DEA Calls Cannabis Rescheduling Discovery Request a “Fishing Expedition,” Opposes Reopening Hearing

The Drug Enforcement Administration (DEA) is pushing back against another potential delay in federal marijuana rescheduling, urging an administrative law judge to reject demands for additional documents, testimony and legal briefing in the proceedings to move cannabis from Schedule I to Schedule III.

In an October 20 filing, the agency called the request an “obvious fishing expedition,” arguing that opponents had already been given opportunities to examine the government’s scientific evidence and question federal officials during hearings held earlier this year.

The filing responds to a motion from the National Drug & Alcohol Screening Association (NDASA), DUID Victim Voices and physician Kenneth Finn, who are seeking to reopen the proceedings following a September report from the Government Accountability Office (GAO) that identified deficiencies in federal drug scheduling procedures.

For cannabis operators and investors, the dispute represents another procedural hurdle in a regulatory process with significant implications for federal taxation, cash flow and capital allocation.

Why Opponents Want to Reopen the Hearing

The latest disagreement centers on a September 23 GAO report examining how the DEA and the Department of Health and Human Services (HHS), including the Food and Drug Administration (FDA), evaluate and schedule controlled substances.

The watchdog found that both agencies lacked comprehensive written policies and procedures documenting important aspects of their scheduling processes.

Following the report’s publication, NDASA, DUID Victim Voices and Finn requested permission to introduce the findings into the administrative record and submit additional arguments.

On October 11, the parties went further, requesting additional written discovery, witness testimony and supplemental briefing, along with a continued stay of the proceedings.

Their requests cover five areas:

1. The identities of individuals involved in developing, recommending and approving the two-part Currently Accepted Medical Use (CAMU) test used in the federal marijuana evaluation.
2. The people and organizations involved in drafting the CAMU language incorporated into HHS’s scheduling recommendation, including any participation by other federal agencies or outside groups.
3. An explanation of why HHS’s latest marijuana evaluation differed from its previous assessments.
4. The criteria FDA used to evaluate marijuana’s abuse potential and compare it with substances already classified under Schedule III.
5. The documents and information GAO requested and reviewed while investigating federal drug scheduling procedures.

The opponents argue that additional evidence is necessary to assess whether the government’s evaluation followed appropriate standards.

DEA disagrees, maintaining that the requests go beyond what is permitted in administrative rulemaking proceedings and revisit matters already examined during the hearing.

DEA: Opponents Already Had Their Opportunity

In its response, DEA argues that neither the Administrative Procedure Act nor the Controlled Substances Act provides a general right to discovery in rulemaking proceedings.

According to the agency, additional discovery is generally justified only under exceptional circumstances, including a strong showing of bad faith or an administrative record so limited that meaningful judicial review would be impossible.

DEA contends that the opponents have demonstrated neither.

The agency points to testimony from Dr. Dominic Chiapperino, an FDA official who participated in the scientific and medical evaluation supporting HHS’s recommendation to reschedule marijuana.

Chiapperino testified during hearings conducted between June 29 and July 15, addressing the development of the two-part CAMU test, differences from previous medical-use standards, the scientific evidence reviewed and the criteria used to assess marijuana’s abuse potential.

DEA acknowledges that Chiapperino did not identify every individual involved in developing the CAMU test or drafting the relevant language in the HHS recommendation.

However, the agency argues that opponents had the opportunity to question him about those matters during the hearing.

Reopening that examination now, DEA said, would give them a “second bite at the apple.”

The government also disputes the characterization of the requested discovery as limited.

While the opponents describe their requests as narrowly tailored, DEA argues that they seek extensive documentation and testimony, including GAO investigative materials concerning drug scheduling matters over a six-year period.

The agency further questions whether it could compel GAO to produce investigative materials outside DEA’s possession or control.

What the GAO Report Actually Found

The GAO report identified gaps in how federal agencies document the procedures used to evaluate and schedule controlled substances.

