David Heldreth, CEO and founder of Panacea Plant Sciences, has filed a federal court lawsuit, claiming the DEA breached several legal protocols in preparing for a hearing on the Biden administration’s proposal to reclassify marijuana. The suit urges the court to issue an injunction halting the DEA’s scheduled hearing until these legal concerns are addressed.
Heldreth’s complaint argues that the DEA has not complied with important legal requirements related to administrative procedures and federal consultation obligations. At the core of his argument is the agency’s decision to hold a hearing on moving marijuana from Schedule 1 to 3 of the CSA, which he contends lacks necessary adherence to federal guidelines.
The initial hearing is slated for Dec. 2, following a period of public comment that ended several months ago. While numerous groups requested participation in the hearing, DEA director Anne Milgram selected only 25, excluding Panacea. Heldreth claims that this exclusion was unwarranted and appears to be a retaliatory move by the DEA. He argues that Panacea’s prior opposition to the DEA’s regulatory moves on psychedelic substances may have led to this exclusion, framing it as a response to the company’s stance on various drug policy issues.
In his legal filing, Heldreth highlights four primary grounds for requesting a stay on the DEA’s proceedings. One key argument is that the DEA failed to follow a 1990s executive order mandating federal agencies to consult with tribal organizations when developing policies or regulations that could impact their interests.
Additionally, he claims that the agency did not comply with the Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act, which require that the impact on small businesses be considered in federal rulemaking.
The complaint seeks a court order blocking any further proceedings or scheduling actions on cannabis until the case is fully reviewed. It requests that all deadlines and hearings within the DEA’s administrative process be suspended while the legal issues in question are resolved.
While the initial hearing remains slated for December, John Mulrooney, the DEA’s Chief Administrative Law Judge, issued an order indicating that the DEA’s current witness list lacks sufficient detail. The judge has asked the agency for additional information on the witnesses and possible dates for a formal hearing early next year, potentially in January or February.
The DEA has hinted that further information may be needed on several aspects of the scientific review that informed the decision to recommend reclassifying marijuana. The agency’s recent actions have sparked speculation among some observers who interpret this as a sign of hesitation or skepticism regarding the rescheduling proposal.
Entities like Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB) within the marijuana industry will be following how this lawsuit plays out and the subsequent steps in the rescheduling process since a lot is riding on this expected change to federal marijuana policy.
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