was set to begin Jan. 21.

But these plans have now been canceled by DEA Administrative Law Judge John Mulrooney.

The parties in support of rescheduling — Village Farms International, Hemp for Victory and the Connecticut Office of the Cannabis Ombudsman — have asked that DEA Administrator Anne Milgram be removed as a supporter of rescheduling in the hearing process.

The groups alleged that at least one high-level DEA official had communicated with opponents of marijuana rescheduling, helping them improve their chances of being chosen as a participant in the hearings.

Mulrooney denied the parties’ request, writing, “I can no more remove or re-designate the Administrator than I can hold parties in contempt and fine them. The strangeness of this unsupported approach is amplified by the fact that the appointment of a new DEA Administrator by a different political party is imminent.”

The judge also wrote that if the allegations are true, even in the best light, they would represent “a puzzling and grotesque lack of understanding and poor judgment from high-level officials at a major federal agency with a wealth of prior experience with the [Administrative Procedure Act].”

Per DEA regulations, parties can file an appeal if their request is denied. Mulrooney found in his ruling that allowing the parties to appeal could “potentially avoid exceptional delay, expense or prejudice to the [designated participants] and the Government by injecting appellate certainty into the equation at this stage of proceedings.”

The proceedings are now paused pending this appeal. The DEA declined to comment on the paused proceedings when reached by The Hill.

For those in the cannabis industry, the delay was cause for some concern, as rescheduling to Schedule III stands to help their businesses make deductions or add credit to their annual federal taxes, something businesses that deal with Schedule I or Schedule II substances can’t do.

Jordan Tritt is founder and CEO of the Panther Group, a cannabis merchant bank and advisory firm that aims to help business owners secure financial backing. Tritt told The Hill that bumps in the road were expected.

“We're not surprised by this," he said. "Ultimately, I do think that rescheduling will happen, and I think it's probably a good thing that a new administration is coming in."

Tritt noted there did not seem to be a great deal of support coming from the current DEA when it came to marijuana rescheduling. Trump's initial pick to lead the agency withdrew from consideration, and he has yet to name a new nominee.

Judge Mulrooney alluded in his ruling this week that the DEA may not be a “perpetual cheerleader-proponent" when it comes to this proposal and acknowledged that the current DEA administrator could have “reservations” on the proposed rescheduling. He wrote that this should encourage the parties to present their “best case” for marijuana rescheduling.

Karen O’Keefe, director of state policies at the Marijuana Policy Project, echoed that the incoming administration could present a fresh start for marijuana legalization efforts.

“For the first time in decades, we have an incoming U.S. president who believes cannabis should be legal,” O’Keefe said. “More than two-thirds of Americans support legalization, and most live in a legal cannabis state. Yet every cannabis consumer and every worker that serves them remains a federal criminal. If President Trump makes federal reform a priority, we could be at the cusp of historic progress.”

During his 2024 campaign, President-elect Trump expressed support for rescheduling and decriminalizing marijuana.

“I believe it is time to end needless arrests and incarcerations of adults for small amounts of marijuana for personal use. We must also implement smart regulations, while providing access for adults, to safe, tested product,” Trump wrote on Truth Social in September.

He added that he planned to vote “yes” on Amendment 3 in Florida, a ballot measure that would have legalized adult marijuana. The measure ultimately failed despite roughly 56 percent voting “yes,” as it needed a 60 percent supermajority to pass.

O’Keefe said Trump could "uphold cannabis consumers' Second Amendment rights, de-schedule cannabis, and otherwise lead on this popular issue of personal liberty, limited government, fiscal responsibility, and states' rights.”

Under federal law, someone who unlawfully uses a controlled substance like marijuana while also possessing a gun or ammunition is considered to have committed a felony.

Michael Teller, COO of the Panther Group, said the Trump administration may support further marijuana legalization as part of its pro-states rights and business-friendly attitude.

“I think Trump will look at this totally from a dollars and cents tax revenue [perspective]. Because whatever makes money,” Teller said. “I don't think he'll push federal legalization at any point, but I think rescheduling and everything that needs to allow states to make the decisions ... he'll clear a path.”

Michael DeGiglio and Robert Head, leads of Village Farms and Hemp for Victory respectively, wrote in an op-ed published in Marijuana Moment this week that the paused rescheduling hearing was a good thing for the cannabis industry. They acknowledged that they were “frustrated” by the delay but said it was necessary to achieve the goal of rescheduling.

“Had we not intervened, the hearing would have gone ahead with DEA openly tipping the scales against rescheduling and setting the stage for an acting career official to formally reject the move to Schedule III,” they wrote.

“Instead, the matter will likely be handled in the near future by the incoming Justice Department and yet-to-be-named DEA Administrator under President-elect Donald Trump, who publicly endorsed rescheduling on the campaign trail.”

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