DEA drug report looks at “organized crime” involvement in illegal U.S. grows • Cannabis regulators group releases guidance on cannabinoid products • & more …

Fri, May 10

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The Drug Enforcement Administration released its 2024 National Drug Threat Assessment. As expected, much of the report is dedicated to fentanyl. But cannabis came up plenty, too. 

The “main suppliers” of cannabis to U.S. markets are cannabis “growers and processors operating inside the United States,” the report notes. While cannabis remains illegal at the federal level — there was no mention of the scheduling review — most states have legalized cannabis for adult or medical use (the DEA report put “legalized” or “decriminalized” in quotes). 

Delaware, Minnesota, and Ohio are the most recent states to “legalize,” the report continued. 

“Despite these measures, the black market for marijuana continues, with substantial trafficking by Mexican cartels, and Chinese and other Asian organized crime groups profiting from illegal cultivation and sales, as well as exploitation of the ‘legal’ market. The price of marijuana in illegal U.S. markets has remained largely stable for years, even as the potency of marijuana has increased exponentially,” the report notes. 

The report also had a separate section devoted to “Asian Organized Crime Involvement in Marijuana Cultivation.”

“Asian investors have emerged as a new source of funding for illegal marijuana production in the United States, and site owners, eager to protect and oversee those investments, have been encountered at illegal grows seized in Oklahoma, California, Oregon, and Maine,” the report hightlighted. 

The report highlights state legal programs in western states where organized crime groups have, the DEA says, for decades been operating “industrial” sized grows in residential settings. 

“Many of these home-grows pretend to operate under business registrations granted by state licensing authorities in jurisdictions where marijuana cultivation and sales are ‘legal’ at the state level but, absent overt evidence such as the trafficking of marijuana across state lines or the commission of non-drug crimes such as money laundering and human trafficking, it can be difficult for law enforcement to immediately identify violations or discover an illegal grow,” the report notes. 

The report continued, “Across jurisdictions with a state-level ‘legal’ framework for cultivation and sales, Asian drug trafficking organizations defy restrictions on plant quantities, production quotas, and non-licensed sales, and hide behind state-bystate variations in laws governing plant counts, registration requirements, and accountability practices.” 

The report later highlights concerns over youth exposure to cannabis, especially potent edibles, as well as the well-documented environmental harms that illegal trespass grows cause. 

This week, CANNRA released a “guidance document” focused on “best practices in regulating cannabinoids for safety.” The doc “aggregates and distills” the various CANNRA member states’ regulatory approaches.

· The guidance recommends, for example, quality control guardrails like cGMP, as well as regs for product form, dose, and content (“Limits or restrictions on cannabinoids based on safety data and scientific knowledge about their use in humans” and “Limits on cannabinoids per serving and servings per container.”) 

· The CANNRA guidance also recommends regs for packaging, labeling (“does not appeal to children” and “does not mimic non cannabinoid commercial items”), and advertising (doesn’t target kids and “includes any relevant warnings.”) 

“In conclusion, based on the experience and expertise of CANNRA members, there are a range of cannabinoid and cannabinoid product regulations that are warranted to protect consumers and public health. These include licensing and registration, processing and manufacturing standards, age-gating, product form, dose, and content regulations, packaging and labeling regulations, advertising regulations, and education, compliance, and enforcement programs,” the guidance reads.

Further: “Because the cannabinoid industry is dynamic and each of these regulatory areas is complex, statutes should provide for regulatory flexibility, allowing regulators to respond appropriately to protect consumer safety in the evolving marketplace.” 

A new Congressional Research Service report titled “The Federal Status of Marijuana and the Policy Gap with States” acknowledges the snowballing legalization across states amid the ongoing illegality of cannabis, a picture that would remain unchanged even if cannabis is moved to Schedule III. 

“Over the last several decades, most states and territories have deviated from a comprehensive prohibition of marijuana and have laws and policies allowing for some cultivation, sale, distribution, and possession of marijuana,” the authors wrote. 

The report highlights that, “in April 2024, the Drug Enforcement Administration (DEA) proposed tomove marijuana from Schedule I to Schedule III under the CSA.” 

But, the report continues: “Moving marijuana from Schedule I to Schedule III, without other legal changes, would not bring the state-legal recreationalmarijuana industry into compliance with the CSA. If marijuana were moved to Schedule III, it could theoretically be used for medical purposes consistent with federal law. However, Schedule III controlled substances may only legally be dispensed pursuant to a valid prescription” and “marijuana is not currently a prescription drug approved by the Food and Drug Administration (FDA).” 

The authors put it more bluntly. 

“Activities related to recreational marijuana are illegal under the CSA and would remain so if marijuana moves to Schedule III.”

State cannabis programs are forcing the feds to think, though. 

“Although state laws do not affect the status of marijuana under federal law or the ability of the federal government to enforce it, state legalization initiatives have spurred a number of questions regarding potential implications for federal laws and policies, including federal drug regulation, and access to banking and other services for marijuana businesses,” the report notes. 

So far, the federal response to state laws has been to “allow states to implement their own laws,” the report continued. The DOJ has “nonetheless reaffirmed that marijuana growth, possession, and trafficking remain crimes under federal law irrespective of states’ marijuana laws.” 

Congress could beat the DEA to the punch and pass a cannabis bill before the DEA moves on rescheduling. 

“Such legislation might take the form of more or less stringent marijuana control, ranging from pushingfor federal law enforcement to dismantle state medical and recreational marijuana programs to limiting federal marijuana regulation through means such as appropriations provisions, to rescheduling or de-controlling marijuana under the CSA,” the report notes. 

“This last option would largely eliminate the gap with states that have authorized recreational and comprehensive medical marijuana.”