[Federal Register Volume 88, Number 177 (Thursday, September 14, 2023)]
[Notices]
[Pages 63124-63126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19820]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Green Wave Analytical Decision and Order

    On August 10, 2022, the Drug Enforcement Administration 
(hereinafter, DEA or Government) issued an Order to Show Cause 
(hereinafter, OSC) to Green Wave Analytical (hereinafter, Applicant) of 
San Diego, California. Request for Final Agency Action (hereinafter, 
RFAA), Exhibit (hereinafter, RFAAX) 10, at 1, 6. The OSC proposed the 
denial of Applicant's application for a DEA Certificate of Registration 
(hereinafter, registration), Control No. W21055614H, alleging that 
Applicant has ``committed such acts as would render [its] registration 
inconsistent with the public interest.'' Id. at 1, 2 (citing 21 U.S.C. 
824(a)(4),\1\ 823(g)(1) \2\).
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    \1\ Prior Agency decisions have addressed whether it is 
appropriate to consider a provision of 21 U.S.C. 824(a) when 
determining whether to grant a practitioner registration 
application. For over forty-five years, Agency decisions have 
concluded that it is. Robert Wayne Locklear, M.D., 86 FR 33738, 
33744-45 (2021) (collecting cases); see also Dinorah Drug Store, 
Inc., 61 FR 15972, 15973-74 (1996).
    \2\ Effective December 2, 2022, the Medical Marijuana and 
Cannabidiol Research Expansion Act, Public Law 117-215, 136 Stat. 
2257 (2022) (Marijuana Research Amendments or MRA), amended the 
Controlled Substances Act (CSA) and other statutes. Relevant to this 
matter, the MRA redesignated 21 U.S.C. 823(f), cited in the OSC, as 
21 U.S.C. 823(g)(1). Accordingly, this Decision cites to the current 
designation, 21 U.S.C. 823(g)(1), and to the MRA-amended CSA 
throughout.
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    The Agency makes the following findings of fact based on the 
uncontroverted evidence submitted by the Government in its RFAA dated 
March 3, 2023.\3\
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    \3\ Based on the Declaration from a DEA Diversion Investigator, 
the Agency finds that the Government's service of the OSC on 
Applicant was adequate. RFAAX 1, at 7. Further, based on the 
Government's assertions in its RFAA, the Agency finds that more than 
thirty days have passed since Applicant was served with the OSC and 
Applicant has neither requested a hearing nor submitted a corrective 
action plan, and therefore, has waived any such rights. RFAA, at 6; 
see also 21 CFR 1301.43 and 21 U.S.C. 824(c)(2).

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[[Page 63125]]

