Federal Register / Vol. 74, No. 9 / Wednesday, January 14, 2009 / Notices 2101 

$4.25 (25 cents per page reproduction 

cost) payable to the U.S. Treasury. 

Maureen M. Katz, 

Assistant Section Chief, Environmental 

Enforcement Section, Environment and 

Natural Resources Division. 

[FR Doc. E9–592 Filed 1–13–09; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Consent Decree 

Under the Clean Water Act 

Notice is hereby given that on 

December 31, 2008, a proposed consent 

decree (the ‘‘Decree’’) in United States 

and State of Oregon v. Pacific Northern 

Environmental Corp., dba Dedicated 

Fuels, Inc., Civil Action No. 3:08–cv– 

01513–HU, was lodged with the United 

States District Court for the District of 

Oregon. 

In this action the United States and 

State of Oregon sought civil penalties 

for Pacific Northern Environmental 

Corp.’s (‘‘PNE’’) violation of the Clean 

Water Act’s spill prohibition. PNE owns 

and operates a heating oil business 

located in North Bend, Oregon, as well 

as several gas stations in the area. On 

July 8, 2006, a tanker truck owned and 

operated by Dedicated carrying several 

hundred barrels of diesel fuel 

overturned while traveling on Highway 

38, near Milepost 17, just east of 

Scottsburg, Oregon. Approximately 197 

barrels of diesel fuel spilled. Diesel fuel 

that did not ignite in the ensuing fire 

migrated to the Umpqua River. PNE’s 

discharge to the Umpqua River violated 

the Clean Water Act and Oregon law. 

Under the consent decree, PNE will pay 

the United States and the State of 

Oregon civil penalties of $74,272 and 

$20,000, respectively. Additionally, 

PNE agrees to perform a supplemental 

environmental project (‘‘SEP’’), the cost 

of which shall be not less than $47,640. 

The Department of Justice will receive 

for a period of thirty (30) days from the 

date of this publication comments 

relating to the consent decree. 

Comments should be addressed to the 

Assistant Attorney General, 

Environment and Natural Resources 

Division, and either e-mailed to 

pubcomment-ees.enrd@usdoj.gov or 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611, and should refer to United 

States and State of Oregon v. Pacific 

Environmental Corp., dba Dedicated 

Fuels, Inc., Civil Action No. 3:08–cv– 

01513–HU, D.J. Ref. 90–5–1–1–09175. 

The consent decree may be examined 

at the Office of the United States 

Attorney, Mark O. Hatfield U.S. 

Courthouse, 1000 SW. Third Avenue, 

Suite 600, Portland, OR, 97204, and at 

U.S. EPA Region 10, 1200 Sixth Avenue, 

Seattle, WA, 98101. During the public 

comment period, the consent decree 

may also be examined on the following 

Department of Justice Web site: http:// 

www.usdoj.gov/enrd/ 

Consent_Decrees.html. A copy of the 

consent decree may also be obtained by 

mail from the Consent Decree Library, 

P.O. Box 7611, U.S. Department of 

Justice, Washington, DC 20044–7611, or 

by faxing or e-mailing a request to Tonia 

Fleetwood (tonia.fleetwood@usdoj.gov), 

fax no. (202) 514–0097, phone 

confirmation number (202) 514–1547. In 

requesting a copy from the Consent 

Decree Library, please enclose a check 

in the amount of $5.75 (25 cents per 

page reproduction cost) payable to the 

U.S. Treasury or, if by e-mail or fax, 

forward a check in that amount to the 

Consent Decree Library at the stated 

address. 

Robert E. Maher, Jr., 

Assistant Section Chief, Environmental 

Enforcement Section. 

[FR Doc. E9–579 Filed 1–13–09; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging Proposed Consent 

Decree 

In accordance with Departmental 

Policy, 28 CFR 50.7, notice is hereby 

given that a proposed Consent Decree in 

United States v. Savoy Senior Housing 

Corp., et al., No. 6:06–cv–31 (W.D. Va.), 

was lodged with the United States 

District Court for the Western District of 

Virginia, Lynchburg Division, on 

January 7, 2009. 

The proposed Consent Decree 

concerns a complaint filed by the 

United States against Savoy Senior 

Housing Corporation, Savoy Liberty 

Village, LLC, SDB Construction, Inc., 

Jacob A. Frydman, Best G.C., Inc. (a/k/ 

a Best Grading), and Acres of Virginia, 

Inc., for alleged violations of Section 

301(a) of the Clean Water Act (CWA), 33 

U.S.C. 1311(a). The proposed Consent 

Decree resolves all allegations against 

the defendants for discharging dredged 

or fill material, and/or controlling and 

directing such discharges, into waters of 

the United States at a 140-acre property 

located in Campbell County, Virginia, 

without a permit issued by the United 

States Army Corps of Engineers. The 

proposed Consent Decree also resolves 

all allegations against the defendants for 

discharging sediment in stormwater, 

and/or controlling and directing such 

discharges, into waters of the United 

States on or from the same property, 

both without a CWA permit and in 

violation of such a permit once it was 

obtained. 

The proposed Consent Decree 

requires Savoy Senior Housing 

Corporation, Savoy Liberty Village, LLC, 

SDB Construction, Inc., Best G.C., Inc., 

and Acres of Virginia, Inc., to pay to the 

United States a civil penalty. The 

proposed Consent Decree also requires 

these defendants to restore certain areas 

on and adjacent to the 140-acre site, and 

also to fund off-site mitigation through 

the purchase of credits from stream and 

wetland restoration banks in the region. 

The Department of Justice will accept 

written comments relating to the 

proposed Consent Decree for thirty (30) 

days from the date of publication of this 

Notice. Please address comments to 

Kenneth C. Amaditz, Trial Attorney, 

Environmental Defense Section, P.O. 

Box 23986, Washington, DC 20026– 

3986, and refer to United States v. Savoy 

Senior Housing Corp., et al., DJ # 90–5– 

1–1–17868. 

The proposed Consent Decree may be 

examined at the Clerk’s Office, United 

States District Court for the Western 

District of Virginia in Lynchburg, 

Virginia. In addition, the proposed 

Consent Decree may be viewed at 

http://www.usdoj.gov/enrd/ 

Consent_Decrees.html. 

Russell M. Young, 

Assistant Chief, Environmental Defense 

Section, Environment & Natural Resources 

Division. 

[FR Doc. E9–605 Filed 1–13–09; 8:45 am] 

BILLING CODE 4410–CW–P 

DEPARMENT OF JUSTICE 

Drug Enforcement Administration 

[Docket No. 05–16] 

Lyle E. Craker; Denial of Application 

On December 10, 2004, the Deputy 

Assistant Administrator, Office of 

Diversion Control, issued an Order to 

Show Cause to Lyle E. Craker, Ph.D. 

(Respondent), of Amherst, 

Massachusetts. The Show Cause Order 

proposed the denial of Respondent’s 

pending application for a registration as 

a bulk manufacturer of marijuana on 

two grounds. Show Cause Order at 1. 

First, the Show Cause Order alleged 

that Respondent’s ‘‘registration would 

not be consistent with the public 

interest as that term is used in 21 U.S.C. 

823(a).’’ Show Cause Order at 1. Second, 

the Show Cause Order alleged that the 

Respondent’s registration would be 

inconsistent ‘‘with the United States’ 


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2102 Federal Register / Vol. 74, No. 9 / Wednesday, January 14, 2009 / Notices 

1The National Center is an entity of the 

University of Mississippi which currently holds the 

contract with NIDA for growing marijuana to 

supply United States researchers. 

2The meaning of 21 U.S.C. 823(a)(1) and the 

competition issue are discussed in detail in part C 

of the discussion section of this final order. 

obligations under the Single Convention 

on Narcotic Drugs (Single Convention), 

March 30, 1961, 18 U.S.T. 1407.’’ Id. 

With respect to both of these 

contentions, noting that Respondent 

sought registration ‘‘to supply 

analytical, pre-clinical and clinical 

researchers with marijuana,’’ the Show 

Cause Order emphasized that the 

‘‘National Institute on Drug Abuse 

(NIDA), a component [of] the National 

Institutes of Health (NIH)’’ and ‘‘the 

United States Department of Health and 

Human Services [HHS], oversees the 

cultivation, production and distribution 

of research-grade marijuana on behalf of 

the United States Government.’’ Id. at 2. 

With respect to the contention that 

Respondent’s proposed registration is 

inconsistent with the public interest, the 

Show Cause Order stated that, under 21 

U.S.C. 823(a), ‘‘DEA must limit the 

number of producers of research-grade 

marijuana to that which can provide an 

adequate and uninterrupted supply 

under adequately competitive 

conditions.’’ Id. at 4. The Show Cause 

Order then stated: ‘‘For the past 36 

years, the University of Mississippi has 

provided such supply under the 

foregoing criteria, and there is no 

indication that this registrant will fail to 

do so throughout the duration of its 

current registration. While the 

University of Massachusetts is free to 

compete with the University of 

Mississippi to obtain the next NIDA 

contract to produce research-grade 

marijuana, there is no basis under 

Section 823(a) to add an additional 

producer.’’ Id. 

With respect to the contention of 

Respondent’s sponsor, the 

Multidisciplinary Association for 

Psychedelic Studies (MAPS), that 

marijuana provided by NIDA to 

researchers was both qualitatively and 

quantitatively inadequate, the Show 

Cause Order alleged that marijuana 

provided by NIDA was ‘‘of sufficient 

quantity and quality to meet’’ the needs 

of ‘‘legitimate and authorized 

research[ers].’’ Id. at 3. 

The Show Cause Order also noted 

MAPS’s contentions that ‘‘NIDA is 

limited to supplying marijuana for 

research purposes and cannot supply 

marijuana on a prescription basis,’’ that 

‘‘this limitation effectively prohibits a 

sponsor * * * from expending the 

necessary large amounts of funds to 

conduct drug development studies 

resulting in [a] marijuana prescription 

product,’’ and that granting Respondent 

a registration would resolve this 

problem. Id. In response to these 

contentions, the Show Cause Order 

alleged that to obtain approval for the 

marketing of a new drug under the 

Food, Drug, and Cosmetic Act (FDCA), 

the safety and effectiveness of the drug 

must be demonstrated through three 

phases of clinical trials, and that clinical 

trials involving marijuana had not 

progressed beyond the first phase (phase 

1). Id. at 2–4. 

The Show Cause Order further noted 

that the policy of HHS for approving the 

distribution of marijuana to researchers 

‘‘has not unduly limited clinical 

research with marijuana.’’ Id. at 5. More 

specifically, the Show Cause Order 

alleged that ‘‘[s]ince the year 2000, there 

have been or are eleven approved 

clinical trials utilizing smoked 

marijuana,’’ and that approved 

‘‘marijuana researchers administer 

marijuana to almost 500 human 

subjects.’’ Id. The Show Cause Order 

also alleged that since 2000, there were 

‘‘four approved pre-clinical trials in 

laboratory and animal modes.’’ Id. at 5. 

Relatedly, the Show Cause Order also 

asserted that ‘‘DEA has no statutory 

authority to overturn HHS’ policy.’’ Id. 

With respect to the contention that 

Respondent’s registration would be 

inconsistent with the United States’ 

obligations under the Single 

Convention, the Show Cause Order 

again referenced that HHS, through 

NIDA, oversees the cultivation, 

production and distribution of researchgrade marijuana on behalf of the United 

States Government and alleged that 

‘‘[i]n accordance with the Single 

Convention, the Federal Government [is 

required] to limit marijuana available 

for clinical research to [this] source.’’ Id. 

at 4. 

Respondent timely requested a 

hearing. The matter was assigned to 

Administrative Law Judge (ALJ) Mary 

Ellen Bittner, who conducted a hearing 

on August 22–26 and December 12–14 

and 16, 2005. At the hearing, the parties 

put on testimonial evidence and 

introduced documentary evidence. 

Following the hearing, the parties 

submitted briefs containing their 

proposed findings of fact, conclusions of 

law, and argument. 

On February 12, 2007, the ALJ issued 

her recommended decision. Therein, the 

ALJ rejected the Government’s 

contention that the Single Convention 

precluded Respondent’s registration. In 

so holding, the ALJ acknowledged that 

the Convention requires that its 

signatories maintain a ‘‘government 

monopoly on importing, exporting, 

wholesale trading, and maintaining 

stocks.’’ ALJ at 82. The ALJ reasoned, 

however, that ‘‘[i]t also appears, 

although it is not entirely clear, that the 

marijuana grown by the National 

Center 1 or by any other registrant for 

utilization in research would qualify as 

either ‘medicinal’ * * * or as ‘special 

stocks’ within the meaning of’’ the 

Convention. Id. at 82 (citing Single 

Convention, art. 1, para. (1)(o) & (x)). 

The ALJ then turned to whether 

Respondent had established that his 

registration would be consistent with 

the public interest when considering the 

six enumerated factors of 21 U.S.C. 

823(a). With respect to the first factor, 

21 U.S.C. 823(a)(1), the ALJ first recited 

the relevant text of this provision, 

which requires DEA to consider 

maintenance of effective controls 

against diversion by limiting the 

manufacturing of schedule I or II 

controlled substances ‘‘to a number of 

establishments which can produce an 

adequate and uninterrupted supply of 

these substances under adequately 

competitive conditions for legitimate 

medical, scientific, research, and 

industrial purposes.’’ ALJ at 82 (quoting 

§ 823(a)(1)). Noting that there is 

precedent for the agency to interpret 

this provision in two distinct ways 

regarding the issue of adequacy of 

competition (either by considering or 

not considering the issue),2 the ALJ 

stated that she would evaluate the issue 

in both ways. Id. at 83. 

