Harris Sliwoski: Thoughts on DEA’s Marijuana Rescheduling Hearing Announcement (Dec. 2)

Yesterday, the Drug Enforcement Administration (DEA) near-noticed a hearing for its marijuana rescheduling proposal. The hearing would begin on December 2, 2024 at 9 a.m. ET, and may span multiple days or even weeks. The announcement came via an unpublished “notice of hearing on proposed rulemaking” (NOH).

The final NOH is set for publication this Thursday, August 29. However, nothing should change between now and then. This means that we finally know with certainty that if marijuana rescheduling happens, it won’t be until after the November elections.

Below are some thoughts on the latest development, in Q&A format.

Did you tell us so?

Yes, we told you so. Back in March, when DEA agreed to initiate rulemaking to reschedule marijuana, I wrote that “I doubt cannabis will be on Schedule III by November.” More recently, during the open comment period, I again stated that “you can expect this process to be ongoing at the time of the November elections.”

Why are you telling us that you told us so?

It’s fun of course; but more than that, I believe expectations by some have been overly optimistic as to rescheduling timelines. I am not just talking about on social media. I’ve seen dubious forecasts in investment pro formas and elsewhere.

At this point, cannabis businesses should check their expectations for planning purposes (specifically tax planning purposes) at least through next year. There is still no guarantee the Schedule III will happen, and there is certainly no guarantee that Schedule III would apply to the 2024 tax year.

What can cannabis businesses do at this point?

Wait a few days for NOH to drop, then sign up to participate in the hearing if that is of interest to you. You’ll have 30 days from the date of NOH to sign up, which is September 28, 2024, I believe.

Other than that, the comment period on DEA’s proposed Schedule III rule closed last month. You could be calling and writing your Congressional reps, I suppose, but even the most powerful and vocal among them haven’t been able to move things along.

Interested parties should also remain on the lookout for proposed “marijuana specific controls” from DEA, which should accompany the current proposed rules at some point. That could be a whole ‘nother can of worms, as I explained back in May.

Did Biden muck things up?

I sort of think he did. Back in January, I argued that “Biden passed the buck, putting us on an uncertain, circuitous path” when he instigated this process. He could have done more, and sooner, in keeping with his campaign promises.

Now that we know a hearing will not occur until December, it seems more likely than ever that marijuana will remain on Schedule I through January, when we have a new President. I’d like to be wrong.

Are more delays on the horizon?

Could be, to the extent that the NOH could even be considered a “delay.” Beyond that, it’s hard to say. DEA has a lot of discretion to speed up or slow down this process. From the Administration’s perspective, a slower process could help insulate its decisions, especially given all of the eyeballs on this thing (over 40,000 comments submitted).

And yet, while DEA might try to run a cautious, transparent process, the prospect of litigation around rescheduling is very real. It’s also possible that a new President attempts to put the brakes on things come January. I don’t think this is likely, but I’m no pundit either. For some scuttlebutt on that, Marijuana Moment ran a good piece yesterday.

What’s next for marijuana rescheduling?

Nobody knows exactly, including probably DEA Administrator Anne Milgram.

So, sit tight and enjoy the end of summer. In the meantime, check out the following, related posts:

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