I. Findings of Fact

    According to the DEA Diversion Investigator assigned to investigate 
Applicant (hereinafter, the DI), on May 18, 2021, Applicant applied, 
through its owner (hereinafter, J.P.), for a DEA registration as an 
analytical lab. RFAAX 1, at 2; see also RFAAX 3. Applicant's previous 
DEA registration, Control No. RG0546359, expired on September 30, 2020, 
and since then, Applicant has not held an active DEA registration. 
RFAAX 1, at 3; see also RFAAX 4. As part of her investigation of the 
application, the DI exchanged emails with J.P. regarding Applicant's 
possession of controlled substances. RFAAX 1, at 3; see also RFAAX 5. 
The DI asked J.P. if Applicant continued to possess controlled 
substances at its facility, and J.P. stated that Applicant had old 
samples of phenobarbital injection (Schedule IV) and ``a very small 
amount'' of opium suppositories (Schedule II) stored. RFAAX 1, at 3; 
RFAAX 5, at 4-5. Further, J.P. added that Applicant was uncertain of 
the proper disposal procedure for such substances. RFAAX 1, at 3; RFAAX 
5, at 4.
    The DI attempted to schedule with J.P. an onsite preregistration 
inspection of Applicant and time to assist J.P. with disposal of the 
controlled substances that Applicant continued to unlawfully 
possess.\4\ RFAAX 1, at 3; RFAAX 5, at 1-3. On August 3, 2021, the DI, 
along with another Diversion Investigator, traveled to Applicant's 
registered address ``for the purpose of [Applicant] voluntarily 
surrendering its controlled substances and with the understanding that 
the preregistration inspection would occur at a later date.'' RFAAX 1, 
at 4. According to the DI, J.P. showed her the area of the facility 
where controlled substances were kept locked in a cabinet, and the DI 
found that Applicant possessed greater quantities and more types of 
controlled substances than J.P. had previously claimed. Id. Further, 
only some portions of the substances possessed by Applicant were 
labeled as controlled substances, with other portions unlabeled and 
unidentified.\5\ Id. Applicant surrendered all of the substances, which 
the DI took possession of, inventoried, and delivered to the DEA 
Southwest Laboratory. Id.; see also RFAAX 6.\6\ While still at 
Applicant's location, the DI also asked J.P. for the accompanying 
receiving records, logs, and/or inventory documentation, to which J.P. 
indicated that ``he did not have any such records, except for a 
partially completed DEA Form 222 in which [Applicant] acquired powdered 
opium suppositories from Vitae Enim Vitae Scientific, Inc. (VEV).'' 
RFAAX 5, at 1; see also RFAAX 7.\7\
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    \4\ Regarding the quantities of controlled substances possessed 
by Applicant, J.P. stated ``I guess there are about 250 to 400 x 2 
mL small vials with septum caps. Most are variable amounts left as 
they were analyzed in most cases. I guess that is about 400 to 500 
total mLs of Phenobarbital Sodium Injection Solution.'' RFAAX 1, at 
3-4; RFAAX 5, at 1.
    \5\ The DI noted that ``in addition to quantities of 
phenobarbital injections and opium suppositories, [Applicant] also 
had quantities of morphine sulfate and tetrahydrocannabinol (THC) 
residue.'' Id.
    \6\ As listed by the DI, ``the controlled substances (as 
identified by label) that [Applicant] unlawfully possessed included 
suppositories of opium . . . approximately 500 milligrams (mg) of 
morphine sulfate . . . 200 mg of phenobarbital . . . 1,714 vials of 
phenobarbital of various concentrations; and one vial containing THC 
residue.'' RFAAX 1, at 5; see also RFAAX 6.
    \7\ The record purported to show that on March 3, 2020, 
Applicant ``ordered two packages of 180 mg powdered opium from VEV, 
and the supplier portions and [Applicant's] portions after delivery 
were not completed.'' RFAAX 1, at 5; RFAAX 7.
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    Thereafter, the DI requested administrative subpoenas for VEV's 
records ``[t]o determine whether [Applicant] received any controlled 
substance[s] as a DEA registrant, for which it lacked records of 
receipt, and whether [Applicant] received any controlled substances 
after its DEA registration expired, for which it lacked legal 
authorization.'' RFAAX 1, at 5-6. On August 9, 2021, DEA issued an 
administrative subpoena to VEV, pursuant to which VEV produced records 
of controlled substance distributions to Applicant and ``Order 
Information/Chain of Custody'' forms. Id. at 6; see also RFAAX 8. As 
noted by the DI, the records show that ``between on or about October 
21, 2020, and July 15, 2021, on approximately 14 occasions--while 
[Applicant] was not registered--[Applicant] received approximately 
7.958 [g] of powder phenobarbital sodium, and at least 21 [ml] of 
phenobarbital sodium at a concentration of 130 [mg/ml].'' Id.\8\
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    \8\ The DI also noted that some of the ``Order Information/Chain 
of Custody'' forms stated the name ``Expert Chemical Analysis, 
Inc.'' as the purchaser. Id. Based on a review of DEA registration 
records and business entity records available online through the 
California Secretary of State, the DI found that ``Expert Chemical 
Analysis, Inc.'' was a non-registrant company controlled by J.P. at 
the same address as Applicant. RFAAX 1, at 6.
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    On July 6, 2022, DEA issued another administrative subpoena to VEV, 
pursuant to which VEV produced records of controlled substance 
distributions from VEV to Applicant between December 3, 2018, and 
September 30, 2020, ``Order Information/Chain of Custody'' forms, and 
DEA Forms 222. Id.; see also RFAAX 9. As noted by the DI, the records 
show that ``between on or about May 7, 2019, and September 29, 2020, on 
approximately 31 occasions--while [Applicant] was registered--
[Applicant] received approximately 645 vials of 65 mg/ml phenobarbital 
sodium, 775 vials of 130 mg/ml phenobarbital sodium, 30.7 g of powder 
phenobarbital sodium, 3.9 g of powder opium, and 0.5 g of powder 
morphine sulfate, yet [Applicant] did not maintain any records of 
receipt.'' Id.

