A three-judge panel of circuit court judges rejected a cannabis prohibitionist motion to stay the Trump administration’s Schedule III cannabis order on Sept. 9 while an underlying lawsuit proceeds.
The National Drug and Alcohol Screening Association (NDASA) and MMJ International Holdings, whose subsidiary holds an active DEA Schedule I analytical laboratory registration, asked the U.S. Court of Appeals for the District of Columbia Circuit in June to stay U.S. Attorney General Todd Blanche’s April 22 signed order reclassifying state-licensed medical cannabis to Schedule III until a lawsuit seeking to vacate the entirety of the order is resolved.
NDASA, which promotes drug-free workplaces, and MMJ, an aspiring cannabinoid pharmaceutical company, argued in the motion that they’d suffer irreparable harm should the court allow the Schedule III order to remain in effect. They further argued that a stay would “avoid the devastating effects that will flow from ballooning access to marijuana while this case is pending.”
But the D.C. Circuit judges were not persuaded.
“Petitioners have not satisfied the stringent requirements for a stay pending court review,” the judges wrote in Wednesday’s order.
The Department of Justice (DOJ) had previously argued in response to the motion that NDASA and MMJ have “pocketbook interests” in prohibition, and that those interests don’t “systematically align” with the American public.
The judges on Wednesday also denied a motion by two medical cannabis companies – MedPharm Iowa LLC (d/b/a Bud and Mary’s) and Tri-Mountain Pure LLC – to intervene in support of the DOJ’s Schedule III order.
The companies argued in July that they already applied for Schedule III registration status with the Drug Enforcement Administration (DEA) under the administration’s order, and that they’d lose the benefits of deducting ordinary business expenses under Section 280E of the Internal Revenue Code if the court reverses the order.
Although the D.C. Circuit judges denied this request to intervene, ordering that the “Medical Marijuana Companies fail to demonstrate that their interests in this litigation are not adequately represented by existing parties,” the judges granted an alternative request permitting the companies to participate through amicus briefs.
The court also granted a similar request allowing cannabis industry attorneys to participate as amicus curiae – meaning they won’t be an official party in the lawsuit but can provide legal arguments and information to assist the judges.
The American Trade Association for Cannabis and Hemp (ATACH) applauded the D.C. Circuit’s decision.
“With the medical marijuana order clearing this key hurdle and DEA registrations well underway, the U.S. is ushering in a new era of safe access for all medical marijuana patients,” ATACH President Michael Bronstein said. “No amount of prohibitionist rhetoric can undermine this clear legal authority or roll back the progress made in creating a safer and more accessible medical marijuana market.”
While the Sept. 9 court decision keeps the DOJ’s current Schedule III order in effect, it doesn’t resolve the underlying petitions for review of the order. The now-rejected stay motion is part of a broader lawsuit by nine anti-rescheduling petitioners who are hoping the D.C. Circuit will turn back the clock entirely, claiming Blanche’s order was unlawful.
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.
As part of its standing statement, New Directions claimed that “rescheduling will foreseeably increase the availability and social acceptability of marijuana, undermining New Directions’ organizational mission to assist individuals in overcoming substance abuse, including cannabis use disorder, and diverting organizational resources to address increased marijuana-related harm among its patient population.”
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.
On Sept. 9, the three-judge panel further ordered that the parties submit their proposed briefing formats within 30 days.
“The parties are strongly urged to submit a joint proposal and are reminded that the court looks with extreme disfavor on repetitious submissions and will, where appropriate, require a joint brief of aligned parties with total words not to exceed the standard allotment for a single brief,” the judges wrote. “Whether the parties are aligned or have disparate interests, they must provide detailed justifications for any request to file separate briefs or to exceed in the aggregate the standard word allotment. Requests to exceed the standard word allotment must specify the word allotment necessary for each issue.”
While this case remains ongoing, not only have state-licensed medical cannabis companies throughout the nation applied for DEA registration, but publicly traded companies like Trulieve and Glass House have restructured their businesses and subsequently listed their shares on the New York Stock Exchange, something that wasn’t previously possible for U.S. cannabis businesses under a Schedule I listing.
In addition, the DEA’s administrative law judge hearing to reclassify all cannabis – not just medical – to Schedule III under the Controlled Substances Act concluded proceedings on July 15, with a final recommendation the judge expected very soon.
