The DEA's cannabis rescheduling hearing is over. The stage is set for a court battle.

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Arlington, VA: The cannabis rescheduling hearings wrapped up in Virginia last week and may have set the stage for a bigger fight to come. 

The historic hearings that took place over the last two weeks were to decide whether the DEA can continue with its plan to move cannabis from Schedule I to Schedule III, a far less restrictive category under the Controlled Substances Act. But they were also an opportunity to build the case for future appeals, should Chief Administrative Law Judge Derek Julius rule in favor of rescheduling. Stakeholders on both sides of the argument say the hearings themselves have set the stage for a complicated future lawsuit.  

Key testimony from government representatives at the hearing gave proponents something to be nervous about and opponents new ammunition in their argument against rescheduling. Pro-rescheduling supporters, however, still believe their case can withstand the new information.

“Dr. [Dominic] Chiapperino’s testimony is going to support the government's argument that this process was measured, it was robust, it was thoughtful,” said Kelly Fair, a principal and strategic partner at Crestwood Strategies, referencing testimony given by the Director of the FDA’s Controlled Substances Staff on the first day of the hearing.

At the Administrative Law Judge hearing, two primary questions were at stake: is there any indication for medical usefulness, and how large is the potential for abuse? 

The DEA is legally bound to defend HHS’ report and did so with simple efficiency, often spending far less time questioning and cross-examining witnesses than the anti-rescheduling opposition. 

The anti-rescheduling opposition, meanwhile, worked hard to build a legal record that could help in future legal challenges. They brought law enforcement, medical professionals, families of people impacted by cannabis use, government scientists and more to the stand to build a case of abuse potential and to question the government’s decision to use a new, two-part test for medical use potential. 

Both sides, unsurprisingly, feel bullish about their chances that Judge Julius rules in their favor. At the same time, both are looking to testimony presented during the hearings to bolster their case in a possible lawsuit to come after the government makes a final decision.

“We feel very good about how the cross-examination of the government's two witnesses went. We feel very good about how most of the witnesses performed for the interested parties,” said Luke Niforatos, executive vice president of Smart Approaches to Marijuana, an anti-legalization group. “If an appeal is ever in order, the record is rock solid from our perspective.”

But opponents appealing the case will first have to prove they have standing to bring a lawsuit, Fair says. To that end, many of the witnesses brought by the opposition provided testimony that could be used to build a case for standing. Testimony from families who’ve been impacted by cannabis legalization, like Laura Stack, a mother who testified about the death of her son, could be used to illustrate actual public harm if this reaches another stage of litigation.

Supporters of rescheduling, meanwhile, argue that moving cannabis to Schedule III, which includes drugs like ketamine, won’t loosen the rules and regulations around medical or recreational cannabis consumption in the states where it is legal, though it may add more DEA regulations on top of existing local regulations. 

It’s possible, of course, that rescheduling would loosen the tax burden on state-legal cannabis companies  — a financial boon which Niforatos argues could help the existing cannabis industry scale up further and increase diversion, which is cannabis that moves illegally from the legal industry into unregulated channels. 

In fact, one key comment delivered during these hearings could help rescheduling opponents in their standing argument. In the course of questioning, DEA pharmacologist Luli Akinfiresoye was asked if a relaxation of federal standards would thereby result in more access, and therefore more abuse, of cannabis, says Fair. Akinfiresoye confirmed.

“That bit of testimony is going to now be in the forefront of the opposition's standing arguments to say that there is actual harm that will result from this rescheduling,” said Fair. “It's not true … it can be unpacked, but that testimony, we will see that again.”

If opponents can establish the standing to sue the government, Fair said, their argument will then likely revolve around the efficacy of the two-part test and whether it was adequate and whether the government considered all relevant factors in its decision making.

Luke Niforatos of SAM declined to discuss their potential legal strategy, but he did say that he was encouraged by the testimony and flagged many of the same moments as Fair and pro-cannabis advocates who spoke with Cultivated. 

The second key testimony came when Chiapperino, during cross examination, confirmed that cannabis would not have passed the five-part test for accepted medical use. Both opponents and supporters of rescheduling say that testimony could be used to undermine the government’s use of the two-part test and subsequent rescheduling recommendation. 

When asked about the cross-examination, the DEA told Cultivated that it “cannot comment on hearing testimony or speculate on outcomes.”

“It was not great,” said Fair, saying she expects that portion of testimony to resurface. But, she argued, other testimony from Chiapperino made a very good case for why the five-part test was not used. “There was a reason that HHS evolved the test … because marijuana is a plant, not a single molecule drug.”

The five-part test is more commonly used by the FDA to determine whether a drug has medical use, but it is primarily used on single molecule drugs, not on complex plants. The argument many supporters make for switching to the two-part test is that marijuana contains many molecules and is not an appropriate subject for the five-part test. Opponents of rescheduling have argued that the government lowered or changed its standard in order to achieve a specific outcome with cannabis, while supporters argue that the use of the two-part test shows the government can innovate when the current guidelines don’t fit the product being reviewed.

But after the hearings, even supporters of rescheduling and the two-part test said the testimony raised questions.

“As a member of the public, I'm even interested in, like, where did this test come from?” said Cat Packer, director of drug markets and legal regulation at the Drug Policy Alliance and a self-proclaimed supporter of the test’s use.  

“Did we create a test to pass a test?

Story edited by Jeremy Berke