The D.C. Circuit will not pause Schedule III

Last week →  The hemp delay is law — for most products

On Wednesday, September 9, a three-judge panel of the D.C. Circuit denied the motion to stay the Attorney General's April order moving state-licensed medical marijuana and FDA-approved marijuana drugs to Schedule III. The order is two pages long. It says the petitioners “have not satisfied the stringent requirements for a stay pending court review,” denies two medical operators leave to intervene, and tells every party to propose a briefing format within thirty days — with a warning that aligned parties will share one brief. That is the sentence that matters: the merits fight will run on a single, unhurried track, and the April order will likely be a year old before any court reaches its validity. The next morning the Sixth Circuit showed the limit of that status quo. In Hello Farms, it threw out a $31.8 million verdict because federal courts cannot enforce a contract to grow and sell marijuana, and it held the Schedule III order does not reach back to a 2020 deal — or forward to any transaction without a DEA registration. Rescheduling survived the week. It did not cure a single contract. What Schedule III changes for operators →

Top story. The D.C. Circuit denied a stay of the April Schedule III order on September 9 (No. 26-1106, consolidated with 26-1130 and 26-1136), leaving state-licensed medical marijuana in Schedule III while a consolidated, joint-brief merits case proceeds — and the Sixth Circuit held the next day that the order is not retroactive and does not make a marijuana contract enforceable in federal court.

Next three.

Why it matters: Medical licensees that filed DEA registrations under the April order, and companies that uplisted on it, keep the status quo while the case is briefed. A stay denial is not a merits ruling — the panel said only that the “stringent requirements” for one were not met — but the briefing instruction that came with it points to a merits decision no earlier than 2027. Adult-use operators get nothing here; they remain Schedule I until DEA-1362 ends.

In No. 26-1106, SAM, Inc. and National Drug and Alcohol Screening Association v. Department of Justice, consolidated with 26-1130 and 26-1136, Judges Wilkins, Walker and Garcia denied the joint stay motion on September 9. The same order denied MedPharma Iowa and Tri-Mountain Pure leave to intervene while admitting them and a group of cannabis-industry attorneys as amici, and directed proposed briefing formats within 30 days, warning that the court “looks with extreme disfavor on repetitious submissions.”

Why it matters: In Michigan, Ohio, Kentucky and Tennessee, a plant-touching supply or offtake agreement that lands in federal court on diversity jurisdiction is unenforceable, and the April Schedule III order does not rescue it: the court judged legality as of when the contract was made, and said a state-licensed medical transaction still needs a DEA registration to be lawful. Forum-selection and arbitration clauses just became the most important paragraphs in the deal. Talk to your counsel.

In Hello Farms Licensing MI, LLC v. GR Vending MI, LLC, No. 25-1759 (Sept. 10, recommended for publication), Judge Nalbandian wrote that “federal courts cannot enforce agreements to commit federal crimes,” reversing a jury award to a Michigan grower against two Curaleaf subsidiaries that stopped taking its 2020–2021 harvests when prices fell. Judge Hermandorfer did not join the finding that the contract reached the adult-use market; the full panel held that a purely medical contract fails too, because the Rohrabacher-Farr rider legalizes nothing.

Why it matters: Multi-state hemp brands should assume state total-THC and product-form rules are enforceable. Ohio's plaintiffs won because S.B. 56 pushes excluded products into dispensaries that cannot buy out of state — a discrimination claim, not preemption — and the order protects only the named plaintiffs’ products that remain hemp under federal law, a category Congress narrows on December 11. Hawaii and Connecticut plaintiffs lost on preemption and standing.

Judge Helmick of the Northern District of Ohio granted a preliminary injunction on September 4 in Delta Beverages Inc. v. Canepa, No. 3:26-cv-01793, barring enforcement of the amended hemp definition against the plaintiffs’ federally compliant products. The same day the District of Hawaii dismissed Alyas v. Lopez without leave to amend, holding the 2018 Farm Bill bars states only from blocking interstate transport, as reported by Bloomberg Law; on September 8 the District of Connecticut dismissed hemp farmers’ challenge to the state’s THC rules for lack of standing, per Law360.

Why it matters: The calendar binds harder than the lottery. Initial licenses must issue by May 1, 2027 and sales start July 1 — a gap no new cultivator can grow into, which is why commenters asked the Board to fast-track cultivation authorizations. Prospective impact licensees should start the eligibility file now. Every fee figure is draft; the Authority expects a consultant’s market study by the end of October.

The Cannabis Control Authority released the draft at its September 9 Board meeting — “not final by any means,” per its legislative and regulatory manager — and plans to finalize in December after stakeholder, Public Health Advisory Council and Attorney General review. As reported by Virginia Business, the draft sets a $20,000 retail-store authorization, $20,000–$50,000 for cultivation by size, $40,000 for a dispensing-facility permit and $2,500 for a microbusiness; state law caps retail stores at 350 and Tier V cultivators at five.

