Why the DEA’s Cannabis Rescheduling Delays Matter—and How Advocates Are Fighting Back

Hearings Canceled Amid Legal Disputes

DEA Administrative Law Judge John Mulrooney recently canceled the rescheduling hearings that were set to begin January 21st, 2025, delaying the process by at least three months. The decision follows legal challenges from rescheduling advocates, Village Farms International, veterans group Hemp for Victory, and the Office of the Cannabis Ombudsman (OCO), accusing the DEA of improperly opposing its own proposed rule to reclassify cannabis from a Schedule I drug (akin to heroin) to a Schedule III drug.

The allegations include claims that the DEA collaborated with prohibitionist groups, manipulated witness selection to oppose rescheduling, and engaged in communications outside the legal framework. These actions, according to advocates, suggest the DEA may be acting against the principles of fairness and transparency.

However, Mulrooney did criticize the DEA’s lack of professional conduct so far in the rescheduling effort stating:

Disputes Over Evidence and Authority

In a Jan. 6 motion for reconsideration, rescheduling proponents argued that new evidence showed conflicts of interest and improper communication between the DEA and anti-rescheduling groups. However, the DEA dismissed these claims in its Jan. 13 response, asserting that the evidence cited was either not new or irrelevant to the proceedings. The DEA was instructed to “timely provide hard copies” of its planned testimony and evidence, but instead provided a compact disc (CD) containing copies of both the thousands of public comments DEA received over the summer as well as its own testimony after their request for an exemption to the rule was denied.

The DEA also argued that Judge Mulrooney lacks the authority to remove the agency as the proponent of the rule, a key demand from advocates. Mulrooney has previously denied similar requests, maintaining that the Administrative Procedures Act does not support such a move.

Advocacy Groups Push for Reform

Amid the controversy, the cannabis industry is stepping up its lobbying efforts. Leading U.S. cannabis companies such as Cresco Labs, Trulieve, and Green Thumb Industries have joined forces to create the U.S. Cannabis Roundtable. This new coalition merges two major lobbying groups—the U.S. Cannabis Council and the National Cannabis Roundtable—to form a unified voice advocating for federal reform.

The group, representing over 450,000 employees and 13,000 dispensaries across 38 states, aims to push for cannabis reclassification and the passage of the SAFER Banking Act. This measure, which would provide cannabis companies access to the federal banking system and possibly aid in the uplisting of cannabis related stocks, has been approved multiple times by the House but has stalled in the Senate.

Investing in the Cannabis Industry

The evolving legal landscape presents both challenges and opportunities for investors interested in the cannabis sector. Despite regulatory hurdles, the industry’s growth potential remains significant, driven by increasing public support for legalization and expanding state-level markets. Companies like Cresco Labs and Trulieve are not only leading advocacy efforts but also emerging as major players in the market, offering potential long-term value for investors. However, the sector remains volatile, and those considering investments should carefully evaluate market trends, federal reform progress, and the financial health of individual companies.

*Source: Whitney Economics

A Political Tug-of-War

While public support for cannabis legalization continues to grow, federal reform efforts face significant resistance, particularly from older GOP lawmakers. However, some Republicans and high-profile influencers like Elon Musk, Joe Rogan, and Robert F. Kennedy Jr. are voicing support for cannabis reform, potentially signaling a shift in attitudes.

The incoming Trump administration's stance on cannabis remains uncertain. Although Trump has expressed support for cannabis reclassification, safe banking, and adult-use legalization in Florida previously stating: 

Looking Ahead

The delays and controversies surrounding the DEA’s hearings illustrate the uphill battle cannabis reform faces at the federal level. While the legal wrangling continues, industry stakeholders and advocates remain hopeful that broader societal and political shifts will eventually pave the way for meaningful change.

For now, the cannabis rescheduling debate serves as a reminder of the complexities involved in reforming decades-old policies—and the determination of those working to modernize them.

The opinions expressed in this publication are those of the authors and are subject to change. They do not purport to reflect the opinions or views of ETF Central or its members. ETF central does not guarantee the accuracy, completeness, or reliability of the information provided.

Sources:

●        Dow Jones, “Cannabis Stocks Pull Back After DEA Postpones Rescheduling Hearing” & “Exclusive: Cannabis groups combine to push for federal reforms under Trump”, January 2025.

●         Cannabis Business Times, “DEA Responds to ‘Out of Time’ Cannabis Rescheduling Claims”, January 2025.

●        MJ Biz Daily, “Marijuana rescheduling judge blasts DEA for ‘unprecedented, astonishing’ behavior.”, January 2025.

●        CNN, “Trump says he will vote to legalize adult recreational marijuana use in Florida”, September 2024.

●        Vangst, “Job Reports 2024, Positive growth returns”, January 2025.

●        Whitney Economics, “Whitney Economics U.S. Legal Cannabis Forecast - 2024-2035”, March 2024.