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DEA judge cancels upcoming cannabis rescheduling hearings

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The cannabis rescheduling saga hit a new snag, with a chance the policy change could be nixed altogether.

A Drug Enforcement Administration judge on Monday canceled marijuana rescheduling hearings set to begin next week and put the process on hold for at least three months, giving pro-rescheduling groups time to challenge earlier rulings directly with the DEA’s administrator.

Chief Administrative Law Judge John J. Mulrooney II issued a strongly worded order that will let cannabis industry groups appeal his ruling that kept DEA in charge of the proceedings, though he rejected their request to remove the agency entirely.

“The specter of officials at the highest level of Agency management selectively assisting and granting access to individuals and groups standing in opposition to the [Notice of Proposed Rulemaking] it purportedly supports as the proponent, carries no small measure of discomfiture,” Mulrooney wrote in his 6-page decision.

While Mulrooney said he couldn’t remove DEA from its role, he warned he could take other serious steps, including stopping the entire process and recommending it start over from scratch with new rules.

“Even factoring in the reality that sometimes litigants and their representatives should be mindful of what they wish for, to the extent my analysis is found to be in error on review, I am willing to certify that the allowance of this interlocutory appeal could potentially avoid exceptional delay, expense or prejudice,” Mulrooney wrote.

The judge described DEA’s actions as showing “a puzzling and grotesque lack of understanding and poor judgment” for a major federal agency, but said such issues wouldn’t ultimately compromise the final decision.

A cohort of cannabis companies and advocates, including Village Farms International and Hemp for Victory, tried to disqualify the DEA from participating in rescheduling hearings by pointing to several examples of alleged bias. They said DEA Deputy Assistant Administrator Matthew Strait gave special help to the Tennessee Bureau of Investigation with its application to participate – help that wasn’t offered to others, including Colorado state officials.

Questions also arose about how the DEA picked who could participate in the hearings, with documents showing the agency received 123 requests from 163 organizations but only selected 25 participants. The companies uncovered that the DEA had an undisclosed partnership with one of the chosen hearing participants, the Community Anti-Drug Coalitions of America, on fentanyl-related programs.

The cannabis companies first raised concerns in November when Kevin Sabet, CEO of anti-legalization group Smart Approaches to Marijuana, claimed he had “two confidential sources inside the DEA” who knew about the agency’s opposition to rescheduling. A federal judge recently dismissed a separate lawsuit seeking to force the DEA to reveal these alleged communications.

But the DEA defended itself Monday, saying that “marijuana is presently a Schedule I controlled substance and DEA continues to treat it as such.”

The agency argued that its job to enforce drug laws doesn’t prevent it from fairly considering changes to marijuana’s status.

The judge noted a paradox in the DEA’s approach. Had the agency “elected at the outset to narrow the scope of participants within the strict parameters of the regulations… without any of the unpalatable noise associated with the alleged ex parte communications,” its decisions would likely have been upheld, according to the order.

Mulrooney also criticized the DEA’s failure to acknowledge “in any way the gravity” of high-level officials allegedly helping potential participants strengthen their applications.

The appeal itself adds complexity to the timeline. Under DEA regulations, the process now returns to agency leadership, who will control all aspects including briefing schedules and potential oral arguments.

Additionally, President-elect Donald Trump will take office next week, which Mulrooney noted in his order, means that “the appointment of a new DEA Administrator by a different political party is imminent.”

In a separate rebuke, Mulrooney on Monday also blasted the DEA for ignoring his instructions about evidence submission when the agency tried to submit thousands of public comments digitally against his orders, calling the move “unprecedented and astonishing,” according to Marijuana Moment.

Both sides must now update the court every 90 days on the appeal’s status. The cannabis companies have 15 days to file their appeal.

2283000-2283354-marijuana rescheduling_order regarding village farms interna, hemp for victory and oco et al’s motio

 

2283000-2283354-government opposition to vfi et al request for reconsideration



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Nebraska medical cannabis regulations stall in legislative committee

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A Nebraska legislative committee voted 5-3 against advancing a bill designed to implement and regulate the state’s medical cannabis program, leaving legislators and advocates searching for alternative paths forward, according to the Nebraska Examiner.

The General Affairs Committee rejected Legislative Bill 677, sponsored by State Sen. Ben Hansen of Blair, during a Thursday vote where committee members declined to offer amendments to the legislation, the publication reported.

“I don’t want to shut all the doors right now, but some doors are closing, and they’re closing fast, and so we have to act,” Hansen told reporters after the vote, according to the Examiner.

Nebraska voters approved medical cannabis in November 2024, with residents legally permitted to possess up to 5 ounces with a healthcare practitioner’s recommendation since mid-December. However, the regulatory commission created by the ballot initiative lacks effective power and funding to regulate the industry.

Hansen described his legislation as “a must” for 2025 to prevent a “Wild West” scenario in the state’s cannabis market. The bill would have expanded regulatory structure through the Nebraska Medical Cannabis Commission and extended deadlines for regulations and licensing to allow more time for implementation, the Examiner noted.

