Will Rescheduling Marijuana Permit Federally Legal Medical Use?

Yes

Following the release of HHS’s unredacted scientific and medical evaluation and scheduling recommendation, the Canna-gentsia have been opining left and right on the potential implications of a Schedule III move for marijuana.

Seeing this debate occur following the release of the HHS report is refreshing. Indeed, this is part of what inspired the bringing of the FOIA case: if we’re going to have a public debate about rescheduling, it should be based on information, not speculation.

And yet, in our view, a key misconception about rescheduling is being perpetuated.

As we and others have pointed out, rescheduling won’t make marijuana an FDA-approved prescription medicine. So, even with rescheduling, we wouldn’t count on seeing ads for marijuana any time soon. Simply put, there’s a whole lot of merit to the argument that the single most significant consequence of moving marijuana to Schedule III would be removing it from 280E’s deadly vortex.

Consider the following paragraph from a recent Congressional Research Service publication summarizing this view:

Moving marijuana from Schedule I to Schedule III, without other legal changes, would not bring the state-legal medical or recreational marijuana industry into compliance with federal controlled substances law. With respect to medical marijuana, a key difference between placement in Schedule I and Schedule III is that substances in Schedule III have an accepted medical use and may lawfully be dispensed by prescription, while Substances in Schedule I cannot. However, prescription drugs must be approved by the Food and Drug Administration (FDA). Although FDA has approved some drugs derived from or related to cannabis, marijuana itself is not an FDA-approved drug. Moreover, if one or more marijuana products obtained FDA approval, manufacturers and distributors would need to register with DEA and comply with regulatory requirements that apply to Schedule III substances in order to handle those products. Users of medical marijuana would need to obtain valid prescriptions for the substance from medical providers, subject to federal legal requirements that differ from existing state regulatory requirements for medical marijuana.

We agree with most of that. That bolded bit at the end, though—in our view—is incorrect, at least legally. A close read of the statute reveals that once marijuana makes its way to Schedule III, physicians and probably even dispensaries will be able to dispense medical marijuana directly to patients without a prescription. Let us explain.

First, the FFDCA (Federal Food Drug and Cosmetic Act) regulates drugs introduced in interstate commerce. FDA does not, however, have jurisdiction to regulate purely intrastate conduct. Per 21 U.S.C. 331:

(a) The introduction or delivery for introduction into interstate commerce of any food, drug, device, tobacco product, or cosmetic that is adulterated or misbranded.

(b) The adulteration or misbranding of any food, drug, device, tobacco product, or cosmetic in interstate commerce.

(c) The receipt in interstate commerce of any food, drug, device, tobacco product, or cosmetic that is adulterated or misbranded, and the delivery or proffered delivery thereof for pay or otherwise.

…

Interstate commerce, in turn, means “(1) commerce between any State or Territory and any place outside thereof, and (2) commerce within the District of Columbia or within any other Territory not organized with a legislative body.”

For more on this, see this essay. Ergo, marijuana grown and dispensed entirely within a state—i.e., intrastate—with no nexus to interstate commerce is beyond FDA’s jurisdiction.

Second, several provisions of the federal CSA (Controlled Substances Act), make express exceptions to otherwise generally-applicable requirements to permit “practitioners” to dispense controlled substances directly to “ultimate users.” Section 829 is a great example. That provision describes the prescription requirement. It generally applies to Schedule III and IV substances but clarifies that the requirement does not apply when those substances are “dispensed directly by a practitioner, other than a pharmacist ….”:

Except when dispensed directly by a practitioner, other than a pharmacist, to an ultimate user, no controlled substance in schedule III or IV, which is a prescription drug as determined under the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 301 et seq.], may be dispensed without a written or oral prescription in conformity with section 503(b) of that Act [21 U.S.C. 353(b)]. Such prescriptions may not be filled or refilled more than six months after the date thereof or be refilled more than five times after the date of the prescription unless renewed by the practitioner.¹

“Practitioner,” in turn, is defined as:

a physician, dentist, veterinarian, scientific investigator, pharmacy, hospital, or other person licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he practices or does research, to distribute, dispense, conduct research with respect to, administer, or use in teaching or chemical analysis, a controlled substance in the course of professional practice or research.

The upshot is that if marijuana lands in Schedule III, the black-and-white, plain language of the CSA permits a physician, dentist, veterinarian, scientific investigator, hospital or other person licensed, registered, or otherwise permitted by the United States or the jurisdiction in which he practices or does research, to distribute, dispense, conduct research with respect to, administer, or use in teaching or chemical analysis to dispense it “directly … to an ultimate user”—i.e. a patient or research subject—without a written or oral prescription. By our plain reading of the statute, this could include state-licensed dispensaries. Importantly, it could also include state-licensed and regulated service centers and facilitators. “Other person” is pretty broad, no?

