Once a marijuana enemy, DEA now key to rescheduling

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Image of a flag bearing the Drug Enforcement Administration logo sitting above the U.S. flag

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The most significant shift in U.S. marijuana policy is drawing closer, but one major obstacle remains in reform’s way: the Drug Enforcement Administration.

On Aug. 29, the U.S. Department of Health and Human Services (HHS) responded to President Joe Biden’s October 2022 call for a federal review of marijuana scheduling with a revolutionary pronouncement: The drug should be reclassified as a Schedule 3 controlled substance.

Now, the federal government’s first official acknowledgment that marijuana has medicinal value goes to the DEA, the arm of the Justice Department that’s most closely associated with the country’s war on drugs.

DEA Administrator Anne Milgram and federal attorneys will consider relevant questions of law and policy in a review of indeterminate length.

How long the DEA might take to form a response is an open question, though experts told MJBizDaily that an initial proposed rule could be issued by the end of the year and the process finalized by next spring.

What the DEA cannot do is reject the HHS recommendation outright, said Howard Sklamberg, who once served as the U.S. Food and Drug Administration’s top enforcement official.

This means marijuana’s days as a Schedule 1 drug are ending. It’s only a matter of when.

“They have to defer to HHS on that,” Sklamberg, a partner at Washington DC-based law firm Arnold & Porter, told MJBizDaily in an interview.

“To have that be countermanded by non-public health people would be a mess.

“They will have the legal and policy questions. And they are not as factually complicated.”

‘Uncharted’ territory

The DEA must consider such questions as U.S. obligations under international drug-control treaties.

And barring a rejection of the HHS recommendation – experts told MJBizDaily that’s highly unlikely – the DEA must issue a proposed change to federal law consistent with the HHS’ comprehensive scientific evaluation of marijuana.

Such a proposal could come as early as the end of the year, though there’s no guarantee or even a clear timeline.

“I don’t think it will take terribly long, because they knew they were going to get this,” Sklamberg said.

“They didn’t know what (the) HHS was going to conclude, but (they) knew it was coming.”

He added: “This is not a new issue for (the) DEA. It has a lot of the data already.

“If (the DEA) wants to move quickly, it has a bit of a head start.”

When and if the DEA suggests that change, there will be more hurdles:

  • A public-comment period will be opened, usually 30-60 days.
  • The DEA will then be obligated to review those comments and respond before the rule change takes effect.
  • Almost inevitably, there will be lawsuits that could delay implementation further.

The DEA declined to comment on the timeline of its response.

Neither the DEA nor Health and Human Services has released the letter containing HHS’ recommendation.

Though the DEA has rejected earlier rescheduling petitions – including pleas for relief from state governors seeking federal accommodations for medical cannabis – the nation’s federal drug police hadn’t previously been ordered by a president to review marijuana law.

And this is the first time the DEA has had to consider a recommendation from health regulators to consider marijuana as legitimate medicine.

All of this leads to an “uncharted” situation, said Joshua Horn, a Philadelphia-based attorney and partner at Fox Rothschild, where he co-chairs the firm’s cannabis law practice and has advised major multistate operators such as Chicago-headquartered PharmaCann and Florida-based Trulieve Cannabis Corp.

“I don’t think there’s really much precedent for this situation,” agreed Andrew Kline, senior counsel and cannabis law co-chair at the Denver office of Seattle-based Perkins Coie.

It’s still an open question how much time the DEA will spend considering the rescheduling question and exactly what the agency will recommend, experts told MJBizDaily.

Much less clear is exactly what the new landscape will look like, how the new reality will disrupt the U.S. marijuana industry as it currently exists and exactly when this all will happen.

“This is going to be a journey,” Sklamberg predicted.

How we got here

Marijuana’s current odyssey through Capitol Hill bureaucracy began Oct. 6, 2022, when Biden directed Cabinet-level agencies to “review expeditiously” how marijuana is scheduled.

It seemed to be a clear message that the White House was dissatisfied with the status quo of marijuana as well as with a deadlocked Congress’ inability to dismantle it.

Marijuana has been Schedule 1 since 1970, when then-President Richard Nixon signed into law the Controlled Substances Act, which defined “marihuana” as “all parts of the plant Cannabis sativa” aside from mature stalks and seeds.

In addition to an official determination that marijuana has no medicinal value and high potential for abuse, the Schedule 1 designation means that legal marijuana businesses launched over the past two decades face significant challenges, including:

  • Not being able to deduct basic business expenses on federal tax returns.
  • Being shut off from most mainstream banks and U.S.-based stock exchanges.
  • Being raided and shut down by the DEA at any time, in theory.

The federal ban creates numerous other headaches, including restrictions on research and product development, workplace-safety rules, health-insurance complications and more.

Strongest challenge yet

Earlier challenges to marijuana’s classification have been brought through a petition process or via the courts by advocacy organizations, including the National Organization for the Reform of Marijuana Laws (NORML) and Americans for Safe Access as well as two governors of states with regulated medical cannabis.

Legal and academic experts told MJBizDaily they believe the DEA’s leg of the Biden-ordered review won’t take nearly as long as the yearslong reexaminations of previous rescheduling petitions brought by other parties.

That includes a 2002 petition from drug-reform advocates that the DEA formally denied in 2011 and a 2011 request from two governors to move marijuana to Schedule 2 that the agency rejected in 2016.

According to Sklamberg, marijuana could officially be a Schedule 3 substance by next spring.

“You can get the whole thing finalized, if everything goes well, by the first half of next year,” Sklamberg said.

Business impacts still unknown

Sklamberg and Kline concurred that the DEA’s work and its ultimate decision is simple, if not already predetermined: The HHS has declared marijuana a medicine, so the DEA must suggest an adjustment to federal law, known as a rule change, to accommodate the new classification.

“For (the) DEA to say, ‘Yeah, you’re right on science and medicine but wrong on schedule placement – that would be really hard,’” Kline said.

“That would be the DEA saying, ‘FDA, you don’t know what you’re doing.’

“I just don’t see that happening.”

What the DEA might be most concerned about is creating a careful administrative record for when the inevitable lawsuits land – some filed by parties that want to keep marijuana illegal, others from advocates who want the drug descheduled.

Whatever the DEA suggests, more thorny questions will remain.

Ongoing conflict between state and federal law will continue for legal marijuana businesses.

There’s currently no example of a Schedule 3 controlled substance that hasn’t been approved by the FDA being sold in stores without the DEA’s blessing.

So, in the long term, Congress will still be on the hook to craft federal regulations of some kind.

“Is that going to be worse than what we have now?” Horn asked. “That’s a great unknown.”

Nevertheless, a significant change seems inevitable – and more imminent than ever before.

The DEA “has the final say, but the custom and the tradition and the expectation is that (the) DEA defers to Health and Human Services on the question of medical value,” said Jonathan Caulkins, a drug policy researcher and professor at Carnegie Mellon University in Pittsburgh.

“I wouldn’t be surprised if (the) DEA slow-walked this, but for the DEA to outright say ‘no’ would be outside of past practices,” he said.

“My best guess is that nothing will happen fast, but this eventually goes through.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.