On August 29, 2023, the Department of Health and Human Services (“HHS”) sent the Drug Enforcement Administration (“DEA”) its recommendation to move marijuana from Schedule I to Schedule III of the Controlled Substances Act (“CSA”). Since then, the marijuana industry has waited in suspense for the DEA to make the final call as to what schedule marijuana will be placed.

DEA's Options and Treaty Considerations

The DEA must review HHS’ recommendation (and supporting documents) and conclude whether moving marijuana to Schedule III will violate the US’ treaty obligations. Then, the DEA will either commence the administrative rulemaking process or issue a final order stating where marijuana should be scheduled. It would be surprising if the DEA went straight to issuing a final order and did not allow for a notice and comment period. Still, under 21 U.S.C. 811(d), the DEA can skip the notice and comment period if it believes that its scheduling decision is most appropriate to carry out our US obligations under the Single Convention. This would not be done without precedent since the DEA went straight to issuing a final order when it rescheduled Epidiolex in 2018 (which was considered marijuana at the time).

This blog assumes, however, that the DEA will allow a notice and comment period for a decision of this magnitude. As such, this administrative process will be just as crucial as the DEA’s scheduling decision itself. The following lays out how the process will likely play out and why marijuana stakeholders must meaningfully participate in the administrative process ahead to ensure its success.

The DEA Publishes Proposed Rule and Opens Public Comment Period

Once the DEA publishes in the Federal Register its proposed rule to move marijuana to another schedule, then the public will likely have the right to submit comments for the official record, and interested parties should have the ability to request and participate in a formal administrative hearing. The DEA’s comment period will likely last for 60 days, but the formal hearing is a bit more open-ended since it operates much like a court. Comments should be submitted by those interested in ensuring that the DEA has the data it needs to support a Schedule III classification, develop, or improve the draft rule, or recommend against the DEA issuing the proposed rule.

Administrative Hearing

An administrative hearing is overseen by an administrative law judge or officer who presides over the hearing with the authority to administer oaths, issue subpoenas, accept or reject evidence presented, regulate the course of the hearing, allow for cross-examination, etc. The type of evidence that may be presented in a hearing is much like a regular court proceeding and must be relevant to the DEA’s scheduling recommendation (i.e., scientific data and marijuana medical efficacy and potential for abuse, and how the DEA can comply with the US treaty obligations with marijuana in schedule III). Once the hearing concludes, the administrative law judge compiles all the records and provides them to the DEA.

The DEA Reviews the Record

Upon the conclusion of the comment period and administrative hearing, the DEA will then review the entire record and issue its final rule based on its analysis, HHS’ analysis, the comments submitted, and the administrative hearing record. Notably, while proponents of the proposed rule bear the burden of proof, the DEA must take into consideration everything contained in the record, and its decision must be reasonably based on that record. Otherwise, the DEA’s scheduling move, or lack thereof, could be subject to invalidation upon judicial review. If the DEA proposes a rule placing marijuana in Schedule III, but industry stakeholders don’t submit comments or participate in the hearing further supporting such a decision and ensuring the record stands against the opposition. There is a risk that marijuana will not be reclassified to Schedule III.

Opponents to moving marijuana to Schedule III will undoubtedly request a hearing and flood the agency with comments showing, in their opinion, why marijuana must remain on Schedule I or go no further than Schedule II. Submitting a robust record of the substantial evidence supporting marijuana’s reclassification is critical to a successful process. Additionally, to preserve an issue for judicial review (should an interested party disagree with the DEA’s scheduling decision), then the interested party must submit a comment or participate in the administrative hearing. Otherwise, they cannot seek judicial review of the final rule.

DEA Issues Final Rule

The timeframe for issuing a final rule is still being determined, but since the DEA is required to review and respond to every comment submitted during the notice period, it could take some time. When the DEA issues its final rule, it will not be effective until at least 30 days after it is published in the Federal Register.

30-Day Judicial Review Period

Whether the DEA goes through the process of notice and comment before issuing a final rule or skips that step and issues a final order, after the final decision is published, an aggrieved party has 30 days to seek judicial review of the agency's decision. Importantly, if DEA goes through notice and comment, a party cannot be considered aggrieved unless it submitted comments or participated in the hearing. Stakeholders should appreciate that participation is critical to preserving their remedies in this process and ensuring a successful rescheduling process.