Committee disagreements centered on proposed restrictions. A committee amendment would have prohibited smoking cannabis and the sale of flower or bud products while limiting qualified healthcare practitioners to physicians, osteopathic physicians, physician assistants or nurse practitioners who had treated patients for at least six months.

The amendment also would have limited qualifying conditions to 15 specific ailments including cancer, epilepsy, HIV/AIDS, and chronic pain lasting longer than six months.

State Sen. Bob Andersen of Sarpy County opposed allowing vaping due to concerns about youth drug use, while committee chair Rick Holdcroft suggested selling cannabis flower would be “a gateway toward recreational marijuana,” a claim Hansen “heavily disputed,” according to the Examiner.

Hansen now faces a difficult path forward, requiring at least 25 votes to pull the bill from committee and then needing 33 senators to advance it across three rounds of debate, regardless of filibuster attempts.

Crista Eggers, executive director of Nebraskans for Medical Marijuana, remained optimistic despite the setback.

“This will not be the end,” Eggers said, according to the outlet. “Giving up has never been an option. Being silenced has never been an option. It’s not over. It’s not done.”

The legislative impasse is further complicated by ongoing litigation. Former state senator John Kuehn has filed two lawsuits challenging the voter-approved provisions, with one appeal pending before the Nebraska Supreme Court. The state’s Attorney General is also trying to do something about the hemp question, akin to other states across the country.



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One of Las Vegas’ cannabis lounges closes its doors

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Nevada’s cannabis lounge experiment faces some expected growing pains, with one of just two state-licensed venues closing its doors after barely a year in business, according to the Las Vegas Weekly.

“The regulatory framework, compliance costs and product limitations just don’t support a sustainable business model,” said Thrive Cannabis managing partner Mitch Britten, who plans to convert the space into an event venue until regulations loosen up.

The closure leaves Planet 13’s Dazed Consumption Lounge as the only operational state-regulated cannabis lounge in Nevada. Dazed manager Blake Anderson estimates the venue attracts around 250 customers daily, primarily tourists. One other establishment, Sky High Lounge, has operated since 2019 on sovereign Las Vegas Paiute Tribe land exempt from state regulations.

Even with Nevada regulators conditionally approving 21 more lounge licenses, potential owners are struggling to meet the $200,000 liquid assets requirement – particularly social equity applicants from communities hit hardest by prohibition.

Recreational marijuana has been legal statewide since 2017, but public consumption remains prohibited. That’s created an obvious disconnect for the millions of tourists who visit Las Vegas annually but have nowhere legal to use the products they purchase. The state recorded roughly $829 million in taxable sales during the 2024 fiscal year.

“It always comes down to money, and it’s difficult to get a space if you can’t afford to buy a building. On top of that, getting insurance and finding a landowner who’s willing to lease to a cannabis business is a challenge in and of itself,” said Christopher LaPorte, whose consulting firm Reset Las Vegas helped launch Smoke and Mirrors, told Las Vegas Weekly.

Many think the key to future success lies in legislative changes that would allow lounges to integrate with food service and entertainment – playing to Las Vegas’s strengths as a hospitality innovator. In the meantime, the industry will continue to adapt and push forward.

“Things take time,” LaPorte said. “There’s a culture that we have to continue to embrace and a lot of education that we still have to do. But at the end of the day, tourists need a place to smoke, and that’s what these places are.”



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Psyence Group consolidates its shares

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Psyence Group Inc. (CSE: PSYG) told investors that it will be consolidating all of its issued and outstanding share capital on the basis of every 15 existing common shares into one new common share effective April 23, 2025 with a record date of April 23, 2025. As a result of the consolidation, the issued and outstanding shares will be reduced to approximately 9,387,695 on the effective date.

This is the second time a Psyence company has consolidated shares recently. In November, its Nasdaq-listed associate, Psyence Biomedical Ltd. (Nasdaq: PBM), implemented a 1-for-75 share consolidation as the psychedelics company worked to maintain its Nasdaq listing.

Psyence Group reported earnings in February when the company delivered a net loss of C$3 million and was reporting as a going concern. At the end of 2024, the company said it had not yet achieved profitable operations, has accumulated losses of C$48,982,320 since its inception.

Total assets at the end of 2024 were C$11,944,478 and comprised predominantly of: cash and cash equivalents of C$10,611,113, other receivables of C$159,808, investment in PsyLabs of C$1,071,981 and prepaids of C$68,243.

Still, the company is pushing ahead. Psyence told investors that it has historically secured financing through share issuances and convertible debentures, and it continues to explore funding opportunities to support its operations and strategic initiatives. “Based on these actions and
management’s expectations regarding future funding and operational developments, the company believes it will have sufficient resources to meet its obligations as they become due for at least the next twelve months,” it said in its last financial filing.

The company said it believes that the consolidation will position it with greater flexibility for the development of its business and the growth of the company.

 



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