MMJ International Challenges DEA's Marijuana Rescheduling Decision

MMJ International Holdings, a pharmaceutical company developing standardized cannabinoid investigational medicines, has raised a critical question regarding the Drug Enforcement Administration's (DEA) rescheduling of marijuana. The company argues that the DEA's own findings and the Attorney General's order are in direct contradiction, highlighting a glaring inconsistency in the agency's actions.

In April 2026, the DEA Administrative Law Judge's recommendation is pending, following a rescheduling proceeding. The Attorney General's Order No. 6754-2026, published on April 28, 2026, placed FDA-approved marijuana products and state-licensed medical marijuana in Schedule III, creating an expedited federal registration pathway for state licensees. The order's basis was the robust infrastructure developed by state marijuana regulatory systems to prevent diversion, ensure product safety, maintain records, and conduct facility inspections.

However, DEA's 2025 National Drug Threat Assessment, published on May 13, 2025, paints a different picture. The assessment states that cannabis growers in states where cultivation is legal are the main suppliers of illicit marijuana markets in the rest of the United States, growing in excess of quotas and legal market needs. It also notes that THC levels in marijuana continue to climb and are largely unregulated in states where marijuana has been legalized, with product labeling often significantly inaccurate. The assessment further highlights that in 2024, marijuana seized in Oklahoma accounted for 66 percent of the total amount seized by DEA.

Eleven days after the Attorney General's order, the White House published its National Drug Control Strategy, which described how groups exploit state marijuana markets, leveraging them to establish massive, unlicensed cultivation operations. The report cited Oklahoma as a stark example, where law enforcement estimates that Chinese criminal groups run more than 80 percent of the state's thousands of marijuana and hemp farms. The scale is staggering, with the state's marijuana production exceeding its entire licensed medical demand by at least 32 times, with an estimated 85.5 million plants unaccounted for.

MMJ International Holdings President and CEO, Duane Boise, stated, "DEA's own assessment says legal state cultivation supplies the illicit market. The White House says lax regulations and eighty-five million plants unaccounted for. The DEA Administrator said this area has lacked consistency and oversight. And Oklahoma's own regulator was told it is occurring through the licensed system. The Order says 'in light of that record.' The record is public, it is federal, and it says the opposite. What is DEA supposed to do with its own evidence?"

The administrative record, which is now closed, does not reconcile these divergent findings. DEA's threat assessments and the White House strategy do not determine marijuana's proper schedule, but they do provide critical information that the DEA's Administrative Law Judge must consider. Under the Motor Vehicle Manufacturers Association v. State Farm and SEC v. Chenery rulings, DEA must examine the relevant data and articulate a rational connection between the facts found and the choice made.

MMJ International Holdings is not arguing that these statements can never be reconciled.

The company is urging the DEA to address the contradiction between its own findings and the Attorney General's order. The ALJ now has the task of reconciling the record, and the DEA Administrator must sign off on the decision. The outcome of this process will have significant implications for the regulation of marijuana and its integration into the federal drug scheduling system.