The DOJ Drug Enforcement Administration ("DEA") issued Notices of Application by about 30 entities that seek to become registered as bulk manufacturers of marijuana. If applicants applying for DEA registration are ultimately approved, they will be able to manufacture and distribute bulk marijuana active pharmaceutical ingredients to DEA registered researchers.

The agency has been reviewing its policies governing marijuana growers since the publication of an August 2016 policy statement expressing support for increased research, and the creation of a new class of DEA registration for manufacture supporting that research. The DEA anticipates that new strains of marijuana available for researchers should (i) facilitate research, (ii) "advance scientific understanding" of the effects of marijuana, and (iii) possibly support the development of safe and effective drug products for FDA approval for marketing.

In a separate filing, the DEA stated that it had sent to the Office of Management and Budget ("OMB") a draft petition for rulemaking that would govern bulk marijuana growers. OMB has approximately 90 days to review the proposals, which, once finalized, will be published in the Federal Register for notice and comment. The DEA will not consider the pending bulk marijuana manufacturer applications until the regulations are adopted, which could be at least four months from now, at the earliest.


Jodi Avergun

The news that DEA has drafted regulations and initiated application review for bulk manufacture of marijuana is welcome and demonstrates the continued trajectory toward federal easing of marijuana restrictions, particularly for medicinal use. But, the news does not change the fact that DEA took no action at all on the numerous applications that had been filed with the agency since the August 2016 announcement of the new license.

New regulations that must go through a full Notice and Comment period will further delay the issuance of any registrations. It is likely that the registration process will be tightly controlled and will require strict compliance with the types of recordkeeping, reporting and physical security requirements that already govern other addictive controlled substances. Don't be surprised if established controlled substance manufacturers soon start filing their own bulk manufacture applications. Those companies are already scaled to comply with the likely burdensome DEA regulations. Nevertheless, provided that the OMB approval process is reasonable, these new licenses should be granted by mid 2020. Additional easing on banking restrictions – at least in the medical marijuana space might follow close behind.

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