Cannabis Rescheduling Hearing Set: What Happens Now?
By Jason Adelstone
Sep 9, 2024
The historic US Drug Enforcement Administration (DEA) public comment period for marijuana's proposed rescheduling to Schedule III ended on July 22, 2024. Nearly 43,000 comments were submitted, which was the most comments ever submitted during a DEA public comment period. Over the next month, the DEA reviewed the comments and determined that a hearing in front of an administrative law judge (ALJ) is warranted.
Next Steps: Hearing on Proposed Rulemaking
On August 29, 2024, the DEA published its Notice of Hearing on Proposed Rulemaking in the Federal Register. The hearing is scheduled for December 2, 2024, at 9 a.m. ET at 700 Army Navy Drive, Arlington, VA 22202. "Interested Persons" are given 30 days (until 11:59 p.m. on September 30, 2024) to submit a request to participate in this hearing. An Interested Person is defined in 21 CFR 1300.01(b) as "any person adversely affected or aggrieved by any rule or proposed rule." Considering the DEA's discretion in granting a hearing in this process, there has always been a possibility that a hearing would be scheduled.
After the submission deadline passes, DEA Administrator Milgram will "assess the notices submitted and make a determination of participants. Following that assessment, [she] will designate a presiding officer to preside over the hearing." This means that Admin. Milgram, who notably did not sign a proposed order for rescheduling, will choose who appears at the hearing and what judge presides over it.
This is important because who qualifies as an "Interested Person" can be viewed liberally, which would extend the time of the hearing and a final decision, or conservatively, which would shorten the hearing timeline but potentially prevent rescheduling proponents from participating (since it could be argued that proponents are not harmed by a schedule III decision). There are two primary legal issues in the rescheduling analysis—marijuana's currently accepted medical use in treatment and its abuse potential.
Another critical aspect of the hearing will be the administrative law judge appointed to oversee the hearing, which will be like a mini-trial. The ALJ will have broad authority to determine the hearing timeline since the ALJ has
"all powers necessary to conduct a fair hearing, to take all necessary action to avoid delay, and to maintain order. The presiding officer's authorities include the power to hold conferences to simplify or determine the issues in the hearing or to consider other matters that may aid in the expeditious disposition of the hearing; require parties to state their position in writing; sign and issue subpoenas to compel the production of documents and materials to the extent necessary to conduct the hearing; examine witnesses and direct witnesses to testify; receive, rule on, exclude, or limit evidence; rule on procedural items; and take any action permitted by the presiding officer under DEA's hearing procedures and the APA. Notice of Hearing (internal citations omitted)."
Cannabis Rescheduling Hearing Timeline
The anticipated timeline is unknown but will become clearer once Admin. Milgram determines the "Interested Persons" who will participate in the hearing and who the ALJ will be. As a glimpse into the potential length of a hearing, recently, DEA ALJ Paul Soeffing set a 10-day hearing for a proposed rule placing two psychedelics in Schedule I. While the issues with rescheduling marijuana are likely less debatable than scheduling these two psychedelics (because we have HHS' recommendation and the Office of Legal Counsel (OLC) has stated its legally binding position), the public interest and DEA's apparent (and unsurprising) desire to leave marijuana in Schedule I could lead to a longer hearing than may otherwise be warranted.
Once the hearing concludes, the ALJ will submit its findings to the DEA, along with the evidence, testimonies, etc. presented at the hearing. DEA will then review those findings together with HHS' recommendation, OLC's memorandum, DEA's own analysis, and the comments submitted to make a final determination. At some point after a final determination is made, DEA will publish the final rule in the federal register. At that point, interested persons aggrieved by the final rule will have 30 days to seek judicial review of the decision. After 30 days, assuming a court does not stay the final rule pending litigation, it will become effective.
A final order on marijuana rescheduling will certainly not become effective until the beginning of 2025, at the earliest. Considering the DEA's opposition to Schedule III and the almost certain threat of litigation, even with a Schedule III final rule, the industry could be waiting until the middle to end of 2025 before Schedule III and 280E relief becomes a reality (if it becomes a reality).
Presidential Election Impacts on Cannabis Rescheduling
Based on recent public statements, it appears that neither presidential candidate would be eager (and it would not be an easy feat) to stop or reverse a Schedule III determination. Recently, President Trump posted that his administration would support Schedule III and medical advancements in marijuana and that he would be voting in favor of Florida's marijuana ballot initiative. Even with President Trump's support of Schedule III, however, if he chooses an Attorney General adamantly opposed to marijuana liberalization (see recent comments from 'William Barr, Trump's former AG, and current attorney for Smart Approaches to Marijuana on their attempt to keep marijuana in Schedule I), that could change the fate of marijuana's scheduling—or at least its timeline.
Based on VP Harris being the face of marijuana liberalization for the Biden Administration and championing federal legalization through the MORE Act in 2020, and Gov. Walz signing state marijuana legalization into law, it is likely that the Harris administration will be strong allies in Schedule III determination. Notably, cannabis decriminalization was removed from the 2024 democratic platform, so the administration's path toward decriminalization and legalization is currently unclear.
Litigation Could Delay Rescheduling
Litigation is almost certain. If litigation is successful in getting a stay on the final rule, particularly if there is an unfavorable judge, the process could be substantially delayed.
Congressional Review Act Could Rescind the Rule
The Congressional Review Act (the "CRA") is a tool Congress can use to overturn certain federal agency actions. After the DEA issues its final rule, it will submit the rule to Congress. Congress then has "60-days-of-continuous-session" to pass a resolution of disapproval in both houses that, once signed by the president, will cause the final rule to be treated as though it never took effect. This means that whenever the DEA issues its final rule, the next Congress and president could rescind the rule. Importantly, the CRA states that "no determination, finding, action, or omission under this chapter shall be subject to judicial review." As such, the majority view of federal courts believes that should a disapproval be signed by the president, judicial review will be unavailable.
If you are interested in supporting scheduling reform or would like to discuss how rescheduling may affect your business, please contact us.
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