Arizona Tribune - The Cannabis Industry Built on Schedule III. Federal Courts Are About to Decide Whether That Foundation Holds

WASHINGTON, D.C. / ACCESS Newswire / August 1, 2026 / The cannabis industry has largely treated the Attorney General's April 2026 Marijuana Rescheduling Order as a settled foundation for future growth.

The federal courts have not yet decided whether that foundation is lawful.

MMJ International Holdings, Inc. and its subsidiaries are currently involved in multiple separate federal matters examining different aspects of the government's treatment of cannabis:

• A D.C. Circuit challenge to the legality of the Marijuana Rescheduling Order;

• Federal litigation arising from MMJ's nearly eight-year effort to obtain a DEA bulk-manufacturer registration; and

• A D.C. Circuit appeal challenging a Medicare reimbursement pathway for certain cannabinoid products.

The proceedings involve different statutes, agencies and administrative records. Collectively, however, they raise one fundamental question:

Did the federal government follow the law when it changed the rules governing cannabis?

The Industry Moved First. The Court Is Still Deciding.

Since the Attorney General issued Order No. 6754-2026, published at 91 Fed. Reg. 22714 on April 28, 2026, cannabis companies have moved quickly to restructure their businesses around Schedule III.

State-licensed operators have projected substantial federal tax savings associated with the removal of qualifying medical-marijuana activity from the reach of 26 U.S.C. § 280E. Companies have pursued expedited DEA registrations, reorganized medical operations and sought financing based on the expectation that the new regulatory framework will remain in force.

That expectation is now being tested in the U.S. Court of Appeals for the District of Columbia Circuit.

MMJ is among the petitioners challenging the Rescheduling Order in SAM Inc. v. Department of Justice, Nos. 26-1106, 26-1130 and 26-1136.

Briefing on the motion to stay the Rescheduling Order and the state-licensed operators' motion to intervene-including the parties' competing arguments over MMJ's standing-concluded on July 17, 2026. Both motions remain pending before the Court.

Three Federal Matters, One Common Theme

1. The Marijuana Rescheduling Challenge

The consolidated D.C. Circuit proceeding asks whether the Attorney General complied with the Controlled Substances Act and other governing law when moving two categories of marijuana from Schedule I to Schedule III:

• Marijuana contained in FDA approved drug products; and

• Marijuana produced and distributed under qualifying state medical marijuana laws.

MMJ contends that the Attorney General could not lawfully create that framework without following the procedures Congress prescribed, including the required administrative process, evidentiary development and reviewable findings.

The government disputes MMJ's claims and argues, among other things, that MMJ lacks standing to challenge the Order.

MMJ responds that the government cannot hold the company's lack of final DEA authorization against it while the company's federal registration application has remained unresolved since 2018-and while the new Order offers expedited federal registration to state-licensed operators that entered the marijuana market without first completing the FDA pharmaceutical pathway.

2. MMJ's Long-Pending DEA Registration

MMJ BioPharma Cultivation, Inc. applied on December 27, 2018, for DEA registration as a bulk manufacturer of marijuana.

The registration would allow MMJ to cultivate federally lawful, pharmaceutical-grade cannabis for FDA-regulated research and drug development. The company's application has undergone extensive administrative review, including Federal Register notices, DEA inspections and proceedings before a DEA administrative law judge.

The application remains unresolved after more than seven years.

Related litigation in the U.S. District Court for the District of Rhode Island concerns the government's handling of MMJ's registration effort and the legal consequences of the prolonged administrative process.

MMJ maintains that the delay has prevented it from securing the federally controlled botanical material necessary to advance its investigational medicines-even as the government now offers an expedited registration pathway to qualifying state medical-marijuana operators.

3. The Medicare Cannabinoid-Benefit Appeal

A separate appeal pending in the D.C. Circuit, SAM Inc. v. Kennedy, No. 26-5205, concerns a federal Medicare program involving reimbursement for certain cannabinoid products.

The district court dismissed that challenge for lack of standing without reaching the merits. The appeal asks whether the plaintiffs-including parties supported by declarations from MMJ and its subsidiaries-alleged a sufficiently concrete competitive and regulatory injury to obtain judicial review.

