The marijuana rescheduling hearing isn't reopening for new testimony, but it isn't closing the book on a federal audit either. DEA Chief Administrative Law Judge Derek Julius this week denied a bid by rescheduling opponents to reopen the proceeding for fresh witness testimony and document discovery, while agreeing to admit a Government Accountability Office report into the record and inviting the parties to brief its significance. For an industry that has waited years for a scheduling decision, the ruling keeps the process moving without reopening it to a fresh evidentiary fight.
What the Judge Actually Decided
Julius found most of what opponents wanted to probe was either beside the point or something they already had a chance to raise. Some of the requested material, he wrote, is "immaterial for the narrow purpose of this hearing." Other lines of inquiry "could have been explored" when witnesses were already on the stand back in June and July. That's a notable rebuke, procedurally speaking: it signals the judge isn't inclined to let the hearing become an open-ended discovery exercise months after testimony wrapped.
The GAO report was a different story. Julius called the opponents' arguments around it the "strongest" basis for reopening - strong enough to matter, but not strong enough to justify new testimony. Instead, the report goes into the record as-is, and the parties get a narrow window to argue over what it should mean for the case. Initial filings are due October 29, replies by November 5, and the judge made clear he doesn't want this turning into a prolonged briefing war: "Requests for further briefing on these issues beyond the replies allowed above are disfavored."
Why the GAO Findings Matter to the Industry
The GAO review found that DEA "does not have any policies or procedures regarding how its staff are to conduct evaluations or schedule substances," and that FDA, within HHS, lacks written procedures for how staff should conduct evaluations or develop scheduling recommendations. For operators watching this process from the outside, that's not a minor administrative footnote - it goes to whether the scheduling system itself has consistent, documented rules, or runs more on institutional habit.
Julius was careful to wall that question off from the rescheduling proposal itself. "The GAO is not a party to this litigation, and the GAO Report speaks for itself," he wrote, adding that letting in testimony on the subject "would only serve to confuse the matter." The briefs he's inviting are supposed to stay narrowly focused on two things: how much weight the report deserves, and whether the "gaps" it identifies are serious enough to actually undercut the specific Schedule III proposal in front of him - not whether DEA's rulemaking process in general needs an overhaul.
The Bigger Picture for Operators and Investors
Multi-state operators, wholesalers, and investors tracking this case have reason to read the ruling as a modest win for keeping the timeline intact, even if it isn't a resolution. A Schedule III move would reshape the regulatory and tax environment for licensed cannabis businesses - most notably by easing the 280E tax burden that currently blocks plant-touching companies from deducting ordinary business expenses. That stake is part of why the hearing has drawn state attorneys general, legalization opponents, and at least one biopharmaceutical company into consolidated litigation challenging the process.
Julius noted that DEA and the opponents "appear closer aligned in their understanding of the GAO Report than their postures may indicate" - the real disagreement, he said, is over how much that report should weigh on this specific case, not what it says. The matter remains stayed until briefing closes, at which point the stay lifts automatically. There's no new hearing date, no new witness list - just a tightly bounded paper fight over one document, with the broader Schedule I-to-III question still sitting with the judge.