Why it matters: Processors can file sublingual-pouch SKUs from today at up to 10 mg THC per serving and 100 mg per package if unflavored or in an MCA-approved flavor — 2.5 mg and 25 mg otherwise. Packaging must still be opaque but no longer “plain,” with an explicit ban on cartoons, animals, neon colors, celebrities and mascots. Conditional licensees can now request a second six-month extension if they show control of a premises.

The Maryland Cannabis Administration’s amendments to COMAR 14.17.01, .05, .10, .12, .13, .18 and .22, adopted August 13 and published as final action in the September 4 Maryland Register, take effect September 14. They also require growers whose test results exceed a published failure rate to investigate root cause and decontaminate, add minimum labor standards and a grievance procedure for growers, and let MCA require health-and-safety inserts with micro-dispensary deliveries.

Why it matters: Adult-use dispensaries that have not filed the $5,000 Form 15-37 are now competing for patient traffic against 37 stores that can sell at the medical tax rate. The immediate task for those that have is point-of-sale and tax configuration for dual-rate sales at a single location.

IDFPR issued medical cannabis dispensary licenses to 37 existing adult-use dispensaries on September 10, the first day of the opt-in created by SB 3222, calling it the largest expansion of medical access since 2016 and saying further licenses will issue on a rolling basis, including to social-equity lottery stores. An approved dispensary may sell to registered patients at the medical rate, up to the patient’s allotment, at the same location.

Why it matters: DSHS’s post–July 31 enforcement of its trace-amount THC standard and its registration fee schedule continue unchanged through at least October 30; Texas hemp retailers should not plan on relief before the fourth quarter. This is a third litigation track, separate from the Fifteenth Court of Appeals case and the federal suit in Galveston, where a restraining order was also denied in August.

A Travis County district judge denied a temporary restraining order sought by SS Distro USA and co-plaintiffs against the Department of State Health Services in early September and set a temporary-injunction hearing for October 30, as reported by the Austin American-Statesman and The Marijuana Herald. The plaintiffs argue the agency is enforcing an undefined “trace amount” standard without rulemaking, contrary to HB 1325’s 0.3 percent delta-9 definition, and challenge its annual fees under the Texas APA.

Why it matters: This is the first public DCC-driven store closure over adverse-event reports; Ohio licensees should expect lot-level quarantine and third-party testing requests on any report. It lands the same week the Division’s packaging, labeling and single-serving-unit rules took effect, adding hemp-derived-ingredient disclosure to the label.

Vext Science said on September 4 that it voluntarily closed its Herbal Wellness Center dispensary in Jackson at the Division of Cannabis Control’s request, pending an investigation into two serious adverse health events DCC believes involve purchasers from the store. The company says it has not been told the products or circumstances, has provided samples for independent testing, and has quarantined certain product lines across its Ohio sites. DCC’s packaging, labeling and single-serving rules took effect September 11.

Why it matters: No commercial edibles market opens, but Cofepris’s discretion under the 2021 general declaration of unconstitutionality narrows again while Congress still has not legislated. Companies watching Mexico should read it as a signal about where authorization litigation is heading, not as a product opportunity.

On September 10 the Court ordered Cofepris to issue an authorized adult user a new permit covering prepared foods for personal consumption, holding that ordinary culinary preparation is not the specialized manufacturing that health law regulates. Sale, distribution and public offering remain prohibited, and restrictions on medicines, vapes and e-cigarettes stand. The vote was 7–2, as reported by The Marijuana Herald.

Why it matters: These are the first hard numbers from a national supply-side pilot, and regulators elsewhere will cite them. Participating shops carried roughly three times as many flower products and edibles appeared in nearly all of them, while measures of consumption frequency and problematic use did not move against the comparison towns.

The Trimbos Institute, RAND Europe and Breuer&Intraval published the first follow-up evaluation on September 9, covering ten participating and ten comparison municipalities since the experiment phase began April 7, 2025. As reported by The Marijuana Herald, average unique flower products per shop rose from 10.8 to 34.2 and menu prices fell about €3.35 per gram relative to comparison towns; edibles were stocked in 94 percent of participating shops. Annual follow-ups are planned.

Also this week: the UK Food Standards Agency Board meets Wednesday, September 16 to decide whether the first three CBD novel-food authorisations — RP 7, RP 350 and RP 427, covered in Issue 016 — go to ministers. The outcome will be in next week’s brief.

Ohio’s injunction protects products that are “hemp under federal law,” and that category shrinks on December 11 to 0.4 mg of THC per container — unless a state moved its own date first. Our state-by-state map of which hemp deadlines moved with P.L. 119-103 and which did not: Missouri’s November 12 ban, Illinois’ hard-coded date, Virginia’s 2 mg cap, and the federal buckets that decide which one binds. Read the summary →