Further evidence that this is the correct reading is found in our favorite book about the CSA entitled “A Handbook on the 1970 Federal Drug Act,” co-authored by Michael Sonnenreich, the key drafter of the CSA itself. Describing an identical exception in another provision of Section 829 that applies to Schedule II substances, he explains that:

Subsection (a) provides that Schedule II substances must be dispensed on a written prescription, unless they are dispensed directly to the patient.

The simple possession statute contains a similar carveout:

It shall be unlawful for any person knowingly or intentionally to possess a controlled substance unless such substance was obtained directly, or pursuant to a valid prescription or order, from a practitioner, while acting in the course of his professional practice, or except as otherwise authorized by this subchapter or subchapter II.

The fact that the CSA lists “prescription” separately from “obtained directly” and “order” weighs strongly in favor of the notion that access to Schedule III controlled substances does not require a prescription and FDA approval—at least not when patients obtain the substances directly from a practitioner. And the fact that Congress carved direct dispensing out of the criminal ban on simple possession means that the Biden Administration’s efforts to transfer marijuana to Schedule III have broader criminal-justice implications than critics seem to appreciate.

But let’s consider counter-arguments, shall we? Some might argue that even if the CSA does appear to permit direct dispensing of Schedule III drugs in some situations, the statute still imposes strict registration requirements that will prevent that phenomenon from applying to Schedule III marijuana anyway. This objection has some truth to it. Section 823 of the CSA does impose several fairly arduous registration requirements on folks seeking to handle Schedule III substances in various ways. Those seeking to “manufacture” (a concept the CSA defines broadly to include cultivation) Schedule III substances, for example, must get DEA registration to do so legally.² Same goes for those seeking to “distribute.”³ And under longstanding DEA policy, those with a history of violating the CSA—i.e. everyone in the marijuana industry—are ineligible for DEA registration almost by default.

Notice, however, that the practitioners we’re focused on here don’t fall under any of those registration requirements. After all, they would be seeking to dispense—not manufacture or distribute—medical marijuana. And with respect to practitioners seeking to dispense Schedule III substances, Section 823(g) makes DEA registration automatic as long as the practitioner in question holds a state-level dispensing license.⁴ And, if those practitioners now want to grow their own marijuana (or, perhaps, psilocybin in the future) and get a registration to manufacture, it isn’t that hard.

Bottom line: the CSA’s registration requirement could theoretically disrupt other parts of the current medical marijuana supply chain,⁵ but they would pose no obstacle to the direct dispensing of Schedule III medical marijuana to ultimate users.

Conclusion

Until last week, the vast majority believed that the only way to get a Schedule I substance down-scheduled was to run the prohibitively-expensive FDA clinical trial gauntlet. We have long argued that this common wisdom was wrong. The common wisdom rested on accepting an incorrect view of the CSA and administrative law, namely, DEA’s misinterpretation of “currently accepted medical use in the United States” to require FDA approval or the equivalent. In its Schedule III recommendation, however, HHS confirmed our reading of the statute—a better reading of the statute—that accepted medical use can also be established based on widespread recognition by states. And that makes sense: historically and today, the states regulate the practice of medicine.

Point being, as always, don’t believe the hype. Believe—and read—the statute.

1. To be clear, marijuana is not a “prescription drug as determined under the Federal Food, Drug, and Cosmetic Act”—at least not yet. Importantly, though, when a “drug not considered to be a prescription drug” has “abuse potential”—as all agree marijuana does—another provision of Section 829 requires DEA to “so advise the Secretary and furnish to him all available data relevant thereto.” Were DEA to follow that directive and refer marijuana to HHS, the Secretary presumably would consider whether marijuana “because of its toxicity or other potentiality for harmful effect, or the method of its use, or the collateral measures necessary to its use, is not safe for use except under the supervision of a practitioner licensed by law to administer such drug” under 21 U.S.C. 353(b). If the Secretary concluded that marijuana meets that standard—and it may not, since marijuana might be safe to use without supervision—Section 353(b) would require him to designate it as a “prescription drug.”

Even if that were to happen, (1) Section 829 of the CSA would still specifically permit practitioners to dispense marijuana directly to ultimate users without a prescription and (2) the FDCA’s misbranding provisions would be limited to drugs introduced into interstate commerce.

2. 21 U.S.C. 823(e).

3. Id. 823(f).

4. In fact, the CSA requires a practitioner seeking to dispense a controlled substance to an ultimate user to get a special DEA-issued registration in only one situation, and it plainly wouldn’t apply to Schedule III medical marijuana. See id. 823(h) (“Practitioners who dispense narcotic drugs (other than narcotic drugs in Schedule III, IV, or V) to individuals for maintenance treatment or detoxification treatment shall obtain annually a separate registration for that purpose.”).

5. In a future post, we’ll explain why we believe there would be fairly simply workarounds for this upstream disruption, too.