Under the first approach of 

interpreting 21 U.S.C. 823(a)(1) to allow 

DEA to disregard the issue of adequacy 

of competition as long as the agency 

finds that the applicant for registration 

would provide effective controls against 

diversion, the ALJ concluded that ‘‘there 

is no evidence or contention that either 

Respondent or anyone working with 

him would be likely to divert the 

marijuana from the growing or drying or 

storage areas.’’ Id. 

The ALJ next rejected the 

Government’s contention that there was 

a risk of diversion because Mr. Rick 

Doblin, the Director of MAPS, would 

determine who was to receive the 

marijuana. In so holding, the ALJ 

reasoned that Mr. Doblin would not 

have physical possession of the 

marijuana and that Respondent would 

only send marijuana to researchers with 

DEA registrations and the requisite 

approval of HHS. ALJ at 84. The ALJ 

thus concluded that ‘‘the research 

project has procedures in place to 

adequately protect against diversion of 

the marijuana’’ and that ‘‘there is 

minimal risk of diversion.’’ Id. 


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3 In so finding, the ALJ rejected the Government’s 

contention that because the NIDA contract is open 

to competitive bidding, adequate competition 

exists. According to the ALJ, ‘‘[t]he question is not 

* * * whether the NIDA process addresses that 

agency’s needs, but whether marijuana is made 

available to all researchers who have a legitimate 

need for it in their research. As discussed above, I 

answer that question in the negative.’’ Id. at 85. 

As further support for her conclusion, the ALJ 

reasoned that ‘‘the NIDA contract requires the 

contractor to analyze’’ marijuana seized by law 

enforcement agencies, and that ‘‘a qualified 

cultivator may not be able to fulfill’’ this 

requirement.’’Id. 

4As related in the Notice, the FDA recommended 

that marijuana be maintained in schedule I of the 

CSA. The FDA based its finding on, inter alia, the 

extensive evidence that marijuana has a history and 

pattern of abuse, that it is ‘‘[t]he most frequently 

used illicit drug,’’ and that it ‘‘has a high potential 

for abuse.’’ 66 FR at 20047 & 20051. The FDA also 

found that ‘‘[t]here are not FDA-approved medical 

products,’’ ‘‘marijuana does not have a currently 

accepted medical use in treatment in the United 

States or a currently accepted medical use with 

severe restrictions,’’ and ‘‘that, even under medical 

supervision, marijuana has not been shown to have 

an acceptable level of safety.’’ 66 FR at 20052. 

5The legal definition of marijuana, as set forth in 

the CSA, 21 U.S.C. 802(16), is as follows: The term 

‘‘marihuana’’ means all parts of the plant Cannabis 

sativa L., whether growing or not; the seeds thereof; 

the resin extracted from any part of such plant; and 

every compound, manufacture, salt, derivative, 

mixture, or preparation of such plant, its seeds or 

resin. Such term does not include the mature stalks 

of such plant, fiber produced from such stalks, oil 

or cake made from the seeds of such plant, any 

other compound, manufacture, salt, derivative, 

mixture, or preparation of such mature stalks 

(except the resin extracted therefrom), fiber, oil, or 

cake, or the sterilized seed of such plant which is 

incapable of germination. 

6Cannabinoids are chemical compounds that are 

unique to the cannabis plant (not found in any 

other plant). Tr. 1140–41. 

7While there are numerous isomers of THC (all 

of which fall within the listing of 

‘‘Tetrahydrocannabinols’’ in schedule I of the CSA 

and many of which are found in the cannabis 

plant), delta-9-THC is the isomer that is recognized 

as the primary psychoactive component in 

marijuana and, for this reason the term ‘‘THC’’ is 

often used to refer to delta-9-THC. See 66 FR at 

20045; Tr. 1146–47. 

Under the second approach of 

interpreting 21 U.S.C. 823(a)(1) to 

require DEA to consider whether 

competition is inadequate, the ALJ first 

turned to whether the supply of 

marijuana currently available to 

researchers through HHS is adequate. In 

this regard, the ALJ found that while 

‘‘there have been some problems with 

the marijuana that the National Center 

produces, * * * a preponderance of the 

evidence establishes that the quality is 

generally adequate.’’ Id. The ALJ further 

found, however, that ‘‘NIDA’s system 

for evaluating requests for marijuana for 

research has resulted in some 

researchers who hold DEA registrations 

and requisite approval from [HHS] being 

unable to conduct their research 

because NIDA has refused to provide 

them with marijuana.’’ Id. The ALJ thus 

concluded ‘‘that the existing supply of 

marijuana is not adequate.’’ Id. The ALJ 

also concluded that competition is 

inadequate within the meaning of 21 

U.S.C. 823(a)(1). Id. 3 The ALJ thus held 

that the first public interest factor, 21 

U.S.C. 823(a)(1), supported granting 

Respondent’s application. 

Under the second public interest 

factor, 21 U.S.C. 823(a)(2), the ALJ 

found that there was ‘‘neither evidence 

nor contention that Respondent has not 

complied with applicable laws’’ and 

thus concluded that this factor 

supported the granting of Respondent’s 

application. See id. 

Under the third public interest factor, 

21 U.S.C. 823(a)(3), as to whether 

granting Respondent’s application 

would promote technical advances in 

the art of manufacturing controlled 

substances, the ALJ found that 

Respondent has ‘‘considerable 

experience in cultivating medicinal 

plants, which might promote technical 

advances in the cultivation of marijuana 

or developing new medications from it.’’ 

ALJ at 85–86. The ALJ nonetheless 

found that ‘‘there is not sufficient 

evidence in the record on which to base 

a finding as to whether granting 

Respondent’s registration would 

promote technical advances.’’ Id. at 86. 

Under the fourth public interest 

factor, 21 U.S.C. 823(a)(4), the ALJ 

found that it was ‘‘undisputed that 

Respondent has never been convicted of 

any violation of any law pertaining to 

controlled substances’’ and therefore 

this factor weighed in favor of granting 

the application. Id. 

Under the fifth public interest factor, 

21 U.S.C. 823(a)(5), the ALJ considered 

Respondent’s ‘‘past experience in 

manufacturing controlled substances 

and the existence of effective controls 

against diversion.’’ Id. The ALJ 

acknowledged that ‘‘Respondent has no 

experience in manufacturing controlled 

substances.’’ Id. Noting that Respondent 

‘‘does have experience in growing 

medicinal plants’’ and that ‘‘the risk of 

diversion is minimal,’’ the ALJ 

concluded that this factor supported 

granted the application. Id. 

Finally, under the sixth public 

interest factor, 21 U.S.C. 823(a)(6), in 

analyzing such other factors as are 

relevant to and consistent with public 

health and safety, the ALJ rejected the 

Government’s contention that granting 

the application would ‘‘circumvent[]’’ 

HHS’s policy with respect to the 

provision of marijuana to researchers. 

Id. Reasoning that ‘‘the NIH Guidance 

by its own terms applies to marijuana 

that [HHS] makes available, [and] not 

[to] marijuana that might be available 

from some other legitimate source[,]’’ 

the ALJ concluded that ‘‘the NIH 

Guidance is not a factor in determining 

whether Respondent’s application 

should be granted.’’ Id. The ALJ thus 

concluded that granting Respondent’s 

application ‘‘would be in the public 

interest,’’ and recommended that I grant 

his application. Id. at 87. 

The Government excepted to the 

ALJ’s decision on numerous grounds, 

and Respondent filed a response to the 

Government’s exceptions. Thereafter, 

the record was forwarded to me for final 

agency action. 

Having considered the record as a 

whole, I hereby issue this Decision and 

Final Order. For reasons explained more 

fully below, I reject the ALJ’s legal 

conclusion ‘‘that the Single Convention 

does not preclude registering 

Respondent.’’ Id. at 82. Moreover, I 

reject the ALJ’s finding that the 

proposed registration is consistent with 

the public interest when considering the 

six factors enumerated in 21 U.S.C. 

823(a). Id. at 82–86. I therefore reject the 

ALJ’s recommendation that the 

application be granted. See id. at 87. 

Findings 

Under Federal Law, marijuana and 

tetrahydrocannabinols (THC) are 

schedule I controlled substances. 21 

U.S.C. 812(c), Schedule I(c)(10) & (17). 

Congress placed marijuana and THC in 

schedule I because the substances have 

‘‘a high potential for abuse,’’ ‘‘no current 

accepted medical use in treatment in the 

United States,’’ and ‘‘a lack of accepted 

safety for use * * * under medical 

supervision.’’ 21 U.S.C. 812(b)(1). See 

also 66 FR 20038 (2001) (denying 

petition to reschedule marijuana from 

schedule I), petition for review 

dismissed, Gettman v. DEA, 290 F.3d 

430 (D.C. Cir. 2002).4

Marijuana is cultivated from the 

cannabis plant, which is recognized as 

‘‘a very adaptive plant [whose] 

characteristics are even more variable 

than most plants.’’ GX 25, at 7. 

Marijuana, which consists primarily of 

the dried flowering tops and leaves of 

the cannabis plant,5 ‘‘is a variable and 

complex mixture of biologically active 

compounds.’’ Id. As of 2001, 483 

different chemical constituents had 

been identified in marijuana, including 

approximately 66 cannabinoids.6 66 FR 

at 20041; Tr. 1142, 1147. ‘‘THC7 is the 

main psychoactive cannabinoid in 

marijuana’’; the plant, however, also 

contains ‘‘[v]arying proportions of other 

cannabinoids, mainly cannabidiol (CBD) 

and cannabinol (CBN),’’ which 

‘‘sometimes [exist] in quantities that 

might modify the pharmacology of THC 

or cause effects of their own.’’ Id. at 7– 

8. 


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8 Initially, the National Center obtained a 

researcher’s registration; it now also holds a 

manufacturer’s registration. 

9These batches range from approximately 12 to 

15 kg in size. 

10As of the date of the hearing, more than 

920,000 marijuana cigarettes of various THC 

concentrations including placebo had been 

manufactured pursuant to the NIDA contracts 

between 1974 and 2003. GX 27. 

11 11 As Dr. ElSohly explained, he has grown 

numerous strains of marijuana from seeds that have 

been obtained from a variety of countries and has 

used them to do ‘‘genetic selection to have genetic 

material of high potency.’’ Tr. 1255. 

12These include that the researcher have the 

appropriate DEA registration and FDA/IND 

approvals, provide assurance that the marijuana 

‘‘will not be resold’’ and ‘‘will be used only for 

research or patient purposes,’’ that the use of the 

marijuana will adhere to the appropriate Safety 

Standards for research,’’ and that the researcher 

agree ‘‘to comply with all Federal, State and Local 

Safety requirements for use of the materials.’’ See 

GX 13, at 8. 

13 Independent of its contract with NIDA, the 

National Center holds an additional registration to 

manufacture marijuana and THC. GXs 75 & 78. The 

National Center was granted this registration under 

the terms of a Memorandum of Agreement (MOA) 

entered into with DEA in 1999. GX 78. As set forth 

in the MOA, the purpose of the registration was ‘‘to 

allow the Center to develop a new product 

formulation for effecting delivery of [THC] in a 

pharmaceutically acceptable dosage form 

suppository * * * and to provide crude THC 

extract to a DEA-registered manufacturer of THC for 

further purification.’’ Id. at 2. The MOA further 

stated that, under the terms thereof, the Center 

would ‘‘manufacture marijuana for the purpose of 

extracting THC therefrom.’’ Id. Subsequently, the 

Center submitted a new application for a 

registration to bulk manufacture marijuana and 

THC ‘‘to prepare marihuana extract for further 

purification into bulk active [THC] for use in 

launching FDA-approved pharmaceutical 

products.’’ 70 FR 47232 (2005). DEA has not yet 

issued a final order as to this application. (DEA 

publishes in the Federal Register all final orders on 

applications for registration to bulk manufacture 

schedule I and II controlled substances.) 

The MOA further provided that ‘‘[i]n accordance 

with articles 23 and 28 of the Single Convention on 

Narcotic Drugs * * * private trade in ‘cannabis’ is 

strictly prohibited. Therefore, the Center shall not 

distribute any quantity of marijuana to any person 

other than an authorized DEA employee.’’ GX 78, 

at 2. Continuing, the MOA explained that ‘‘[t]he 

Single Convention does not prohibit private trade 

in ‘cannabis preparations,’ ’’ and noted that this 

term, ‘‘within the meaning of the Single 

Convention, is a mixture, solid or liquid containing 

cannabis, cannabis resin, or extracts or tinctures of 

cannabis.’’ Id. Because ‘‘[t]he THC that the Center 

will extract from marijuana [is] considered such a 

‘cannabis preparation[,]’ * * * the Center may, in 

accordance with the Single Convention, distribute 

the crude THC extract to private entities’’ provided 

the Center otherwise complies with the CSA and 

DEA regulations. Id. at 2–3. The MOA also set forth 

a detailed series of controls to maintain 

accountability of the marijuana from acquisition of 

the seeds through the extraction of THC from the 

harvested material. Id. at 3–7. 

