NORML says agency misapplied federal law by excluding all supporters of cannabis reform from June 29 proceedings
WASHINGTON DC – The National Organization for the Reform of Marijuana Laws (NORML) is accusing the Drug Enforcement Administration of creating a one-sided hearing process that could influence the future of federal marijuana policy and the financial outlook for thousands of cannabis businesses nationwide, including one of Michigan’s largest emerging industries.
In a formal request submitted to the DEA, NORML asked the agency to reconsider its decision to exclude all supporters of marijuana rescheduling from a June 29 administrative hearing on the federal government’s proposal to move cannabis from Schedule I to Schedule III under the Controlled Substances Act.
The challenge comes just days after the DEA announced that all seven participants selected for the hearing oppose marijuana rescheduling, leaving supporters of the proposed change without representation in the proceedings.
NORML argues the DEA misapplied federal administrative law by determining that only parties opposed to rescheduling are “adversely affected” by the proposed change and therefore eligible to participate in the hearing.
“The DEA’s position effectively excludes the very people and businesses most directly impacted by federal marijuana policy,” the organization argued in its filing.
Why Michigan Businesses Should Care
The dispute carries significant implications for Michigan, which has become one of the nation’s largest legal cannabis markets.
Michigan generated $3.17 billion in adult-use cannabis sales in 2025, making it the nation’s second-largest marijuana market behind California, with four times the population.
The industry supports an estimated 40,000 to 45,000 jobs statewide, includes roughly 850 licensed dispensaries and retail outlets, and generates hundreds of millions of dollars annually in tax revenue for state and local governments, schools, transportation programs and public services.
For many Michigan operators, the most immediate financial benefit of Schedule III status would be relief from Internal Revenue Code Section 280E, a federal tax provision that prevents cannabis businesses from deducting ordinary operating expenses such as payroll, rent, marketing, insurance and other business costs.
Most businesses can deduct those expenses. Cannabis companies cannot because marijuana remains a Schedule I controlled substance under federal law.
Industry analysts have argued that eliminating the 280E tax burden could save some cannabis companies hundreds of thousands of dollars annually. For Michigan operators already battling industry consolidation, shrinking profit margins and the state’s new 24 percent wholesale cannabis tax, those savings could become increasingly important.
NORML Challenges DEA Interpretation
NORML’s filing centers on the DEA’s interpretation of who qualifies as an interested party in the hearing process.
According to the organization, the agency improperly concluded that only individuals and groups opposing rescheduling could be considered adversely affected by the proposal.
NORML argues that cannabis patients, consumers, researchers, state-licensed marijuana businesses and advocacy organizations are also directly affected by marijuana’s federal classification and therefore deserve the opportunity to present evidence and testimony.
The organization contends that excluding all supporters of rescheduling creates the appearance of an unbalanced process and undermines confidence in a hearing that could shape federal cannabis policy for years to come.
The dispute has transformed what many expected would be a routine administrative proceeding into a broader debate over fairness, transparency and whether all viewpoints will be represented.
Understanding The Schedule Change
Under federal law, marijuana is currently classified as a Schedule I controlled substance, a category reserved for substances the federal government considers to have a high potential for abuse and no currently accepted medical use.
The federal government’s proposal would move marijuana to Schedule III, a category that includes substances with accepted medical uses and a lower potential for abuse than Schedule I or Schedule II drugs. Schedule III drugs include products such as ketamine, anabolic steroids and certain codeine-containing medications.
The proposed change would not legalize marijuana under federal law, permit interstate cannabis commerce, or override state marijuana laws. However, it would represent the federal government’s first broad acknowledgment that cannabis has accepted medical uses, a position already embraced by more than 40 states.
What Schedule III Could Mean
The June 29 hearing represents one of the final major procedural steps in the federal government’s effort to review marijuana’s status under the Controlled Substances Act.
The rescheduling proposal originated after the U.S. Department of Health and Human Services concluded marijuana has accepted medical uses and recommended moving cannabis from Schedule I to Schedule III.
Supporters argue the change would better align federal policy with scientific research and the reality that legal cannabis markets now operate in dozens of states.
Rescheduling would not legalize marijuana federally, allow interstate cannabis commerce, or eliminate state cannabis taxes. However, it could reduce federal tax burdens, expand medical research opportunities and improve access to capital for some cannabis businesses.
Opponents maintain marijuana remains insufficiently studied and should retain its current Schedule I classification.
Hearing Approaches
The DEA has not publicly indicated whether it intends to reconsider its participant selections before the hearing begins.
Unless the agency changes course, one of the most consequential marijuana policy hearings in recent history will move forward without a single participant formally representing cannabis consumers, patients, researchers or the state-licensed marijuana businesses that stand to benefit most from rescheduling.
For Michigan’s cannabis industry, the outcome could ultimately affect profitability, investment, hiring and the long-term financial health of companies already navigating one of the most competitive marijuana markets in the United States.
