The Government Takes The Stand

Written By Shawn Collins, Founder

For fifty years the federal case against cannabis was the simplest sentence in American law: dangerous, useless, Schedule I, filed next to heroin. Tomorrow, in a courtroom in Arlington, the same government has to stand up and argue the opposite. It will be the most reluctant party in the room, but their argument is also fifty years overdue.

“Fifty years of the harshest drug enforcement in the developed world never kept it from teenagers, never shrank the illicit market, never delivered the safety it promised.”

Start with what the noise about harm keeps drowning out. Patients have used this plant for years, on the recommendation of their own doctors, and many will tell you it gave them relief the pharmacy never could. They have earned a government that listens to those accounts instead of talking over them. And whatever cannabis is, it is not heroin. Fifty years of the harshest drug enforcement in the developed world never kept it from teenagers, never shrank the illicit market, never delivered the safety it promised. Filing the plant beside heroin was a slogan dressed as a finding. A schedule was never meant to be a tomb. When a substance turns out to help people, the system is supposed to be able to say so and to move. That is what rescheduling is: the law catching up to what patients and their doctors have known for years. It is overdue, and we are for it.

So you might expect tomorrow to be the day it finally happens. It is not, quite. What opens in Arlington is not the congressional kind of hearing, where the harmed testify and the public weighs in. It is administrative procedure: a narrow, technical inquiry into whether cannabis meets the statutory test for Schedule III, bound by rules of standing and evidence. There is a judge, the DEA's chief administrative law judge, Derek Julius. There are parties and witnesses, an oath, a cross-examination, even a burden of proof. But nobody is convicted and nobody wins. When the three weeks are up, the judge writes a recommendation the DEA can adopt, rewrite, or leave in a drawer, on no deadline. The verdict, such as it is, is a suggestion. The real decision comes later, and it comes somewhere else.

That is also why the room looks the way it does. Every participant is an opponent of the reform: Smart Approaches to Marijuana, a drug-testing trade group, a victims' organization, the Tennessee Bureau of Investigation, a doctor, a pharmacist, and a bloc of states led by Nebraska. NORML and the industry groups asked to take part and were turned away. That sounds rigged until you see why. Under the Administrative Procedure Act, only a party the proposed change would injure has standing to be heard, and a rule that loosens the law does not “injure” the people who spent years asking for it. The public already had its say. Some 43,000 people filed comments, about 70% in favor, and those sit in the record the agency must answer. Even the fight over livestreaming makes the point. The press asked to watch, as it could in 2024, and the judge declined because the people asking are not parties. This was built to make a record, and a record is a quiet, clerical thing.

Watch what the government does with its own old case, though. Ordered to argue that cannabis is medicine, the DEA will, and its filings name a doctor to testify to the benefit for patients in pain. But when one of the opponents asked the agency to produce its own pharmacologist, the author of the DEA's report on the harms of cannabis, the agency fought to keep her off the stand. The prohibition case it spent fifty years building cannot survive a cross-examination, and the agency seems to know it. Take that as the most honest verdict the old story has ever gotten, and as one more sign the reform is right.

If the case for rescheduling is this strong, the worry is not whether it happens. The worry is whether it is done well enough to last. The decision does not really get made in Arlington. It gets made on appeal. The April order that already moved medical cannabis to Schedule III by signature is under a consolidated challenge in the D.C. Circuit right now, with a motion to freeze it pending and the government's reply due July 2nd, in the middle of this very hearing. The challengers' sharpest weapon is a case the reform movement itself won, NORML v. DEA in 1977, which bars the government from moving a drug between schedules by fiat without findings made on a formal record. The shortcut that made April feel fast is the crack they are prying at now. And two years ago, in Loper Bright, the Supreme Court overruled the Chevron doctrine and stopped letting courts defer to an agency's reading of a statute. So the judges now decide the law themselves and measure it against the record. A clean record is a wall around the rule. A rushed, one-sided record is a door left open. We gave that heavy consideration during my time regulating in Massachusetts. What we knew never mattered as much as what we could prove to a judge who came to the file cold. A decision you cannot defend on review is just a reversal with a delay on it. An administration well practiced at getting sued and far less practiced at winning has built this proceeding for speed and stocked it with one side. It calls that strength. A reviewing court may call it an opening. The fastest way to lose this reform is to win it poorly.

