Three AGs Sue As Cannabis Rescheduling Moves Forward | TDR Cannabis in 5

Added: 2026-05-30

[00:00:00]What's up everyone? Welcome into our latest TDR Cannabis in 5% by Flow Hub. I am your host Shad Dales. Today we're going to take a look at news that broke earlier this week. It was first reported by Tom Angel over at Marijuana Moment where three Republican attorneys general from Indiana, Nebraska, and Louisiana filed a lawsuit to block the Trump administration's cannabis rescheduling order. So yes, this is another attempt and chapter of the SAM story because this case has already been consolidated with a lawsuit filed earlier by SAM and the National Drug and Alcohol Screening Association, otherwise known as the NDASA, [music] in the US Court of Appeals for the DC Circuit, the most important regulatory court [music] in the country outside of the Supreme Court. And look, at first glance, this is serious. These groups are well-funded, they're well-lawyered, and they know how to use procedural law as a weapon. But here's the important part that most headlines miss. Judges don't operate in a vacuum. They don't just read a lawsuit and decide based on the four corners of the page. They look at patterns, they look at credibility, they look at timing, and they look at the broader legal context surrounding the case. And when you zoom out the last 30 to 60 days, it tells a very different story than the one the prohibitionist groups want to project. So let's get into our latest TDR Cannabis in 5. All right, so first up, what are the AGs claiming in this lawsuit? Well, the attorneys general, they argue that acting Attorney General Todd Blanche's rescheduling order fails to comport with federal law, was improperly promulgated, exceeds statutory authority, and is arbitrary, capricious, and not in accordance with law. So to drum this down and make it simplified, they're not challenging the science here, they're not challenging the medical evidence.

[00:01:43]What they are challenging is the process, claiming the administration used the Single Convention Treaty pathway to move faster instead of completing the full administrative hearing process. [music] And if If read a little closer, this is the same strategy Sam is using in its petition, a procedural attack, not a scientific one.

[00:02:02]But here is where legal reality then kicks in. Judges don't operate in a vacuum. Federal judges, especially in the DC Circuit, they look at patterns, not isolated filings. And that pattern here is unmistakable. Why? Well, Sam just had a lawsuit dismissed for lack of standing in the Medicare CBD pilot program case. Prohibitionist groups have filed multiple rapid-fire lawsuits in a short window. The plaintiffs are largely the same ecosystem of anti-cannabis organizations, and the timing is clearly designed to slow down or undermine rescheduling right now. So, when you process that, judges definitely notice this. They also talk about this. And judges factor this into how they view credibility. And here's the key point as well. Standing [music] is still the fatal flaw. Even with state attorneys general involved, the question remains is, what actual harm do these states suffer because medical cannabis moved to schedule three? Cuz look, schedule three, it doesn't force states to legalize, doesn't preempt state law, doesn't require new spending, and it doesn't impose new enforcement burdens.

[00:03:05]And judges know the difference between a real injury and a political disagreement. And courts have repeatedly held that policy disagreement is not an injury. So, now let's look at the DC Circuit's track record. So, in our newsletter earlier this week, and by the way, you could become a Daily Baked In newsletter subscriber by scanning this QR code, we highlighted something important. The DC Circuit has historically been highly deferential to federal agencies on scheduling decisions. In Americans for Safe Access versus DEA, the court upheld DEA's decision to keep cannabis in schedule one, saying the agency followed proper procedure, and the court wouldn't second-guess the outcome. Then we look back in 2022, the hemp-related cases, the court again deferred to the DEA's interpretation of the Controlled Substances Act. And here's the twist, that same deference now works in favor of the government's decision to move cannabis now to schedule three. Yes, the DEA is now behind this because if the court's philosophy is we don't micromanage DEA as long as they follow the process, then the challengers have a steep hill to climb here. So now let's look at procedural attacks and how are they a sign of weakness. Look, right now the AGs and Sam aren't arguing cannabis belongs in schedule one. They're not arguing again on the science. They're not arguing about public health. They're arguing the paperwork in this. So that could be a sign that the substantive argument is indeed unwinnable, but we all know nothing is concrete until we know. So the big picture in all this and where does this go? The lawsuit again, it's serious, but the legal foundation, there are some questions. The DC Circuit is tough, but historically deferential to agencies' decisions. Standing remains the biggest obstacle for the challengers and judges will absolutely notice the pattern of rapid-fire prohibitionist litigation. And the administrative hearing next month on June 29th, it's still moving forward. As we said in our newsletter, this is a coordinated, well-funded challenge, but it's also coming from the same ecosystem that just got bounced out of federal court for lack of standing. So again, the legal fight is real, but so is the momentum behind schedule three, and that's the way you've got to look at it. But again, this is serious, and I think the industry is well prepared because the moment of truth time is about to all unfold here in the next 30 days. So that's it for our latest TDR Cannabis in Five. Drop your comments below. Let us know what you thought of this lawsuit.

[00:05:29]Do Sam or these attorneys general have any kind of chance? Is this just the latest effort to stall things? Love to keep this conversation going, so leave your comments below. And as usual, make sure to like, subscribe, smash on that bell for all notifications, and share this video to your network. Let's get the truth out there, and more importantly, let's grow this audience.

[00:05:48]We would appreciate it here at TDR. I'm your host Shad Dales. Thanks again for checking in, and I'll see you in the next one. Take care, everyone.