An interlocutory appeal has officially derailed the cannabis rescheduling hearing that was scheduled to begin on Jan. 21.

In granting the appeal on Jan. 13, John J. Mulrooney, the Drug Enforcement Administration’s (DEA) chief administrative law judge (ALJ), said the hearing to debate the merits of a proposed rule to reclassify cannabis from Schedule I to Schedule III under the Controlled Substances Act is “canceled.”

The hearing proceedings, with expert testimonies scheduled to run through early March, are now “stayed,” pending a resolution of the interlocutory appeal to the DEA administrator—currently Anne Milgram. However, the DEA head will likely change following President-elect Donald Trump’s inauguration on Jan. 20.

Furthermore, Mulrooney ordered that the three pro-rescheduling designated participants (DPs)—who requested the appeal absent of him granting relief to their motion—and the DEA work together to provide the tribunal (the court) with a joint status update in 90 days and every 90 days thereafter.

Although Mulrooney used the word “canceled” in his Jan. 13 order, whether or not the rescheduling process picks back up is a decision that is now in the hands of the DEA administrator. Specifically, any party participating in the hearing may file a brief with the administrator, who can grant oral arguments if he or she chooses.

With a new political party coming into power, this appeal process will likely get kicked down the road: Trump hasn’t named a replacement nomination for his administration’s DEA administrator following Florida Sheriff Chad Chronister’s exit for consideration in early December.

Moreover, once Trump is inaugurated, his administration can choose to kill the current rescheduling process altogether. According to administrative law, if a federal agency hasn’t published a final rule before a new administration takes the White House, then a president can direct that the proposed rule be withdrawn entirely, according to the Congressional Research Service (CRS).

“Soon after taking office, recent presidential administrations typically have directed agencies to cease pending rulemaking activities of the prior administration, withdraw proposed and final rules from [Office of the Federal Register] prior to publication, and stay (or consider staying) the effective dates of published rules that have not yet become effective to give the new administration time to review the late-term rulemakings of the prior administration,” legislative attorneys Kate R. Bowers and Daniel J. Sheffner wrote in 2021.

Mulrooney granted the interlocutory appeal as a result of his denying a motion to reconsider the DEA’s role/status in the hearing as the proponent of a proposed rule that was put forward by the Department of Justice (DOJ). That proposal is for cannabis to move to Schedule III.

As part of his denial, Mulrooney wrote, “I can no more remove or re-designate the [DEA] administrator than I can hold parties in contempt and fine them. The strangeness of this unsupported approach is amplified by the fact that the appointment of a new DEA administrator by a different political party is imminent.

“Similarly, the concept that the movants are somehow entitled to an agency head who is steadfastly convinced of the correctness of their position before the first witness has been sworn, is as peculiar as their insistence that the ALJ assigned to the case has some bizarre, inherent authority to remove the head of the agency from its place as the proponent of the [proposed rule].”

Shane Pennington, a partner at Porter Wright Morris & Arthur LLP, authored a motion to reconsider that he filed on Jan. 6 on behalf of cannabis company Village Farms International, along with counsel representing veterans group Hemp for Victory and the Office of the Cannabis Ombudsman, collectively referred to as “the movants.”

All three parties are pro-rescheduling DPs that were selected by the DEA for the hearings. In seeking the interlocutory appeal, the movants are appealing the denial of their motion requests before the rescheduling proceedings are final. 

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Specifically, the movants accused the DEA of improper ex parte communications with anti-rescheduling DPs and neglecting to disclose a conflict of interest with another anti-rescheduling DP to “subvert the process and thwart” the DOJ’s Schedule III proposal.

Uncovering what they considered to be new evidence, the movants requested relief from the tribunal, including that Mulrooney orders the DEA to disclose any improper communications and to publicly declare whether it supports or opposes the DOJ’s proposed rule, among other requests.

The DEA’s counsel responded to the movants’ motion to reconsider on Jan. 13—before Mulrooney issued his order—suggesting that there was no new evidence offered because the alleged ex parte communications happened before the movants’ initial motion in November. Also, the DEA offered no clarification of its stance on the Schedule III proposal other than to say that cannabis is currently a Schedule I controlled substance and the agency “continues to treat it as such.”

Mulrooney scolded the DEA in his Jan. 13 order.

“The government’s failure to acknowledge in any way the gravity of the highest levels of its organization allegedly reaching out to help one of the potential DPs fortify its application to ease the task of justifying its apparently pre-made determination for appeal demonstrates an arrogant overconfidence that may not serve it well in the future,” the judge wrote.

However, in denying the movants’ relief requests, Mulrooney granted the interlocutory appeal under Section 1316.62 in the Federal Code of Regulations, which the movants preemptively asked him to do in their motion to reconsider should the judge deny their requested relief.

Mulrooney also pointed out that his hands were tied in the DP selection process as a result of Milgram’s actions.

“Ironically, had the [DEA] administrator elected at the outset to narrow the scope of participants within the strict parameters of the regulations (that is, to limit inclusion to only those adversely affected or aggrieved), without any of the unpalatable noise associated with the alleged ex parte communications, it is likely that such decision would have been easily sustained on review and the movants would not have the voice they currently enjoy in these proceedings,” Mulrooney wrote in the Jan. 13 order.

When granting the ALJ hearing in August, Milgram tasked Mulrooney with overseeing a fair and transparent hearing and “to take all necessary action to avoid delay.”

Although granting the interlocutory appeal has delayed the hearing process, Mulrooney indicated in Monday’s order that it may be the lesser of two evils.

“Even factoring in the reality that sometimes litigants and their representatives should be mindful of what they wish for, to the extent my analysis is found to be in error on review, I am willing to certify that the allowance of this interlocutory appeal could potentially avoid exceptional delay, expense or prejudice to the DPs and the government by injecting appellate certainty into the equation at this stage of proceedings,” the judge wrote. “Were my analysis to be reviewed on appeal and determined to constitute prejudicial error, a remand would clearly result in significant delay and expense to the designated participants and the process.”

In saying that the movants should be “mindful of what they wish for,” Mulrooney reiterated that an interlocutory appeal takes the process out of his hands and returns jurisdiction of the matter to the full control of the DEA’s leadership “in all respects” under Section 1316.62. In other words, the agency that the movants are trying to eject from the ALJ hearing is now back in the driver’s seat.

While the ALJ proceedings are on a stay due to the interlocutory appeal, the DEA administrator is tasked with issuing a briefing schedule, entertaining oral arguments if he or she desires, and issuing a binding, written decision to the tribunal.

Mulrooney indicated that the movants’ relief requests were unlikely to affect the outcome of the proceedings.

“Notwithstanding the pleas of the designated participants that they are anxious for action on the proposed rescheduling of marijuana, the movants (a subset of the pro-rescheduling DPs) are apparently eager to trade a timely disposition and recommended decision for the dubious advantage of piling on more DPs,” the judge wrote.