“This may be an encouraging sign for those advocating for the rescheduling of cannabis in a way that will survive the inevitable legal challenge(s) that would follow rescheduling.”
By Brett Schuman and Adam Horowitz, Goodwin Procter LLP
On Monday, the Drug Enforcement Administration (DEA) began a hearing concerning the potential rescheduling of cannabis from Schedule I to Schedule III under the Controlled Substances Act (CSA) of 1970. DEA recently announced the list of participants invited to speak at the hearing, and all have expressed opposition to rescheduling. Indeed, not a single supporter of rescheduling who sought to participate has been invited to speak.
This has, unsurprisingly, been met with skepticism (to put it mildly) from many in the industry. But there is another way to look at DEA’s approach to selection of the participants: this may be an encouraging sign for those advocating for the rescheduling of cannabis in a way that will survive the inevitable legal challenge(s) that would follow rescheduling.
As an initial matter, it is worth mentioning that this hearing does not concern the rescheduling of Food and Drug Administration (FDA)-approved products containing cannabis or medical cannabis products that were rescheduled to Schedule III pursuant to the Department of Justice’s April 2026 order; rather, the present hearing concerns only the rescheduling of all cannabis products that currently remain under Schedule I of the CSA.
In other words, the outcome of this hearing will have no direct effect on the cannabis products that have already been rescheduled to Schedule III—a separate action that itself is being challenged by opponents in court.
For purposes of the hearing that started on June 29, DEA is the party advocating in support of rescheduling and it bears the burden of proving rescheduling is warranted by a preponderance of the evidence.
We have some indication from the DEA how it plans to try to carry its burden.
First, while DEA listed a pharmacologist who submitted a report linking cannabis to psychosis and cognitive harm as a witness for the 2024 rescheduling hearing, DEA has indicated that it will not be calling this pharmacologist at the June 29 hearing and also that opponents of rescheduling would need to try to subpoena her to compel her testimony.
Second, on June 26, DEA revealed the witnesses it will be calling in support of rescheduling—a physician will testify as to the medical benefits of cannabis, and an FDA official will explain how FDA developed its recommendation to move cannabis to Schedule III.
The other witnesses permitted to testify and present evidence at the June 29 hearing have all expressed their opposition to rescheduling, and some have already sued DEA over its rescheduling of medical cannabis. DEA probably expects these groups and individuals to sue again challenging any rescheduling of adult-use cannabis. So, by inviting them to be heard at the hearing, DEA may be preserving the defensibility of the administrative process before making any final decision on the proposed rule.
While it is yet to be seen whether this plan will be successful, this is not uncommon in regulatory rulemaking and also is a common strategy by judges in court to better protect their decisions on appeal.
Under DEA regulations, only “interested persons”—defined as those “adversely affected or aggrieved by any rule or proposed rule issuable”—are required to be allowed to speak at a rule making hearing. In fact, this is the exact basis DEA has cited in its rejection letters to proponents of rescheduling who wished to speak.
Because the pending proposed rule would reschedule cannabis to Schedule III, DEA has determined that proponents of rescheduling do not qualify as “interested persons” and therefore are not entitled to speak.
Skeptics have pointed out that DEA previously permitted proponents of rescheduling to speak at a 2024 administrative hearing regarding potential. Of course, many proponents of rescheduling thought that hearing was not going to result in a rescheduling recommendation even with proponent participation, so it is hard to understand why proponents think this time it could turn out any worse.
Further, the current hearing appears to be applying a different framework for determining whether participation is appropriate, adhering strictly to the definition of “interested person.” While this may be alarming to those unfamiliar with regulatory proceedings, it is not necessarily indicative of any particular outcome. Indeed, this is entirely consistent with an agency seeking to protect its process from later legal challenges.
And while some may be concerned that the absence of proponent testimony means the regulatory record supporting a decision to reschedule will be absent, the Department of Health and Human Services’s (HHS) recommendation, DEA’s own analysis the public comments—many of which were submitted by the proponents seeking to speak—are all part of the administrative record if DEA ultimately decided to recommend rescheduling.
And that existing record will be supplemented by the testimony of DEA’s two pro-rescheduling witnesses. Because the standard of judicial review for such rulemaking is whether the agency’s decision was “arbitrary and capricious;” in being extraordinarily accommodating of rescheduling opponents, DEA can later demonstrate that it considered all opposition and still found rescheduling to be warranted (if that is DEA’s recommendation).
On the other hand, if the DEA granted supporters speaking rights as “interested persons,” despite not meeting the definition of an “interested person” under DEA regulations, that would be providing rescheduling opponents a potential basis to challenge a rescheduling decision.
Finally, it is worth noting that the outcome of the hearing will be, at most, a recommendation to the DEA administrator regarding whether to move cannabis from Schedule I to Schedule III. The DEA administrator can accept or reject that recommendation, and the attorney general of the United States could make the ultimate decision whether to reschedule cannabis. So, there are both political and legal components to the rescheduling process.
Given the history of court challenges, including the pending challenges to the rescheduling of medical cannabis, DEA may be structuring the hearing to best withstand the inevitable legal challenges if the administrative law judge’s recommendation is to move cannabis from Schedule I to Schedule III.
Brett Schuman is a partner at Goodwin Procter LLP and co-chair of the firm’s cannabis practice, where he advises cannabis and hemp operators and investors on regulatory, intellectual property and litigation matters. Adam Horowitz is an associate at Goodwin Procter LLP and a member of the firm’s cannabis practice.
Photo courtesy of Philip Steffan.
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