14To similar effect, an ad hoc group of experts, 

who were selected by NIH and convened in 1997 

as part of a workshop to assess the potential 

medical uses of marijuana, issued a report to the 

Director of NIH, which noted: 

As with any smoked drug (e.g., nicotine or 

cocaine), characterizing the pharmacokinetics of 

THC and other cannabinoids from smoked 

marijuana is a challenge. A person’s smoking 

behavior during an experiment is difficult for a 

researcher to control. People differ. Smoking 

behavior is not easily quantified. An experienced 

marijuana smoker can titrate and regulate doses to 

obtain the desired acute psychological effects and 

The National Center and NIDA’s Drug 

Supply Program 

Since 1968, the National Center for 

Natural Products Research (National 

Center), a division of the University of 

Mississippi, has held a contract with the 

Federal Government to grow marijuana 

for research purposes and held the 

requisite registrations under the 

Controlled Substances Act (CSA), as 

well as the federal law that preceded the 

CSA, authorizing the University to 

conduct such activity.8 Tr. 1152–53, 

1350–51. See also 21 CFR 1301.13. The 

contract, which is open for competitive 

bidding at periodic intervals, see GX 15, 

is administered by NIDA, a component 

of NIH (which is part of HHS), pursuant 

to its Drug Supply Program. RX 1, at 

231. Since 1999, the term of the contract 

has been five years. See GXs 13 & 15; 

Tr. 1156. 

Under the NIDA contract, the 

National Center ‘‘[g]row[s], harvest[s], 

store[s], ship[s] and analyze[s] cannabis 

of different varieties, as required.’’ GX 

13, at 6. The contract requires that the 

National Center ‘‘shall serve as NIDA’s 

cannabis drug repository,’’ as well as 

‘‘develop and produce standardized 

marijuana cigarettes within a range of 

specified THC content, and placebos for 

use in pre-clinical and clinical research 

programs,’’ and maintain minimum 

stocks of both bulk marijuana and 

marijuana cigarettes of various THC 

contents, and store them in a DEA 

approved facility. Id. at 6–7. 

Marijuana potency is primarily based 

on the concentration (percentage by 

weight) of THC in the plant material. Tr. 

1148–49. As of August 25, 2005, the 

National Center held on behalf of NIDA 

approximately 1055 kilograms (kg) of 

marijuana with THC contents ranging 

up to 12.26 percent. See RX 53. This 

inventory includes six batches of 

marijuana with THC contents ranging 

from 9.02 to 9.89 percent,9 one batch (of 

nearly 19 kg) with a THC content of 10 

percent, nearly 25 kg with a THC 

content of 11.34 percent, and 

approximately 27 kg with a THC content 

of 12.26 percent.10 See id. In his 

testimony, Mahmoud ElSohly, Ph.D., 

who is the Principal Investigator under 

the NIDA contract, and who has 

overseen the National Center’s work 

with marijuana since 1980, stated that 

the Center is capable of producing 

marijuana with a THC content of 20 

percent or more.11 Tr. 1130–31, 1152, 

1203, 1254–55. 

The contract also requires the 

National Center to ‘‘ship to research 

investigators as authorized by the 

[NIDA] Project Officer upon receipt of a 

shipment order.’’ GX 13, at 7. While the 

NIDA ‘‘Project Officer may preauthorize any normal recurring requests 

that the contractor will then fill once it 

has received’’ various assurances,12 the 

contract further states that ‘‘[a]ll other 

requests should be submitted to the 

NIDA Project Officer for approval.’’ Id. 

at 8. Moreover, ‘‘[i]f there is a reason to 

question a particular request, the 

Contractor shall inform the NIDA 

Project Officer who will make a final 

decision on providing the material and 

quantity requested.’’ Id. As these 

provisions make clear, the National 

Center has no authority to distribute any 

of the marijuana it produces pursuant to 

the NIDA contract without NIDA’s 

approval.13

In 1997, the White House Office of 

National Drug Control Policy asked the 

Institute of Medicine (IOM), a 

component of the National Academy of 

Sciences, to conduct a review of the 

scientific evidence regarding the 

potential health benefits and risks of 

marijuana and its constituent 

cannabinoids. RX 1, at 7. In 1999, the 

IOM published its report. The IOM 

found, among other things, that 

‘‘[d]efined substances, such as purified 

cannabinoid compounds, are preferable 

to plant products, which are of variable 

and uncertain composition. Use of 

defined cannabinoids permits a more 

precise evaluation of their effects, 

whether in combination or alone.’’ RX 1, 

at 22. With respect to this issue, the 

IOM reached the following conclusion: 

‘‘Scientific data indicate the potential 

therapeutic value of cannabinoid drugs, 

primarily THC, for pain relief, control of 

nausea and vomiting, and appetite 

stimulation; smoked marijuana, 

however, is a crude THC delivery 

system that also delivers harmful 

substances.’’ Id. The report further 

stated: 

The therapeutic effects of cannabinoids are 

most well established for THC, which is the 

primary psychoactive ingredient of 

marijuana. But it does not follow from this 

that smoking marijuana is good medicine. 

Although marijuana smoke delivers THC 

and other cannabinoids to the body, it also 

delivers harmful substances, including most 

of those found in tobacco smoke. In addition, 

plants contain a variable mixture of 

biologically active compounds and cannot be 

expected to provide a precisely defined drug 

effect. For those reasons there is little future 

in smoked marijuana as a medically 

approved medication. If there is any future in 

cannabinoid drugs, it lies with agents of more 

certain, not less certain, composition.’’ 14


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to avoid overdose and/or minimize undesired 

effects. Each puff delivers a discrete dose of THC 

to the body. Puff and inhalation volume changes 

with phase of smoking, tending to be highest at the 

beginning and lowest at the end of smoking a 

cigarette. * * * During smoking, as the cigarette 

length shortens, the concentration of THC in the 

remaining marijuana increases; thus, each 

successive puff contains an increasing 

concentration of THC. 

One consequence of this complicated process is 

that an experienced marijuana smoker can regulate 

almost on a puff-by-puff basis the dose of THC 

delivered to lungs and thence to brain. A less 

experienced smoker is more likely to overdose or 

underdose. Thus a marijuana researcher attempting 

to control or specify dose in a pharmacologic 

experiment with smoked marijuana has only partial 

control over the drug dose actually delivered. 

See GX 25, at 9–10 (Workshop on the Medical 

Utility of Marijuana). 

15 Dr. Gust initially testified that someone from 

FDA sits on the committee but later stated that he 

was not exactly sure if this was so. Tr. 1712. 

16The California research studies were conducted 

pursuant to a law enacted by California in 1999 

known as the Marijuana Research Act of 1999. Cal. 

Continued 

Id. at 195–96. See also GX 53 (letter 

from Alice P. Mead, GW 

Pharmaceuticals, P.L.C., to Christine V. 

Beato, Acting Asst. Sec. for Health, HHS 

(Apr. 12, 2005)) (‘‘[H]erbal cannabis 

should comprise only the starting 

material from which a bona fide 

medical product is ultimately derived. 

* * * [S]tandardizing herbal starting 

material represents only the first of 

many steps necessary to create a modern 

medicine that is safe and effective for 

use in specific medical conditions. 

* * * [A] final medical product * * * 

must also be delivered in a dosage form 

that is consistent in composition and 

that allows the patient to obtain an 

identifiable and reliable amount of 

medication.’’) (emphasis in original). 

Accordingly, the IOM recommended 

that clinical trials using cannabinoid 

drugs should be conducted with ‘‘the 

goal of developing rapid-onset, reliable, 

and safe delivery systems.’’ Id. at 197. 

The IOM also advised that clinical trials 

involving smoked marijuana ‘‘should 

involve only short-term marijuana use 

(less than six months), should be 

conducted in patients with conditions 

for which there is a reasonable 

expectation of efficacy, should be 

approved by institutional review boards, 

and should collect data about efficacy.’’ 

Id. 

Also in 1999, due in part to an 

increased interest in marijuana research 

and taking into account the IOM report, 

HHS decided to change the procedures 

by which it would supply marijuana to 

researchers. Tr. 1632–33; GX 24. The 

new procedures were announced in a 

document released by NIH on May 21, 

1999. GX 24, at 1. In the announcement, 

‘‘HHS recognize[d] the need for 

objective evaluations of the potential 

merits of cannabinoids for medical 

uses[,]’’ and that ‘‘[i]f a positive benefit 

is found, * * * the need to stimulate 

development of alternative, safer dosage 

forms.’’ Id. at 2. Toward this end, NIH 

explained that the new procedures were 

designed to increase the availability of 

marijuana for research purposes by, 

among other things, making such 

marijuana ‘‘available on a costreimbursable basis.’’ Id. This new 

procedure allowed researchers who 

were privately funded to obtain 

marijuana from HHS by reimbursing the 

NIDA contractor for the cost of the 

marijuana. Tr. 1633; see also GX 31, at 

3. This was a departure from the prior 

practice (pre-1999), whereby HHS only 

made marijuana available to persons 

who received NIH funding. Id. The new 

procedures implemented by HHS in 

1999 remain in effect today. Tr. 1629. 

HHS further stated in 1999 that it 

intended through the new procedures 

‘‘to make available a sufficient amount 

of research-grade marijuana to support 

those studies that are the most likely to 

yield usable, essential data.’’ GX 24, at 

2. With respect to those researchers who 

do not have NIH funding, HHS 

explained that ‘‘the scientific merits of 

each protocol will be evaluated through 

a Public Health Service 

interdisciplinary review process [which] 

will take into consideration a number of 

factors, including the scientific quality 

of the proposed study, the quality of the 

organization’s peer-review process, and 

the objective of the proposed research.’’ 

Id. 

HHS then identified the criteria it 

would apply in evaluating requests for 

marijuana: 

The extent to which the protocol 

incorporates the elements of good clinical 

and laboratory research; 

The extent to which the protocol describes 

an adequate and well-controlled clinical 

study to evaluate the safety and effectiveness 

of marijuana and its constituent 

cannabinoids in the treatment of a serious or 

life threatening condition; 

The extent to which the protocol describes 

an adequate and well-controlled clinical 

study to evaluate the safety and effectiveness 

of marijuana and its constituent 

cannabinoids for a use for which there are no 

alternative therapies; 

The extent to which the protocol describes 

a biopharmaceutical study designed to 

support the development of a dosage form 

alternative to smoking; [and] 

The extent to which the protocol describes 

high-quality research designed to address 

basic, unanswered scientific questions about 

the effects of marijuana and its constituent 

cannabinoids or about the safety or toxicity 

of smoked marijuana. 

Id. at 3. 

HHS further noted that ‘‘[a] clinical 

study involving marijuana should 

include certain core elements,’’ and that 

‘‘[a] study that incorporates the [1997] 

NIH Workshop recommendations will 

be expected to yield useful data and 

therefore, will be more likely to receive 

marijuana under the HHS program.’’ Id. 

Finally, HHS explained that the 

‘‘proposed protocols must be 

determined to be acceptable under 

FDA’s standards for authorizing the 

clinical study of investigational new 

drugs.’’ Id. Relatedly, HHS stated that 

‘‘although FDA’s review of Phase 1 

submissions will focus on assessing the 

safety of Phase 1 investigations, FDA’s 

review of Phases 2 & 3 submissions will 

also include an assessment of the 

scientific quality of the clinical 

investigations and the likelihood that 

the investigations will yield data 

capable of meeting statutory standards 

for marketing approval.’’ Id. HHS 

further made clear that if a protocol is 

approved, ‘‘NIDA will provide the 

researcher with authorization to 

reference NIDA’s marijuana Drug Master 

File.’’ Id. at 4. 

At the administrative hearing in this 

case, Steven Gust, Ph.D., Special 

Assistant to the Director of NIDA, 

explained that, in addition to seeking to 

facilitate research into the possible 

medical utility of marijuana, the new 

procedures implemented by HHS in 

1999 were intended ‘‘to make the 

process more standardized, and to 

* * * provide some expertise that did 

not really exist at NIDA in terms of 

reviewing applications that involved 

* * * the use of marijuana * * * for 

treatment of diseases.’’ Tr. 1632–33. 

Accordingly, HHS ‘‘established a 

separate peer review process that * * * 

moved the review into the Public Health 

Service [a component of HHS] * * * 

where additional expertise from other 

NIH Institutes and other Federal 

agencies’’ could be utilized in reviewing 

the scientific merit of the applications. 

Id. at 1633–34. Dr. Gust further 

explained that the members of the 

review committee are drawn from the 

various specialty institutes of NIH, and 

the Substance Abuse and Mental Health 

Services Administration (SAMHSA). Id. 

at 1692; 1713–15.15 Dr. Gust also 

testified that the ‘‘scientific bar has been 

set very low, [so] that any project that 

has scientific merit is approved,’’ and 

that ‘‘anything that gets approved gets 

NIDA marijuana.’’ Id. at 1700–01. As of 

April 2004, HHS had approved at least 

seventeen pre-clinical or clinical studies 

of marijuana, which were sponsored by 

the California Center for Medical 

Cannabis Research (CMCR).16 GX 31, at 


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Health & Safety Code § 11362.9. This state law 

established the ‘‘California Marijuana Research 

Program’’ to develop and conduct studies on the 

potential medical utility of marijuana. Id. (The 

program is also referred to as the ‘‘Center for 

Medicinal Cannabis Research’’ (CMCR). Tr. 396.) 

The state legislature appropriated a total of $9 

million for the marijuana research studies. Tr. 397. 

