If you want to run FDA-approved clinical trials for cannabis, you need to source the cannabis from a federally authorized cultivator. For nearly 50 years, the U.S. has had only a single federally-authorized marijuana cultivator: the University of Mississippi’s National Center for Natural Products Research (National Center).
Since the Drug Enforcement Agency (DEA) was formed in 1973, the National Center has been the sole entity in the nation with a DEA license to cultivate marijuana for research purposes. Under the Controlled Substances Act (CSA), all persons who seek to manufacture a controlled substance must obtain a DEA registration.
The National Center cultivates its federally-authorized marijuana pursuant to a contract administered by the National Institute on Drug Abuse (NIDA). Under this contract, the National Center receives funding and is permitted to cultivate, produce, process, analyze, store and distribute standardized marijuana of varying THC potencies to support researchers.
According to an internal Department of Justice (DOJ) memo from 2018 that was just released to the public this week, the DOJ’s Office of Legal Counsel is of the opinion that the DEA’s marijuana licensing framework with the National Center has been out of compliance with an international narcotics treaty for the past 47 years. But before we dive into the details of this bombshell memo and its analysis of the treaty, first, we provide a bit of background on what prompted the public release of the document:
DEA Announces In 2016 That It Will Approve Additional Marijuana Cultivation Licenses
In 2016, as legalization was spreading rapidly among states, the demand for cannabis research was increasing as a result of heightened public interest in cannabis’ medicinal benefits. As a result, the DEA announced a policy change that was “designed to foster research by expanding the number of DEA registered marijuana manufacturers” in the US.
Despite some initial reluctance and pushback from universities across the country, the DEA ultimately received 33 applications from pharmaceutical companies, universities, and a tribe to grow marijuana for research purposes.
But over the last four years, the DEA has neither responded to nor processed any of the pending applications. As a result of this delay, last year one of the applicants, the Scottsdale Research Institute (SRI), filed a lawsuit against the agency. The lawsuit alleged that the DEA unlawfully withheld and unreasonably delayed the processing of the applications, and asked the court to compel the agency and Attorney General to act.
SRI also argued that Congress specifically passed legislation to allow for applicants like SRI to move forward, as Congress had just amended the CSA by passing the “Improving Regulatory Transparency for New Medical Therapies Act,” which requires the Attorney General to notice applications to manufacture Schedule I substances for clinical research not later than 90 days after the application is “accepted for filing.”
Meanwhile, critics and lawmakers were arguing that the National Center’s cannabis is low in THC and more genetically similar to hemp, and therefore is not a representative sample of the commercial cannabis varieties available at dispensaries across the country. These critics asserted that the unavailability of representative research-grade marijuana is counterproductive to the progress of important studies into the effects of medical marijuana, and raises concerns as to the accuracy of previous studies that relied on the National Center’s marijuana.
To that end, SRI’s lawsuit also alleged that the National Center’s marijuana is inadequate for clinical studies, the NIDA’s monopoly over the supply chain stifles the progress of research, and additional manufacturers are needed to increase the genetic diversity of marijuana for research.
On July 30, 2019, the court ordered the DEA to respond to SRI’s legal challenge within 30 days. Accordingly, the DEA responded by announcing it had published a notice in the Federal Register explaining that the agency was busy developing new rules to approve the pending applications, but needed more time. The notice informed the applicants that the DEA would be proposing revised regulations in the near future that would govern registration to grow cannabis for clinical research.
The court found that the DEA’s status update afforded SRI the relief it requested, and dismissed the case in October 2019 on mootness grounds.
The DEA Continues To Stall Through 2020
Since last year’s dismissal of SRI’s lawsuit, and to the frustration of the applicants, the DEA has yet to approve a single application for a marijuana manufacturer.
In March, however, the DEA released proposed new rules that would allow the agency to approve additional applicants to grow marijuana for research purposes. The revised rules include structural changes that would give the DEA significantly more hands-on control by giving it the “exclusive right” of importing, exporting, wholesale trading, and maintaining stocks of marijuana, and requiring it to take legal title and possession of the crops soon after they are harvested.
These structural changes, which are designed to give the DEA ownership, possession, and a monopoly over the wholesale trade of cultivated research-grade marijuana, would fundamentally change the existing policy, under which the DEA does not purchase, maintain ownership, or have physical possession over the National Center’s marijuana.
The DEA has clarified that these new rules are prerequisites for it to approve any additional cultivators, and claimed that its legal interpretation of an international narcotics treaty (discuss below) required that it make these newly proposed changes to the regulatory framework. The agency initially did not release the details as to how it reached this legal interpretation.
SRI Strikes Again
Asserting that the agency should release the documents supporting its legal interpretation, SRI took the DEA to court again, but this time, the lawsuit included a Freedom Of Information Act (FOIA) claim demanding that the DEA release the documents it relied on to support the need for the rule change. FOIA, under 5 U.S.C. § 552(a)(2), requires the government to make publicly available all non-sensitive government documents–which would include documents supporting the DEA’s analysis in this matter.
