Legal Experts Break Down ALJ’s Cannabis Rescheduling Pause
In our latest Trade To Black podcast presented by Flowhub, hosts Shadd Dales and Anthony Varrell break down DEA Chief Administrative Law Judge Derek Julius’s decision to pause the marijuana rescheduling hearing. Opponents had moved to add a new Government Accountability Office report to the record.
In segment one, Michael Bronstein, president of the American Trade Association for Cannabis and Hemp (ATACH), says the headline risk far outweighs the substance. The report raises nothing new, questions no part of HHS’s recommendation, and by its logic would undercut virtually every prior scheduling decision. ATACH sees four paths once DEA responds by October 13: deny the motion and lift the stay, take official notice of limited findings without new briefing, grant the motion as proposed, or admit the report on a modified schedule. Varrell adds that October 13 is a deadline, not a halt.
Cannabis consultant Seth Yakatan then joins as the sector sells off, with most major operators down double digits and Trulieve trading a record 8.3 million shares. He blames the industry’s fragmentation for both its rumor-driven trading and its weak lobbying, and attributes part of Glass House’s decline to programmatic trading. Yakatan also sees Decibel as cheap relative to its Canadian peers and argues Trulieve will eventually need acquisitions to show growth.
In segment two, Eric Berlin of Dentons stresses that rescheduling itself is not stayed; the pause covers only whether to include the report. The GAO found no scheduling decision, including marijuana’s, made incorrectly, and the procedures it flagged aren’t required by law. DEA’s recommendation rests on HHS’s 252-page 2023 evaluation, and GAO’s own review found DEA followed HHS in all 84 completed cases it examined. Berlin expects a delay of anywhere from days to months and says a final rule in the fourth quarter of 2026 remains doable.
He urges the industry to be less reactive, while warning that well-funded opponents remain motivated, including in Massachusetts this November. Varrell closes by urging caution on cannabis stocks over the next few weeks.
