Inside the DEA Hearing: The Conversations That Could Shape Cannabis Rescheduling

The federal government’s long‑running effort to reconsider marijuana’s place in the Controlled Substances Act reached a milestone last Wednesday, when the DEA’s administrative hearing on cannabis rescheduling officially wrapped. Held inside DEA headquarters over multiple days, the proceeding offered a rare public look at how the agency is weighing scientific evidence, medical testimony, and administrative law in determining whether cannabis should move from Schedule I to Schedule III. 

To understand what unfolded inside the hearing room and what comes next, I spoke with several insiders who followed the process closely, including one who sat through more than half of the testimony.

Setting The Scene

Max Jackson, founder of Cannabis Wise Guys, attended six days of the hearing and provided a detailed account of the environment inside DEA headquarters. His description underscores how unusual the setting was for a proceeding with national implications.

“It was in the DEA headquarters, so the security is no-nonsense,” Jackson said in an online interview. “You have to have an escort with you at all times.” 

Inside the hearing room, observers were barred from using phones, computers, or recording devices. 

“It was all handwritten notes,” he said. “Big gigantic church pews, basically, were the seats for the gallery. I was sitting cross‑legged most of the time.”

The room was smaller than Jackson expected. 

“Probably like a classroom‑sized room,” he said, with only a few rows of seating and a single row reserved for media. One detail stood out immediately: a gold placard on a table that read “Designated Participants Against Rescheduling,” a reminder of how heavily the hearing weighed in favor of opponents of the proposed rule.

What surprised Jackson most was the attendance. 

“There were more DEA agents who were just sitting in watching than there were people from the public,” he said. 

Given the hearing’s broad implications, he expected a full gallery. 

“These are the decisions that get made without us in the room,” Jackson said, “and that’s not a good thing.”

Jackson said the tone of the proceeding was professional and efficient. He also observed that the government asked “very few questions on cross-examination,” which helped keep the hearing ahead of schedule.

First Impressions

Jackson’s early impressions centered on the disconnect between the scientific testimony offered by longtime researchers and the realities of the regulated cannabis industry. Many of the expert witnesses relied on decades‑old research paradigms focused on isolated cannabinoids or pharmaceutical preparations rather than whole‑plant cannabis as used in state‑regulated markets. Jackson said this created two parallel conversations: one rooted in clinical studies of single‑molecule compounds, and another grounded in the lived experience of operators and consumers in legal states.

He also noted that several witnesses focused heavily on hemp, THCA, and unregulated products sold outside licensed markets. 

“When you tell me that kids are buying it at a gas station and a grocery store and a corner store, I know you’re not talking about the regulated cannabis industry in the twenty‑four states that do it,” he said.

Key Takeaways

Jackson’s biggest takeaway was that opponents appeared focused less on persuading the administrative law judge and more on building a record for future litigation. 

“You’re not arguing the case before you,” he said, referring to some of the opponents’ witnesses who testified at the hearing. “You’re arguing that this is a scary thing that we are not… we can’t permit to happen, and this is why, so that we can go back and say, ‘Look, we told you so.’”

Opponents included groups such as Smart Approaches to Marijuana (SAM), the National Alcohol and Drug Screening Association (NADSA), and other organizations that have long opposed cannabis reform, including law enforcement. Their testimony ranged from concerns about youth access and impaired driving to critiques of scientific methodology and regulatory oversight.

Legal Analysis

To understand the legal significance of the hearing, I spoke with Neil Willner, an attorney with Vicente LLP. Although he did not attend in person, the firm had a law clerk in the room every day, taking detailed notes. Willner said the hearing was “monumental” for one reason above all.

“It was the first time in history that [the DEA] was the proponent of rescheduling marijuana,” he said in an interview with IgniteIt.

Willner emphasized that the legal issues were narrower than many observers realized. 

“The government maintained the central advantage because they were really trying to prove just a narrow issue,” he said. 