The parties ultimately reached a settlement in the case, under which the DEA agreed to release an official document that would explain the reason for the delay in processing the pending applications. Pursuant to this settlement, on April 29, 2020 the agency released a DOJ Office of Legal Counsel (OLC) memo from 2018, which appears to have been used internally by the DEA to justify its delay tactics.
The Secret Memo
The 25-page memo, titled “Licensing Marijuana Cultivation in Compliance with the Single Convention on Narcotic Drugs,” describes why the current arrangement with the University of Mississippi, as well as the DEA’s pledge in 2016 to approve additional applicants, do not comply with an international treaty called the Single Convention on Narcotic Drugs (“Single Convention”), 18 U.S.T. 1407, which went into effect in 1961.
In short, the memo explains that under the Single Convention, signatory nations (which includes the US) that permit marijuana cultivation must meet the following requirements:
- The nation must establish “a single government agency” to oversee marijuana cultivation;
- That agency must monopolize or exercise “exclusive rights” over the import, export, wholesale trade, and stock maintenance of lawfully grown marijuana; and
- The agency must “purchase and take physical possession of such crops as soon as possible, but not later than four months after the end of the harvest.”
The memo concludes that the current licensing framework fails all three requirements:
“First, the division of responsibilities between DEA and NIDA, a component of the Department of Health and Human Services (“HHS”), contravenes [the Single Convention’s requirement that all] functions be carried out by a single government agency. Second, neither of the two government agencies “take[s] physical possession” of the marijuana grown by the National Center, as required by [the Single Convention]. Third, no federal agency exercises a monopoly over the wholesale trade in marijuana, as required by [the Single Convention].”
In other words, because the Research Center’s contract is administered by the NIDA, which falls under the Department of Health and Human Services, there is not a single government agency overseeing the Research Center’s marijuana cultivation. Further, the DEA presently neither purchases nor takes physical possession of the marijuana at any point in the distribution process. Rather, the Research Center distributes the marijuana to researchers itself pursuant to the NIDA contract and NIDA oversight.
The memo also explains that the National Center does not step into the shoes of the federal government for purposes of satisfying the monopoly requirement, and that any conclusion to the contrary would create constitutional concerns:
“If the National Center were viewed as exercising significant authority in establishing a federal government monopoly over the lawful distribution of marijuana, in conformity with the international obligations of the United States, its officials might be viewed as officers of the United States, who would need to be appointed consistent with the appointments clause.”
The memo also outlines the recommended changes to the current licensing framework, and explains how those changes must be made in order to bring the United States into compliance.
The memo seems to be a complete 180 from the views of the DEA in its 2016 policy statement. In 2016, the Obama-led DOJ announced its policy change that the DEA would accept additional applications for marijuana manufacturing. That was just before the DOJ was handed over to Jeff Sessions, who had very open and candid about his anti-cannabis legalization policies. Some of these policies included going after fully state-legal operations, increasing asset forfeitures, and doing everything he could to increase criminal penalties for even minor drug offenses.
Tellingly, the memo concedes that there are arguments that could be used to support the conclusion that the United States’s licensing framework actually is in compliance with the Single Convention. The document lists several arguments in support of that conclusion, but dismisses them one by one. For example, the memo acknowledges that the UK, Canada, Israel and Australia–which have similar licensing frameworks to the US–are also violating the treaty for the very same reasons as the US. But rather than accepting the consistent interpretation of the treaty amongst these multiple nations as an indication of treaty compliance, the memo asserts that “the practices of a handful of the 186 parties to the treaty are entitled to comparatively little weight.”
However, in our view, we would draw a different conclusion here. These nations are some of the most influential and powerful countries in the world. To merely disregard them as “a handful of the 186 parties” is to ignore the fact that these are some of the countries most likely to respect the treaty. If all of these countries are independently interpreting the treaty in the same way, it is erroneous to simply overlook their interpretations.
Ultimately, however, the release of the memo is a good thing for several reasons. First, the government’s legal arguments are now in the public domain, and thus can be openly debated and discussed. This increase dialogue will hopefully minimize further delay of applications. Second, the memo is effectively old news. The DEA has already released its interim rule to change those policies, and must turn to the pending applications in the near future. Hopefully the future will hold some good news for the applicants and the progress of cannabis research.
Disclaimer: This article has been prepared and published for informational and educational purposes only and is not offered or intended, nor should it be construed, to be legal advice.
 See 21 U.S.C. 822(a)(1).
 In re Scottsdale Research Inst., Case No. 19-1120 (D.C. Cir. 2019).
 See 21 U.S.C. § 823(i)(2).
 In re Scottsdale Research Inst., LLC, 2019 U.S. App. LEXIS 31233 D.C. Circuit Appeals Court (October 18, 2019)
 Scottsdale Research Institute LLC v. United States Drug Enforcement Administration, 2:20-cv-00605 (D. Ariz. March 25, 2020)
 See Single Convention art. 23.
 Licensing Marijuana Cultivation in Compliance with the Single Convention on Narcotic Drugs, Opinions of the Office of Legal Counsel in Volume 42, at 8.
 Id. at 15.