DEA asked its own judge for Schedule III

Last week →  A judge said no — Virginia's 2 mg hemp cap is live

The agency that spent five decades defending marijuana's place in Schedule I filed a brief on August 17 asking an administrative law judge to take it out. In its post-hearing filing in DEA Docket No. DEA-1362, DEA argued that marijuana "no longer fits the statutory requirements for Schedule I because it has a currently accepted medical use within the United States and it has an accepted safety for its use under medical supervision," and asked Chief Administrative Law Judge Derek Julius to "expeditiously recommend" a move to Schedule III. Smart Approaches to Marijuana, the states of Idaho, Indiana and Nebraska, the Tennessee Bureau of Investigation and the drug-testing industry filed against. Julius now writes a recommendation for Administrator Terrance Cole, who holds the final call and faces no statutory deadline. Nothing has changed yet — a recommendation is not a rule, and no operator should book a 280E position on one. But the government's own argument is now on the record, and it is the argument for rescheduling. How the record closed →

Top story. DEA filed its post-hearing brief on August 17 asking its administrative law judge to recommend moving marijuana to Schedule III — the government's formal position, on the record, one step before the Administrator decides.

Next three.

1. Texas — Four hemp businesses opened a third legal front against DSHS, this one over THCA detentions and the $10,000 and $5,000 annual fees.
2. Congress — The hemp-ban delay still waits on the House, which returns August 31. Square is not waiting: hemp and CBD listings must come down by October 15.
3. Illinois — Adult-use dispensaries can apply to add medical sales starting September 10, with a $5,000 nonrefundable fee and a build-out requirement.

Why it matters: This is the government's formal litigating position in the proceeding that produces the ALJ's recommendation — the last procedural step before DEA leadership decides. Section 280E exposure, DEA registration obligations, and banking and insurance underwriting all sit downstream of it. Nothing is final, and a recommendation is not a rule.

DEA filed its post-hearing brief with Chief ALJ Derek Julius on August 17 in DEA Docket No. DEA-1362, leaning on HHS's ten-month scientific review and citing "over 30,000 practitioners treating more than six million patients in 43 U.S. jurisdictions." Opposing briefs came from Smart Approaches to Marijuana, Idaho, Indiana and Nebraska, the Tennessee Bureau of Investigation and the drug-testing industry. On August 20, Julius ordered 294 corrections to the roughly 2,500-page transcript of the June 29–July 15 hearing; the corrected version is due on DEA's website by August 26.

Why it matters: November 12 is still the operative federal date, and payment access can disappear well before a statute does. Square has told hemp and CBD merchants to strip those items from their catalogs by October 15 and will close hemp-heavy merchant accounts by November 5 — five weeks and one week ahead of the deadline respectively. If your processor moves early, the delay debate is academic.

The Senate passed its stopgap 90-6 on August 8, which would push the narrower federal hemp definition from November 12 to December 11. The House has not acted. It returns from recess on August 31 and faces a September 30 government-funding deadline that will force the question quickly. Until the House passes the Senate language and the President signs it, November 12 remains the law.

Why it matters: Written guidance from Treasury and DOJ on 280E relief and DEA registration enforcement would change operator tax exposure more concretely than the scheduling docket itself. The lawmakers asked for answers by September 30 — the same day the government-funding deadline lands.

Reps. Dina Titus (D-NV), David Joyce (R-OH), Ilhan Omar (D-MN) and Greg Steube (R-FL) wrote to President Trump, HHS Secretary Robert F. Kennedy Jr., Treasury Secretary Scott Bessent and Attorney General Todd Blanche on August 18. The letter asks how the April partial rescheduling — which moved state-licensed medical marijuana and FDA-approved marijuana products to Schedule III — will be implemented, including Medicare coverage, §280E treatment for dual-licensed operators, DEA registration posture, and patient and worker protections.

Why it matters: No operator obligation attaches, but this is the first federal rule outside the scheduling process itself to treat marijuana differently from other controlled substances. It is a useful signal for how agencies are reading the April order, and worth logging for anyone drafting workforce policy.

DOJ announced a final rule on August 17 establishing a process under 18 U.S.C. § 925(c) for prohibited persons to apply to restore federal firearm rights. Marijuana use or addiction alone does not trigger the drug-based presumption against restoration, because DOJ's definition of "controlled substance" for this purpose excludes it. A $30 application fee applies, waivable for indigency, and the program is initially capped at 5,000 applicants. Applications phase in 30 days after Federal Register publication.

Why it matters: FDA is building a consumer and product-use evidence base of its own, independent of the DEA rescheduling record. That matters less for compliance this quarter than for what a future CBD framework or cannabinoid GRAS position gets built on. Marketing and label claims made on social channels are, functionally, being collected.

The solicitation covers monitoring TikTok, Instagram and Reddit for marijuana- and hemp-related conversation, plus a "US Cannabis Consumer Survey" of dispensary shoppers on product preferences, desired effects, medical conditions, purchase frequency and dosing — alongside a general-population survey covering kratom and psilocybin, and a women's-usage survey. The contract period runs September 30, 2026 to September 29, 2027.

Why it matters: This suit targets enforcement practice rather than the rules themselves — the difference between what DSHS may write and what it may do to product sitting in your warehouse. The fee claim is the quiet one: an agency can be right about the cannabinoid and still lack authority to charge for the license.

