The planned rescheduling of cannabis in the US could now take far longer than initially expected following a landmark Supreme Court decision last week.
Writing for MJBiz Daily, Head of Legal and Policy Research at NuggMD, Deb Tharp, raised concerns that a decision to limit the power of regulatory agencies could have significant impact on rescheduling.
In late June, the Supreme Court decided to overturn what is known as the ‘Chevron deference’ in the case of Loper Bright Enterprises v. Raimondo.
During the case, which focused on a dispute around fishing regulations, the lower courts had used the Chevron deference, which gives significant weight to regulatory agency’s ‘reasonable interpretation of an ambiguous statute’.
Chief Justice Roberts wrote the majority opinion, arguing that Chevron deference conflicted with the Administrative Procedure Act (APA), which requires courts to exercise their independent judgement in deciding whether an agency’s interpretation of a statute is lawful.
In essence, this takes power away from regulatory bodies to implement and enforce new regulations, and hands it to courts, who will now have increased leeway to reject their interpretation.
As such, Loper v. Bright makes it harder for the DEA to rely solely on its own interpretation of the Controlled Substances Act and could force them to present a more substantial scientific basis for keeping cannabis as Schedule I.
Further, courts previously might have deferred to the DEA’s interpretation, even if challengers argued for rescheduling based on cannabis’s medicinal properties or lower potential for abuse. Now, these challenges have a stronger legal footing, potentially leading to court decisions in favor of rescheduling.
Tharp argues that the most likely scenario is that rescheduling will be consistently delayed by legal challenges, but she has suggested that Congress may now be the most effective route to pushing the change through.
It comes as the prospect of rescheduling continues to boost sentiment towards cannabis following a difficult few years, seeing credit markets show signs of renewed activity.
According to Green Market Report, recent weeks have seen several significant private placements and increased offerings, indicating growing investor interest in the sector. Notable deals include:
Jones Soda Co.: Upsized its private placement from $3 million to $5 million due to high demand.
Willow Biosciences Inc.: Closed a private placement of 16,397,365 units at $0.10 per unit, raising approximately $1.64 million.
Avant Brands Inc.: Announced a non-brokered private placement aiming to raise up to C$3.9 million and closed a previous placement of C$2.
