Marijuana Rescheduling's Glaring Contradiction: What Is DEA Supposed to Do?
"With the DEA Administrative Law Judge Recommendation Pending, the Government's Own Published Findings Collide With the Attorney General's Conclusion That State Marijuana Systems Prevent Diversion" Duane Boise, CEO of MMJ International Holdings stated.
WASHINGTON, September 17, 2026 (Newswire.com) - MMJ International Holdings, Inc., a pharmaceutical company developing standardized cannabinoid investigational medicines through the FDA botanical drug development pathway, today put a question to the Drug Enforcement Administration. The evidentiary record in the pending marijuana rescheduling proceeding is closed, and the matter now awaits the Administrative Law Judge's recommended decision to DEA Administrator Terry Cole:
What is DEA supposed to do when the Attorney General's order rests on confidence in state marijuana regulatory systems, and the government's own published findings - DEA's and the White House's alike - identify those same state licensed systems as a source of diversion?
What the Attorney General found
Attorney General Order No. 6754-2026, published at 91 Fed. Reg. 22714 (Apr. 28, 2026), placed FDA-approved marijuana products and state-licensed medical marijuana in Schedule III and created an expedited federal registration pathway for state licensees. Its basis:
"These state regimes have developed robust infrastructure for preventing diversion, ensuring product safety, maintaining records, and conducting facility inspections-functions that fulfill the objectives of federal registration and recordkeeping requirements."
The Order then states: "In light of that record ..." It never identifies the record. No study, no inspection data, no diversion statistics, no state audit appears anywhere in it.
Diversion control is not peripheral to the Controlled Substances Act. It is the reason the federal registration system exists.
What DEA published
DEA's 2025 National Drug Threat Assessment, its most recent, states:
"Cannabis growers in states where cultivation is legal are the main suppliers of illicit marijuana markets in the rest of the United States, growing in excess of quotas and legal market needs." (p. 48)
"THC levels in marijuana continue to climb and are largely unregulated in states where marijuana has been legalized ... Product labeling is not controlled and is often significantly inaccurate." (p. 48)
"In 2024, marijuana seized in Oklahoma accounted for 66 percent of the total amount seized by DEA." (p. 51)
DEA notes that the seizure state is not necessarily where the marijuana was grown or destined, as marijuana is often seized in transit.
This is not an argument advanced by an opponent of rescheduling. It is DEA's own national intelligence assessment, published May 13, 2025 - eleven months before the Attorney General's order, and never mentioned in it.
And what the White House published eleven days after the Order
"These groups systematically exploit states where marijuana has been legalized under state law, leveraging these markets and lax regulations to establish massive, unlicensed cultivation operations. A stark illustration of this is Oklahoma, where law enforcement estimates that Chinese criminal groups run more than 80% of the state's thousands of marijuana and hemp farms. The scale is staggering: in 2023, the state's marijuana production exceeded its entire licensed medical demand by at least 32 times, with an estimated 85.5 million plants unaccounted for."
Robust infrastructure on April 23. Lax regulations on May 4. Same administration, eleven days apart.
The answer to the obvious objection
It will be said that these are different populations - that the Order credits licensed operators while the threat assessments describe criminals. The record does not support that division.
"The large oversupply observed in the regulated systems suggests that the licensed operators contributing to oversupply are very likely adding to an illicit market both at the point of cultivation and the point of retail sale." (p. 19)
"Data from Oklahoma's Bureau of Narcotics and Dangerous Drugs (OBNDD) support this theory, estimating that about 2,000 licensees are obtained fraudulently or are masking illicit sales." (p. 20)
Against a population the same page puts at "close to 7,000 cultivators." The diversion the threat assessments describe is not occurring around the licensed system. The state's own regulator was told it is occurring through it.
DEA's 2024 assessment supplies the concrete case: two Chinese nationals convicted in the Western District of Oklahoma in January 2024 for trafficking nearly 28 tons of black-market marijuana shipped from a grow facility licensed by the Oklahoma Medical Marijuana Authority.
The Administrator's own words
On April 23, 2026, announcing the rescheduling action, DEA Administrator Terry Cole described the purpose of the new hearing:
"DEA is expeditiously moving forward with the administrative hearing process - bringing consistency and oversight to an area that has lacked both."
The Attorney General's order, issued the same day in support of the same initiative, rests on the asserted strength of that oversight.
The record is closed
The ALJ is not writing on a blank slate. The Attorney General has already placed specified categories of marijuana in Schedule III. DEA's separate proceeding concerns the broader transfer of marijuana from Schedule I to Schedule III.
MMJ's position is not that these statements can never be reconciled. It is that the administrative record has not reconciled them - and that the question grows sharper given the Government's own post-hearing proposed findings, which state that marijuana "is not a single chemical with a consistent and reproducible chemical profile" and that state programs have "no unified controls on the cultivation and manufacturing of marijuana products, which raise concerns regarding the products' safety, quality, and consistency."
The administrative-law question
Neither DEA's threat assessments nor the White House Strategy determines marijuana's proper schedule, and nothing in them dictates what the ALJ must recommend.
But under Motor Vehicle Manufacturers Association v. State Farm, an agency must examine the relevant data and articulate a rational connection between the facts found and the choice made. Under SEC v. Chenery, agency action stands or falls on the grounds the agency actually articulates. Where diversion control and state-market oversight are the stated basis for federal action, published federal findings on diversion and state market oversight are difficult to leave unaddressed - particularly when they come from the same government.
"This is no longer MMJ arguing with DEA about marijuana," said Duane Boise, President and CEO of MMJ International Holdings. "DEA's own assessment says legal state cultivation supplies the illicit market. The White House says lax regulations and eighty-five million plants unaccounted for. The DEA Administrator said this area has lacked consistency and oversight. And Oklahoma's own regulator paid for a study finding its licensed operators are very likely the ones feeding it. The Order says ‘in light of that record.' The record is public, it is federal, and it says the opposite. What is DEA supposed to do with its own evidence?"
The Attorney General has issued his order. The witnesses have testified. DEA has published its own intelligence. Now its Administrative Law Judge has to reconcile the record - and its Administrator has to sign it.
About MMJ International Holdings
MMJ International Holdings, Inc. is a privately held pharmaceutical company developing standardized cannabinoid investigational medicines through the FDA botanical drug development pathway, including MMJ-001 for Huntington's disease and MMJ-002 for multiple sclerosis. MMJ holds FDA Orphan Drug Designation for its Huntington's disease candidate and maintains an active IND's.
CONTACT:
Madison Hisey
MHisey@mmjih.com
203-231-8583
Sources
AG Order No. 6754-2026, 91 Fed. Reg. 22714 (Apr. 28, 2026)
U.S. Dep't of Justice, Office of Public Affairs, press release (Apr. 23, 2026)
DEA, National Drug Threat Assessment 2025 (May 13, 2025), pp. 48, 51
DEA, National Drug Threat Assessment 2024, p. 40
Office of National Drug Control Policy, National Drug Control Strategy (May 4, 2026), p. 40
An Empirical Assessment of Oklahoma's Medical Marijuana Market (June 2023), Cannabis Public Policy Consulting, prepared for the Oklahoma Medical Marijuana Authority, pp. 1, 14, 19, 20
Thanks for the good catch. United States' Post-Hearing Brief, Proposed Findings Nos. 30-33 (DEA Docket No. 26-96)
SOURCE: MMJ International Holdings
Source: MMJ International Holdings
