The same cannabis prohibitionist groups claiming that rescheduling “a dangerous narcotic” to Schedule III only benefits a for-profit industry have self-serving financial interests in keeping a Schedule I listing, according to the U.S. Department of Justice (DOJ).
In responding to a motion in a lawsuit that nine prohibitionist parties initiated in May, the DOJ argued that the “focus” of the Controlled Substances Act (CSA) is on protecting “the health and general welfare of the American people,” which it said is best served through the use of controlled substances with “legitimate medical purpose.”
Cannabis, according to the DOJ, has a legitimate medical purpose.
A two-party subset of the prohibitionist petitioners motioned the U.S. Court of Appeals for the District of Columbia Circuit in June to stay U.S. Acting Attorney General Todd Blanche’s April 2026 order that immediately rescheduled state-licensed medical cannabis and FDA-approved cannabis products to Schedule III under the CSA.
The DOJ filed its opposition response to that motion on July 2. The department’s legal team argued the “intended beneficiaries” of the CSA are “the American public and scientists and medical practitioners seeking legitimate access to controlled substances for research and patient treatment.”
Furthermore, the DOJ argued that the two anti-rescheduling groups that are motioning the D.C. Circuit to stay the April 2026 order are doing so under self-serving interests.
The DOJ referenced the National Drug and Alcohol Screening Association (NDASA), an organization that promotes drug-free workplaces, which argued the federal Schedule III listing for state-licensed medical cannabis will impose unrecoverable costs for its members, including employers who will be forced to revise their drug-testing policies, as well as medical review officer practices whose physicians interpret drug test results.
MMJ International Holdings (MMJ), an aspiring pharmaceutical company whose subsidiary holds an active Drug Enforcement Administration (DEA) Schedule I analytical laboratory registration, argued that it invested $10 million and eight years of research and development to create cannabinoid-based drugs along the pathway to Food and Drug Administration approval and DEA registration.
In response, the DOJ argued that these anti-rescheduling interests don’t align with Congress’ express findings in enacting the CSA. Therefore, their asserted injuries “fall outside the zone of interests” of the CSA, according to the department’s legal team.
“Petitioners are not the intended beneficiaries of the CSA, nor do their interests systemically align with [the American public],” according to the DOJ’s July 2 response. “Petitioners invoke the interests of (1) drug screeners in avoiding loss of business and increased costs; (2) employers in avoiding the costs of revising drug-testing protocols; and (3) a pharmaceutical company (MMJ) in preventing market competition. Petitioners thus invoke pocketbook interests served by keeping all marijuana in Schedule I.”
These two parties are among the broader set of nine anti-rescheduling litigants petitioning the D.C. Circuit to review the April 2026 order in the underlying lawsuit, which aims to vacate the Schedule III order entirely.
NDASA filed its petition for review alongside Smart Approaches to Marijuana (SAM) on May 4, while MMJ filed its petition for review on May 28 alongside substance-abuse recovery clinic New Directions Addiction Recovery Services; medical doctors Kenneth Finn and Elizabeth B. Stuyt; and victims advocacy organization Cannabis Industry Victims Educating Litigators.
The D.C. Circuit consolidated those filings – as well as a third petition for review filed by the attorneys general from Nebraska and Indiana – into one lawsuit.
NDASA and MMJ joined forces on June 9 for the stay motion, which attempts to pause the Schedule III order while the petitioners prepare their briefs for judicial review in the underlying lawsuit.
In part, NDASA and MMJ argued that Blanche overstepped his authority in the order as it relates to U.S. compliance with international treaty obligations under the Single Convention on Narcotic Drugs.
The DOJ argued in its July 2 response that the treaty obligations were already settled in the DOJ’s Office of Legal Counsel’s (OLC) opinion from 2024, which concluded that a Schedule III listing satisfied U.S. compliance, and that the U.S. attorney general may “issue an order controlling such drug under the schedule he deems most appropriate” for the treaty obligations “without regard to” other statutory requirements, such as formal rulemaking procedures.
“And the Department of Health and Human Services (HHS) has already recommended that marijuana be placed in Schedule III,” the DOJ wrote on July 2. “As this court has explained, the acting attorney general was authorized to ‘establish[] a minimum schedule or level of control,’ which here was the same level of control recommended by HHS’s ‘medical and scientific findings.’”
The DOJ also argued that NDASA and MMJ failed to meet Article III standing, claiming NDASA did not identify “concrete harm” to any of its individual members, and that MMJ did not “demonstrate competitor standing when it has not yet produced an authorized product to compete” against other cannabinoid-drug companies in the marketplace and therefore is not a current market competitor but rather a potential future market competitor.
“Congress enacted the CSA to ensure the proper regulation of substances for research and medical use – it did not enact the CSA to provide drug screeners with a permanent source of income for testing marijuana, nor did it enact the law to protect ‘market opportunities’ for the creation of ‘cannabinoid-based drugs,’” the DOJ argued in response.
Overall, the DOJ argued that NDASA and MMJ are not likely to succeed on their merits, claiming they did not establish standing to challenge the rescheduling order; their alleged injuries are not within the zone of interests of the CSA; and their rulemaking claims are flawed.
The DOJ’s legal team argued that drug screeners, employers who screen for drugs and a “hopeful pharmaceutical company” are not suitable challengers for determining whether certain cannabis products are appropriately scheduled under the CSA.
“Even if rescheduling would unquestionably best serve the public health and the interests of the medical community, petitioners’ financial interests would render them opposed to that result,” the DOJ argued in the July 2 response. “They therefore fall outside the statute’s zone of interests: Petitioners’ interest in categorically stricter regulation results in an ‘unqualified preference’ that is misaligned with the CSA, and their suits are ‘more likely to frustrate than to further statutory objectives.’”