The other worry is what the change does to the market on its way in. Rescheduling does not arrive like a light switch. It arrives like a shockwave, and the first wave is already moving. April split the industry in two. Medical cannabis now sits in Schedule III, with tax relief and a federal registration path, while adult-use stays in Schedule I with neither. In every state that runs both lanes, that line cuts straight through the same companies, the same shelves, the same customers, and nobody can yet say cleanly which of their costs are now deductible. Whatever the hearing decides for the rest of the plant will send a second wave through a market still reeling from the first. And a change this big rewards whoever is biggest and cleanest on paper. It favors the operator who can afford the lawyers and the restructuring, and it grinds the one who cannot.

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“This industry already drags a wake of harm behind it: the receiverships, the broken equity promises, the people who did real time and never got the second chance the statute advertised. Rescheduling is the right direction.”

So look down the line at where that wave actually lands. It lands on the budtender who knows a thousand customers by name but not whether her store survives the next round. On the trimmer whose harvest a national brand can now undercut from two states away. On the family that signed a personal guarantee on a single storefront because their state finally said yes. On the equity licensee handed a permit, a mountain of debt, and a press release calling it justice. The rule that comes out of Arlington will name none of them and reach all of them. This industry already drags a wake of harm behind it: the receiverships, the broken equity promises, the people who did real time and never got the second chance the statute advertised. Rescheduling is the right direction. But a change this big, run through a market this fragile, is how that wake grows instead of closes when no one is watching where it falls.

If you operate, this is where it gets concrete. For years you have paid a tax no other legal industry pays, handing the IRS a cut of your revenue under 280E because your product sat in Schedule I. Last year that drained an estimated $2.24 billion from the industry. April was supposed to end it for the medical lane, so you registered with the DEA and restructured around the relief. Before you celebrate, read the fine print. That relief rests on an April order a court could freeze by fall. And the registration is a federal form on which you attest, in writing, that you have been dealing a controlled substance without authorization. Your lawyer should read that line twice before you sign it. Do not rush to confess to the government on the strength of an order being litigated this very week. And keep one eye on November, when the federal definition of marijuana widens to swallow intoxicating hemp, and the fault line moves again.

There is a bigger stage waiting, too. The April order opened cannabis to import and export under the drug-control treaties, which puts American operators on a global floor for the first time, next to a Canada already shipping to Germany at scale and a Europe that runs the plant through real clinical trials and pharmaceutical-grade manufacturing. The rest of the world was never waiting for us to lead. It spent the years we spent arguing building the GMP, the testing standards, the chain-of-custody, the dull and expensive infrastructure a serious market runs on. Get there with a sloppy record and standards treated as an afterthought, and we lose more than a lawsuit. We lose the market to everyone who did the boring work first.

What should you expect, then? The predictable shape. The hearing runs close to schedule and settles nothing on the day. Schedule III is the likely landing, eventually, because it is what the science agencies recommended and what the President ordered in December. Watch two risks. The first is Schedule II, which to be clear is unlikely, but sounds like a middle path and would be worse than today. It would keep 280E in place while forcing the plant onto prescription pads and into production quotas no state market can fill. The second, a legitimate risk, is that lopsided record handing the appeals court its reason to send the whole thing back. Either way, the real decision lands later, somewhere else, with judges who were never in the room.

So watch the hearing tomorrow, but watch it for what it is. Strip away the stacked roster and the barred cameras, and what is left is the most ordinary thing in government: a substance inching one notch along a list. That notch is progress, and it is overdue. The danger was never that cannabis would move. The danger is that we move it carelessly, through a process too rushed to survive a court and into a market too fragile to absorb the shock, while the people who built this industry sit nowhere in the room and nowhere in the rule. Wanting rescheduling was always the easy part. Doing it without leaving a new wake behind is the hard one. The only question left is whether anyone running it is watching where it lands.

Links and Resources:

Agency Actions and Filings

News Coverage

Legal Analysis

Case Law

  • National Organization for the Reform of Marijuana Laws v. Drug Enforcement Administration, 559 F.2d 735 (D.C. Cir. 1977).

  • Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024).

Data and Reports

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Policy, Decoded comes from Shawn Collins — former inaugural Executive Director of the Massachusetts Cannabis Control Commission. Close-read analysis of the regulatory and political developments shaping cannabis, alcohol, health care, and AI. Weekday mornings, plus a Sunday editorial.

No roundups. No ‘10 things to know.’ Six mornings a week, from the regulator’s chair.

Shawn Collins, Founder

Shawn Collins was the inaugural Executive Director of the Massachusetts Cannabis Control Commission. Before that: the State Senate and the Treasurer's office. Now he advises operators, investors, and regulators on cannabis, alcohol, health care, and AI policy. He writes Policy, Decoded — weekday mornings plus a Sunday editorial.

https://bio.site/thcgroup
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