DEA Rescheduling Hearing Excludes Patient Groups, Small Operators

Witness List Skews Toward Federal Agencies and Large License Holders

The DEA's preliminary witness roster includes representatives from the Department of Health and Human Services, the Food and Drug Administration, and at least four multi-state operators. Zero patient groups. Zero small cultivators. Administrative Law Judge John Mulrooney II released the list on June 23, 2026, following a May 15 deadline for parties to file requests to testify. According to the docket, at least seven patient advocacy organizations and twelve small operators submitted requests that were denied without explanation.

Under the Administrative Procedure Act, the ALJ retains broad discretion to limit witness lists and avoid redundancy. Still, the exclusion of patient voices marks a significant departure from the public-comment phase of the rulemaking, which drew over 43,000 submissions—many from patients citing medical necessity.

Tax and Operational Stakes for Excluded Parties

Small operators face the highest effective tax burden under IRC §280E, which disallows ordinary business deductions for Schedule I or II substances. Rescheduling to Schedule III would eliminate the 280E penalty, reducing effective tax rates from 70-90% of gross profit to standard corporate rates of 21-35%. For a small cultivator generating $500,000 in annual revenue, the difference between Schedule I and Schedule III treatment can exceed $200,000 per year in federal tax liability.

Patient advocacy groups argue that their exclusion erases the medical-necessity rationale underpinning the HHS recommendation to reschedule. The American Patients' Rights Coalition, one of the denied applicants, submitted a 140-page brief documenting therapeutic use cases across 23 states. That brief will appear in the written record but won't receive live testimony or cross-examination.

The hearing's witness composition suggests the DEA is treating rescheduling as an inter-agency administrative matter rather than a public-health determination—a framing that could influence the final rule's scope and implementation timeline.

What Happens Next

The rescheduling hearing begins the week of August 12, 2026. Estimated duration: four to six weeks. Judge Mulrooney will issue a recommended decision to the DEA Administrator, who retains final authority to adopt, modify, or reject the recommendation. A final rule could be published as early as Q4 2026, though the DEA has historically extended comment periods and taken additional time for inter-agency review.

For comprehensive background on the rescheduling process and prior DEA hearings, see the CannIntel topic hub on DEA Rescheduling Hearings. The next procedural milestone is the June 30 deadline for parties to file objections to the preliminary witness list—a narrow window that patient groups are already mobilizing to use.