Subscriber Question of the Day (And My Response)

James Babcock

8m ago

Doug, why did Trumps executive order with medical cannabis usage not have to jump thru all the hoops that adult use has had to do? Thanks 

Dougie Kass

just now

Very good question.

They used (in medical marijuana) The Treaty Obligation….   

The medical half rode on 21 U.S.C. §811(d)(1), which lets the AG reschedule a substance by order, without the normal §811(a)–(b) rulemaking, when doing so is necessary to carry out U.S. treaty obligations. Blanche’s order reviewed the history of those obligations and concluded that the Single Convention would still be satisfied with marijuana in Schedule III, so he immediately reclassified state-licensed medical cannabis and FDA-approved products under his authority to reschedule drugs to carry out Single Convention obligations. The treaty route only stretches as far as the treaty does, though. The Single Convention confines cannabis to medical and scientific use, so DOJ’s position is that drawing the line at medical reasonably confines federal authorization to medical and scientific channels. Adult-use cannabis has no treaty-compliance rationale to hang on, so §811(d) can’t carry it.

That leaves the adult-use half stuck in the ordinary §811(a)–(b) process: HHS evaluation, notice-and-comment, and, because interested parties requested one, a formal on-the-record hearing before an ALJ. That proceeding already existed (it relates to the May 21, 2024 NPRM, which found currently accepted medical use and lower abuse potential than Schedule I or II), but it had been frozen since early 2025. Rather than start over, Blanche set the adult-use reclassification aside to go through the traditional APA process, including an ALJ hearing commencing June 29, and ordered DEA to finish the Biden-era proposed rule in the most expeditious manner, per Trump’s order.

The practical logic is speed and insulation. The order followed a December 2025 executive order directing the AG to expedite rescheduling; the treaty route delivered immediate 280E relief for state-licensed medical operators while leaving adult-use in Schedule I, and it did so without exposing the medical reclassification to the CAMU fight in the hearing record. The ALJ even walled it off: the judge ruled the hearing would not revisit the medical rescheduling, which had already occurred, and would take no evidence on it. The cost is the vulnerability you’ve already been pressing on — whether §811(d) actually authorizes a use-based split, which is exactly what the state and prohibitionist challenges in the D.C. Circuit are testing.

Positions: None

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Posted by Doug Kass

Doug Kass is a world-renowned hedge fund manager with decades of experience and success navigating through some of the most turbulent periods in market history. He is known for his time-tested analytical skills and ability to look past the current noise and herd mentality. On TheStreet Pro, Kass provides frequent market commentary and investing ideas for active investors throughout each trading day in Doug’s Daily Diary. He also serves as president of Seabreeze Partners Management Inc. Previously, he served as a senior manager at Omega Advisors, a $6 billion investment partnership. He co-authored a book with Ralph Nader and the Center for the Study of Responsive Law called “Citibank: The Ralph Nader Report” and can be found as a guest host on CNBC's "Squawk Box." A Note from Doug: Current strategies and actionable trade ideas -- all on one dynamic platform built exclusively for active trades. From sudden sell-offs to sudden spikes, TheStreet Pro arms you with crucial analysis -- at a rapid fire, professional pace -- to help you make sound trading decisions -- every day, every hour, and every minute. Join me and my team of professional traders for unique perspectives and breakthrough investment opportunities.

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