The state law was enacted following the passage of 

Proposition 215, a ballot initiative otherwise known 

as the Compassionate Use Act of 1996. Tr. 395–96; 

see also United States v. Oakland Cannabis Buyers’ 

Cooperative (‘‘OCBC’’), 532 U.S. 483, 486 (2001). 

17On his application for registration (GX 1), 

Respondent incorrectly checked the box for ‘‘dosage 

form’’ manufacturing when, in fact (based on the 

activity in which he proposes to engage), he is 

seeking to become registered as a ‘‘bulk’’ 

manufacturer. In written questions DEA submitted 

to Respondent as a follow-up to the application, 

DEA properly characterized the activity as ‘‘bulk 

manufacture,’’ and Respondent, in his written 

answers to these questions, gave no indication that 

he disagreed. See GX 3. Also, in his testimony at 

the hearing, Respondent acknowledged that his 

plan was to send marijuana ‘‘in bulk’’ to others, 

who would roll it into cigarettes. Tr. at 243. 

Respondent also testified that MAPS President Rick 

Doblin ‘‘assisted in the response to the bulk 

manufacturer’s questions.’’ Tr. 352 (emphasis 

added). Cf. 32 CFR 1300.02(b)(32) (defining ‘‘drug 

product’’ as ‘‘an active ingredient in dosage form 

that has been approved or otherwise may be 

lawfully marketed under the Food, Drug, and 

Cosmetic Act for distribution in the United States’’); 

21 CFR 1301.72(a) & 1304.22(a) (listing ‘‘bulk 

materials awaiting further processing’’ separately 

from ‘‘finished products’’). 

18As set forth in 21 CFR 1301.15: ‘‘The 

Administrator may require an applicant to submit 

such documents or written statements of fact 

relevant to the application as he/she deems 

necessary to determine whether the application 

should be granted.’’ 

19Respondent further testified that it was his 

intention to simply send bulk marijuana to 

researchers who would then roll their own 

cigarettes. Tr. at 243. 

20When asked during the hearing about the title 

of his organization (Multidisciplinary Association 

for Psychedelic Studies) and, in particular the term 

‘‘Psychedelic,’’ Mr. Doblin explained, in part, ‘‘it’s 

about tools and procedures that bring to the surface 

people’s subconscious and unconscious and, you 

know, deeper emotions.’’ Tr. 474. 

21 In a recent Supreme Court decision, Justice 

Ginsberg, in a dissenting opinion, summarized the 

process by which FDA approves new drugs for 

marketing as follows: 

The process for approving a new drug begins with 

preclinical laboratory and animal testing. The 

sponsor of the new drug then submits an 

investigational new drug application seeking FDA 

approval to test the drug on humans. See 21 U.S.C. 

355(i); 21 CFR 312.1 et seq. (2007). Clinical trials 

generally proceed in three phases involving 

successively larger groups of patients: 20 to 80 

subjects in phase I; no more than several hundred 

subjects in phase II; and several hundred to several 

thousand subjects in phase III. 21 CFR 312.21. After 

completing the clinical trials, the sponsor files a 

new drug application containing, inter alia, ‘‘full 

reports of investigations’’ showing whether the 

‘‘drug is safe for use and * * * effective’’; the 

drug’s composition; a description of the drug’s 

manufacturing, processing, and packaging; and the 

proposed labeling for the drug. 21 U.S.C. 355(b)(1). 

Riegel v. Medtronic, Inc., 128 S.Ct. 999, 1018–19 

n.15 (2008) (Ginsburg, J., dissenting). 

22While Respondent produced evidence 

establishing that the $800–880 million costs of 

bringing a new drug to market includes research 

and development costs incurred for drugs that are 

not approved, as well as opportunity costs (the cost 

of investing in research rather than something else), 

see Tr. 161, 734–36, Respondent has not shown a 

single instance in which an entity has obtained 

FDA approval of a drug through the NDA process 

for the cost range which Mr. Doblin claimed would 

be sufficient to obtain approval of plant-form 

marijuana. 

Moreover, the IOM Report states that the average 

cost of a Supplemental New Drug Application 

(SNDA), which is used when a company seeks to 

obtain FDA approval to market a drug (which has 

already gone through the three phases of clinical 

3. According to one witness who 

testified on behalf of Respondent, all of 

the CMCR-sponsored researchers who 

applied to NIDA for marijuana did in 

fact receive marijuana from NIDA. Tr. 

694–95. 

Respondent’s Application and 

Contentions 

Respondent is a Professor in the 

Department of Plant, Soil and Insect 

Sciences at the University of 

Massachusetts Amherst. Tr. 13. On June 

28, 2001, Respondent submitted an 

application to bulk manufacture the 

schedule I controlled substances 

marijuana and tetrahydrocannabinols.17

GXs 1 & 3; 21 CFR 1308.11(d). 

Respondent’s application is sponsored 

by the Multidisciplinary Associations 

for Psychedelic Studies (MAPS). GX 3, 

at 1. 

Because Respondent seeks a 

registration to manufacture a schedule I 

controlled substance, DEA required that 

he complete a questionnaire.18 In 

response to the question regarding the 

purpose for which he sought 

registration, Respondent stated that 

‘‘[t]he plant material will be grown for 

federally-approved uses only, including 

analytical, pre-clinical, and clinical 

research,’’ and that ‘‘no material is 

intended for illegal use or for medical 

marijuana patients whose use may be 

legal under state, but not federal law.’’ 

GX 3, at 1.19

Respondent added that ‘‘[t]he 

production costs * * * would be 

underwritten by a grant’’ from MAPS. 

Id. According to Respondent, ‘‘MAPS is 

seeking to develop the marijuana plant 

into an FDA-approved prescription 

medicine,’’ and that ‘‘[t]he growth of 

plants at [UMASS] is a necessary step 

for supplying quality marijuana for use 

in MAPS’ drug development process.’’ 

Id. Respondent also advised that 

‘‘MAPS will sponsor research at other 

institutions using smoked marijuana 

and marijuana delivered through a 

vaporizer device that heats, but does not 

burn the plant material, thus reducing 

the products of combustion normally 

found in smoked marijuana.’’ Id. 

Respondent further stated that his 

‘‘[c]ustomers would include both 

MAPS-sponsored research and research 

sponsored by other organizations.’’ Id. at 

3. Relatedly, Respondent explained that 

‘‘[r]esearchers conducting MAPS 

sponsored research would receive 

supplies of the plant material free, while 

other researchers would either receive 

the marijuana free or through a donation 

to MAPS.’’ Id. at 1. See also Tr. 225 (‘‘I 

may very well be approached by other 

people with approved studies who need 

a source also.’’). 

At the hearing, Mr. Rick Doblin, the 

President of MAPS,20 also testified 

regarding the purpose of Respondent’s 

application. Mr. Doblin, who admitted 

that he engages in recreational use of 

marijuana on a weekly basis, explained 

that ‘‘[t]he reason we need a supply 

from Dr. Craker is that we are engaged 

in trying to make marijuana into an 

FDA-approved prescription medicine, 

and * * * we need to establish a drug 

master file for a particular product, and 

* * * we need to conduct research with 

that product, and have that product 

available to us for potential marketing 

should we get FDA approval.’’ Tr. 603, 

718–19. Mr. Doblin testified as to his 

‘‘belie[f] that smoked marijuana or 

vaporized marijuana in plant form will 

successfully compete with marijuana 

extracts on price.’’ Id. at 605. He also 

testified as to his belief that the 

‘‘efficacy and safety’’ of vaporized plantform marijuana ‘‘will be similar’’ to 

drugs containing cannabinoid extracts 

and that ‘‘the efficacy will be similar 

and safety slightly different with 

smoked’’ marijuana than with drugs 

containing cannabinoid extracts. Id. 

Mr. Doblin further testified that he 

‘‘disagree[d]’’ with the Institute of 

Medicine’s conclusion that defined and 

purified cannabinoid compounds ‘‘are 

preferable to plant products, which are 

of variable and uncertain composition.’’ 

Id. at 654. Mr. Doblin also testified that 

‘‘what we’re trying to do is get the 

Public Health Service and NIDA out of 

the picture; they’re only in the picture 

just for marijuana only because they 

have a monopoly. And that is what is 

so obstructing the system.’’ Id. at 666. 

Finally, Mr. Doblin testified that 

MAPS would only need between $5 to 

$10 million ‘‘to make marijuana into a 

medicine’’ through the various stages of 

the FDA new drug approval (NDA) 

process.21 Id. at 701; see also id. at 703. 

In his testimony, Mr. Doblin did not, 

however, identify a single instance in 

which an entity (whether for-profit or 

nonprofit) had taken a drug—let alone a 

botanical substance with known safety 

issues, See, e.g., GX 43, at 9—through 

the multi-faceted NDA process for a 

similar cost.22 Moreover, while Mr. 


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trials and been approved for marketing) for a new 

indication, was $10 to 40 million. RX 1, at 214. It 

should be noted, however, that in taking a drug 

through the three phases, its sponsor will have 

obtained extensive data regarding the drug’s safety 

including ‘‘adverse effects of the drug [and] 

clinically significant drug/drug interactions.’’ 21 

CFR 314.50(d)(5)(vi). 

In support of his assertion that MAPS could 

obtain FDA approval for only $5 to $10 million, Mr. 

Doblin testified that marijuana is different than 

other drugs that go through the FDA approval 

process. Mr. Doblin based this assertion on his 

contentions that: marijuana has been used by ‘‘tens 

of millions of people’’ while others drugs going 

though the NDA process are only used by a few 

thousand; there is ‘‘an enormous body of evidence 

about [marijuana’s] safety * * * that we don’t need 

to replicate;’’ and sufficient data to satisfy the FDA 

as to marijuana’s safety and efficacy could be 

obtained by testing only 500 to 600 people. Id. at 

737–38. 

The FDA’s guidance document for botanical drug 

products makes plain that ‘‘[a] botanical drug 

product that is not generally recognized as safe and 

effective for its therapeutic claims is considered a 

new drug under § 201(p) of the [Food, Drug, and 

Cosmetic] Act,[]’’ and that ‘‘any person wishing to 

market a botanical drug product that is a new drug 

is required to obtain FDA approval of an NDA 

* * * for that product.’’ GX 92A, at 7. Moreover, 

‘‘an NDA must contain substantial evidence of 

effectiveness derived from adequate and wellcontrolled clinical studies, evidence of safety, and 

adequate CMC [chemistry, manufacturing, and 

controls] information.’’ Id. See also GX 92A, at 27– 

38 (specifying the information that must be 

provided to FDA for phase 3 clinical studies of a 

botanical product to meet the requirements of the 

FDA regulations governing the contents of INDs). 

Finally, with respect to the nonclinical safety 

assessment required to support phase 3 clinical 

trials, the FDA guidance states: 

To support safety for expanded clinical studies or 

to support marketing approval of a botanical drug 

product, toxicity data from standard toxicology 

studies in animals may be needed * * * . A 

botanical product submitted for marketing approval 

as a drug will be treated like any other new drug 

under development. Safety data from previous 

clinical trials conducted in foreign countries will be 

considered in determining the need for nonclinical 

studies. However, previous human experience may 

be insufficient to demonstrate the safety of a 

botanical product, especially when it is indicated 

for chronic therapy. Systematic toxicological 

evaluations could be needed to supplement 

available knowledge on the general toxicity, 

teratogenicity, mutagenecity, and carcinogenicity of 

the final drug product. 

Id. at 34. While Mr. Doblin asserted that MAPS 

would not ‘‘need to replicate all those studies about 

the genetics, * * * the effect on reproduction, the 

effect in all sorts of bodily systems,’’ Tr. 737, he did 

not identify any specific studies performed in other 

countries that establish the safety of marijuana for 

testing in phase 3 clinical studies. While millions 

of people have undoubtedly used marijuana, few 

have done so subject to the scientific rigor of a 

controlled clinical trial. Nor did Respondent 

produce any credible evidence establishing that the 

various types of animal studies which FDA usually 

requires to support phase 3 clinical trials would not 

have to be performed. GX 92A, at 35–37. 

23As indicated above, based on the record, no 

clinical trials involving marijuana have advanced 

beyond phase 1. Moreover, each sponsor must 

submit to FDA his/her own IND to be authorized 

to conduct clinical investigation with a new drug 

(such as marijuana). See 21 CFR 312.20, 312.23. 

Again, given the vagaries of Mr. Doblin’s testimony, 

it cannot be determined whether there is sufficient 

existing preclinical laboratory and animal studies 

data to support a submission of an IND for whatever 

proposed indications that Mr. Doblin has in mind 

for his envisioned FDA-approved marijuana 

medicine. But even assuming, arguendo, that MAPS 

could successfully submit an IND based on existing 

data, it would still have to proceed through 

extensive clinical trials (see 21 CFR 312.21), and 

then—assuming that such trials are fully successful 

at demonstrating the basis for safety and efficacy 

(which often is not the case with clinical trials)— 

MAPS would still have to submit and obtain 

approval of an NDA. All of these steps, and the 

uncertainties as to the outcomes of each step, 

further call into question Mr. Doblin’s estimate of 

being able to obtain FDA approval of marijuana for 

only $5 to $10 million. 

