Judge Orders DEA to Answer Bid to Reopen Hearing
In today’s Trade To Black podcast presented by Flowhub, Shadd Dales and Anthony Varrell break down the latest order in the DEA’s marijuana rescheduling hearing with Eric Berlin of Dentons. In segment two, Anthony Coniglio, CEO of NewLake Capital Partners (OTCQX: NLCP), looks past the hearing at what a favorable recommendation would and wouldn’t mean for the industry.
Chief Administrative Law Judge Derek Julius has given the DEA until October 21 to respond, in 10 pages or less, to opponents’ motion for limited discovery and testimony. The opponents, including NDASA, DUID Victim Voices and Dr. Kenneth Finn, want more briefing, document requests and testimony. The DEA opposes additional briefing. The stay remains in place, and the judge reserved ruling on whether to admit the Government Accountability Office report.
Berlin argues the GAO report flags gaps in documenting the rescheduling process, not flaws in the science behind it. He calls the opponents’ discovery requests a fishing expedition. He notes that the Office of Legal Counsel vetted the two-part medical use test in 2024 and found the old five-part test impermissibly narrow. Berlin sees the tight briefing schedule as the judge moving quickly to build an appeal-resistant record. Even if the record is reopened, he says, it means delay, not defeat.
Coniglio reminds investors that cannabis carries regulatory risks few other sectors face. He says timing matters most for Section 280E. A final rule typically takes effect 30 days after filing, so a December filing could leave 280E in place for 2026 without IRS guidance. He also expects years, not months, of uncertainty over how Schedule III is implemented. Interstate commerce is likely a long way off.
On the federal hemp THC restrictions, Coniglio doesn’t expect the ban to take full effect as written, given the administration’s interest in CBD programs for seniors. He still sees whatever survives as a positive for state-legal operators.
He also says capital remains scarce outside proven operators. NewLake recently extended its credit facility and cut its borrowing cost by 100 basis points. He pegs the industry’s future real estate needs at roughly $10 billion, with current demand tilted toward dispensaries over cultivation.
This week’s NuggMD Check-In Poll surveyed 528 consumers on lab testing. The largest group, 39.8%, wouldn’t pay more but would choose a tested product at the same price. Another 19.3% buy only lab-tested products, while 6.3% don’t trust label results at all.
Hear the full breakdown, plus Coniglio’s advice for staying disciplined in a volatile sector.
