Arizona Tribune - Rescheduling Marijuana: The Bet That May Be About To Go Very Wrong

WASHINGTON, D.C. / ACCESS Newswire / July 19, 2026 / For a decade, America's multistate cannabis operators made a calculated bet. They would build their empires through state licenses, sell unapproved products with therapeutic promises, disclose the federal illegality to their shareholders in the fine print - and wait for Washington to forgive it all retroactively. In April 2026, the Attorney General's Marijuana Rescheduling Order looked like the payoff: Schedule III status, Section 280E tax relief, expedited DEA registration, and a path to the New York Stock Exchange. The bet appeared to have worked.

It may be about to go very wrong.

The Bet, in Their Own Words

The shortcut was never a secret. It was disclosed, in writing, to the Securities and Exchange Commission. Verano's 2025 annual report listed as its first risk factor 'the current illegality of cannabis under federal law,' and went on to flag exposure under money laundering statutes and RICO, the burden of Section 280E, the lack of federal bankruptcy protection, and . Trulieve's and Cresco's filings said the same. These companies told their investors, year after year, that their business consisted of conduct prohibited by federal law - and built market share doing it, selling precisely dosed capsules and tablets marketed for therapeutic relief without a single FDA reviewed clinical trial among them.

The Rescheduling Order was supposed to wash all of it away. Overnight, the companies that skipped the Controlled Substances Act and the FDA drug-approval process were handed the federal legitimacy they never earned. Trulieve became the first U.S. cannabis operator listed on the NYSE. Green Thumb filed for DEA registration under the Order's fast-track pathway - a pathway that did not exist for MMJ, which has waited on its DEA bulk manufacturing application since December 27, 2018.

The Reckoning Now in Front of the D.C. Circuit

On July 16, MMJ International Holdings and co-plaintiffs filed their reply in support of a stay of the Rescheduling Order in the U.S. Court of Appeals for the D.C. Circuit. The government's legal position is remarkably weak - because the government already admitted the controlling point. In its own April 2026 Federal Register publication, it conceded that transferring marijuana to Schedule III 'requires formal rulemaking on the record after opportunity for a hearing.' It then skipped that process entirely. Under the D.C. Circuit's own precedent in NORML v. DEA, that shortcut - a shortcut by the government, taken for the benefit of companies built on shortcuts - is unlawful.

If the court stays and ultimately vacates the Order, the consequences for the multistate operators are severe and immediate. Schedule I status returns, and with it Section 280E's prohibition on deducting ordinary business expenses - the tax burden that consumed their margins for years. The expedited DEA registration pathway is vacated, and applications filed under it fall with the Order. The 'federal legitimacy' underwriting an NYSE listing and institutional financing reverts to what their own SEC filings always said it was: a business model prohibited by federal law. And every advantage accumulated in the interim - the listings, the financings, the market share - was built on an order a federal court found unlawful.

The Company That Refused the Shortcut

Against all of this stands one company that took the long road. MMJ International Holdings spent more than eight years and more than $10 million doing what federal law actually requires of a company that wants to sell cannabinoid medicine: FDA Investigational New Drug applications for Huntington's disease and multiple sclerosis, orphan-drug designation, a DEA-registered and inspected analytical laboratory, pharmaceutical formulation and stability studies, and the manufacture - completed with a specialty Pharma Solutions company in 2022 - of 50,000 standardized soft-gel capsules containing precisely 5 mg CBD and 2.5 mg THC. MMJ is not in the market for sale today is for exactly one reason: it followed the law, and the agencies that control its applications have not acted.

"The multistate operators bet that breaking federal law would eventually be forgiven, and the Rescheduling Order tried to make that bet pay," said Duane Boise, CEO of MMJ International Holdings. "But an unlawful order cannot launder a decade of unlawful conduct. If the D.C. Circuit rules as its own precedent requires, the shortcut becomes the most expensive route these companies ever took."

The Question Investors Should Be Asking

Every institutional investor, exchange, and lender now backing the multistate operators is underwriting a single assumption: that the Rescheduling Order survives judicial review. That assumption rests on an order issued without the formal rulemaking the government itself said the law requires, now facing consolidated challenges before a court whose precedent squarely forbids the procedure used. The operators disclosed for years that their business was federally prohibited. The question was never whether the shortcut was illegal - they said so themselves. The question was whether they would ever pay the price. The D.C. Circuit may be about to answer it.

About MMJ International Holdings, Inc.

MMJ International Holdings, Inc. is a pharmaceutical company developing proprietary cannabinoid-based drug candidates through the FDA drug-approval process for Huntington's disease and multiple sclerosis. Together with MMJ BioPharma Cultivation, Inc. and MMJ BioPharma Labs, Inc., the company is pursuing federal pharmaceutical development, controlled-substance registrations, clinical research authorization, and manufacturing approval under the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act.

CONTACT:
Madison Hisey
[email protected]
203-231-8583

SOURCE: MMJ International Holdings

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