Attorney David K. Sergi filed on August 20 in the 459th Judicial District Court, Travis County, for SS Distro USA LLC, Topps Distro LLC d/b/a KingPin Kush, Jason Moreno d/b/a My City Hemp and Trevor Kocaoglan, against DSHS, Interim Commissioner Imelda Garcia and Division Director Glenn Hargett. The complaint challenges DSHS's "Post-July Implementation and Enforcement Standard" — under which the agency allegedly detains product and refers businesses to law enforcement over trace naturally occurring THCA — plus the $10,000 manufacturer and $5,000 retailer annual fees, and raises a state anti-monopoly claim. It joins the Texas Hemp Business Council's appeal at the Fifteenth Court of Appeals and a federal suit in the Southern District of Texas.

Why it matters: Virginia operators are trading under the strictest hemp cap in the country with no injunction, no scheduled appeal, and no legislative session on the calendar. The industry's only live path — a special session — has been asked for and not granted. Plan on the cap staying.

Judge Robert S. Ballou's August 14 denial of a TRO and preliminary injunction let the 2 mg total-THC-per-package cap take effect August 15 as scheduled, ending the prior 25-to-1 CBD-to-THC exception. Barbara Biddle, president of the Cannabis Small Business Association, has since called on the General Assembly to convene a special session and asked the Virginia Cannabis Control Authority, the Attorney General's office and local law enforcement to pause enforcement meanwhile. Neither has happened. Counsel Chap Petersen has not confirmed whether plaintiffs will appeal to the Fourth Circuit; a residual claim for monetary damages remains available and the case stays open.

Why it matters: A new revenue line at the medical tax rate, gated by a physical build. The application requires a dedicated medical consultation area and zoning documentation, and the $5,000 fee is nonrefundable — which makes the floor plan and the municipal paperwork a go/no-go to settle before filing, not after. Municipal zoning letters run on municipal timelines, not the state's.

The Illinois Department of Financial and Professional Regulation posted its five-page "15-37" application this week. Any adult-use dispensary holding an active license in good standing may opt in for a Medical Cannabis Dispensing Organization license and sell to registered patients at the medical rate, up to each patient's allotment. The packet requires a floor plan showing the consultation area, zoning documentation, a patient-prioritization plan and the $5,000 fee. Authority is P.A. 104-0463 (SB 3222), signed by Gov. Pritzker on June 12, 2026. Applications open September 10.

Why it matters: Renewed public scrutiny of internal governance at the agency that regulates the entire Massachusetts market, arriving while the CCC is separately asking the legislature for roughly $7.9 million in supplemental funding to implement its social-consumption rollout. Licensing and enforcement timelines are the thing to watch, not the litigation itself.

Former Cannabis Control Commission Chair Shannon O'Brien filed a whistleblower and retaliation suit on August 20 in Suffolk Superior Court against State Treasurer Deborah Goldberg, the Commonwealth and the CCC, seeking $3 million. The complaint alleges she was suspended, fired, briefly reinstated and removed again after pushing for investigation of regulatory misconduct, enforcement failures and product-testing and licensing problems inside the CCC. Goldberg's office has characterized the suit as relitigating settled issues.

Why it matters: The wholesale tax took effect January 1 and is already under challenge in two suits from the Michigan Cannabis Industry Association. A leading gubernatorial candidate campaigning on repeal puts its political durability in question heading into November — relevant to anyone modelling Michigan margins into 2027. This is a campaign position, not enacted policy.

Republican nominee John James said he would seek to repeal or sharply reduce the 24% wholesale marijuana tax, while also calling for increased enforcement against unlicensed operators and intoxicating hemp products sold outside the regulated market, and reduced regulatory burden on licensed businesses. Separately, the Cannabis Regulatory Agency has closed the comment period on its proposed marihuana rules following a July 23 public hearing, with final rules now headed to the Legislative Service Bureau.

Why it matters: Barcelona holds Europe's largest concentration of cannabis social clubs, and two pressures are converging on the model at once — a resourced municipal investigation and a national tobacco-law overhaul that would remove the private smokers'-club exemption the clubs rely on. Anyone with Spanish exposure, or evaluating the CSC model as a template elsewhere in Europe, should be watching both.

Deputy mayor for prevention and security Albert Batlle and Guàrdia Urbana chief superintendent Pedro Velázquez unveiled "Plan Druida" on August 4 — an anti-trafficking strategy built on increased police presence, a new hotspot-identification data system and closer coordination with the Mossos d'Esquadra. Under it, the city council has opened investigations into what officials describe as the vast majority of the city's clubs, with 50 additional Guàrdia Urbana officers due in September. Separately, Spain's Council of Ministers approved a tobacco-law overhaul on July 21 and sent it to Congress; its status there is unclear as of this week.

Why it matters: A health check on the most mature federally legal adult-use market in the world, and on a country that is also a major medical-cannabis exporter into Germany and the wider EU. Eight years in, the demand curve is still climbing rather than flattening — a data point worth having when U.S. rescheduling arguments turn to what a federally legal market looks like at maturity.

Statistics Canada figures reported August 21 show legal cannabis retail sales of CA$517.761 million in June 2026, edging past May's CA$510.367 million record by 1.4%. First-half 2026 sales total roughly CA$2.896 billion. Ontario led at CA$193.7 million, followed by British Columbia at CA$87.1 million, Alberta at CA$83.1 million and Quebec at CA$70.8 million.

While the rescheduling docket takes the attention, the alcohol industry quietly picked a side on hemp THC drinks — and the bill it endorsed would put beverages under a three-tier system with a 5 mg serving cap, an 8-cent-per-milligram excise, and TTB as the regulator. If you make, distribute or sell hemp beverages, that is the framework to read now rather than in November. Read the summary →