dea marijuana rule

Exclusive: DEA To Bar Federal Licenses For Many State Legal Marijuana Businesses

The DEA is expected to issue a rule Friday morning that will be a serious issue for current marijuana grow operations and a variety of other businesses. Documents obtained by Cannabis & Tech Today detail a significant byproduct of any potential federal legalization.

The rule is from the Department of Justice’s Drug Enforcement Administration (DEA) regarding the Controls to Enhance the Cultivation of Marihuana for Research and will officially be published Friday, December 18, 2020. The rule states any commercial cannabis operation with a pre-existing, plant touching, state-legal but federally illegal, cannabis business is probably not going to receive a federal cannabis cultivation license, aka a Bulk Manufacturing Permit (BMP).

According to Issue 5: “Some commenters believe that DEA’s consideration of an applicant’s compliance with Federal marihuana law would exclude qualified applicants, specifically those who operate in compliance with State laws that are inconsistent with Federal law.”

The Response

The DEA’s response is that “Congress has established by statute the factors that DEA must consider when evaluating whether to grant an application for registration. For an applicant to manufacture a schedule I or II controlled substance, DEA must consider, among other factors, the applicant’s ‘compliance with applicable State and local law;’ ‘prior conviction record’ under Federal and State laws relating to the manufacture, distribution, or dispensing of such substances;’ ‘past experience in the manufacture of controlled substances, and the existence in the establishment of effective control against diversion;’ and ‘such other factors as may be relevant to and consistent with the public health and safety.’ 21 U.S.C. 823(a). An applicant that has manufactured marijuana without obtaining a DEA registration has violated Federal law, see 21 U.S.C. 841(a), regardless of whether that manufacturer has violated the laws of the State in which the applicant is located. Such activity is relevant to past experience in the manufacture of a schedule I controlled substance, past experience in preventing diversion of a controlled substance from other than DEA-authorized sources, and the promotion and protection of public health and safety. Moreover, prior conduct in violation of the CSA is relevant to determining whether the applicant can be entrusted with the responsibilities associated with being a DEA registrant. Indeed, DEA registration is a fundamental component of the CSA, and it is wholly appropriate to consider an applicant’s past noncompliance with the CSA when deciding whether to grant a registration under the Act. DEA will consider all relevant factors for each individual applicant, on a case-by-case basis, when determining whether to grant registration, as provided for in 21 U.S.C. 823(a) and the regulatory text at 21 CFR 1318.05. While the DEA Administrator has discretion to weigh the statutory factors and any one factor need not be dispositive an applicant’s prior compliance with Federal law is a relevant consideration when determining whether to grant an application for registration.”

From that, it appears DEA, who has never been a fan of cannabis, is not considering state-compliant plant-touching businesses for qualification of a BMP.

FULL TEXT: Department of Justice’s Drug Enforcement Administration (DEA) regarding the Controls to Enhance the Cultivation of Marihuana for Research

So who qualifies?

An example of an applicant on track for a federal cannabis license is MMJ Biopharma Cultivation Inc. because they followed the federal statute while eschewing a state-legal, plant touching operation.

Additionally, MMJ International Holdings has two New Drug Development Applications (NDAs) with the Food and Drug Administration (FDA) to prove public safety and efficacy by performing clinical trials in Multiple Sclerosis and Huntington’s disease. (MMJIH was awarded an orphan designation by the FDA for Huntington’s disease.)

Another significant factor the DEA considers necessary is a “bonafide supply agreement,” i.e., a federally-licensed cultivator has to have an agreement to supply either a pharmaceutical development company, or clinical researcher.

Once a bonafide supply agreement is proven established by said commercial entity, the DEA may potentially increase the receiving entity’s annual cannabis quota based on the required demand. This is notable because previously, research facilities such as the University of Mississippi, who cultivate and supply cannabis to the National Institute on Drug Abuse, were given a tightly-controlled quota of cannabis to study.

Cannabis researcher Dr. Sue Sisley considers the amount of cannabis allotted for research purposes to be so inadequate, she infamously sued the DEA to increase the supply, and expand the list of approved universities. Dr. Sisley is a current applicant for a federal BMP through Scottsdale Research Institute.

This piece was an exclusive to Cannabis & Tech Today by Sara Brittany Somerset.


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