The DEA Stacked Its Rescheduling Hearing With Opponents. The Record Still Favors Reform.

The DEA’s rescheduling hearing was, by design, a lopsided room. The government was the only participant defending its own rule. Every other party admitted to the proceeding, three state attorneys general, Smart Approaches to Marijuana, a drug-testing trade group, and several physicians, came to argue against moving marijuana to Schedule III. No pro-reform organization was let in. For operators watching from the outside, that setup looked like a problem.

It didn’t play out that way. The hearing closed July 15 in Arlington after two weeks of testimony, and the more telling story is not that the opposition controlled the witness list. It’s that, having controlled it, the opposition still struggled to land a clean case that cannabis belongs in Schedule I. Some of its own witnesses did the government’s work for it. That shifts the near-term calculus for any business planning around 280E relief, and it clarifies exactly where the risk still lives.

What the Government Actually Had to Prove

The proceeding stems from an April action by Acting Attorney General Todd Blanche, which moved FDA-approved cannabis products and state-licensed medical marijuana to Schedule III and set an expedited hearing on whether the rest of the plant, including adult-use, should follow. Before Chief Administrative Law Judge Derek Julius, the government carried a comparatively light burden: establish that cannabis has at least one currently accepted medical use, a lower abuse potential than Schedule I and II substances, and a dependence profile consistent with Schedule III.

That threshold matters because it is lower than the debate around cannabis usually assumes. The government did not need to prove that cannabis is harmless. It needed to prove accepted medical use and comparative safety. Much of the opposition’s testimony, on youth exposure, potency, and mental-health risk, spoke to harm without rebutting that threshold. Those are real concerns, and they bear on how a Schedule III substance gets regulated. They do less to keep cannabis in Schedule I.

The Opposition’s Own Witnesses Cut the Other Way

The clearest example came from the state’s law-enforcement witness. Humboldt County Sheriff William Honsal was called to argue that legal cannabis fuels crime. Under cross-examination by Justice Department attorneys, he told the tribunal that regulated cannabis can help law enforcement and that most California product diverted across state lines comes from unlicensed operators, not the legal market, according to attorneys from Vicente LLP in the room. That undercut a central implication of his own side’s filing.

Harvard’s Dr. Bertha Madras, a marquee witness for Smart Approaches to Marijuana, reportedly acknowledged under cross-examination that cannabis meets the Schedule III statutory criteria, the exact question the hearing existed to test. The official transcript confirming that exchange is not yet public, so its precise scope remains to be seen. But taken with Honsal, it points to the same pattern: when the opposition engaged the government’s actual legal standard, it tended to give ground.

Where the Real Risk Still Lives

The opposition’s strongest moment was not a factual win. It was a legal one, and it is the piece operators should track most closely. Smart Approaches to Marijuana subpoenaed Dr. Luli Akinfiresoye, a pharmacologist in the DEA’s own Drug and Chemical Evaluation Section, who testified that under the DEA’s traditional five-part test, cannabis lacks a currently accepted medical use. The government declined to cross-examine her, a decision Business of Cannabis read as the government treating that older standard as already superseded.

That is the fork that determines the outcome. The dispute is not really whether cannabis has medical value. It is the legal test that governs the finding. In 2024, the Justice Department’s Office of Legal Counsel concluded that exclusive reliance on the five-part test was impermissibly narrow and that the two-part inquiry used by Health and Human Services was sufficient to establish accepted medical use. If Julius applies the two-part framework, the path to Schedule III is direct. If a court later rules the older test governs, the path narrows. That question is already live at the U.S. Court of Appeals for the D.C. Circuit, where three challenges to the April order have been consolidated, and a stay motion is pending, and where much of the opposition’s hearing testimony appeared aimed all along.

What Operators Should Take From It

The day after the record closed, Julius set August 17 as the deadline for optional post-hearing briefs and proposed transcript corrections, the latter limited to genuine transcription errors. He will then issue a recommended decision on no announced timetable. Parties get 20 days to file exceptions, after which the record is certified to DEA Administrator Terrance C. “Terry” Cole, who makes the final call and faces no statutory deadline.

The practical read is this. The evidentiary record now points toward a Schedule III recommendation, which is the outcome that eventually lifts 280E and opens the DEA registration pathway. Planning for that is reasonable. But the relief is not imminent, no date is fixed, and the decisive fight has effectively moved from the hearing room to the D.C. Circuit, where the question is not the evidence but the legal standard. Operators who want a single indicator to watch should watch that court, not the calendar. The record favors reform. The litigation is what determines when, and whether, it arrives.

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