DEA Judge Admits GAO Report, Rejects Prohibitionists’ Attempt to Reopen Cannabis Rescheduling Hearings

WASHINGTON – Chief Administrative Law Judge Derek Julius admitted a Government Accountability Office report into the DEA’s marijuana rescheduling record and turned down the other requests opponents had filed to slow the case.

Opponents had asked to reopen the hearing, call new witnesses, obtain GAO’s working files, cross-examine FDA’s Dominic Chiapperino a second time, and look into who designed HHS’s two-part test for currently accepted medical use. Julius denied all of it.

He wrote that the record already holds more than 2,500 pages of testimony plus thousands of pages of exhibits. In his view, the questions raised either fall outside the hearing’s scope or could have been answered with evidence the parties already had. The GAO report, he said, needs no witness to explain it. On the HHS test, he said the issue is how much deference it deserves, not who came up with it, and the parties had the chance to brief that point earlier.

The order sets two filing dates. Parties may submit ten double-spaced pages by October 29 on how much weight the report deserves, then ten pages of replies by November 5. The stay on the proceeding ends on its own after that. Julius called any request beyond those filings “disfavored.”

What Comes Next

Once the replies are in, Julius will write a recommended decision. It will contain findings on the eight statutory factors and a conclusion on whether adult-use Cannabis meets the criteria for Schedule I. The order gives no deadline, which is typical for these proceedings. The record closed in late August, and the GAO briefing adds a section rather than forcing a rewrite, so a timeline of weeks to a few months is reasonable. The government’s final brief has also argued that Cannabis no longer fits the requirements for Schedule I.

The recommendation goes to DEA Administrator Terrance Cole, who can adopt, modify, or reject it. The Attorney General’s April order already put state-licensed medical Cannabis in Schedule III, and HHS recommended broader movement in 2023. If Cole follows that direction, the final rule would be published in the Federal Register. Rules like this commonly take effect after 30 days, though the agency could allow more time for registration, security, and recordkeeping changes.

That effective date matters most to operators. It is when Section 280E of the tax code would stop applying to adult-use businesses, extending the treatment medical operators have had since April.

Court challenges are likely. Any aggrieved party can petition a federal appeals court within 30 days of the final rule. Prohibitionists like Smart Approaches to Marijuana (SAM) and its allies are already litigating the April order in the D.C. Circuit, which declined to block it. A stay pending review requires a showing that the challengers are likely to win, and that earlier refusal suggests a hard road. Without a stay, the rule would take effect on schedule while the appeal continues.

What opponents have left is narrow. Their brief can argue that GAO’s finding of missing written procedures reduces the weight of HHS’s analysis. DEA is expected to answer that GAO reviewed paperwork, not the underlying science. Julius framed the question as whether the gaps are “substantial enough to affect this proceeding,” and he did not find that they are.

For Cannabis operators with a mix of medical and adult-use assets, the order changes the planning question from IF to WHEN. The recommended decision is the next marker to watch. The final rule is the one that should show up in earnings, and its effective date is the one that should show up in cash flow. Appeals remain the main risk to the timetable, but a record this large is hard to attack as thin. Investors and operators should treat November 5 as the point where the calendar becomes concrete, while recognizing that each later step still has its own clock.