Why cannabis businesses need to apply for DEA registration now – and why states must help

Steph Sherer (Courtesy photo)

(This is a contributed guest column. To be considered as an MJBizDaily guest columnist, please submit your request here.)

So far, most discussion in the broader cannabis community of the U.S. Drug Enforcement Administration’s upcoming federal marijuana rescheduling hearing has focused on who will testify, while some are paying attention to the June 18 order that appears to narrow the hearing’s scope.

This fails to address a larger misunderstanding: what the outcome of this hearing will mean for cannabis businesses. And that’s clouding the judgment of both the industry and cannabis regulators when it comes to evaluating the importance of the DEA registration process available to state-licensed medical marijuana businesses.

This could have devastating consequences for the legal medical cannabis supply chain and for patient access if they let Friday’s DEA registration deadline pass them by.

The hearing should not be a distraction from the real legal and practical issues facing states and businesses. Cannabis businesses that may qualify for DEA registration should be applying. And state regulators should help them identify eligible licenses, document medical-only operations, preserve medical supply chains and protect patient access.

Does applying for DEA medical marijuana registration create a risk?

This hearing is about the Biden administration-era proposal to reclassify “marijuana” (as defined under federal law) as a Schedule 3 drug. Under the Controlled Substances Act, these administrative hearings give parties who are adversely affected or aggrieved by a proposed rule the opportunity to present their concerns.

The seven parties the DEA selected to participate are not a representative cross-section of the cannabis debate. Nor are they supposed to be. They had a qualifying objection, an adverse interest or a legally recognizable stake in the proposed rule.

In plain English, the hearing is structured for the parties challenging or objecting to the proposed scheduling action.

After decades of rescheduling attempts thwarted by the DEA, it is understandable that the witness list has people concerned. But that elides the part of the June 18 order that has much greater consequences for patients and businesses alike.

DEA Chief Administrative Law Judge Derek Julius’s order states that the hearing will not address the rescheduling of U.S. Food and Drug Administration-approved medical products that contain marijuana or medical marijuana products already regulated by the states.

Instead, the hearing will focus on whether the remainder of marijuana, as defined in the CSA, should be transferred from Schedule 1 to Schedule 3.

This should raise serious concerns.

What is the problem with Schedule 3 status for cannabis?

Under U.S. scheduling law, Schedule 1 is reserved for substances with no currently accepted medical use. If cannabis has a currently accepted medical use it cannot remain in Schedule 1. (And medical cannabis is already Schedule 3 thanks to the Justice Department’s April order.)

Cocaine and methamphetamine remain tightly controlled, but they are not in Schedule 1 because they have accepted medical uses and are only legal with a DEA registration.

Schedule 3 drugs are still federally controlled substances. Businesses that manufacture, distribute, dispense, or handle Schedule 3 drugs generally must comply with federal registration and other requirements.

Thus, rescheduling marijuana generally would not automatically legalize any cannabis businesses.

The tax issue is also more complicated than many headlines suggest. Schedule 3 would affect the application of Section 280E, but post-rescheduling, non-DEA-registered cannabis businesses will find that their tax problems are associated with federally illegal activity, not just 280E.

In other words, the outcome of this hearing will not legalize adult-use cannabis businesses, nor will it give cannabis businesses the same legal standing, tax position, banking opportunities, investment opportunities, or enforcement protections that they can obtain only by participating in the medical cannabis pathway created by April’s final order.

That misunderstanding is one reason some eligible cannabis businesses are not applying for DEA registration now.

Should cannabis businesses register with the DEA?

Acting Attorney General Todd Blanche created a path for state-licensed medical cannabis businesses to seek DEA registration and operate within a federally recognized medical cannabis framework.

That is the opportunity businesses should be evaluating, especially businesses that started in medical cannabis but moved into adult-use markets to survive and make payroll.

Regulators should be helping them. Instead, in too many dual-market states, regulators are not encouraging or helping businesses to apply.

At Americans for Safe Access, we released a guidance document that urges states to act before the deadline. This will preserve medical cannabis patient access, support eligible businesses seeking DEA registration, rebuild patient enrollment, and create or protect medical-only supply-chain documentation.

These are the practical steps that will determine whether patients can access federally recognized medical cannabis and whether businesses can show they are operating inside the lawful medical pathway.

If regulators wait for the outcome of the ALJ hearing instead of helping businesses apply now, patients could lose access to the very supply chains that make federal recognition meaningful.

Patients cannot exercise their medical cannabis rights without access to a legal supply. They cannot rely on a medical-only framework if products are not cultivated, processed, tested, distributed and dispensed in a way that can be documented as medical.

Businesses can apply after the June 26 deadline, but will not be allowed to operate under the federal pathway until they are approved and will have to wait in line.

In a regulated market, timing matters. Missing the window could mean business disruption, loss of patient supply, and increased legal exposure.

What could happen if cannabis businesses don’t register with the DEA?

The enforcement risk is not theoretical. The attorney general’s Order No. 6754-2026 created, for the first time, a federal pathway for medical cannabis. It does not legalize adult-use cannabis, non-medical cannabis supply chains or unregistered activity outside the recognized framework.

Once the federal government creates a lawful route for medical cannabis, businesses outside that route may become easier targets.

The June 26 registration deadline is the first test. It is the moment for states to show whether they are serious about protecting patients and helping medical cannabis businesses move into the federally recognized framework.

DEA registration is what will protect patients and position businesses for the future.

Cannabis businesses should apply by Friday’s deadline. Regulators should help them. And states should adopt the emergency measures needed to preserve patient access before more time is lost.

Steph Sherer, the founder and executive director of Americans for Safe Access, the nation’s largest patient-centered organization dedicated to ensuring access to medical cannabis, is a pioneering international leader and expert in medical cannabis patient advocacy.