Marijuana stakeholders walk fine line to join rescheduling hearing

(This story was updated to clarify the NCIA’s argument.)

The next step in the yearslong marijuana rescheduling process could be a brief hearing where an administrative law judge informs witnesses why they aren’t qualified to participate, observers told MJBizDaily.

Ahead of a Nov. 12 deadline, cannabis advocates and business leaders invited to participate in a Dec. 2 hearing about marijuana rescheduling were asked to explain how they would be harmed by moving the plant from Schedule 1 to Schedule 3 of the Controlled Substances Act.

To do that, anyone in favor of rescheduling marijuana had to reconcile two seemingly counterintuitive ideas if they wanted to engage in the process, according to interviews and a review of filings obtained by MJBizDaily:

• Retaining marijuana as a Schedule 1 drug is untenable.
• Moving marijuana to Schedule 3 without imposing other controls also “adversely” affects them.

It might seem like a delicate balancing act – if not outright contradictory.

But that’s the fine line the 25 “designated participants” listed in an Oct. 31 letter from Drug Enforcement Administration Chief Administrative Law Judge John Mulrooney II must tread if they want a voice in the historic marijuana rescheduling process.

“We have to show standing – that we’re a so-called ‘aggrieved party’ – and so we’re taking the position that we support the proposed rule, but we have a narrow objection,” said Aaron Smith, executive director of the National Cannabis Industry Association (NCIA), a Washington, D.C.-based trade group that represents mostly small and medium marijuana companies.

“The cannabis industry has the most to gain or lose from the proceedings’ outcome, so we want to make sure the cannabis industry has a voice in those proceedings,” Smith told MJBizDaily on Wednesday.

Legal threshold

DEA Administrator Anne Milgram selected 25 potential witnesses to testify at a Dec. 2 hearing about the proposal to reschedule marijuana from Schedule 1 to Schedule 3 of the Controlled Substances Act, MJBizDaily reported on Oct. 31.

However, as Mulrooney noted in his subsequent letter, Milgram’s list did not indicate how the parties might be “adversely affected or aggrieved” by the proposed rule.

That’s the legal threshold that potential witnesses must meet if they hope to testify in future hearings, said Eric Berlin, lead cannabis attorney at global law firm Dentons.

“And they have to state that with particularity,” Berlin told MJBizDaily.

“They can’t just say, ‘Oh, we’re concerned about this; oh, we disagree.’”

Mulrooney directed the designated participants to submit a “brief” filing by 2 p.m. ET Nov. 12 outlining how they would be aggrieved by marijuana rescheduling.

It’s understood that the initial Dec. 2 hearing is where Mulrooney could determine who will be allowed to present evidence or testimony in January and February.

And though Berlin had yet to see the filings, he believes the list will be whittled down significantly, either at the hearing or by notice ahead of time.

“It’s a difficult standard to meet,” he said.

Injured parties

MJBizDaily obtained briefs filed ahead of the Nov. 12 deadline from:

• The Commonwealth Project, a Massachusetts-based organization run by a former top U.S. Food and Drug Administration official that advocates for medical marijuana use as an opioid replacement for American seniors.
• Village Farms International, a Florida-based produce giant that also owns Pure Sunfarms, a large British Columbia-based licensed cannabis producer.
• My Florida Green, an app and web platform where qualified Florida medical marijuana patients can find a physician and enter the state registry.

Smith also described NCIA’s filing, though he did not share a copy.

In the NCIA’s case, the organization will argue that rescheduling could inadvertently offer new federal protections to so-called “novel cannabinoids” that have appeared since the passage of the 2018 Farm Bill.

These include some – such as delta-10 THC or THC-O – that are restricted or banned in certain states.

That’s because rescheduling would move any cannabinoid not explicitly mentioned in the Controlled Substances Act to Schedule 3, Smith said.

Rescheduling impact

According to its filing, The Commonwealth Project would be negatively affected if rescheduling were done “without regulations to adequately consider the effect of rescheduling cannabis from Schedule I to Schedule III for individuals who are 65 and older … which is missing from the DEA’s current proposed rule.”

“We’ve not done the research that’s necessary to tell us which medical conditions” are best treated by cannabis, said Robert Kent, a former top lawyer at the Office of National Drug Control Policy who is involved with the effort.

As for the seeming forced contradiction of asking someone who is pro-rescheduling to list reasons why they might be harmed by a policy they otherwise support? That’s part of a deliberate process, Kent theorized.

“It’s creating a record that will be used to ultimately make a decision,” he said.

It’s also likely another careful step the DEA and Justice Department are taking in order to stave off anticipated legal challenges from anti-rescheduling forces.

International and financial impact

Village Farms’ filing notes that as a major international company currently operating in the Canadian cannabis market, marijuana’s current Schedule 1 status means it can’t enter the U.S. market “without risking its own status as a NASDAQ listed company.”

“While moving marijuana to schedule III would not solve that problem immediately, Village Farms believes it would go a long way toward reducing the perceived risk associated with doing business with marijuana companies in general,” the company wrote in its filing, in part.

“It would, in other words, be an important first step toward permitting Village Farms to enter the U.S. market.”

However, the filing adds, fine print in the rescheduling process means the DEA could reject the current proposal to reschedule – or move marijuana only to Schedule 2.

Schedule 2 drugs are considered to have “a high potential for abuse which may lead to severe psychological or physical dependence.”

“To the extent the Proposed Rule leads to marijuana remaining in schedule I or being rescheduled only to schedule II … Village Farms would be harmed,” the filing notes.

And then there were 24

At least one of the 25 recipients of the DEA’s offer to vie for an opportunity to participate in the rescheduling hearings is choosing to forgo the opportunity.

Dr. Chad Kollas, an Orlando, Florida, oncologist who published a 2011 journal article about medical marijuana’s value in palliative care, received a designated participant invitation on behalf of the American Academy of Hospice and Palliative Medicine (AAHPM), according to the DEA’s Oct. 31 notice.

However, Kollas “is no longer testifying at the cannabis rescheduling,” AAHPM spokesperson Wendy Chill told MJBizDaily in an email.

The organization did not offer an explanation for Kollas’ absence.

“AAHPM continues to support the rescheduling of marijuana and stands by their original comment letter” submitted in July, Hannah Marshall, another AAHPM spokesperson, told MJBizDaily via email.

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