Doblin testified that ‘‘the mission 

statement [of MAPS] is to develop 

psychedelics and marijuana into FDAapproved medicines and then to educate 

the public about that’’ (Tr. 478), the 

vagaries of his testimony prevent a clear 

determination of how far along in that 

goal he envisions MAPS to be.23

Correspondence Pertaining to the 

Application 

Subsequent to Respondent’s 

submission of his application for a DEA 

registration, on March 4, 2003, the Chief 

of DEA’s Drug and Chemical Evaluation 

Section wrote to Respondent noting that 

‘‘it appears that the basis for your 

application is the purported need for a 

higher potency and higher ’quality’ 

marijuana product than that currently 

available from the National Institute on 

Drug Abuse.’’ GX 29, at 1. The DEA 

letter further explained that the Agency 

had ‘‘contacted NIDA, the Department 

of Health and Human Services * * * 

and some current researchers’’ and had 

‘‘determined that * * * the quality of 

marijuana available from NIDA is 

acceptable,’’ that a high potency product 

with a THC content of 7 to 8 percent 

was currently ‘‘available to bona fide 

research protocols,’’ and that if ‘‘[i]n the 

future, should federally approved 

research protocols require a higher 

potency marijuana (i.e. 15 percent THC), 

all believe that it could be supplied by 

NIDA.’’ Id. 

Thereafter, on June 2, 2003, 

Respondent wrote to DEA 

acknowledging that during a visit with 

several agency Diversion Investigators, 

the discussion had ‘‘primarily 

focused[ed] on the need for an 

alternative source of plant material to 

that grown at the University of 

Mississippi under contract to the 

National Institute of Drug Abuse 

(NIDA).’’ GX 30. Continuing, 

Respondent stated that ‘‘[a] second 

source of plant material is needed to 

facilitate privately-funded, FDAapproved research into medical uses of 

marijuana, ensuring a choice of sources 

and an adequate supply of quality, 

research-grade marijuana for medicinal 

applications.’’ Id. Consistent with these 

statements, Respondent has declined to 

bid on the NIDA contract. Tr. 252–53. 

Respondent further asserted that 

while ‘‘the primary researchers now 

receiving plant material may openly 

state to you that they are satisfied with 

the current source, * * * in private 

conversations these same researchers 

indicate a fear of having the current 

supply eliminated if they complain 

about the available source material.’’ GX 

30. As support for his contention 

regarding the level of researcher’s 

satisfaction with NIDA’s marijuana, 

Respondent attached two items: a 

reprint of a newspaper article and a 

letter from a Dr. Ethan Russo to the 

then-Chief of DEA’s Drug and Chemical 

Evaluation Section. See GX 30a & 30b. 

At the hearing, Respondent testified 

that at the time he filed his application, 

he had become concerned, based on 

conversations he had with ‘‘other 

people,’’ that the marijuana provided by 

the National Center ‘‘may have been of 

relatively low quality, and that [it] was 

not readily available to run the clinical 

trials which some people wanted to 

run.’’ Tr. 215. When asked to provide 

the names of these ‘‘other people’’ who 

had told him this, Respondent said he 

did not recall. Id. 

Respondent’s Contentions Regarding 

the Inadequacy of NIDA Marijuana 

Respondent makes three principal 

claims in support of his contention that 

the supply of marijuana currently 

available through NIDA is inadequate. 

First, he claims that ‘‘NIDA does not 

provide medical marijuana to all 

legitimate researchers’’ and that ‘‘NIDA 

has refused to provide marijuana to at 

least three legitimate researchers.’’ Resp. 

Prop. Findings at 12. Second, he claims 

that ‘‘the quality of the NIDA marijuana 

raises concerns for researchers and 

patients.’’ Id. at 16. Third, he claims that 

‘‘the NIDA supply was inadequate 

because a pharmaceutical developer 

could not reasonably rely on NIDA 

marijuana to take marijuana through the 

FDA new drug approval process.’’ 

Respondent’s Response to Govt.’s 

Exceptions (hereafter, ‘‘Respondent’s 

Resp.’’) at 16. 

HHS’s Denials of Researcher’s Requests 

for NIDA Marijuana 

Respondent’s first claim is based on 

three incidents over a decade-long time 

period in which he alleges that 

researchers were improperly denied 

access to NIDA’s marijuana. The first 

incident, which occurred in 1995, 

involved an application submitted by 

Donald Abrams, M.D., who sought 


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24That the above-quoted grounds were the bases 

upon which NIDA denied Dr. Abrams’ original 

application is implicit from the letter that Dr. 

Abrams submitted to NIDA in response to the 

denial (RX 15). These bases are explicitly stated in 

NIDA’s April 19, 1995, letter to Dr. Abrams, which 

appears on MAPS’ Web site (at http:// 

www.maps.org/mmj/leshner.html) and of which I 

take official notice. This letter from NIDA stated, 

among other things, the following: 

Our decision here is based upon issues of design, 

scientific merit and rationale. We believe that your 

study will not adequately answer the question 

posed. 

Although the study propose[d] seeks to make a 

dose-effect comparison of smoked marijuana to 

delta-9-tetrahydrocannabinol (THC), there is no real 

dosing control. The marijuana is to be taken home 

and there is no requirement and way to ensure that 

the subjects smoke all available materials on any 

fixed schedule. Additionally, that they are given a 

two-week supply of marijuana at one time further 

confounds the study design. Thus, we believe the 

dose-effect component is confounded since the 

study cannot correlate variability in weight gain 

with dosage. 

We also believe the study lacks adequate sample 

size to make any inferences regarding the doseeffect relationship. . . . Another confounding 

variable not adequately controlled for in your 

proposed study is diet. Neither the total daily 

caloric intake nor the percentages of the 

composition of the foodstuffs is assessed. 

In accordance with the Administrative Procedure 

Act (APA), an agency ‘‘may take official notice of 

facts at any stage in a proceeding—even in the final 

decision.’’ U.S. Dept. of Justice, Attorney General’s 

Manual on the Administrative Procedure Act 80 

(1947) (Wm. W. Gaunt & Sons, Inc., Reprint 1979). 

In accordance with the APA and DEA’s regulations, 

Respondent is ‘‘entitled on timely request to an 

opportunity to show to the contrary.’’ 5 U.S.C. 

556(e); see also 21 CFR 1316.59(e). To allow 

Respondent the opportunity to refute the facts of 

which I take official notice, Respondent may file a 

motion for reconsideration within fifteen days of 

service of this order which shall commence with 

the mailing of the order. 

25Following the 1996 passage of proposition 215, 

NIDA contacted Dr. Abrams and asked him if he 

would redesign his study to determine whether 

marijuana usage by persons who were HIV-positive 

(but who did not have AIDS-wasting syndrome) 

increased viral load as well as the interaction of 

marijuana with protease inhibitors. Tr. 523–24. Dr. 

Abrams agreed to do so and NIDA provided him 

with a $1 million grant to fund the study. 

26 It appears from the record that Chemic initially 

applied to HHS for marijuana in 2003 but, at HHS’s 

request, Chemic submitted a revised protocol, 

which HHS considered to be submitted in 2004. See 

GXs 49 & 52B. 

27See Kuromiya v. United States, 78 F.Supp.2d 

367 (E.D. Pa. 1999) (describing compassionate use 

program under which less than 10 persons 

currently receive marijuana from HHS). 

28Because marijuana is a schedule I controlled 

substance, human use is limited to ‘‘Governmentapproved research’’ in accordance with 21 U.S.C. 

823(f). See OCBC, 532 U.S. at 491–492 and n.5. In 

accordance with § 823(f) and the DEA regulations, 

where a schedule I controlled substance is used in 

research—including the HHS compassionate use 

program—the activities involving the substance 

must be limited to those authorized in the research 

protocol. See 21 CFR 1301.13(e)(1)(v), 1301.18. 

Research activities beyond those specified in the 

protocol are prohibited absent the submission and 

approval of a supplemental protocol. 21 CFR 

1301.18(d). Respondent made no attempt to assert 

that any of the research protocols associated with 

the compassionate use program allow for the 

distribution of marijuana to a drug testing 

laboratory, as there is no basis for such an assertion. 

The CSA prohibits the distribution of any 

controlled substance except as authorized by the 

Act, 21 U.S.C. 841(a)(1), and the Act makes no 

allowance for ultimate users (including research 

subjects) to distribute their controlled substances to 

others. 

29Chemic was not registered with DEA under 21 

U.S.C. 823(f) to conduct research with marijuana 

and when DEA later learned that Chemic was 

seeking to conduct a second marijuana study (when 

Chemic subsequently sought to obtain marijuana 

directly from NIDA and sought DEA’s authorization 

for doing so), the agency so advised Chemic that 

this activity required a research registration. See RX 

49, at 2. DEA registrants are only authorized to 

conduct activities with controlled substances ‘‘to 

marijuana from NIDA to study its effects 

on persons with HIV-related wasting 

syndrome. RX 15, at 1. NIDA rejected 

Dr. Abrams’s application ‘‘based upon 

issues of design, scientific merit and 

rationale.’’ 24 Dr. Abrams subsequently 

submitted a revised research protocol 

that NIDA found to be scientifically 

meritorious and for which NIDA 

supplied marijuana in 1997.25 See GX 

21, at 1. NIDA also supplied Dr. Abrams 

with marijuana for subsequent studies. 

Id.; Tr. 689. In any event, for purposes 

of determining the relevance of the 1995 

incident in which Dr. Abrams’ original 

protocol was rejected by NIDA, it is 

notable that this occurred before HHS 

adopted its new guidelines for the 

provision of marijuana for research 

purposes. As Dr. Gust testified, in 1995, 

HHS’s practice was to provide 

marijuana only to researchers who 

obtained NIH funding—a practice that 

was abandoned by HHS in 1999 when 

the agency adopted its new procedures 

for facilitating marijuana research 

(allowing privately funded researchers 

to also obtain marijuana). Tr. 1749. 

The second incident involved an 

application by Dr. Ethan Russo, a 

neurologist, who sought funding from 

NIDA to study the use of marijuana to 

treat migraine headaches beginning 

around 1996. Tr. 527–28. The precise 

dates of the events related to Dr. Russo 

are somewhat unclear as Respondent 

presented these events through the 

testimony of Mr. Doblin. (Dr. Russo did 

not testify.) Id. Based on Mr. Doblin’s 

testimony, it appears that during 1996– 

97, NIDA twice rejected Dr. Russo’s 

protocol for reasons which are not 

clearly established by the record. Id. at 

527, 691–92. However, according to Mr. 

Doblin, Dr. Russo conceded that, on 

both of these two occasions when NIDA 

rejected his protocol, NIDA’s bases for 

doing so did include ‘‘some valid 

critiques.’’ Tr. 692. Mr. Doblin testified 

that Dr. Russo subsequently attempted 

for a third time to obtain marijuana from 

NIDA, but on this third occasion he 

decided not to seek government funding 

but to seek private funding to purchase 

the marijuana from NIDA. Id. at 692. 

According to Mr. Doblin, this third 

protocol submitted by Dr. Russo was 

approved by both the FDA and Dr. 

Russo’s institutional review board, but 

NIDA again refused to supply 

marijuana. Id. at 692–93. When asked 

when this last denial by NIDA occurred, 

Mr. Doblin testified: ‘‘I think it was 

1999.’’ Id. at 693. 

As noted above, NIH announced on 

May 21, 1999, HHS’s new procedures 

for making marijuana available to 

researchers. Bearing in mind that 

Respondent had the burden of proving 

any proposition of fact that he asserted 

in the hearing, 21 CFR 1301.44(a), 

nothing in Mr. Doblin’s testimony, or 

any other evidence presented by 

Respondent, established that HHS 

denied Dr. Russo’s request for marijuana 

under the new procedures implemented 

by the agency in 1999. Indeed, 

Respondent produced no evidence 

showing that HHS has denied marijuana 

to any clinical researcher with an FDAapproved protocol subsequent to the 

adoption of the 1999 guidelines. 

The third incident involved an 

application by Chemic Laboratories 

(Chemic), which—at the request of Mr. 

Doblin—sought marijuana from NIDA in 

2004 26 for a proposed study involving 

a device known as the ‘‘Volcano 

Vaporizer’’ (hereafter ‘‘Volcano’’). RX 49 

& 52B. To understand the nature and 

purpose of this proposed study, some 

earlier facts that were disclosed at the 

hearing need to be considered. 

According to Mr. Doblin’s testimony, 

prior to this incident (i.e., before 

Chemic applied to NIDA for marijuana 

in 2004), Mr. Doblin had devised an 

elaborate arrangement whereby Chemic 

received marijuana to conduct an earlier 

study with the Volcano using marijuana 

obtained outside of the HHS process 

and without the knowledge or approval 

of HHS or DEA. Specifically, Mr. Doblin 

admitted that he encouraged persons 

who obtained marijuana from ‘‘buyers’ 

clubs’’ in California as well as persons 

who obtained their marijuana from 

NIDA under HHS’s ‘‘compassionate use 

program’’ 27 to anonymously send their 

marijuana to a DEA-registered drug 

testing laboratory so that MAPS could 

compare the potency of the ‘‘buyers’ 

clubs’’ marijuana with that supplied by 

NIDA.28 Tr. 668–82. Acting at the behest 

of Mr. Doblin, once the drug testing 

laboratory completed its analysis of the 

marijuana it received through these 

sources, it delivered the ‘‘extra’’ 

marijuana to Chemic, so that Chemic 

could conduct testing on the Volcano. 

Id. Chemic did conduct such testing,29


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the extent authorized by their registration and in 

conformity with other provisions of [the CSA].’’ 21 

U.S.C. 822(b). 

