doomed
5 hours ago
Home / Legal
Suspicions that DEA rigged rescheduling process fueled by court documents
Chris Roberts, Reporter
March 14, 2025
Longstanding suspicions that the U.S. Drug Enforcement Administration is adamantly opposed to marijuana rescheduling – and weighted a public process to ensure it could reject moving the drug from Schedule 1 to Schedule 3 under federal law – are confirmed by agency decisions made public during an ongoing lawsuit.
At least, that’s the allegation made in a Feb. 17 federal court filing by a group of doctors who were shut out of the rescheduling process.
According to DEA documents made public as part of a lawsuit brought by Doctors for Drug Policy Reform (DDPR), an organization of pro-cannabis research medical professionals, the federal drug agency:
Considered a total of 163 applicants.
Selected only 25 based on still-unknown criteria.
Rejected participation requests outright from New York and Colorado officials, which supported rescheduling.
Attempted to aid almost a dozen opponents of marijuana rescheduling.
It’s the fullest disclosure to date of the DEA’s actions during the marijuana rescheduling process.
“It confirms what we thought,” Dr. Bryon Adinoff, a Colorado-based addiction psychiatrist, academic and president of the DDPR, told Doomed.
The DDPR’s court action – first filed in November – seeks to compel the DEA to redo its witness-selection process or, failing that, to at least make the agency explain its actions.
That matter, filed by attorney Austin Brumbaugh of the Houston-based Yetter Coleman firm, is still pending in the U.S. Court of Appeals for the D.C. Circuit.
Part of the DDPR’s objective was to determine if the DEA’s process “was fixed,” Adinoff said.
“And it appears to be,” he added.
Adinoff believes pausing the process or forcing a restart are both preferable to seeing it through to the foregone conclusion of a rescheduling rejection.
“We’re better off arguing the case where we are now than going forward and having it not work in our favor,” he said.
Doomed from the beginning
Adinoff’s allegations are the latest – and loudest – accusations of bias against the DEA.
A separate appeal that also alleges DEA bias and seeks to remove the agency as rescheduling arbiter is pending.
Changing marijuana’s status under federal law would provide long-sought tax relief to legal plant-touching businesses in the $32 billion U.S. cannabis industry – and, it’s believed, encourage Congress to pursue other MJ reforms stalled in Washington, D.C.
That belief was buoyed by a September 2023 analysis by the Congressional Research Service that found the DEA acknowledged in 2020 that it is “bound by law” to follow recommendations on matters of health and science from other federal agencies.
But doubts about the DEA’s evenhandedness concerning the federal prohibition of marijuana appeared almost immediately after the Justice Department in May 2024 published its proposal to move the drug from Schedule 1 to Schedule 3 of the Controlled Substances Act.
Footnotes in an April 2024 memo from the DOJ’s Office of Legal Counsel show that the DEA argued internally against rescheduling marijuana and disputed the new standard the HHS used to determine “currently accepted medical use.”
Exactly what the DEA told the Office of Legal Counsel is unknown.
‘Most consequential’ DEA decision ‘ever’
Begun in October 2022 by former President Joe Biden, marijuana rescheduling “is likely the most consequential rulemaking DEA has ever attempted,” a group of former DEA administrators told the agency in a letter last summer. The letter also was released as part of the lawsuit.
But “the most significant relaxation of narcotics restrictions in the history of the CSA” is now on an indefinite hiatus pending the outcome of separate appeals – as well as whatever decisions President Donald Trump and his DEA administrator pick, Terrance Cole, might make.
Hearings before the DEA’s top administrative law judge, ordered in August by agency’s former administrator, Anne Milgram, were supposed to conclude March 6.
That potentially historic process was delayed indefinitely in January after the appeals.
In October, Milgram released a list of 25 participants chosen to give evidence and testimony in hearings before John Mulrooney II, the DEA’s chief administrative law judge, but she did not share her rationale or whether the participants were for or against rescheduling.
‘Secret’ and ‘improper’ process alleged
The document cache released by the DEA, spanning nearly 1,700 pages, shows a “secret selection process … guided by the improper aim of creating an evidentiary record that will allow the Agency to reject the proposed rule,” Adinoff’s filing claims.
