Is the DEA sabotaging a recommendation to reclassify cannabis?

The federal effort to reschedule marijuana has officially been handed to the incoming Trump administration. 

An in-house judge at the Drug Enforcement Administration on Monday canceled a hearing set next week following some drama between the DEA and cannabis industry groups who say the agency has shown bias against rescheduling. The Department of Justice — the DEA’s parent agency — announced in late April that it would recommend reclassifying marijuana from a Schedule I drug (like heroin and LSD) to a Schedule III drug (like Tylenol and testosterone). 

The judge, John Mulrooney, said in an order on Monday that the whole thing should be postponed by at least three months when (presumably) the person who will be in charge of the DEA for the next four years takes over.  

Michael DeGiglio, CEO of the cannabis operator Village Farms International, said in a statement that they view Monday’s ruling “as an imperative step in this administrative process, and a symbolic victory against a conflicted government agency which we believe has no current intention of recommending that cannabis be transferred to a Schedule III designation.”

The move would unlock access to banking and regular tax write-offs for American cannabis companies — which are not listed on major exchanges but make up the basket of some ETFs like AdvisorShares Pure US Cannabis ETF — instantly making them more profitable. The DOJ’s April announcement even gave a bump to Canadian cannabis companies like Tilray, Canopy Growth, and SNDL Inc., which don’t stand to directly benefit from the policy change in the short term.  

But the process of finalizing the rescheduling proposal has dragged on, and the ball is now in President-elect Donald Trump’s court. 

A “disturbing and embarrassing revelation”

It’s unclear who will lead the DEA under President-elect Donald Trump, who’s seen in the industry as a potentially business-friendly wild card. Trump nominated Chad Chronister, a county sheriff in Florida, to fill current DEA head Anne Milgram’s role, but he withdrew from consideration last week.

According to evidence presented in motions filed by VFF, Hemp for Victory, and other pro-cannabis groups, the DEA appears to be in cahoots with anti-marijuana groups.

They say the DEA refused to accept the Department of Health and Human Service’s recommendation to reschedule cannabis. The DEA instead submitted its own analysis that suggests marijuana has a high abuse potential and no accepted medical use.

The DEA’s analysis mirrors talking points from the anti-legalization group Smart Approaches to Marijuana (SAM), the pro-cannabis groups noted. They also allege that the DEA has had improper, off-the-record communications with anti-rescheduling groups like SAM and the Tennessee Bureau of Investigation (TBI). 

Kevin Sabet, the head of SAM, posted on X that he had “confidential sources” within the DEA giving him updates on the proceedings. DEA Deputy Assistant Administrator Matthew Strait allegedly helped the TBI finalize its application to be part of the proceedings. 

The DEA also allegedly excluded input from the state of Colorado, where cannabis has been legal and regulated for a decade, while accepting input from states like Nebraska, where cannabis is not legal. 

The DEA did not respond to a request for comment. While Judge Mulrooney didn’t rule on the allegations, he said they’re a “disturbing and embarrassing revelation.”

“If true, viewed in the best light, these allegations demonstrate a puzzling and grotesque lack of understanding and poor judgment from high-level officials at a major federal agency with a wealth of prior experience with the APA,” or Administrative Procedure Act, he said.

Either way, he said, since there’s a new administration coming in next week, might as well wait for them to come in rather than have him rule on the actions of the current administration.