Researcher David Heldreth, CEO of Panacea Plant Sciences, has filed a lawsuit against the DEA, the DOJ, and top officials, claiming multiple legal violations in the agency's marijuana rescheduling process.
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The lawsuit, submitted to the U.S. District Court for Western Washington, seeks injunctive relief to halt the DEA’s marijuana rulemaking process, challenging the agency’s exclusionary practices and constitutional validity of its administrative law judges (ALJs).
Heldreth’s complaint follows President Joe Biden’s 2022 directive for federal agencies to reconsider marijuana’s Schedule I classification under the Controlled Substances Act. The DEA, in alignment with HHS, recommended reclassifying marijuana to Schedule III in April 2024. This shift would acknowledge marijuana’s medical uses, lower its abuse classification, and permit cannabis businesses to deduct operating expenses—currently disallowed under Section 280E of the Internal Revenue Code.
In response to the DEA’s decision to hold a December 2 hearing on rescheduling, Heldreth criticizes the agency for alleged biases, specifically citing its exclusion of Native American tribes and small businesses from the rulemaking process. Heldreth argues that failing to consult tribal entities over rescheduling marijuana overlooks the impact on tribal law enforcement and health services without federal funding to offset these costs. He also accuses the DEA of favoring larger license holders over small businesses by limiting participation in the hearings, stating that his request to testify was denied as part of a systematic attempt to marginalize critics.
Heldreth’s suit further contends that the DEA’s administrative law judges, appointed by Administrator Anne Milgram, breach Article II of the U.S. Constitution due to insufficient executive oversight. He seeks to pause the ALJ hearings until the DEA addresses concerns over tribal consultations, small business participation, and ALJ appointments.
This lawsuit comes amid evolving federal views on cannabis. While President-elect Donald J. Trump supported marijuana reclassification and access to banking for cannabis businesses during his recent campaign, his support for federal reforms contrasts with state-level setbacks, as shown by Florida’s recent failure to pass a recreational cannabis measure.
The December DEA hearing will culminate in an ALJ report on testimony, with the DEA required to review all public comments before publishing a final rule in the *Federal Register*. The outcome could mark a significant shift in federal cannabis regulation, with the agency mandated to address the substantive issues raised throughout the public and legal review.
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