Specifically, it found that DEA lacked comprehensive written policies defining the responsibilities and procedures associated with scheduling decisions. FDA similarly lacked comprehensive written procedures governing how its staff conduct evaluations and develop recommendations.

However, the report did not conclude that DEA’s completed scheduling decisions generally conflicted with HHS recommendations.

According to GAO, federal agencies evaluated 95 substances requiring HHS scheduling recommendations between 2020 and 2025. By the end of that period, DEA had issued final scheduling decisions for 84 of those substances, all consistent with HHS recommendations.

The watchdog recommended that DEA and FDA establish more comprehensive written policies and procedures. Both agencies agreed with those recommendations.

DEA argues that the report does not identify defects in the underlying scientific and medical evidence supporting marijuana rescheduling.

In its October 20 response, the agency states that the GAO findings do not establish problems with the two-part CAMU test, the FDA’s abuse-potential assessment, the substances used for comparison or the preparation of HHS’s recommendation.

Instead, DEA maintains that the report concerns the documentation of agency procedures, not the scientific validity of the marijuana evaluation.

The distinction is central to the government’s opposition.

DEA argues that disagreements over the interpretation of the GAO report do not establish grounds for additional discovery or further delays.

The Judge Must Decide Whether Additional Evidence Is Necessary

Chief Administrative Law Judge Derek C. Julius stayed the proceedings on September 29 following the initial request to introduce the GAO report.

On October 14, Julius ordered the government to respond to the subsequent motion seeking additional discovery and reopening of the hearing.

DEA submitted its opposition on October 20, ahead of the October 21 deadline.

Importantly, the agency did not take a position for or against admitting the GAO report itself into the administrative record.

Instead, DEA argued that the report was sufficiently clear without further briefing and that its potential admission did not justify reopening the hearing for broader discovery.

The judge must now determine whether the opponents have established sufficient grounds for additional proceedings.

If the motion is denied, the case could move forward without another round of document production or witness testimony. If granted, the proceedings could face additional delays while the parties gather evidence and submit further arguments.

Neither outcome would constitute a final decision to reschedule marijuana.

Why Another Delay Matters for Cannabis Companies

For publicly traded cannabis operators, the broader rescheduling process has financial consequences extending well beyond the administrative hearing.

Marijuana’s classification under Schedule I or II triggers Internal Revenue Code Section 280E, which prevents businesses trafficking in those substances from deducting ordinary and necessary business expenses for federal income tax purposes.

A broader move to Schedule III would remove that particular statutory restriction for marijuana businesses operating within the scope of the change, although other federal tax and regulatory questions would remain.

The potential financial implications are substantial for operators managing tax liabilities, debt obligations, capital expenditures and limited access to conventional financing.

Continued uncertainty complicates forecasting because companies cannot confidently determine when the federal tax treatment of their operations might change.

For investors, the procedural dispute also illustrates the distinction between an agency’s scientific recommendation, an administrative hearing and the eventual adoption of a final federal rule.

Even if Judge Julius rejects the discovery motion, further administrative action would still be necessary to complete the broader rescheduling process.

The government’s October 20 filing does not establish a timetable for that outcome.

What Happens Next?

The DEA’s latest response leaves the next procedural decision with Judge Julius.

The agency maintains that the existing administrative record, including the HHS scientific evaluation, supporting studies and testimony presented during the summer hearings, is sufficient for the proceedings to continue.

Opponents maintain that the GAO findings warrant further examination of how federal officials developed and applied the standards underlying the rescheduling recommendation.

For cannabis executives, the immediate development to watch is whether the judge permits another round of discovery or allows the proceedings to advance on the existing record.

The DEA has made its position clear: additional evidence gathering is unnecessary, and the motion to reopen the hearing should be denied.

Federal cannabis policy, regulatory uncertainty and the financial implications of rescheduling will be among the topics discussed at IgniteIt’s Capital & Policy Summit in Washington, D.C., on November 18. The event will bring together cannabis executives, investors and policymakers to examine how federal developments are shaping tax exposure, access to capital, investment decisions and the industry’s future. Join us in Washington for a conversation about what comes next for the cannabis business.