II. Discussion

    Pursuant to Section 303(g)(1) of the CSA ``[t]he Attorney General 
shall register practitioners . . . to dispense . . . controlled 
substances . . . if the applicant is authorized to dispense . . . 
controlled substances under the laws of the State in which he 
practices.'' 21 U.S.C. 823(g)(1). Section 303(g)(1) further provides 
that an application for a practitioner's registration may be denied 
upon a determination that ``the issuance of such registration . . . 
would be inconsistent with the public interest.'' Id. In making the 
public interest determination, the CSA requires consideration of the 
following factors:
    (A) The recommendation of the appropriate State licensing board or 
professional disciplinary authority.
    (B) The applicant's experience in dispensing, or conducting 
research with respect to controlled substances.
    (C) The applicant's conviction record under Federal or State laws 
relating to the manufacture, distribution, or dispensing of controlled 
substances.
    (D) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (E) Such other conduct which may threaten the public health and 
safety.
    21 U.S.C. 823(g)(1).
    The DEA considers these public interest factors in the disjunctive. 
Robert A. Leslie, M.D., 68 FR 15227, 15230 (2003). Each factor is 
weighed on a case-by-case basis. Morall v. Drug Enf't Admin., 412 F.3d 
165, 173-74 (D.C. Cir. 2005). Any one factor, or combination of 
factors, may be decisive. David H. Gillis, M.D., 58 FR 37507, 37508 
(1993). While the Agency has considered all of the public interest 
factors in 21 U.S.C. 823(g)(1),\9\ the Government's evidence

[[Page 63126]]

in support of its prima facie case for denial of Applicant's 
application is confined to Factors B and D. See RFAA, at 6-9. Moreover, 
the Government has the burden of proof in this proceeding. 21 CFR 
1301.44.
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    \9\ As to Factor A, the record contains no evidence of a 
recommendation from any state licensing board or professional 
disciplinary authority. 21 U.S.C. 823(g)(1)(A). Nonetheless, an 
absence of such evidence ``does not weigh for or against a 
determination as to whether continuation of [or granting of a] DEA 
certification is consistent with the public interest.'' Roni 
Dreszer, M.D., 76 FR 19434, 19444 (2011). As to Factor C, there is 
no evidence in the record that Applicant has been convicted of an 
offense under either federal or state law ``relating to the 
manufacture, distribution, or dispensing of controlled substances.'' 
21 U.S.C. 823(g)(1)(C). Likewise to Factor A, Agency cases have 
found that ``the absence of such a conviction is of considerably 
less consequence in the public interest inquiry'' and is therefore 
not dispositive. Dewey C. MacKay, M.D., 75 FR 49956, 49973 (2010). 
Finally, as to Factor E, the Government's evidence fits squarely 
within the parameters of Factors B and D and does not raise ``other 
conduct which may threaten the public health and safety.'' 21 U.S.C. 
823(g)(1)(E). Accordingly, Factor E does not weigh for or against 
Applicant.
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    Here, the Agency finds that the Government's evidence satisfies its 
prima facie burden of showing that Applicant's registration would be 
``inconsistent with the public interest.'' 21 U.S.C. 824(a)(4).
1. Factors B and D
    Evidence is considered under Public Interest Factors B and D when 
it reflects compliance (or non-compliance) with laws related to 
controlled substances and experience dispensing controlled substances. 
See Kareem Hubbard, M.D., 87 FR 21156, 21162 (2022). In the current 
matter, the Government has alleged that Applicant has violated both 
federal and California state law regulating controlled substances. 
RFAAX 10, at 1-5.\10\
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    \10\ The Agency need not adjudicate the criminal violations 
alleged in the instant Order to Show Cause. Ruan v. United States, 
142 S. Ct. 2370 (2022) (decided in the context of criminal 
proceedings).
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    Under federal law, those engaged in chemical analysis are required 
to be registered with the DEA. 21 CFR 1301.13(e)(1)(x). Regarding 
recordkeeping, the CSA requires that DEA registrants maintain complete 
and accurate records of the manufacture, receipt, sale, delivery, or 
disposal of controlled substances. 21 U.S.C. 827(a)(3). Additional 
relevant recordkeeping requirements can be found at 21 CFR 1304.03(a) 
(all registrants shall maintain required records), 1304.04(a) (records 
must be retained and available for DEA inspection for at least two 
years), 1304.21(a) (records must be complete and accurate), 1304.23(a) 
(registrants registered for chemical analysis with controlled 
substances must maintain records for each controlled substance).
    Here, the record demonstrates that prior to the expiration of its 
previous registration on September 30, 2020, Applicant failed to 
maintain necessary records as required by the CSA despite receiving and 
possessing controlled substances. Further, the record demonstrates that 
following the expiration of its previous registration on September 30, 
2020, Applicant unlawfully continued to receive and possess large 
quantities of controlled substances without maintaining necessary 
records for two years as required by the CSA. As Applicant's conduct 
displays clear violations of federal law relating to controlled 
substances, the Agency hereby finds that Applicant violated 21 U.S.C. 
827(a)(3) and 21 CFR 1301.13(e)(1)(x), 1304.03(a), 1304.04(a), 
1304.21(a), 1304.23(a).
    Accordingly, the Agency finds that Factors B and D weigh in favor 
of denial of Applicant's application and thus finds Applicant's 
registration to be inconsistent with the public interest in balancing 
the factors of 21 U.S.C. 823(g)(1). The Agency further finds that 
Applicant failed to provide sufficient evidence to rebut the 
Government's prima facie case.