That proceeding is legally separate from the marijuana-rescheduling litigation. It nevertheless raises a related question: whether a company that invested in the federally regulated pharmaceutical pathway may challenge government programs that allegedly confer market advantages on cannabinoid products that did not complete that same pathway.

What Happens If the Court Stays the Order?

The cannabis industry has extensively promoted the anticipated benefits of Schedule III. It has devoted considerably less attention to what could happen if the Rescheduling Order is stayed, vacated or remanded.

If the D.C. Circuit stays the Order pending judicial review, the precise consequences will depend on the language and scope of the Court's ruling.

A stay could suspend the operative effect of the new Schedule III framework while the litigation proceeds. That could affect the expedited DEA-registration pathway and create uncertainty concerning anticipated § 280E tax treatment, pending registration applications, financing transactions and corporate restructurings undertaken in reliance on the Order.

A stay would not decide the ultimate merits of the case. Nor would it necessarily prevent marijuana from ultimately being placed in Schedule III.

It would preserve the prior legal framework while the Court determines whether the government acted lawfully.

If the Rescheduling Order Does Not Survive

A ruling finding that the government committed legal error would not necessarily end marijuana rescheduling.

The Court could vacate the Order, remand it for further proceedings or require the government to complete procedures that MMJ contends Congress made mandatory.

The government could ultimately issue a new Schedule III determination supported by a legally sufficient administrative record. Marijuana could also return to Schedule I while the required process is completed.

Whatever the eventual classification, MMJ maintains that the result must rest on the statutory procedures enacted by Congress-not on the assumption that a preferred policy outcome excuses compliance with federal law.

Why MMJ Says the Difference Matters

MMJ did not build its pharmaceutical program around state marijuana laws.

The company pursued the federal drug-development pathway. That effort has included FDA Investigational New Drug programs for Huntington's disease and multiple sclerosis, orphan-drug designation, pharmaceutical manufacturing through Catalent, completed chemistry and stability work, a DEA-registered analytical laboratory and a pending DEA bulk-manufacturer application.

MMJ has manufactured approximately 50,000 standardized soft-gelatin capsules containing defined quantities of THC and CBD per FDA guidelines.

The company maintains that federal law should not disadvantage a pharmaceutical developer for following the FDA and DEA pathways while granting expedited federal benefits to state-licensed operators that entered the marijuana market outside those pathways.

"We are not asking the courts to decide whether cannabis can become medicine," said Duane Boise, Chief Executive Officer of MMJ International Holdings. "We have spent nearly a decade trying to answer that question through FDA science, pharmaceutical manufacturing and controlled clinical research."

"The courts are being asked something more fundamental: whether the federal government must follow the law Congress enacted before changing the legal status of one of the country's most heavily regulated substances. The industry has moved forward as though that question has already been answered. It has not."

About MMJ International Holdings

MMJ International Holdings, Inc., through its subsidiaries MMJ BioPharma Cultivation, Inc. and MMJ BioPharma Labs, Inc., is developing FDA-regulated cannabinoid therapeutics for Huntington's disease and multiple sclerosis.

Since 2017, the company has pursued the federal pharmaceutical drug-development pathway, including FDA Investigational New Drug programs, orphan-drug designation, pharmaceutical manufacturing, DEA analytical-laboratory registration and an application for DEA registration as a bulk manufacturer of marijuana.

Important Notice

This statement describes pending litigation in which MMJ is a party and reflects MMJ's position. It is not legal, tax or investment advice, does not predict any outcome, and is not a statement about the adequacy of any company's public disclosures. Court filings are available on the public dockets in Nos. 26-1106, 26-1130 and 26-1136 and No. 26-5205 (D.C. Cir.). The rule discussed appears at 91 Fed. Reg. 22714 (Apr. 28, 2026).

This release does not predict the outcome of any proceeding and should not be construed as legal, tax or investment advice. Any discussion of potential judicial rulings or industry consequences is illustrative. The nature, scope and timing of any relief remain within the authority of the applicable courts and federal agencies.

Media Contact:
Madison Hisey
[email protected]
203-231-8583

SOURCE: MMJ International Holdings

View the original press release on ACCESS Newswire

O.Ortiz--AT