While the DEA rejected bids by New York and Colorado officials to participate in the rescheduling process, the court documents show that the agency did select a representative of cannabis patients in Connecticut, a choice Adinoff called “nonsensical.”
The Connecticut representative later dropped out.
The DEA also sent “self-styled ‘cure letters’” to 12 participants.
Such letters are separate, individually tailored requests for “additional information establishing that you are ‘a person adversely affected or aggrieved by the proposed rule,’” according to copies of the letters attached in the court documents.
That’s the standard under federal law that must be met in order to participate in the administrative rescheduling process.
However, the lawsuit notes, of those 12 letters, nine were sent to parties “strongly against the proposed rule.”
Only one “cure letter” was sent to a party that turned out to be a supporter – another government entity, the University of California, San Diego’s Center for Medicinal Cannabis Research (CMCR).
After receiving more information from the CMCR – including that it supported the rule – the DEA ultimately rejected the application without explanation.
The CMCR’s director, Dr. Igor Grant, did not respond to requests for comment.
‘Strong evidence’ of DEA bias
The DEA’s actions add up to “strong evidence that the Agency acted with an impermissible purpose of creating an evidentiary record supporting its preferred outcome – rejection of the proposed rule,” the lawsuit claims, in part.
Other observers and rebuffed participants contacted by Doomed agreed.
“I don’t know that I expected a fair process or outcome,” said Cat Packer, the director of drug markets and legal regulation at the New York-based Drug Policy Alliance and a distinguished cannabis policy practitioner in residence at Ohio State University’s Drug Enforcement and Policy Center.
Packer also attempted to participate in the hearings but was rejected.
It “was pretty clear when the proposed rule (from the HHS) came out” in May 2024 that the DEA didn’t want to reschedule marijuana, she said.
And there’s little to suggest that the DEA’s attitudes have changed under Trump, Packer added.
“This is the DEA’s game,” she said, “and they get to make the rules.”
doomed
1 day ago
Legacy rules!!!
Home / Cultivation
Hundreds of Humboldt marijuana farmers expected to lose licenses over tax debt
Chris Casacchia, Staff Writer
March 13, 2025
Hundreds of marijuana farmers in California’s Humboldt County are in jeopardy of losing their business licenses as a deadline looms to pay county cultivation taxes levied years ago.
County growers in the state’s famed Emerald Triangle face a March 31 deadline to eliminate all tax debts associated with Measure S, a ballot referendum approved by voters in 2016 when the industry outlook was far better than it is today.
According to a Public Records Act request from the Humboldt County Growers Alliance (HCGA) more than 75% of the county’s 1,000 or so cultivation permit holders carry some tax debt.
The average outstanding tax debt is about $12,000, according to county data and officials, although some owe more than $150,000.
In all, cultivation permit holders owe the county more than $17 million in taxes primarily from 2017 to 2021.
The overhang is indicative of a larger statewide predicament: Operators owe more than $1.3 billion in unpaid taxes and related penalties, according to the state’s Department of Tax and Fee Administration.
Tax delinquents’ fates “sealed”
Of the 765 listed account holders with cultivation permits in Humboldt County, public records show 415 agreed to a payment plan.
Nearly as many, 350, did not.
For this segment of operators who have failed to work with county officials or ignored their warnings, their fate is likely sealed, according to County Supervisor Steve Madrone.
He told us most have dropped off the map completely, abandoning grows and other commercial requirements, including property taxes and various application and processing fees.
“We cannot locate them,” Madrone said.
“They’ve walked away from disasters on their property, and it’s a nightmare and a mess.
“There’s not going to be any forgiveness there.”
The county’s five-member board is slated to discuss the issue at a March 25 meeting, where they could approve enforcement measures, such as license suspensions and revocations, and/or provide more industry relief by extending the deadline.
Referendum returns to haunt growers
Humboldt County voters more than eight years ago approved Measure S, which created the following three-tiered cannabis cultivation tax structure:
$1 per square foot for outdoor grows.
$2 per square foot for mixed-light grows.
$3 per square foot for indoor grows.
That same election cycle state voters legalized adult-use retail.