III. Sanction

    Where, as here, the Government has established grounds to deny 
Applicant's application, the burden shifts to the registrant to show 
why it can be entrusted with the responsibility carried by a 
registration. Garret Howard Smith, M.D., 83 FR 18882, 18910 (2018). 
When a registrant has committed acts inconsistent with the public 
interest, it must both accept responsibility and demonstrate that it 
has undertaken corrective measures. Holiday CVS, L.L.C., dba CVS 
Pharmacy Nos 219 and 5195, 77 FR 62316, 62339 (2012) (internal 
quotations omitted). Trust is necessarily a fact-dependent 
determination based on individual circumstances; therefore, the Agency 
looks at factors such as the acceptance of responsibility, the 
credibility of that acceptance as it relates to the probability of 
repeat violations or behavior, the nature of the misconduct that forms 
the basis for sanction, and the Agency's interest in deterring similar 
acts. See, e.g., Robert Wayne Locklear, M.D., 86 FR 33746.
    Here, Applicant did not request a hearing, submit a corrective 
action plan, respond to the OSC, or otherwise avail itself of the 
opportunity to refute the Government's case. As such, Applicant has 
made no representations as to its future compliance with the CSA nor 
demonstrated that it can be entrusted with registration. Moreover, the 
evidence presented by the Government clearly shows that Applicant 
violated the CSA and the Agency has found that Applicant is ineligible 
for DEA registration. See supra at II.1. Accordingly, the Agency will 
order the denial of Applicant's application.

Order

    Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 
U.S.C. 823(g)(1) and 21 U.S.C. 824(a), I hereby deny the pending 
application for a Certificate of Registration, Control No. W21055614H, 
submitted by Green Wave Analytical, as well as any other pending 
application of Green Wave Analytical for additional registration in 
California. This Order is effective October 16, 2023.

Signing Authority

    This document of the Drug Enforcement Administration was signed on 
September 5, 2023, by Administrator Anne Milgram. That document with 
the original signature and date is maintained by DEA. For 
administrative purposes only, and in compliance with requirements of 
the Office of the Federal Register, the undersigned DEA Federal 
Register Liaison Officer has been authorized to sign and submit the 
document in electronic format for publication, as an official document 
of DEA. This administrative process in no way alters the legal effect 
of this document upon publication in the Federal Register.

Scott Brinks,
Federal Register Liaison Officer, Drug Enforcement Administration.
[FR Doc. 2023-19820 Filed 9-13-23; 8:45 am]
BILLING CODE 4410-09-P