30The first report, which was submitted by 

Chemic in 2003 to MAPS and CaNORML, is titled 

‘‘Evaluation of Volcano(r) Vaporizer for the Efficient 

Emission of THC, CBD, CBN and the Significant 

Reduction and/or Elimination of PolynuclearAromatic (PNA) Analytes Resultant of Pyrolisis,’’ 

and is available on MAPS’ Web site at http:// 

www.maps.org/mmj/vaporizerstudy4.15.03. The 

second report, titled ‘‘Cannabis Vaporizer Combines 

Efficient Delivery of THC with Effective 

Suppression of Pyrolitic Compounds,’’ also appears 

on MAPS’ Web site at http://www.maps.org/mmj/

Gieringer-vaporizer.pdf. I take official notice of both 

documents. See also http://www.maps.org/newsletters/v13n1/13111gie.pdf (2003 MAPS news letter 

discussing Vaporizer studies sponsored by MAPS 

and NORML and the Marijuana Policy Project), of 

which I take official notice. 

31HHS also noted that there were ‘‘a number of 

technical concerns’’ with Chemic’s proposal. RX 

52B, at 4. 

32The report, titled ‘‘Evaluation of Volcano® 

Vaporizer for the efficient emission of THC, CBD, 

CBN and the significant reduction and/or 

elimination of polynuclear-aromatic (PNA) analytes 

resultant of pyrolysis,’’ appears on MAPS Web site 

as discussed in note 30. 

33 If Chemic had a valid basis to challenge HHS’s 

denial of its request for marijuana, it presumably 

had remedies available to challenge that agency 

action either within HHS or in the courts. See, e.g., 

5 U.S.C. 702 (‘‘A person suffering legal wrong 

because of agency action * * * is entitled to 

judicial review thereof.’’). Respondent produced no 

evidence showing that Chemic has pursued any 

such remedies. 

which was funded by MAPS and the 

California National Organization for the 

Reform of Marijuana Laws (CaNORML), 

and Chemic published its results in two 

reports, one of which was co-authored 

by CaNORML.30 See id. 

Thus, this ‘‘third incident’’ to which 

Respondent points involved an effort by 

MAPS to expand upon the research that 

Chemic had conducted on the 

Volcano—this time using marijuana 

directly obtained from NIDA rather than 

using marijuana obtained without the 

knowledge or approval of HHS or DEA. 

Id. Under MAPS sponsorship and 

oversight, Chemic so applied to NIDA in 

2004. Id.; RX 52B. The protocol 

submitted by Chemic proposed to heat 

marijuana obtained from NIDA and from 

a Dutch ‘‘medical marijuana’’ program 

to three different temperature levels 

below its combustion temperature and 

to then ‘‘compare the quality and 

relative percentage of available 

cannabinoids’’ in the material obtained 

from each source. RX 52B, at 2–3. 

By letter dated July 27, 2005, a U.S. 

Public Health Service (PHS) committee 

of scientists, which evaluated Chemic’s 

protocol pursuant to the 1999 Guidance, 

rejected it on the grounds that the 

‘‘project does not add to the scientific 

knowledge base in a significant way.’’ 31

Id. at 4. With respect to the protocol’s 

purpose of comparing the cannibinoid 

content of NIDA and Dutch marijuana, 

the PHS committee found that 

‘‘[m]arijuana varies in THC content and 

[that] simply demonstrating that this 

device can measure those differences is 

of little scientific value.’’ Id. at 3. The 

PHS committee also found that the 

protocol’s other purposes (‘‘to conduct a 

reliability study of the device by 

analyzing multiple vapor collections’’ 

and to ‘‘determine the ‘precision, 

accuracy, robustness and efficacy’ of the 

vaporizing device’’) did ‘‘not appear to 

be a hypothesis driven research 

project,’’ but rather, ‘‘analogous to a 

process that is used to ‘validate’ an 

analytical method.’’ Id. The PHS 

committee thus concluded that the 

‘‘overall aims of the project appear to be 

descriptions of work that would need to 

be conducted as part of good standard 

laboratory procedure prior to a clinical 

study.’’ Id. 

The PHS Committee further noted 

that, at that time (2005), a separate, 

HHS-approved clinical trial involving 

marijuana and the Volcano was already 

underway. Id. This then-ongoing 

clinical trial was being conducted by Dr. 

Abrams and was sponsored by the 

CMCR, using NIDA-supplied marijuana. 

Id.; Tr. 689. Moreover, as the letter from 

the PHS Committee indicates, one of the 

documents that Dr. Abrams had 

previously submitted in support of his 

then-ongoing clinical trial was a report 

that Chemic itself had prepared 

regarding its prior study of marijuana 

and the Volcano.32 GX 52B, at 3. Given 

that Dr. Abrams’ clinical trial was 

‘‘underway and is examining the 

pharmacodynamics and 

pharmacokinetics of several different 

potencies of marijuana in human 

volunteers using the Volcano(c) device,’’ 

the Committee concluded that ‘‘[i]t is 

difficult to see what additional scientific 

knowledge will be provided by the 

current protocol, considering the prior 

work done by the applicant, as 

described in the above report, and the 

ongoing clinical trial at CMCR.’’ Id. 

Respondent also introduced into 

evidence a letter from the President of 

Chemic to HHS responding to several 

points raised by the PHS Committee in 

denying Chemic’s application. See RX 

55. Respondent’s letter does not, 

however, establish that HHS 

impermissibly denied Chemic’s 

application for marijuana.33 To the 

contrary, the evidence supports the 

conclusion that HHS (acting through the 

PHS Committee) made its determination 

not to supply marijuana on this 

occasion based on scientific 

considerations, finding that Chemic’s 

then-latest proposed study was 

duplicative of prior and ongoing 

research and not likely to provide useful 

data. 

Respondent’s Contention That NIDA’s 

Marijuana Is of Poor Quality 

Respondent also contends that ‘‘[t]he 

quality of the NIDA marijuana raises 

concerns for researchers and patients.’’ 

Resp. Prop. Findings at 16. In this 

regard, Respondent asserts that various 

researchers have complained that 

NIDA’s marijuana is of inconsistent 

potency, that NIDA’s marijuana is harsh, 

that NIDA’s marijuana is frequently 

several years old and not fresh, that the 

available product is of low potency, and 

that NIDA’s product includes stems and 

seeds. See id. at 16–27. Contrary to 

Respondent’s view, the evidence does 

not ‘‘demonstrate[] serious concerns 

about the quality of NIDA’s’’ marijuana 

products. Id. at 27. As explained below, 

Respondent’s contentions are largely 

based on snippets from questionnaires 

in which the researchers generally 

indicated their overall satisfaction with 

the quality of NIDA’s marijuana. As the 

ALJ found, ‘‘a preponderance of the 

record establishes that the quality is 

generally adequate.’’ ALJ at 84. 

With respect to the contention that 

NIDA’s marijuana is of inconsistent 

potency or inadequate potency, 

Respondent relies on comments 

contained on three questionnaires that 

were completed by researchers at DEA’s 

request. Resp. Prop. Findings at 17–18. 

One of the questions asked: ‘‘Have you 

ever had any difficulty obtaining 

marijuana from NIDA for all strengths of 

cigarettes to meet research 

requirements?’’ GX 16, at 8. While Dr. 

Grant of the CMCR answered 

affirmatively and added that ‘‘having 

consistency of 6% -8% [THC] content 

have been difficult,’’ he further stated 

that NIDA ‘‘ha[s] been accommodating 

by trying to produce the high % 

products in a timely manner.’’ Id. at 9 

(emphasis in original). In response to 

another question regarding the adequacy 

of NIDA’s products, Dr. Grant noted that 

‘‘NIDA has been reliable[,]’’ and ‘‘they 

have been easy to work with and 

amenable to accommodating for the 

requirements of the study.’’ Id. at 6. 

It is true that Dr. Grant, in answering 

this question, noted the problems with 

the range of potency in the higher 

potency material. Dr. Grant explained, 

however, that the problems he found 

regarding the range of potency were 

attributable to the cigarettes being 

‘‘handrolled and thus difficult to 

prepare.’’ Id. Moreover, Dr. Grant 

answered ‘‘yes’’ to the question of 

whether NIDA’s current products were 

‘‘adequate for your research purposes 


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34Respondent also cites the questionnaire of Prof. 

Aron Lichtman, of the Department of 

Pharmacology, Virginia Commonwealth University, 

who conducted research in animals. Resp. Proposed 

Findings at 23 (citing GX 28). On his questionnaire, 

Prof. Lichtman indicated that he ‘‘would [have] 

prefer[red] something at a higher potency, but at the 

time, 3–4% was the highest potency available.’’ GX 

28, at 9. Prof. Lichtman’s questionnaire indicated, 

however, that his study had last obtained marijuana 

in 1999. Prof. Lichtman’s answer is thus not 

probative of whether NIDA is currently capable of 

providing marijuana of adequate potency to support 

legitimate research needs. 

Respondent’s evidence regarding the potency of 

marijuana distributed by NIDA for patients in the 

former Compassionate Investigational New Drug 

program likewise dates back to 1999. See Resp. 

Prop. Findings at 24 (citing RX 19, at 47–48). As 

such, the evidence is not probative of whether 

NIDA is currently capable of supplying marijuana 

of adequate potency. 

35 Dr. ElSohly testified: ‘‘I think you had like 50 

subjects, and only three or four complained of the 

harshness. That’s a very small percentage. You are 

going to get that regardless of what you administer.’’ 

Tr. at 1589. 

36As Dr. Cory-Bloom noted, it was unclear 

whether the harshness was attributable to actual 

marijuana cigarettes or placebo cigarettes. GX 18, at 

7. Relatedly, Dr. ElSohly testified that the 

complaints of harshness were likely attributable to 

the placebo because ‘‘all of the components have 

been extracted out . . . [s]o this will be just like 

smoking * * * grass or * * * hay or something like 

that or just paper that might have this harshness, 

and there’s no soothing effect of the other 

components in the plant material.’’ Tr. 1289–90. 

37Respondent also cites to hearsay evidence 

regarding the experience of a single patient who 

had previously used non-NIDA marijuana (illegally 

obtained from California ‘‘buyers’’ clubs’’) without 

problems but then purportedly developed 

bronchitis upon smoking NIDA marijuana. Resp. 

Prop. Findings at 21; Tr. 570. Even if I were to 

credit this testimony, the record as a whole 

establishes that NIDA’s marijuana was well 

tolerated in the great majority of the various studies’ 

subjects. 

38Marijuana is known to cause, among other 

things, ‘‘a distortion in the sense of time associated 

with deficits in short-term memory and learning,’’ 

‘‘difficulty carrying on an intelligible conversation,’’ 

anxiety, paranoia, panic, depression, dysphoria, 

delusions, illusions, and hallucinations. RX 1 (IOM 

report), at 101–102. These effects impact the 

determination of what, if any, weight to attach to 

research subjects’ descriptions of their satisfaction 

with the marijuana they have smoked. 

39 Dr. Israelski did not recall any complaints 

about the ‘‘freshness’’ of NIDA’s marijuana. 

with regard to potency?’’ Id. at 15. Also, 

in response to the question of whether 

‘‘these problems [have] ever 

compromised the study?,’’ Dr. Grant 

indicated: ‘‘N/A.’’ Id. at 6. 

Dr. Grant further indicated that he 

had ‘‘no’’ information that ‘‘would lead 

[him] to believe that the future supply 

of marihuana required for research 

would be insufficient or unavailable 

through NIDA,’’ id. at 8, and that he had 

‘‘no’’ concerns regarding ‘‘the 

availability of research-grade marijuana 

from NIDA’’ to meet CMCR’s future 

needs. Id. at 9. While Dr. Grant also 

indicated that it would be clinically 

important to evaluate a higher potency 

product than the 7–8 percent THC 

content marijuana CMCR was currently 

using, he also indicated that CMCR had 

not sought a higher potency product but 

had only discussed with NIDA the 

feasibility of such a product. Id. at 16. 

On his questionnaire, Ronald Ellis, 

M.D., of the University of California, 

San Diego, noted that in ‘‘[a]t least two 

shipments, [there] was some variability 

on stated THC content and the actual 

[content] measured.’’ GX 17, at 6. Dr. 

Ellis further noted, however, that NIDA 

personnel ‘‘have been very responsive.’’ 

Id. Apparently, Dr. Ellis’s clinical trial 

received some marijuana which was 

supposed to have a THC content of 8 

percent, but only had a content of 

approximately 7 percent. Id. at 9. Dr. 

Ellis indicated, however, that the 

potency of NIDA’s current product was 

adequate for research purposes. Id. 

Respondent also relies on Dr. Donald 

Abrams’ ‘‘no’’ answer regarding the 

consistency of the potency of NIDA’s 

product. Resp. Prop. Findings at 18 

(citing GX 21, at 6). Dr. Abrams further 

noted that ‘‘[o]riginally approved for 

3.9% THC content, midway through the 

‘Short-term effects * * *’ protocol, 

NIDA informed [us] that the potency 

had been downgraded to 3.5%. 

Everything since is said to be at 3.5%.’’ 

GX 21, at 6. Notably, the ‘‘Short-term 

effects’’ study occurred more than a 

decade ago, and Dr. Abrams did not 

indicate that there had been further 

problems with the consistency of the 

potency of the marijuana supplied by 

NIDA for several later studies he 

conducted. 

