DOJ Defends Authority To Reschedule Cannabis, Rejects Claims Of Industry Harm

The United States Department of Justice has moved to shut down an attempt to put cannabis rescheduling on the shelf. The DOJ has formally urged the U.S. Court of Appeals for the District of Columbia on Thursday to reject a motion that seeks to block the federal cannabis rescheduling order temporarily.

The National Drug and Alcohol Screening Association (NDASA) and MMJ International Holdings filed the motion. The petitioners asked the court to temporarily block a final order signed by Attorney General Todd Blanche in April, which effectively transferred cannabis products and cannabis subject to state-licensed medical marijuana programs approved by the U.S. Food and Drug Administration (FDA) from Schedule I to Schedule III of the Controlled Substances Act (CSA).

Three Separate Lawsuits

The U.S. Court of Appeals for the D.C. Circuit is reviewing three separate lawsuits challenging the proposed move, as reported by Marijuana Moment. The NDASA and MMJ International Holdings are part of the legal dispute, along with Smart Approaches to Marijuana and other prohibitionist-leaning activists and groups.

The DOJ’s legal arguments in opposition to the petitioners’ motion are that they lack standing, their claims lack merit, and they have failed to demonstrate irreparable harm.

Anthony Varrell, co-founder of Trade To Black and an expert focusing on cannabis markets, policy, and industry analysis, highlighted three main DOJ moves in his latest analysis. His interpretation is that DOJ is “dismantling” the stay request at the threshold, focusing less on the policy merits of rescheduling and more on showing that the challengers don’t meet the basic legal standard for emergency relief.

The DOJ Said

The DOJ said in its brief that the NDASA seeks to protect drug-testing revenue, that employers are seeking to avoid updating testing policies, and that MMJ wants to protect a future commercial advantage. The agency called these “pocketbook interests served by keeping all marijuana in Schedule I.”

NDASA’s stance is speculative, according to the government, to support legal standing as it’s “about how the rescheduling order might affect the drug-testing industry rather than particularized allegations about how the order has affected specific members.”

The DOJ also rejected claims that rescheduling would harm the industry through losses driven by employers changing drug-testing policies.

“Petitioners have not shown that it is ‘predictable,’ rather than merely ‘speculative,’ that third-party employer-clients will choose to stop testing for illegal marijuana use,” the government brief stated.

The government also challenged the severity of the alleged damages proposed by the petitioners, noting that NDASA’s projected costs of roughly $700,000 across 700 employers are relatively modest and are rather typical in regulatory shifts.

Regarding MMJ International Holdings, the DOJ said it cannot show competitive harm because it is not an approved market participant, has no FDA-approved products or revenue, and its claim is based on a hypothetical future position that isn’t legally protected.

The DOJ noted the Attorney General has the legal authority to move cannabis to Schedule III under the Controlled Substances Act and international treaty obligations, while keeping it regulated.

It also argues that because about 40 states already allow some form of cannabis legalization, rescheduling would not cause sudden nationwide disruption.

MMJ CEO Duane Boise said the company has spent years working through FDA and DEA requirements to develop cannabinoid treatments for Huntington’s disease and multiple sclerosis, but is now being told its case has no standing because it has not yet received FDA approval.

“For eight years, we have done exactly what the government demanded,” Boise said in a press release. “We followed the FDA pathway, complied with the DEA, and invested millions in drug development for clinical research. Now, the DOJ tells the Court our injuries don’t matter because we haven’t completed the very process they forced us to navigate.”