DEA Releases Final Rule For Federal Cannabis Cultivation Licenses DEA Releases Final Rule For Federal Cannabis Cultivation Licenses

In the coming weeks, the US Drug Enforcement Administration could begin to issue federal licenses to entities hoping to cultivate cannabis for research, as the federal agency announced its final rule for these licenses on Thursday. 

There has only ever been one federally-approved cannabis cultivation site for research purposes, and it has been at the University of Mississippi for decades. In 2016, the Drug Enforcement Administration said it would, for the first time, approve additional growers. Then, in 2019, the DEA paused its plans, and nine months ago, it released its proposed rule for the program. Now, on Thursday, the DEA has released its final rule

The road has been long, winding, and confusing for those hoping to obtain a license. As Cannabis Wire reported, the list of applicants who applied after the 2016 announcement and who were subsequently put on hold includes some major names, from cannabis giant Canopy Growth to existing government-contractor Battelle. In an interview with Cannabis Wire, one applicant, Biopharmaceutical Research Company, described “uncertainty” and “frustration” throughout the process.

While the DEA received a flurry of comments from, in its own words, “the general public, DEA registrants, applicants for registration to manufacture marijuana, organizations, associations, and a United States Senator,” the final rule released this week is mostly unchanged from the proposed rule released in March. 

The DEA noted that several comments were focused on “DEA’s ability and authority to lead the program.” There was pushback in response to language in the rule that puts the DEA in a middle person role: growers will not directly provide cannabis to researchers, but instead to the DEA, which will then provide it to researchers. 

This, the DEA argues, is in compliance with the Single Convention on Narcotic Drugs of 1961. The global drug control treaty also requires, the DEA notes, that it have “the exclusive right of importing, exporting, wholesale trading, and maintaining stocks of cannabis and cannabis resin, except that this exclusive right need not extend to medicinal cannabis, cannabis preparations, or the stocks of cannabis and cannabis resin held by manufacturers of such medicinal cannabis and cannabis preparations.”

Several comments also suggested that researchers be able to obtain cannabis from state-legal sources, which the DEA rejected. (As Cannabis Wire recently reported, a cannabis research bill passed by the House would allow for that, while a Senate bill focused on cannabis research would not.) 

In fact, such state-legal operators could be at a disadvantage in the application process. The DEA rule notes that it will consider “whether the applicant has demonstrated prior compliance with the CSA and DEA Regulations,” which is among criteria “aimed at selecting applicants that can be entrusted with the responsibility of a DEA registration and complying with the corresponding obligations under the CSA and DEA regulations.” (Some of the entities that applied for licenses are state-legal operators, like Columbia Care and PharmaCann.)

In response to public comments challenging this, the DEA wrote that “an applicant that has manufactured marijuana without obtaining a DEA registration has violated Federal law,” even if they have a state license, and “it is wholly appropriate to consider an applicant’s past noncompliance with the CSA when deciding whether to grant a registration under the Act.”

Several comments also focused on how many licenses would be awarded, including the suggestion that there be no limit. The DEA has only said it will ensure an “adequate and uninterrupted supply of marihuana under adequately competitive conditions.”

It’s worth noting that the subject of equity, which has become a key focus in state legalization efforts, was put forth in public comment. DEA wrote that “commenters suggested DEA establish application requirements or committees that ensure diversity and inclusion of minority applicants.” To this, it responded only that “DEA gives all applicants equal treatment regardless of the gender, race, socioeconomic status, or disabled status of the applicant.”

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