Will the United States Attorney General, via the U.S. Drug Enforcement Administration (“DEA”) follow the recent recommendation of the U.S. Department of Health and Human Services (“HHS”) to reschedule cannabis to Schedule III? The plain language in the United States Controlled Substances Act (the “CSA”) compels DEA to do so, but there is speculation that the DEA could disregard the last week’s historic HHS Recommendation because of the Attorney General’s limited duty under Section 811(d)(1) of the CSA.

Section 811(d)(1) of the CSA requires the Attorney General to make scheduling decisions, among other things, that carry out the country’s obligations under the UN Single Convention on Narcotics of 1961, to which the United States is signatory (the “UN Single Convention”). Like the CSA, the UN Single Convention establishes several classifications or “schedules” of drugs and substances, all of which generally require member nations to tightly control cannabis, most similarly to the CSA’s Schedule I or Schedule II.

Drugs and substances that are subject to international treaties are re- and de-scheduled pursuant to the process established in Section 811(d), including cannabis. Section 811(d)(1) of the CSA states that “the Attorney General shall issue an order controlling such drug under the schedule he deems most appropriate to carry out such [international treaty] obligations, without regard to the findings prescribed by subsection (a) of this section or section 812(b) of this title and without regard to the procedures prescribed by subsections (a) and (b) of this section”.

Several commentators have largely dismissed concerns regarding the Attorney General’s ability (via the DEA) to reschedule cannabis below Schedule II. After all, we’ve already violated it through our permissive approach to states’ rights to establish and regulate their own medical and adult-use markets. Moreover, several signatories to the UN Single Convention (including Canada, Mexico, Uruguay, Luxembourg, South Africa, Thailand, and others) have legalized adult use cannabis or have otherwise decriminalized possession and/or home cultivation in clear violation of the Single Convention. After all, the Single Convention seems to lack any enforcement mechanism. So, it’s no big deal, right? RIGHT?

Maybe so, but the issue is tricky: treaty compliance is not the issue. At least not the primary issue. The issue is compliance with domestic law. The key question is whether the Attorney General, via the DEA, can or will be able to reschedule cannabis to Schedule III given that the UN Single Convention is effectively incorporated into the CSA – a federal statute passed by Congress that the Executive Branch must follow. Specifically, Section 811(d)(1) of the CSA appears to limit the AG’s discretion to ensuring a rescheduling decision complies with our treaty obligations without regard to other factors, including HHS’ recommendation. The DC Circuit Court has previously affirmed this limited discretion based on clear congressional intent in a decades-old case, but one that rescheduling opponents will surely seize upon[1]. The plain language in 811(d) (bolded above) further limits the DEA by the use of the term “shall” instead of, for example, “may”. In the words of the DC Circuit Court, “the events surrounding the drafting of Section 201(a)-(d) reveal an overarching congressional aim to limit the Attorney General’s authority to make scheduling judgments under the Act.[2]” If congress intended to give the DEA more discretion to either disregard the HHS recommendation for any other reason, or to disregard the CSA, the DEA would have been vested with this power and discretion. But it has not.

Moreover, should the DEA issue an order placing cannabis on Schedule III, opponents may challenge that order as exceeding the agency’s statutory authority under CSA Section 811(d)(1). To explain how and why such an order could be challenged, some background is necessary. “When Congress delegates regulatory functions to an administrative agency, that agency’s ability to act is governed by the statutes that authorize it to carry out these delegated tasks. In the course of its work, an agency must interpret these statutory authorizations to determine what it must do under the statute and what it may do within the limits that Congress has set.”[3]  In a landmark decision in 1984, the U.S. Supreme Court[4] indicated that when a statute is susceptible to multiple reasonable interpretations, the “Chevron framework” requires courts to give agencies substantial latitude by deferring to an agency’s reasonable interpretation of the statute. The first of two “steps” in the Chevron analysis is determining whether Congress directly addressed the precise issue before the court through its application of customary tools of statutory construction. If the statute is clear on its face, the court must implement Congress’s stated intent. The trouble here is that D.C. Circuit Court has previously indicated that Section 811(d)(1) is clear and unambiguous. In short, it’s possible that the DEA would not be afforded the protection of the “Chevron Deference” by the courts if a Schedule III order from the DEA is challenged as arbitrary and capricious.

So what does this all mean? It means that this could go a few different ways ultimately. Even if the DEA issues an order to reschedule cannabis to Schedule III, a properly aggrieved party could initiate litigation challenging a DEA order to reschedule cannabis to Schedule III, and it’s possible that a court ultimately invalidates any rescheduling order that falls below Schedule II on the basis that the DEA exceeded its statutory authority in doing so. That said, it’s difficult to assume that this process is completely devoid of politically driven administrative coordination and that President Biden would risk a rescheduling decision to Schedule II backfiring on him so close to an election. It’s also worth noting that the UN Commission on Narcotic Drugs voted to remove cannabis from Schedule IV under the Single Convention in 2020; however, the controls required under Schedule I are practically the same under Schedule IV, so this move does not necessarily militate any change in the DEA’s treatment of cannabis under the CSA. That said, the UN’s 2020 vote could provide cover for the DEA to provide a reasonable basis to issue an order consistent with the HHS recommendation to move cannabis to Schedule III.

A successful challenge to any order moving cannabis to Schedule III or lower would be an unmitigated disaster for the cannabis industry. A move to Schedule II would have zero practical benefit to the existing cannabis industry because, among many other reasons, Section 280 of the IRS Code would still apply and the likelihood of revisiting the scheduling decision within any reasonable timeframe is highly unlikely. Meaning we will likely need to live with the DEA’s decision for a very long time. As it stands, rescheduling to Schedule III would not legalize the existing industry and would do nothing to decriminalize cannabis at the federal level. But it’s an important first step. The next step in the process requires sound thinking on the implications of CSA Section 811(d)(1) and the U.N. Single Convention.

[1] NORML v. DEA, 559 F.2d 735, 751 (D.C. Cir. 1977), “The language of Section 201(d) is consistent with the clear import of the Act’s legislative history. The section provides that the Attorney General shall, without regard to the usual referral and hearing procedures, “issue an order controlling such drug under the schedule he deems most appropriate to carry out such [international] obligations * * * .” (Emphasis added.) The underscored phrase…circumscribes the Attorney General’s scheduling authority: it enables him to place a substance in a CSA schedule — without regard to medical and scientific findings — only to the extent that placement in that schedule is necessary to satisfy United States international obligations. Had the provision been intended to grant him unlimited scheduling discretion with respect to internationally controlled substances, it would have authorized him to issue an order controlling such drug “under the schedule he deems most appropriate.”

[2] Id.

[3] Chevron Deference: A Primer (https://sgp.fas.org/crs/misc/R44954.pdf) (Updated May 18, 2023).

[4] Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 468 U.S. 837 (1984).