Nor does the evidence support 

Respondent’s contention that the 

marijuana available through NIDA is of 

insufficient potency to satisfy the needs 

of legitimate researchers. In his brief, 

Respondent relies on the statements of 

Drs. Grant and Abrams that it would be 

beneficial to evaluate the efficacy of 

marijuana cigarettes with a higher THC 

content than what was currently being 

supplied by NIDA. Resp. Prop. Findings 

at 22–23 (citing GX 16 & 21). 

Respondent, however, produced no 

evidence establishing that any 

researcher has obtained approval of 

FDA and other reviewing authorities to 

conduct clinical trials using higher THC 

content marijuana. As Dr. Abrams 

explained, he ‘‘wanted to use a higher 

potency product but there were 

questions from the [scientific review 

board] and the funding agency 

[CMCR].’’ GX 21, at 9. 

Moreover, as Dr. ElSohly testified, the 

National Center has in inventory 

substantial quantities of bulk marijuana 

material with THC contents of ten to 

eleven percent and has some material 

with a THC content of fourteen 

percent.34 Tr. 1203. Dr. ElSohly also 

testified that the National Center could 

produce marijuana with a THC content 

of up to 20 percent. Id. He further 

testified that he had informed ‘‘some of 

the investigators that if they want to, 

they can order material of a certain 

potency’’ and ‘‘roll their own 

cigarettes.’’ Id. at 1204–05. 

Respondent also maintains that 

NIDA’s marijuana is harsh and that 

some patients have complained that it 

was ‘‘inferior in sensory qualities (taste, 

harshness) [to] the marijuana they 

smoke outside the laboratory,’’ and that 

‘‘it was the worst marijuana they had 

ever sampled.’’ Resp. Prop. Findings at 

19–21. Yet, as the questionnaires 

completed by the researchers indicate, 

only a small percentage of study 

subjects have complained about the 

harshness of NIDA’s marijuana. See GX 

18, at 7 (one of ten patients 

complained); GX 21, at 8 (four out of 

fifty dropped out because of quality); 

GX 22, at 7 (‘‘Out of 100 plus subjects, 

no more than [three] may have 

commented that the product was 

harsh.’’).35 Moreover, as one of the 

researchers noted, it was unclear 

whether the harshness was related to 

the actual marijuana cigarettes or the 

placebo material.36 As for Respondent’s 

further contention that some patients 

complained that NIDA’s marijuana ‘‘was 

the worst they had ever sampled,’’ this 

evidence does not establish that the 

taste of the products rendered them 

unsuitable for their intended use.37

Furthermore, Respondent provides no 

scientific basis for his suggestion that 

the research subjects’ description of the 

degree of their subjective satisfaction 

with the experience of smoking 

marijuana in a research setting should 

be a criterion for judging the adequacy 

of the quality of marijuana for research 

purposes.38

Finally, Respondent contends that 

NIDA’s marijuana is frequently ‘‘not 

fresh’’ and that it includes stems and 

seeds. Resp. Prop. Findings at 21–22; 

25–27. While the record contains some 

evidence that older marijuana loses 

some if its potency, all but one of the 

researchers indicated that neither the 

lack of freshness nor the existence of 

plant parts (stems and seeds) had 

adversely impacted their research. See 

GX 16, at 13 (CMCR); GX 17, at 7 (Dr. 

Ellis); GX 18, at 7 (Dr. Corey-Bloom); GX 

19, at 7 (Dr. Israelski); 39 GX 20, at 7 (Dr. 

Wallace); GX 22, at 7 (Dr. Polich); GX 

28, at 7 (Prof. Lichtman); but see GX 21, 

at 7–8 (Dr. Abrams) (indicating that four 


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40 In support of its contention that NIDA 

marijuana contains stems and seeds which renders 

the product’s quality inadequate, Respondent also 

cites an article, ‘‘Chronic Cannabis Use in the 

Compassionate Investigational New Drug Program.’’ 

Resp. Prop. Findings at 26 (citing RX 19, at 49–50). 

Respondent particularly notes two photographs of 

marijuana that was manufactured in April 1999. See 

id. This evidence thus predates the National 

Center’s 2001 acquisition of a de-seeding machine. 

41 I also take official notice of the FDA’s Guideline 

For Drug Master Files (Sept. 1989) (available at 

http://www.fda.gov/cder/guidance/dmf.htm/). 

According to this FDA guideline (at 2), ‘‘[a] Drug 

Master File (DMF) is a submission to the [FDA] that 

may be used to provide confidential detailed 

information about facilities, processes, or articles 

used in the manufacturing, processing, packaging, 

and storing of one or more human drugs.’’ 

42 In that letter, Mr. Doblin also mentioned that 

DEA had indicated that it would not review 

Chemic’s application to import ten grams of Dutch 

marijuana until NIDA/HHS completed its review of 

Chemic’s protocol. RX 14. Mr. Doblin also 

Continued 

out of fifty patients had ‘‘dropped out 

due to quality’’). 

Moreover, with respect to the 

existence of stems and seeds in NIDA’s 

marijuana, Dr. ElSohly acknowledged 

that prior to 2001, there may have some 

stems and seeds in the marijuana it sent 

to the Research Triangle Institute (the 

contractor for the manufacture of the 

cigarettes). Tr. 1300–01. Dr. ElSohly 

further testified, however, that in 2001, 

the National Center acquired a special 

de-seeding machine which removes all 

the seeds and stems from the marijuana 

that is used to manufacture cigarettes. 

Id. at 1301. Respondent produced no 

evidence showing that the marijuana 

which the National Center has since 

supplied has contained stems and 

seeds.40

Respondent’s Contention That NIDA’s 

Marijuana Is Inadequate To Support 

The Development of Plant-Form 

Marijuana Into an FDA-Approved 

Prescription Drug 

Respondent further contends that the 

existing supply of NIDA marijuana is 

inadequate because ‘‘MAPS seeks to 

develop botanical marijuana as an FDAapproved prescription drug.’’ Resp. 

Prop. Findings at 8. In support of this 

contention, Respondent makes two 

primary factual assertions. First, he 

claims that ‘‘to develop a 

pharmaceutical product, a developer 

must have assured access to a reliable, 

dependable source of the particular 

formulation of the product the 

developer needs, both for research, and 

for distribution if the product is 

approved,’’ and that ‘‘[w]ithout such a 

source, there is no development.’’ Id. at 

9. Second, he claims that ‘‘even before 

the Phase [1] and Phase [2] studies on 

a product, the developer must generally 

submit a Drug Master File,’’41 and that 

the Drug Master File (DMF) for NIDA’s 

marijuana contains proprietary 

information which NIDA controls. Id. 

As for Respondent’s contentions 

regarding the need to submit a DMF, 

Respondent asserts that ‘‘there is no 

procedure to force [the DMF’s] owner to 

make a Drug Master File, or the 

information in it, available to a drug 

developer.’’ Resp. Prop. Findings at 10 

(citing Tr. 447–49; testimony of Dale 

Gieringer). While Respondent concedes 

that NIDA ‘‘has allowed the researchers 

whom it chooses to supply with 

marijuana to rely on that file,’’ and that 

FDA has approved several Phase 1 

studies using NIDA marijuana and the 

information contained in the DMF, id. at 

10, it contends that because NIDA’s 

mission is to study drug abuse, it is not 

likely that ‘‘NIDA would authorize 

MAPS to rely on the NIDA marijuana 

[DMF] currently on file with the FDA.’’ 

Id. at 45. 

The 1999 HHS Guidance makes clear, 

however, that if a proposed research 

project meets the Department’s criteria 

for the provision of research-grade 

marijuana, ‘‘NIDA will provide the 

researcher with authorization to 

reference NIDA’s marijuana Drug Master 

File.’’ GX 24, at 4. Moreover, as the FDA 

has explained, ‘‘the submission of a 

DMF is not required by law or 

regulation,’’ but rather, ‘‘is submitted 

solely at the discretion of the holder.’’ 

Guideline For Master Drug Files, at 2. 

The FDA regulations provide: ‘‘FDA 

ordinarily neither independently 

reviews drug master files nor approves 

or disapproves submissions to a drug 

master file. Instead, the agency 

customarily reviews the information 

only in the context of an application 

under part 312 or part [314].’’ 21 CFR 

314.420(a). Accordingly, as the FDA 

Guidelines explain, while ‘‘the 

information contained in [a] DMF may 

be used to support an Investigational 

New Drug Application (IND), [or] a New 

Drug application (NDA) * * * [a] DMF 

is NOT a substitute for an IND [or] 

NDA.’’ Guideline For Master Drug Files, 

at 3. 

Relatedly, David Auslander, M.D., the 

Government’s expert witness in 

pharmaceutical development, testified 

that ‘‘not all companies do Drug Master 

Files’’ and that ‘‘FDA does not 

necessarily require a Drug Master File to 

do a Phase [1] and Phase [2] study in all 

cases if the Drug Master File * * * 

comes from a producer that’s different 

from the sponsor itself.’’ Tr. 2024. Dr. 

Auslander also explained that a drug 

developer may not even have a Drug 

Master File at the time it applies to 

conduct Phase 1 or Phase 2 studies. Id. 

As Dr. Auslander further testified, the 

necessary information can be submitted 

in an IND or an NDA. Id. at 2024–25. 

As for the contention that NIDA is not 

a reliable source of supply, it is 

undisputed that a for-profit drug 

developer would be unlikely to take a 

drug through the FDA approval process 

unless it was ‘‘assured that they would 

have a drug supply that is unchanging 

and reliable.’’ Tr. 117 (testimony of 

Irwin Martin, Ph.D.). Dr. Martin also 

testified that ‘‘[o]ne of the biggest 

problems in drug development is the 

unfortunate need sometimes to repeat 

studies. If you have a new formulation 

or your drug source has changed, you 

many need to repeat years worth of data 

because you can no longer assure that 

the data you developed with this earlier 

version of [the] drug will actually be the 

same drug as you now have.’’ Id. at 118. 

Dr. Martin further testified that while 

‘‘no reasonably business-oriented 

company would ever develop a 

product’’ if it did not have a reliable and 

consistent supply source, he also noted 

that if a company had to change its 

supply source, a company could try to 

show that the new product was 

pharmcokinetically equivalent to the 

old product. Tr. 120–21; see also Tr. 

2027. 

Also on this issue, Dr. Auslander 

testified further on behalf of the 

Government that if the developer’s 

source changed, it ‘‘would not 

necessarily repeat the Phase [1] and [2] 

clinical studies over again, but * * * 

would do additional chemical studies, 

stability [studies] * * * to show that the 

quality of material from source A and 

the quality of material acquired from 

source B are equivalent.’’ Tr. 2027–28. 

Both Respondent’s and the 

Government’s experts agreed, however, 

that if the developer could not establish 

equivalence between the two products, 

‘‘it would not be a trivial experience’’ 

for the developer. Id. at 2029; see also 

id. at 121 (testimony of Dr. Martin that 

developer would have to start over). 

Relatedly, Respondent further asserts 

that there is ‘‘overwhelming’’ evidence 

that NIDA ‘‘would not be likely to 

choose to serve as the supplier to a 

medical marijuana pharmaceutical 

product developer even if it were 

authorized to so.’’ Resp. Prop. Findings 

at 10. In support of this assertion, 

Respondent extracts two sentences from 

a letter in which Nora Volkow, M.D., 

NIDA’s director, responded to Mr. 

Doblin’s letter accusing NIDA/HHS of 

‘‘seriously obstructing’’ Chemic’s 

research involving the Volcano which 

MAPS was sponsoring (and whose 

application HHS ultimately 

denied).42 See id. (quoting RX 13; ‘‘It is 


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referenced DEA’s handling of Respondent’s 

application. 

43 In discussing the content of the HHS Guidance, 

Respondent asserts: ‘‘And it expressly states that 

‘the purpose of clinical trials of smoked marijuana 

would not be to develop marijuana as a licensed 

drug.’ ’’ Resp. Proposed Findings at 11 (quoting GX 

24, at 2). Notably, Respondent’s quotation edits out 

the Guideline’s reference to the IOM Report. The 

complete text of the Guidance shows, however, 

HHS did not come to this conclusion without 

evidentiary support, but rather, relied on the 

extensive findings of the IOM. 

44 In discussing this testimony, the ALJ noted that 

Dr. Gust had acknowledged that a researcher with 

an FDA-approved protocol might nonetheless be 

denied marijuana by the PHS committee under the 

criteria set forth in the guidance. ALJ at 51 (citing 

Tr. 1694). There is, of course, no evidence that any 

researcher with an FDA-approved protocol has been 

denied marijuana subsequent to the 1999 

guidelines. Dr. Gust’s answer was based on a 

hypothetical question. Accordingly, this portion of 

Dr. Gust’s testimony provides no basis to question 

his credibility as to whether in his experience, HHS 

(and the PHS review committees) are biased against 

researchers who seek to obtain FDA approval for 

plant-form marijuana. 

45 Given that, as indicated above, marijuana has 

been found to contain hundreds of different 

chemicals, including a variable mixture of 

biologically active compounds that cannot be 

expected to provide a precisely defined drug effect, 

IOM has expressed the view that, ‘‘if there is any 

future in cannabinoid drugs, it lies with agents of 

more certain, not less certain, composition.’’ RX 1, 

at 195–96. 