At the time California’s medical market under Proposition 215 was viewed largely as a commercial success though the market transacted in the grey zone without a regulatory framework or enforcement mechanisms.
Meanwhile, the prospects of federal legalization, reliable banking services and market expansion fueled the national conversation – and the green rush.
Responding to new challenges
Of course many of these expectations fizzled, and in recent years, the California market has too, showing wear across several metrics, including active licenses, total sales, price contraction and retail access.
Active dispensaries, a key sales outlet for growers, now number 800 to 900 statewide, down from 1,200 just a few years ago, according to industry sources and media reports.
Nearly 60% of California’s 539 municipalities still prohibit retail business, according to state data.
In response to these challenges and others that hindered small farm competitiveness, Humboldt County supervisors in November 2022 suspended the Measure S excise tax for two years and deferred related payments and penalties two years prior.
For the past year, the excise tax was set at 10 cents per square foot for outdoor, 20 cents per square foot for mixed-light and 30 cents per square foot for indoor cultivation.
“We’ve done a lot to try to consider the market crash,” Madrone said.
“In many cases farmers are burdened with state costs, sales and crop costs, labor costs, you name it.”
Meanwhile Humboldt County, like several other jurisdictions across the state, is facing a budget shortfall and cuts in federal resources and grants.
“That means we’re looking at layoffs and other kinds of really drastic cuts in our budget,” Madrone said.
“Not only farmers, but all of our economies, personal and countywide, are in the tank, and people are hurting.”
Payment plans sought
Talking Trees Farms, located in Willow Creek, was among the first 50 permitted farms in Humboldt County and the state.
The farm, which has struggled to balance cash flow, transitioned from indoor to outdoor cultivation due to high costs. Its branded and bulk products, including packaged flower, pre-rolls and top selling Bubble Hash, are carried in about 100 stores today, down from 300 a few years ago.
Founder and CEO Craig Nejedly said dozens of retailers and distributors owe the brand hundreds of thousands of dollars in unpaid invoices, a growing nationwide challenge that has wrecked the world’s largest regulated market.
“I’m never going to get that money, which circles back to why I can’t pay my Measure S taxes,” he said.
Nejedly said he was caught off-guard late last year when he received a nearly $30,000 bill from the county for 2020 and 2021 cultivation taxes.
“It was a total shock and surprise, and I know we had never received those bills before,” he said.
Nejedly paid the $100 county requirement to remain in good standing.
Ideally, he wants some debt forgiveness but is willing to enter a payment plan, interest-free preferred.
He said the business can allocate $300 to $500 per month to decrease its tax debt.
“I’m wondering what’s going to happen at the end of this month because it’s going to be really impossible to come up $27,000 they say I owe.”
Friends and neighbors
In a Jan. 31 letter to the Board of Supervisors urging them to address the crises, Humboldt County Growers Alliance Executive Director Natalynne DeLapp outlined the financial strain on small farmers fueled by “distributor defaults, natural disasters, the market crash, and burdensome regulatory costs.”
She told MJBizDaily the county collected over $55 million in Measure S taxes from 2017 to 2021, a period when the vast majority of farmers were paid up.
The county has benefited from those proceeds, and the industry has put Humboldt County on the global map for weed.
“Having a sizable concentration of cannabis businesses and farms in our area is good for the industry,” DeLapp added.
“We don’t want to lose our friends and neighbors.”
Incentives in play?
Mattole Valley SunGrown is one of a few dozen marijuana cultivators in Humboldt County without a Measure S tax debt.
“I definitely prioritize those taxes above everything else out of fear of losing my permit,” said owner Dylan Mattole, who sympathizes with struggling farmers in the region.
Thousands have left the industry, lost their licenses or moved to the unlicensed market since his company secured a cultivation permit in 2018, the same year California transitioned to an adult-use regulated market.
His one-acre outdoor farm in Honeydew focuses on supplying premium niche products, like resin and rosin, and partnering with reputable manufacturers.
Mattole told MJBizDaily he opposed Measure S but would like to see the county offer some incentives for those in compliance.
Madrone agreed.
“However it worked out, they prioritized getting those paid,” he said.
