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The Supreme Court Nuked Cannabis Rescheduling With Its Chevron Ruling (Op-Ed)



“Bottom line: Absent Congressional action, the move to Schedule III just isn’t going to happen anytime soon.”

By Deb Tharp, NuggMD

The regulatory state has been in full force since, ironically, 1984, with the institution of the Chevron doctrine. Chevron has required courts to defer to the expertise of administrative agencies when the legislative intent of an underlying law is ambiguous, which made it a cornerstone of how regulators and businesses interact.

On Friday, the Supreme Court’s Republican-appointed majority demolished the doctrine, overturning the broad authority of the administrative state and raising fresh questions about how cannabis will be regulated moving forward.

Regulatory oversight and enforcement weren’t perfect in any field under Chevron. And in cannabis, regulation has been a unique frustration to operators because the regulatory infrastructure is still being built and the norms are still being defined. So, it is tempting to look at anything that curtails regulation as a positive for cannabis.

But the truth is, Chevron being overruled in the way that SCOTUS overruled it is bad for operators who crave certainty. Very, very bad. It is tough to overstate how much chaos this ruling will create for cannabis operators. Not that we aren’t used to it by now.

In broad strokes, it means that rescheduling is already functionally dead as a matter of policy.

How the Chevron repeal guts rescheduling

Rescheduling has been moving forward as a regulatory, rather than a legislative, change, and now, regulations do not hold the same force of law as they did just last week. Those who mapped out the long-awaited move to Schedule III now need to grapple with massively increased judicial scrutiny and regulatory uncertainty. Opponents have a strong chance of ending rescheduling by winning on the law—and if they don’t, they still could achieve the same goal by using the appeals process to postpone the new regulation for years.

I have some terrible news for anyone who thinks it took the White House too long to put rescheduling into motion, which is only modest progress towards equitable drug policy anyway: In this post-Chevron environment, prohibitionists will abuse the courts to drag the process out longer, possibly indefinitely. That sound you hear is Big Law partners using hundred-dollar bills to light their cigars.

On top of that, operators can also expect a complete shitshow whenever new regulations are enacted, for good or ill.

For the good, we have a chance of successfully challenging previously obstinate regulators who defied the legislated dictates of the people.

On the ill side, this will discourage the consumer protections that cannabis operators want, and prohibitionists will latch onto the resulting lax safety standards in their campaigns of deceit and fear-mongering. Liquor companies and opiate manufacturers are ripping out their checkbooks as I type this.

In fact, rescheduling is already being challenged and the comment period isn’t even over yet. Opponents, both from within the industry and outside, have been organized, looking for any angle that will prevent the move. The door that SCOTUS threw open in its Chevron repeal is now an extremely likely target.

But perhaps this will give us a chance to scrap their restrictive proposal and do this right.

Congress can fix all of this

With the end of Chevron deference, courts will be independently interpreting statutes, and will likely rule as unconstitutional broad delegations of authority from Congress that lack clear guidelines. Rescheduling opponents will argue that the Controlled Substances Act (CSA) lacks the clarity needed for regulators to have the authority to add, remove or reschedule substances on the controlled substances list. They’ll argue that the CSA’s broad language grants too much discretion to the attorney general without adequate congressional oversight or clear standards.

Opponents will also probably argue that the ability to remove substances like marijuana from the controlled substances list should be a decision made by Congress entirely, given its original placement there by Congress and the significant policy implications.

These arguments are probably pretty solid in the objective sense. They’d be at least moderately convincing to most judges—and they’d be gas station crack to activist judges who want to move backward and revisit the country’s failed experiments with criminalization and capricious enforcement.

So, it’s highly likely the rescheduling proposal will die in our courts. Whether this outcome is positive or negative depends on one’s opinion about rescheduling in the first place. Regardless of feelings on the matter, I wouldn’t be holding my breath for those 280E tax exemptions any time soon.

Congress does have the power to fix all of this. But if legislators want to avoid a return to the Wild West attitudes of the ’70s that led to the Chevron decision in the first place, they’ll need to roll their sleeves up and do some real work. Congress will need to create clearer laws instead of passing off these duties to regulators who may understand the nuances better but aren’t elected by the people. And the cannabis industry will face new and interesting challenges as a result.

Personally, I believe there’s very little point in creating a law or regulation that no one will follow. Cannabis is already legal in half the Union, and it’s high time to remove it from the schedule altogether. Time to light a fire under Congress’s collective bottoms.

Deb Tharp is head of legal and policy research at NuggMD, the largest telehealth platform for cannabis.

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Photo elements courtesy of rawpixel and Philip Steffan.

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