The administrative law judge (ALJ) whom the Drug Enforcement Administration (DEA) tasked with overseeing a fair and transparent cannabis rescheduling hearing said in a Nov. 22 order that his powers are limited in the matter.
John J. Mulrooney, the chief ALJ for the agency, issued the order Friday to deny a motion from DEA-licensed researcher MedPharm to intervene in the upcoming rescheduling hearings, which are scheduled to commence with preliminary proceedings on Dec. 2 and resume with testimonies from designated participants in early 2025.
The hearings are to allow DEA-designated participants (DPs) to debate the merits of the Department of Justice’s proposed rule to reclassify cannabis from a Schedule I to Schedule III drug under the Controlled Substances Act (CSA), a recommendation that came from the U.S. Department of Health and Human Services and Food and Drug Administration.
MedPharm filed a timely petition to participate in the ALJ hearings but never received notice from the DEA that it was excluded or why—a violation of the Administrative Procedures Act (APA)—according to a motion filed earlier this week calling into question the fairness of the DEA’s designated participant list of 25 organizations/individuals.
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As part of that Nov. 18 motion—filed jointly by DPs Village Farms International, a cannabis company, and Hemp for Victory, a veterans group—MedPharm was listed as an intervenor seeking to insert itself into the upcoming rescheduling hearings as a participant. MedPharm separately made that motion to intervene on Nov. 12.
Editor’s note: Cannabis Business Times reached out to the DEA for comment.
Mulrooney acknowledged in Friday’s denial order that MedPharm, as a DEA registrant, could add great value to the rescheduling conversation in the upcoming hearings.
“MedPharm expends considerable effort into outlining some positive attributes of its mission, outlining ways in which it would seek to establish standing under the Administrative Procedure Act (APA), and pointing out how any marijuana rescheduling hearing would greatly benefit from its participation,” Mulrooney wrote. “However, as explained in more detail in the standing order issued by this tribunal, potential, meaningful input, and even arguable APA standing, is not the full extent of the inquiry.”
The judge was referring to his 47-page standing order from Nov. 19, in which he approved most of the DEA’s designated participants to partake in the hearings while also removing two of the DEA’s DPs whom he ruled did not demonstrate the proper “interested person” standing requirement under the APA. He also ruled seven other DPs—all rescheduling advocates—did not demonstrate proper standing but could still participate.
But in Mulrooney’s Nov. 22 order denying MedPharm’s motion to intervene, he indicated that his ALJ hands were tied behind his back in the matter and that the researcher would have to take up its beef with the DEA.
“I was designated by [DEA Administrator Anne Milgram] to preside over the hearing proceedings but was not involved in or apprised of the process utilized to select the DPs,” he said. He added, “The agency is endowed with the right to place reasonable limits on the number of participants in a given APA hearing … which is, when reduced to its essence, precisely what the administrator did in exercising her discretion in determining the number and nature of participants.
“To be sure, thousands upon thousands of individuals and entities across the country could add value to the issues to be decided here, but they cannot all be included.”
Mulrooney further explained that his authority regarding the DPs is limited because Milgram selected the DPs before she named him as the ALJ.
“Appeals flow from the ALJ to the administrator, not the other way around,” Mulrooney said. “I have not been designated to review the administrator’s prehearing actions on this matter or the manner in which her DP decisions were reached, issued, or not issued.”
Going back to the joint motion filed by Village Farms and Hemp for Victory earlier this week, one main concern for the cannabis rescheduling advocates is the absence of a DEA-licensed researcher as a DP in the hearing process.
Shane Pennington, a partner in the litigation department at Porter Wright Morris & Arthur LLP who authored the joint motion, claimed that the DEA stacked the deck in favor of prohibitionists with its participation list and provided no record of who it excluded and why.
“The two main problems are that DEA decided who was going to be in and out of this hearing before it sent the case to the ALJ, which is unusual first of all,” Pennington told Cannabis Business Times earlier this week.
“And second of all, the DEA administrator didn’t send all the requests—she didn’t send any of the requests—that she received to participate in the hearing to the ALJ, none of them,” he said. “And she didn’t say, here’s the reasons why we denied some of them. And she didn’t say, here’s the reasons that we didn’t make any decision on a bunch of others.”
When Attorney General Merrick Garland signed the notice of proposed rulemaking (NPRM) that appeared in the Federal Register on May 21, it directed the DEA administrator to provide a courtesy copy of the hearing requests and waivers to the Office of Administrative Law Judges—as outlined on page three of the 92-page document.
And although Milgram wrote in an August notice granting the ALJ hearing that the “DEA is committed to conducting a transparent proceeding,” that hearing notice contained no such requirement to provide the hearing requests to the ALJ office.
After Mulrooney learned he was designated by Milgram to preside over the hearings, he issued a preliminary order on Oct. 31 calling attention to the DEA administrator’s diversion from the attorney general’s signed directive.
“This tribunal is not in possession of documentation related to whether/how the designated participants would be ‘adversely affected or aggrieved’ by the proposed regulation change in the NPRM, or any other particularly helpful information,” Mulrooney said.
These secretive DEA documents—regarding who requested to participate, their positions on rescheduling, their expertise on the matter, and any pertaining denial orders outlining why they were omitted from the process—have left gaping legal concerns for rescheduling advocates who are now questioning whether the process has been manipulated.
Notably, Mulrooney said in his preliminary order from Oct. 31 that when Congress granted the attorney general (and by delegation the DEA administrator) the authority to schedule or reschedule a substance like cannabis, the legislative branch required under the APA that such an action “shall be made on the record.”
In his Nov. 22 order denying MedPharm’s motion to intervene, Mulrooney made it clear that Milgram does not answer to him regarding the designated participants for the hearing.
“The administrator exercised her discretion to fix the number of DPs to be included, and to expand that number would effectively overrule her decision and exceed the proper and logical role of the ALJ under the APA and the CSA,” he said.
As a footnote, Mulrooney admitted that had the standing determinations for a designated participant list been deferred until after the ALJ had a chance to review requesters’ qualifications as “interested” persons, then “matters would have been procedurally different” and Milgram could have waited to review his rulings.
“But that is not the way the matter progressed,” he said.
