The Rescheduling Process Is Becoming A Circus - TDR 1/9/2025

Judging from the flurry of motions and cross-motions, the DEA’s upcoming marijuana rescheduling hearing is shaping up to be the cannabis world’s version of a courtroom drama—minus the Netflix deal (for now). Earlier this week, Administrative Law Judge (ALJ) John Mulrooney told the DEA to speak up, pronto, regarding new allegations that it’s actually anti-rescheduling—even though it’s supposed to be championing the Biden administration’s plan to move cannabis from Schedule I to Schedule III.

So why all the fuss? Several pro-reform groups, including Village Farms International and Hemp for Victory, say they’ve discovered “new evidence” that the DEA has been chatting behind the scenes with folks opposed to the rescheduling plan. The complaint? Alleged clandestine communications, favoritism toward anti-cannabis participants, and even a suggestion that the DEA is ignoring the legal framework set out by its own Justice Department’s Office of Legal Counsel. Talk about a dysfunctional family dinner.

Cue the big question: Could the judge remove the DEA as the main sponsor of the rule altogether? That’s precisely what the pro-reform bloc wants. Their argument? If the agency can’t play fair—by its own rules, no less—how can anyone trust the final outcome?

Complicating matters, the DEA just filed a declaration that critics say reads like a laundry list of “marijuana-has-no-medical-value” talking points. The problem? That legal test was supposedly nixed by the Justice Department, leaving the DEA looking more than a little out of sync with the script. If true, that’s awkward for an agency whose official stance should align with the White House recommendation.

|| || |For investors eyeing the cannabis sector, the hearing’s outcome could be a genuine market mover. Rescheduling to Schedule III wouldn’t mean full legalization—sorry, no coast-to-coast pot shops overnight—but it would unlock certain tax benefits and lower research barriers. Translation: potential for bigger gains and new entrants in an already spirited field.| |We’ll see how Judge Mulrooney responds to these new developments. Thus far, he’s revealed zero patience for clandestine communications, even calling out the DEA’s “critical blunder” in issuing subpoenas to FDA officials. Meanwhile, the pro-reform side is doubling down, pointing out that Colorado (a major cannabis trailblazer) wasn’t allowed in, while Nebraska—a staunch prohibitionist—gets a front-row seat.| |If there’s one takeaway from this saga, it’s that cannabis policy is never dull. With the DEA’s official response due any minute and the hearing kicking off January 21, get your popcorn—this regulatory drama could ripple across the entire U.S. cannabis market.|