Whereas most consideration has targeted on the recently concluded marijuana rescheduling hearing, an equally vital authorized battle has unfolded within the D.C. Circuit over the ultimate rescheduling order (“Remaining Order”). Petitioners, the Division of Justice, newly intervening events, and amici individuals have exchanged a collection of briefs over the previous month. These filings could in the end decide whether or not the rescheduling effort survives judicial evaluation.
At this stage, nevertheless, the court docket just isn’t deciding whether or not shifting marijuana to Schedule III was lawful. As a substitute, the events are litigating a number of threshold points. The court docket should resolve these questions earlier than it could possibly attain the deserves. Most significantly, it should determine whether or not any petitioner has standing to problem the Remaining Order, whether or not implementation of that order needs to be stayed whereas the litigation proceeds, and whether or not further events could intervene in help of rescheduling.
How the court docket solutions these procedural questions could show simply as necessary because the deserves of the Remaining Order.
(All briefs mentioned may be discovered on PACER, D.C. Circuit Court docket of Appeals Docket #: 26-1136)
Standing comes first
As I have discussed previously, the destiny of the Remaining Order could flip much less on marijuana coverage than on a basic query of administrative legislation: standing. Earlier than the D.C. Circuit can think about whether or not the Division of Justice lawfully moved marijuana to Schedule III, it should decide whether or not any petitioner has suffered the kind of concrete harm required to problem the Remaining Order.
The Division of Justice argues that neither petitioner has standing. DOJ contends that the Nationwide Drug and Alcohol Screening Affiliation (NDASA) depends on speculative predictions about employer habits fairly than concrete harm. It additionally argues that one other petitioner, MMJ BioPharma, has failed to determine competitor standing or a cognizable harm. Lastly, DOJ maintains that neither petitioner has proven an harm inside the Managed Substances Act’s “zone of pursuits.”
NDASA responds that its members would face rapid compliance prices upon rescheduling. They supplemented the document with further declarations describing concrete accidents. MMJ likewise refined its competitor standing principle. It argues that the Remaining Order advantages state-regulated operators whereas diminishing the worth of the standard FDA and DEA pharmaceutical pathway. It argues that state-legal merchandise from Trulieve Cannabis Corp., Cresco Labs Inc., Verano Holdings Corp., Green Thumb Industries Inc., and TerrAscend Corp. instantly compete with MMJ’s pharmaceutical product.
I proceed to consider NDASA is prone to set up standing. DOJ introduced a really robust opening transient (surprisingly so), however NDASA considerably strengthened its place in reply. I stay much less satisfied that MMJ can set up standing by itself, though it additionally improved its argument within the reply. If NDASA establishes standing, nevertheless, MMJ’s standing turns into largely irrelevant as a result of the court docket can proceed to the deserves.
Whether or not Petitioners ought to obtain a keep
If the petitioners set up standing, the court docket should subsequent determine whether or not to remain the Remaining Order pending evaluation. A stay is extraordinary aid, as it could freeze the Remaining Order (at the least quickly). It requires a chance of success on the deserves, irreparable harm, minimal hurt to others, and consistency with the general public curiosity.
DOJ argues that the Appearing Lawyer Normal acted inside the authority granted by 21 U.S.C. § 811(d)(1). It additionally argues that the petitioners’ alleged accidents stay speculative. NDASA and MMJ reply that they face current, unrecoverable financial harms. Additionally they argue that the Remaining Order instantly modifications each compliance obligations and the aggressive panorama.
The events additionally disagree concerning the public curiosity. DOJ argues that the Remaining Order ought to stay in impact whereas the litigation proceeds. The petitioners argue there isn’t any public curiosity in permitting an allegedly illegal company motion to take impact.
For my part, the petitioners’ strongest argument just isn’t a authorized one however a sensible one. Marijuana has remained prohibited for greater than 50 years. Preserving the established order for a number of further months whereas the court docket opinions the Remaining Order’s legality is hardly a rare burden.
What does § 811(d)(1) really authorize?
Assuming the petitioners set up standing, the central statutory query is whether or not DOJ exceeded its authority underneath § 811(d)(1).
DOJ argues that the statute approved the Lawyer Normal to situation the Remaining Order with out following the standard scheduling procedures. It depends on NORML v. DEA and a 2024 Workplace of Authorized Counsel opinion (cited to within the Lawyer Normal’s “Questions Related to the Potential Rescheduling of Marijuana”) supporting rescheduling.
The petitioners disagree. They argue that § 811(d)(1) authorizes solely an expedited scheduling dedication, not an expedited course of for adopting a completely new regulatory framework.
That disagreement naturally results in the Administrative Process Act (“APA”).
The APA query could also be much more necessary
The petitioners argue that DOJ did excess of merely reschedule marijuana. In line with their briefing, the Remaining Order additionally adopts substantive rules wanted to fulfill treaty obligations. They argue these rules required notice-and-comment rulemaking underneath the APA and the CSA.
DOJ responds that treaty-based scheduling happens by “order,” not by “rule.” It additionally argues that any problematic regulatory provisions are severable from the scheduling dedication.
The petitioners reject that place. Utilizing DOJ’s personal phrases, they argue the rules are indispensable to treaty compliance and subsequently can’t be severed whereas leaving the scheduling determination intact.
Treaty obligations stay on the middle of the case
Practically each situation within the case traces again to a U.N. treaty referred to as the Single Convention on Narcotic Drugs. DOJ argues that § 811(d)(1) permits the Lawyer Normal to position marijuana in Schedule III whereas imposing no matter restrictions are needed to keep up treaty compliance.
The petitioners reply that DOJ has successfully conceded their level by acknowledging that rescheduling alone wouldn’t fulfill treaty obligations. If further rules are important, they argue, these rules require extraordinary rulemaking procedures.
For my part, the extra vital query just isn’t whether or not state-legal medical marijuana could also be positioned in Schedule III. The higher query is whether or not Congress meant § 811(d)(1) to authorize a completely new regulatory framework for dozens of state medical marijuana packages and 1000’s of marijuana merchandise.
Motions to intervene replicate the broader stakes
Two medical marijuana operators have moved to intervene in support of DOJ. They argue that the litigation instantly impacts their companies and that DOJ just isn’t outfitted to adequately characterize their industrial pursuits. The petitioners reply that DOJ is absolutely able to defending its personal Remaining Order. Though procedurally distinct, these motions underscore the litigation’s broader financial significance.
Wanting forward
This litigation is in the end about administrative legislation as a lot as marijuana coverage. Earlier than the court docket reaches the deserves, it should resolve standing, the keep request, and the motions to intervene. As a result of the petitioners argue {that a} keep is important to forestall ongoing hurt whereas the case proceeds, the court docket is prone to tackle these threshold points fairly rapidly. I anticipate a call inside the subsequent week or two. The approaching rulings is not going to determine whether or not DOJ in the end acted lawfully. They are going to, nevertheless, present the primary significant indication of how the court docket views both sides’s case. If the court docket grants each standing and a keep, I consider that can sign the top of state-legal medical marijuana in Schedule III.
For extra on marijuana rescheduling and the DEA rulemaking course of, please try these current posts:
