A new lawsuit seeks to remove the U.S. Drug Enforcement Administration from its role in upcoming hearings on cannabis rescheduling, claiming a pattern of resistance and improper communications by the agency throughout the process.

Village Farms International (NASDAQ: VFF) and veterans advocacy organization Hemp for Victory filed a joint motion this week seeking to replace the DEA with the Department of Justice as the proponent of a rule moving cannabis to Schedule III ahead of first hearings next month.

The dispute traces back to President Joe Biden’s October 2022 directive to review marijuana’s Schedule I status. When the Department of Health and Human Services recommended moving cannabis to Schedule III in August 2023, it marked a potentially watershed moment for federal drug policy. But the DEA’s response would prove controversial.

“Not once in its history as an agency had DEA ever rejected an HHS scheduling recommendation,” according to the Monday suit, though in that instance, “(the) DEA did not just disagree with HHS’s views, it opposed them so vehemently that the Attorney General had to refer the interagency dispute to the Office of Legal Counsel for resolution.”

Not only that, but when the Department of Justice formally proposed rescheduling in May, Attorney General Merrick Garland – not DEA Administrator Anne Milgram – signed the notice, breaking with decades of precedent.

In the 26-page motion, prominent cannabis attorney Shane Pennington on behalf of the group alleges that the DEA’s apparent opposition became more visible through social media posts by Smart Approaches to Marijuana (SAM), an antilegalization group. SAM president Kevin Sabet claimed in May to have “confidential sources inside DEA” discussing the agency’s resistance. By June, SAM Executive Vice President Luke Niforatos was telling supporters that DEA’s approach provided a “roadmap for how to rebut their own Proposed Rule.”

The new joint motion argues such communications could violate administrative procedure rules requiring disclosure.

The motion also argues that the DEA has “stacked the deck” against rescheduling efforts by selecting 25 witnesses for the hearings without explaining criteria, the filing states. While a DEA hearing was initially set for Dec. 2, Administrative Law Judge John J. Mulrooney II at the top of the month delayed witness testimony until early 2025.

A report in The Washington Post noted that Mulrooney already signaled potential skepticism toward challenges to DEA’s authority, saying that such petitions “add nothing” and present “little more than an ad hominem distraction.”

Mulrooney previously denied the Veteran’s Action Council’s request to participate, Law360 reported last week. The group advocates for Schedule V placement or complete descheduling to enable Veterans Affairs doctors to prescribe cannabis.

Village Farms CEO Michael DeGiglio said in a statement that the current restrictions create “near-insurmountable barriers” to clinical research.

Adding to the uncertainty,  former President Donald Trump will step back into the office in January. His attorney general nominee, Matt Gaetz, previously backed efforts to expand banking access for cannabis companies and supported Democrat-sponsored legalization bills. However, Gaetz faces an uncertain confirmation process due to being widely unpopular among his peers on the Hill, as well as allegations of trafficking at least one underaged teen during his time in office.

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