“And they should receive some sort of an incentive for that.”
doomed
4 days ago
Home / Legal
Suspicions that DEA rigged rescheduling process fueled by court documents
Doomed
March 10, 2025
Longstanding suspicions that the U.S. Drug Enforcement Administration is adamantly opposed to marijuana rescheduling – and weighted a public process to ensure it could reject moving the drug from Schedule 1 to Schedule 3 under federal law – are confirmed by agency decisions made public during an ongoing lawsuit.
At least, that’s the allegation made in a Feb. 17 federal court filing by a group of doctors who were shut out of the rescheduling process.
According to DEA documents made public in as part of a lawsuit brought by Doctors for Drug Policy Reform (DDPR), an organization of pro-cannabis research medical professionals, the federal drug agency:
Considered a total of 163 applicants.
Selected only 25 based on still-unknown criteria.
Rejected participation requests outright from New York and Colorado officials, which supported rescheduling.
Attempted to aid almost a dozen opponents of marijuana rescheduling.
It’s the fullest disclosure to date of the DEA’s actions during the marijuana rescheduling process.
“It confirms what we thought,” Dr. Bryon Adinoff, a Colorado-based addiction psychiatrist, academic and president of the DDPR, told Doomed.
The DDPR’s court action – first filed in November – seeks to compel the DEA to redo its witness-selection process or, failing that, to at least make the agency explain its actions.
That matter, filed by attorney Austin Brumbaugh of the Houston-based Yetter Coleman firm, is still pending in the U.S. Court of Appeals for the D.C. Circuit.
Part of the DDPR’s objective was to determine if the DEA’s process “was fixed,” Adinoff said.
“And it appears to be,” he added.
Adinoff believes pausing the process or forcing a restart are both preferable to seeing it through to the foregone conclusion of a rescheduling rejection.
“We’re better off arguing the case where we are now than going forward and having it not work in our favor,” he said.
Marked from the beginning
Adinoff’s allegations are the latest – and loudest – accusations of bias against the DEA.
A separate appeal that also alleges DEA bias and seeks to remove the agency as rescheduling arbiter is pending.
Changing marijuana’s status under federal law would provide long-sought tax relief to legal plant-touching businesses in the $32 billion U.S. cannabis industry – and, it’s believed, encourage Congress to pursue other MJ reforms stalled in Washington, D.C.
At least some observers in Washington, D.C., believed the DEA would approve the finding that marijuana has a “currently accepted medical use,” a conclusion first arrived at in August 2023 by the Department of Health and Human Services (HHS).
That belief was buoyed by a September 2023 analysis by the Congressional Research Service that found the DEA acknowledged in 2020 that it is “bound by law” to follow recommendations on matters of health and science from other federal agencies.
But doubts about the DEA’s evenhandedness concerning the federal prohibition of marijuana appeared almost immediately after the Justice Department in May 2024 published its proposal to move the drug from Schedule 1 to Schedule 3 of the Controlled Substances Act.
Footnotes in an April 2024 memo from the DOJ’s Office of Legal Counsel show that the DEA argued internally against rescheduling marijuana and disputed the new standard the HHS used to determine “currently accepted medical use.”
Exactly what the DEA told the Office of Legal Counsel is unknown.
‘Most consequential’ DEA decision ‘ever’
Begun in October 2022 by former President Joe Biden, marijuana rescheduling “is likely the most consequential rulemaking DEA has ever attempted,” a group of former DEA administrators told the agency in a letter last summer. The letter also was released as part of the lawsuit.
But “the most significant relaxation of narcotics restrictions in the history of the CSA” is now on an indefinite hiatus pending the outcome of separate appeals – as well as whatever decisions President Donald Trump and his DEA administrator pick, Terrance Cole, might make.
Hearings before the DEA’s top administrative law judge, ordered in August by agency’s former administrator, Anne Milgram, were supposed to conclude March 6.
That potentially historic process was delayed indefinitely in January after the appeals.
In October, Milgram released a list of 25 participants chosen to give evidence and testimony in hearings before John Mulrooney II, the DEA’s chief administrative law judge, but she did not share her rationale or whether the participants were for or against rescheduling.