That issue was whether HHS and FDA had identified at least one currently accepted medical use for cannabis, commonly referred to as CAMU. 

“Only one is needed to move marijuana out of Schedule I,” he said.

Opponents, meanwhile, focused on building an appellate record. 

“They were much more focused on the appeal and three larger overarching factors that are required to demonstrate Schedule III,” Willner said.

 He expects the administrative law judge to recommend moving cannabis to Schedule III, but he also believes opponents “peppered the record very well for the appeal after the final rule comes out.”

Willner also noted a significant moment during the cross‑examination of a government witness. Opponents got the witness to acknowledge that cannabis might not satisfy the traditional five‑part CAMU test, while the government is now relying on a newer two‑part test. 

“That was a pretty significant admission on the record,” he said.

Regarding what comes next, Willner said the path is clear. Parties will now submit post‑hearing briefs. The administrative law judge will then issue a recommendation, followed by a period for objections. After that, the DEA administrator will issue the final rule. 

“Once the DEA administrator publishes the final rule about marijuana, then that becomes the appealable event,” he said. 

And whatever the outcome, Willner expects litigation. 

“I think the appeal is inevitable,” he said. “It doesn’t matter what the [administrative law judge] recommends or what the DEA administrator decides. Someone is going to appeal.”

Industry And Capital Implications

To understand what the hearing means for the cannabis industry, I spoke with Adam Stettner, founder and CEO of financial services firm FundCanna. Stettner followed the hearing closely, gathering daily updates from cannabis media, conducting online research, and speaking with FundCanna’s general counsel. He said the most important takeaway is that the government “defended and didn’t retreat” from its recommendation to move cannabis to Schedule III.

“To me, what a change in sentiment from seven, eight months ago,” Stettner said in an interview. “They presented scientific and medical confirmation as to why they dug in on supporting the recommendation for Schedule 3.”

Despite the significance of the proceeding, Stettner noted that the hearing itself does not change anything immediately. 

“Nothing changes on the back of this,” he said. “But it gives the market… a bit more confidence directionally.”

The biggest near‑term impact, if rescheduling succeeds, is the elimination of 280E, the federal tax policy that denies most standard business deductions to businesses dealing in Schedule I substances. 

“Cannabis companies’ balance sheets look significantly worse than I believe they really are,” Stettner said. 

Removing 280E would “lead to more free cash flow,” easier borrowing, and healthier financial statements. “Underwriting becomes a lot easier,” he said.

He also expects broader capital markets to take notice. 

“You’ll see industries from outside of cannabis begin to look at this industry because it’s no longer federally illegal,” he said, citing alcohol, consumer packaged goods, and tobacco as likely entrants.

Stettner believes litigation is inevitable but not destabilizing. 

“I would absolutely expect litigation and appeals,” he said. “But I don’t think it will change our trajectory.”

He added one more point about market behavior. 

“Markets don’t really price certainty, but they price probability,” he said. “Once we get the announcement, even if appeals follow, people will start to make moves. The pioneers will take the chances, and once they have proof of concept, everybody else will follow.”

Looking Ahead

The DEA’s rescheduling hearing may not have produced immediate changes, but it offered a rare window into how the federal government is approaching cannabis policy at a pivotal moment. From the legal maneuvering to the industry’s anticipation of a post‑280E landscape, the proceeding revealed both the complexity of the process and the stakes for operators, investors, and regulators. As the administrative law judge prepares his recommendation and the DEA moves toward a final rule, the industry is watching closely, waiting for the next signal in a process that has already reshaped expectations.

Want to be where these conversations continue? Join IgniteIt on November 18 in Washington, D.C., for the Cannabis Capital & Policy Summit, where leading operators, investors, attorneys, regulators, and policymakers will gather to discuss the future of cannabis policy, capital markets, and the business implications of federal reform. If the rescheduling process has shown anything, it’s that the most important conversations often happen long before the final decision is announced.