💸 The Tape

The DEA filed its response to the motion to reopen the marijuana rescheduling hearing on October 20, a day ahead of Judge Derek Julius’s deadline, and it didn’t waste any of its ten allotted pages on diplomacy. The agency’s position is that the opponents’ request for new discovery and testimony is an “obvious fishing expedition,” that the GAO report “has no bearing on the ultimate issue of whether marijuana should be transferred to Schedule III,” and that the motion should be denied in its entirety.

This is the second DEA filing on the GAO question in two weeks, and the tone has sharpened. The first brief, earlier this month, accepted that the report could go into the record but opposed further argument about it. This one goes after the reopening motion directly, and it does so on the law rather than the science.

The procedural posture

The sequence matters. GAO published its report on September 23, finding that DEA and FDA lack comprehensive written policies for conducting scheduling evaluations. Within days, the National Drug and Alcohol Screening Association, DUID Victim Voices and Dr. Kenneth Finn moved to admit the report and secured a stay. On October 12, they filed a separate motion asking Julius to reopen the hearing for “limited discovery and testimony” if the report is admitted. Julius accepted their reply brief on October 14, ordered the government to respond in ten pages or fewer by October 21, and kept the stay in place while he considers both motions.

The opponents want internal documents, the investigative materials GAO gathered, testimony on who designed the 2023 two-part “currently accepted medical use” test, and a round of supplemental briefing. The DEA’s answer is that none of it is available to them under the rules that govern this proceeding.

The legal argument

The core of the DEA’s brief is a point about administrative procedure that cuts through the noise. Neither the Administrative Procedure Act nor the Controlled Substances Act grants a general right to discovery in rulemaking. Discovery in an administrative hearing of this kind is the exception, not the rule, and it is available only on one of two showings: a strong showing of bad faith or improper conduct by the agency, or a demonstration that the existing record is too thin to permit meaningful judicial review.

The DEA’s brief says flatly, “None of the moving parties have made the requisite showing here.” On bad faith, the agency argues that the absence of written procedures is not evidence of misconduct. The scientific standard HHS applied was explained through live testimony and extensive written submissions, and the opponents’ theory “fails to establish any showing of bad faith, let alone a strong showing.” On the adequacy of the record, the DEA points to FDA witness Dominic Chiapperino’s testimony that his team spent roughly ten months on the scientific review with four working groups meeting regularly, and to a record that contains summaries of the studies, surveys and findings with supporting references. That is not a record that needs supplementing to be reviewable. It is a record that has already been reviewed, in open hearings, by the people now asking for a second look.

The “second bite” problem

The DEA makes one concession, and it uses it against the movants. Chiapperino did not identify every person who helped develop or approve the two-part test. The opponents treat that as a gap requiring new testimony. The DEA’s response is that they had Chiapperino on the stand and could have asked him. They cross-examined him during the hearing. Reopening the record to ask questions they chose not to ask the first time, the brief argues, would give them “a second bite at the apple.”

That framing is the whole case in miniature. Nothing in the GAO report was unavailable to the opponents during the hearing. The absence of written FDA procedures was knowable then. The two-part test was the central subject of the hearing. The witnesses were present. The opponents built their case, argued it, and lost the record. The GAO report is being used not as new evidence but as a procedural reset button.

What the GAO report does and doesn’t say

The DEA is careful to draw the boundary. The report did not raise any concern about the scientific assessment of marijuana. It did not question the legal framework for currently accepted medical use. It did not challenge the comparator substances FDA used for the Schedule III abuse-potential analysis. It found that two agencies should write down procedures they currently carry in institutional practice, and recommended they do so. The DEA has not opposed admitting the report. It opposes the fiction that a recommendation about documentation changes an eight-factor analysis that took ten months and produced a conclusion the agency has already adopted in its own final brief: marijuana “no longer fits the statutory requirements for Schedule I.”

The DEA also questions what GAO’s underlying investigative materials would add, since the report already describes its methodology, evidence and findings. Asking for the raw interview notes behind a published audit is discovery for its own sake.

Why the timing matters

The DEA could have taken a softer posture. It could have deferred to the judge on reopening, as it deferred on admitting the report. It didn’t. The agency that resisted this hearing for two years is now the party pushing hardest to end it, and the explanation is straightforward: since April, state-licensed medical cannabis has been in Schedule III under the Attorney General’s order, the D.C. Circuit has declined to block it, and adult-use remains the only unresolved piece. The DEA has concluded the record, reached its position, and wants Julius’s recommendation on Administrator Cole’s desk. Every week of stay is a week of regulatory limbo the agency no longer sees any reason to extend.

What happens next

Julius now has both motions fully briefed. He can admit the report and deny reopening, which ends the stay and clears the way for his recommendation. He can admit it and order limited supplemental briefing. Or he can grant reopening, which would require him to find bad faith or an inadequate record over the objection of the agency that built that record and now defends it. Given the legal standard the DEA laid out, the third path would be remarkable.

The opponents came into October hoping the GAO report would be a crack in the foundation. The DEA’s response treats it as a note about the filing cabinet. The question for Julius is which reading the law supports, and the DEA just made a strong case that it isn’t close.

📈 Dog Walkers

$AAWH ( ▲ 3.02% ) Launches NJ Dispo

Ascend Wellness opened Ascend of Evesham in Marlton this week, an adult-use dispensary on Route 70 in Burlington County that soft-launched October 20 ahead of a grand opening October 23. The shelves carry Ascend’s house brands, including Ozone, Simply Herb, High Wired, Honor Roll and Effin’, and the store runs 9 AM to 10 PM daily.

The interesting part isn’t the store. It’s the structure. Ascend doesn’t own this dispensary. Michael Santana, a New Jersey resident and minority business owner with a construction background, holds the license and operates the shop through Ascend’s social equity partnership program. Ascend supplies the brand, the product and the operational playbook under a New Jersey-permitted arrangement designed to channel investment into diversely owned cannabis businesses.

That matters because New Jersey caps vertically integrated operators at one license per class, which means the big MSOs hit their retail ceiling fast. Partnership models like this one let Ascend extend its brand footprint, wholesale volume and shelf space without touching its own license count. Santana gets capital, supply chain and a proven brand on day one. Ascend gets another storefront moving its flower in one of the highest-priced adult-use markets in the country.

The company frames it through its CO-LAB for Social Equity program, with Danielle Drummond, VP of Social Equity, pitching tools, training and support for new entrepreneurs. The restorative-justice angle is real, and so is the commercial logic. In a capped market, the partner store is the growth model, and Ascend is building a template other operators will copy.

📺 Trade To Black

Is the Hemp Fight Really About Farmers? | Trade to Black

• Wisconsin hemp farmer Alexander Mootz joins Trade To Black ahead of the December 11 federal hemp deadline, arguing most bills on the table protect the conversion model, not farmers.

• Growing hemp since 2018 on rented land, Mootz recounts the 2019 CBD crash and bankruptcy biomass sales, and says prices never recovered because today’s margin lives in chemically converting CBD into intoxicants, a margin farmers never see.

• He questions where raw material actually comes from, citing imported and yeast-derived CBD isolate, murky import codes and zero farm-lot certification, and warns the 0.4 mg cap in Section 781 threatens even grain growers.

• Mootz explains why he can’t back the Goodness of Hemp Act with its two-year conversion window, why an extension without regulation fixes nothing, what he heard on Capitol Hill including a suggested Takings Clause lawsuit, and his vision for hemp feeding fiber, grain and regulated cannabis markets.