‘Secret’ and ‘improper’ process alleged
The document cache released by the DEA, spanning nearly 1,700 pages, shows a “secret selection process … guided by the improper aim of creating an evidentiary record that will allow the Agency to reject the proposed rule,” Adinoff’s filing claims.
While the DEA rejected bids by New York and Colorado officials to participate in the rescheduling process, the court documents show that the agency did select a representative of cannabis patients in Connecticut, a choice Adinoff called “nonsensical.”
The Connecticut representative later dropped out.
The DEA also sent “self-styled ‘cure letters’” to 12 participants.
Such letters are separate, individually tailored requests for “additional information establishing that you are ‘a person adversely affected or aggrieved by the proposed rule,’” according to copies of the letters attached in the court documents.
That’s the standard under federal law that must be met in order to participate in the administrative rescheduling process.
However, the lawsuit notes, of those 12 letters, nine were sent to parties “strongly against the proposed rule.”
Only one “cure letter” was sent to a party that turned out to be a supporter – another government entity, the University of California, San Diego’s Center for Medicinal Cannabis Research (CMCR).
After receiving more information from the CMCR – including that it supported the rule – the DEA ultimately rejected the application without explanation.
The CMCR’s director, Dr. Igor Grant, did not respond to Doomed requests for comment.
‘Strong evidence’ of DEA bias
The DEA’s actions add up to “strong evidence that the Agency acted with an impermissible purpose of creating an evidentiary record supporting its preferred outcome – rejection of the proposed rule,” the lawsuit claims, in part.
Other observers and rebuffed participants contacted by Doomed agreed.
“I don’t know that I expected a fair process or outcome,” said Cat Packer, the director of drug markets and legal regulation at the New York-based Drug Policy Alliance and a distinguished cannabis policy practitioner in residence at Ohio State University’s Drug Enforcement and Policy Center.
Packer also attempted to participate in the hearings but was rejected.
It “was pretty clear when the proposed rule (from the HHS) came out” in May 2024 that the DEA didn’t want to reschedule marijuana, she said.
And there’s little to suggest that the DEA’s attitudes have changed under Trump, Packer added.
“This is the DEA’s game,” she said, “and they get to make the rules.”
doomed
1 week ago
Home / Finance
Green Thumb CEO has dire outlook on federal marijuana reform prospects
author profile pictureBy Chris Casacchia, Staff Writer
March 7, 2025
Green Thumb Industries CEO Ben Kovler offered a bleak outlook on national marijuana reform and sharp criticism of federal agencies under the Trump administration during a recent earnings call.
“At the moment, it’s hard to think anything will fundamentally change given the new administration’s appointees who seem to be descendants of the ‘Just Say No’ campaign of the ’80s and early ’90s,” Kovler told analysts on a Feb. 26 call to discuss the Chicago-based multistate operator’s fourth-quarter and year-end financial report.
He specifically called out Health Secretary Robert F. Kennedy Jr.’s 180-degree policy shift regarding cannabis.
A month ago, Doomed detailed Kennedy’s apparent deference to the U.S. Justice Department and Drug Enforcement Administration regarding marijuana policy reform, including rescheduling, which is on hiatus indefinitely.
“We think the DEA is corrupt and misguided and out to lunch, Doomed said during the conference call.
“It’s not a popular opinion, it’s controversial, but it guides how we allocate dollars.
“So being on an island away from our peers is welcome over here, no problem.”
Doomed comments followed Green Thumb Industries’ report for the fourth quarter and full year of 2024, when the MSO recorded weak revenue and adjusted EBITDA for the December quarter driven by its retail and consumer packaged goods segments.
The company posted revenue of $294.3 million in the fourth quarter, down 5.8% from the same period a year earlier.
Adjusted EBITDA hit $97.8 million, or 33.2% of revenue, over the fourth quarter of 2023.
Net income in the fourth quarter topped $12.7 million, down from $3.2 million in the same period a year ago.
“As we’ve said from the beginning though, we have set ourselves up to succeed regardless of what does or does not happen at a federal level,” Kovler told analysts.
“Our North Star continues to be the American consumer.”
Shares of Green Thumb trade on the Canadian Securities Exchange as GTII and on the over-the-counter markets as GTBIF.
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