46Based on the questions that led up to the abovequoted question, it appears that, in answering 

‘‘That’s correct,’’ Dr. ElSohly was confirming that 

the marijuana he grows pursuant to the NIDA 

contract may not be taken by the University of 

Mississippi (without prior authorization from 

NIDA) for use in the commercial development of a 

THC extract product where such commercial 

activity was not authorized by NIDA. See Tr. at 

1462–63. Indeed, the following subsequent 

exchange between Respondent’s counsel and Dr. 

ElSohly suggests that Dr. ElSohly correctly 

understood that there was no prohibition on the use 

of NIDA marijuana for the development of 

commercial products: 

Q: Dr. ElSohly, if an organization like MAPS, for 

example, a nonprofit or pharmaceutical 

organization, wanted to try to develop smoked 

marijuana into an FDA-approved medicine, could it 

use the marijuana that you grow to the preclinical 

and clinical testing if NIDA agreed? 

A: I would say yes. 

Tr. 1562–63. Moreover, even if Dr. ElSohly was 

of the mistaken view that the marijuana he grew for 

NIDA could never be used by anyone for 

commercial product development, such a 

misunderstanding on Dr. ElSohly’s part would not 

be controlling for purposes of this proceeding. The 

record is clear that it is HHS—not Dr. ElSohly—that 

determines the terms of his contract, including to 

whom and under what circumstances he may 

supply marijuana; and the record is also clear that 

Dr. ElSohly follows the instructions he receives 

from NIDA as to whom to deliver the marijuana. 

Further, as explained above, the record reveals that 

HHS’s policy contains no prohibition on the use of 

not NIDA’s role to set policy in this area 

or to contribute to the DEA licensing 

procedures. Moreover, it is also not 

NIDA’s mission to study the medicinal 

use of marijuana or to advocate for the 

establishment of facilities to support 

this research.’’). See also RX 14 (letter of 

Mr. Doblin; ‘‘NIDA/HHS is seriously 

obstructing a privately-funded drug 

development program aimed at 

evaluating marijuana’s potential use as 

an FDA-approved medication.’’). 

In that letter, Dr. Volkow declined to 

intervene explaining that: 

* * * NIDA is just one of the participants 

on the HHS review panel and continues, on 

behalf of the U.S. Government, to provide 

supplies of well-characterized cannabis for 

both NIH and non-NIH-funded research. The 

latter is conducted according to the 

procedure established in 1999 by HHS for 

obtaining access to marijuana for research 

purposes. It is not NIDA’s role to set policy 

in this area or to contribute to the DEA 

licensing procedures. Moreover, it is not 

NIDA’s mission to study the medicinal uses 

of marijuana or to advocate for the 

establishment of facilities to support this 

research. Therefore, I am sorry but I do not 

believe that we can be of help to you in 

resolving these concerns. 

RX 13. As both this letter and the 1999 

Guidance make plain, HHS—and not 

NIDA—is the policymaker regarding the 

criteria for determining who can obtain 

research-grade marijuana from NIDA. As 

NIDA does not independently control to 

whom it may supply marijuana for 

legitimate research, the letter is not 

indicative of whether NIDA would be a 

reliable source of marijuana for an entity 

which sought to develop plant-form 

marijuana into an FDA-approved 

prescription medicine. 

Respondent also points to the 1999 

Guidance document’s statement that 

‘‘[t]he goal of this program must be to 

determine whether cannabinoid 

components of marijuana administered 

through an alternative delivery system 

can meet the standards enumerated 

under the Federal Food, Drug, and 

Cosmetic Act for commercial marketing 

of a medical product. As the IOM report 

stated, ’Therefore, the purpose of 

clinical trials of smoked marijuana 

would not be to develop marijuana as a 

licensed drug, but such trials could be 

a first step towards the development of 

rapid-onset, nonsmoked cannabinoid 

delivery systems.’ ’’ 43 GX 24, at 2. 

As found above, the IOM’s 

recommendation was based on its 

conclusion that ‘‘[a]lthough marijuana 

smoke delivers THC and other 

cannabinoids to the body, it also 

delivers harmful substances, including 

most of those found in tobacco smoke. 

In addition, plants contain a variable 

mixture of biologically active 

compounds and cannot be expected to 

provide a precisely defined drug effect. 

For those reasons there is little future in 

smoked marijuana as a medically 

approved medication.’’ RX 1, at 195–96. 

Moreover, the HHS Guidance does not 

address what the Secretary’s response 

would be were the current clinical trials 

to show that the efficacy/safety profile 

of smoked marijuana supported FDA 

approval of it as a prescription medicine 

for particular indications or patient 

populations. Nor does it address what 

the Secretary’s response would be if 

clinical trials were to show that the 

efficacy/safety of vaporized plant form 

marijuana for particular indications 

supported its approval as a prescription 

drug. 

Dr. Gust testified that notwithstanding 

the stated goal of the 1999 Guidance, a 

researcher who ‘‘had an IND from FDA 

* * * would not have a problem getting 

marijuana.’’ Tr. 1718. Further, in 

response to the ALJ’s question as to 

whether a researcher whose goal was to 

obtain FDA approval of plant-form 

marijuana would have more difficulty 

obtaining marijuana from HHS than a 

researcher who sought to produce an 

extract-based product, Dr. Gust testified: 

‘‘I don’t believe so.’’ Id. at 1719–20. 

Dr. Gust also explained that whether 

plant-form marijuana should be 

approved as a prescription medicine is 

‘‘not a question for the’’ PHS committee 

that reviews requests for NIDA 

marijuana. Id. at 1720. Rather, ‘‘it’s a 

question for the regulation and approval 

process that goes on through FDA.’’ Id. 

Finally, while Dr. Gust acknowledged 

that ‘‘HHS would strongly endorse’’ the 

IOM’s view that ‘‘if there’s going to be 

an approved medication, it’s going to be 

a purified constituent of marijuana that 

will be delivered in a non-smokable 

form,’’ he further testified that in his 

experience, there was no bias against 

‘‘the concept of approving marijuana as 

a medication’’ at the level of PHS 

review. Id. at 1722.44

Respondent further asserts that ‘‘it is 

not at all clear that NIDA could serve as 

a source for a pharmaceutical product.’’ 

Resp. Prop. Findings at 11 (emphasis in 

original). Notwithstanding Mr. Doblin’s 

beliefs regarding the likely safety/ 

efficacy profiles of smoked and 

vaporized marijuana, see Tr. at 605, it is 

highly speculative whether clinical 

trials will ultimately support FDA 

approval of plant-form marijuana 

through either delivery system.45

As further support for this contention, 

Respondent references that Dr. ElSohly 

answered ‘‘That’s correct’’ when asked 

the following question by Respondent’s 

counsel: ‘‘So if somebody wants to 

develop a commercial product with 

marijuana, they could not use the NIDA 

marijuana; is that fair?’’ Resp. Prop. 

Findings at 11 (quoting Tr. 1463). It is 

not clear exactly what to make of Dr. 

ElSohly’s answer to this question.46 In 


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the marijuana grown pursuant to the NIDA contract 

for commercial development purposes. 

47As for Respondent’s contention that the 

Government did not ‘‘introduce any evidence that 

NIDA could or would [serve as a supply source] to 

support its claim that NIDA’s supply is adequate to 

meet all legitimate medical and scientific 

purposes,’’ Resp. Prop. Findings at 11, Respondent, 

and not the Government, has the burden of proof 

on the issue of whether supply is inadequate within 

the meaning of 21 U.S.C. 823(a)(1). See 21 CFR 

1301.44(a). 

48Respondent testified that he had performed 

classified work on plants for the U.S. Army and that 

‘‘there were security systems in place similar to the 

security systems you have in this building’’ 

(referring to DEA Headquarters, where the hearing 

took place), and he answered ‘‘Yes’’ when asked by 

his counsel whether he recognized ‘‘the importance 

of that sort of security in a situation like this 

registration application.’’ Tr. 367. It is unclear what 

Respondent meant by ‘‘the security systems you 

have in this building,’’ since the only security to 

which he would have been exposed in entering 

DEA Headquarters to testify were the requirements 

of passing through a metal detector, being 

accompanied by a DEA employee, and wearing a 

visitor’s badge. These DEA Headquarters security 

measures have nothing to do with the security 

measures required of DEA registrants who handle 

controlled substances, which are set forth in 21 CFR 

1301.71 through 1301.76. Thus, this portion of 

Respondent’s testimony was ambiguous and did not 

establish, for purposes of 21 U.S.C. 823(a)(5) that, 

if his application were granted, there would exist 

in his establishment effective controls against 

diversion. 

any event, no provision of the National 

Center’s contract with NIDA imposes 

any prohibition on the use of the 

marijuana produced under the contract 

for the purposes of the development of 

a commercial product. Indeed, the 

language of the contract with NIDA 

suggests otherwise. While Article H.13 

states that ‘‘contract funds shall not be 

used to support activities that promote 

the legalization of any drug or other 

substance included in schedule I’’ of the 

CSA, it further provides that ‘‘[t]his 

limitation shall not apply when the 

contractor makes known to the 

contracting officer that there is 

significant medical evidence of a 

therapeutic advantage to the use of such 

drug or other substance or that federally 

sponsored clinical trials are being 

conducted to determine therapeutic 

advantage.’’ GX 13, at 20 (citing Pub. L. 

108–447, § 510, 108 Stat. 2809 (2005)). 

Likewise, the new procedures that HHS 

announced in 1999 for providing 

marijuana for medical research contain 

no restriction on using NIDA-supplied 

marijuana for the development of 

commercial products. GX 24. To the 

contrary, by adopting a new procedure 

whereby privately funded researchers 

could obtain marijuana from NIDA at 

cost, HHS made it possible starting in 

1999 for a commercially sponsored 

researcher to develop a drug product 

using NIDA-supplied marijuana. See id. 

at 2. Finally, Respondent cites no 

provision of law that prohibits NIDA 

from serving as a supply source for a 

prescription drug approval process.47

Evidence Regarding the Remaining 

Statutory Factors 

There is no evidence that Respondent 

has not complied with applicable state 

or local laws. See Gov. Proposed 

Findings at 139 (discussing 21 U.S.C. 

823(a)(2)). Moreover, Respondent has 

never been convicted of any controlledsubstance related offense. Tr. 78; see 21 

U.S.C. 823(a)(4). 

As for factor five, on the 

questionnaire, Respondent 

acknowledged that he ‘‘has no current 

or previous registrations and is unaware 

of any registration [having] previously 

[been] granted to the university.’’ GX 3, 

at 3. While Respondent testified that he 

would meet all ‘‘appropriate security 

conditions,’’ he also acknowledged that 

‘‘I’ve never grown marijuana or any 

other controlled substance.’’ Tr. 79. He 

further testified that ‘‘We have not—I 

have no experience in the control 

against diversion.’’ Id. Relatedly, 

Respondent testified that he had no 

personal experience in providing 

security for plants, id. at 255, and that 

both graduate students and technicians 

would be used to perform the various 

tasks associated with the project. Id. at 

254 (‘‘I usually don’t go down and water 

the plants in the greenhouse; I usually 

have a technician that does that.’’); id. 

at 254–55 (‘‘They [the graduate students 

and technicians] would probably do the 

transplanting[,]’’ and ‘‘a daily check on 

any environmental controls we have.’’). 

Respondent presented no evidence that 

any person who would be involved in 

the daily operation of the project would 

have experience in the lawful 

manufacture or distribution of schedule 

I and II controlled substances.48

Finally, Respondent testified that he 

believed that granting his application 

would promote technical advances in 

the art of manufacturing controlled 

substances and the development of new 

substances. Id. at 74–76. More 

specifically, Respondent asserted that 

granting his application would advance 

‘‘the understanding [of] any possible 

clinical use of marijuana if we were able 

to supply this to investigators to run 

trials.’’ Id. at 75–76. Respondent also 

testified that ‘‘we would learn more 

about how the environment affects the 

constituents in the plant material which 

would enable’’ a potential manufacturer, 

were marijuana to become approved by 

the FDA as a drug, to ‘‘know the 

environment it needs to be grown under 

to produce a clinical marijuana.’’ Id. at 

76. Respondent further opined that 

granting his registration would promote 

technical advances because part of the 

purpose of growing the marijuana was 

to allow MAPS to test its vaporizer. Id. 

at 77–78. Respondent acknowledged, 

however, that he would not personally 

be working on MAPS’s vaporizer device 

or on any other delivery device. Id. at 

230. He also acknowledged that he has 

no patents regarding the growing of any 

medicinal plants. Id. at 238. 

Discussion 

Pursuant to 21 U.S.C. 823(a), ‘‘[t]he 

Attorney General shall register an 

applicant to manufacture controlled 

substances in schedule I or II if he 

determines that such registration is 

consistent with the public interest and 

with the United States obligations under 

international treaties, conventions, or 

protocols in effect on May 1, 1971.’’ 21 

U.S.C. 823(a). ‘‘In determining the 

public interest,’’ § 823(a) directs the 

Attorney General to consider the 

following factors: 

(1) Maintenance of effective controls 

against diversion of particular controlled 

substances and any controlled substances in 

schedule I or II compounded therefrom into 

other than legitimate medical, scientific, 

research, or industrial channels, by limiting 

the importation and bulk manufacture of 

such controlled substances to a number of 

establishments which can produce an 

adequate and uninterrupted supply of these 

substances under adequately competitive 

conditions for legitimate medical, scientific, 

research, and industrial purposes; 

(2) Compliance with applicable State and 

local law; 

(3) Promotion of technical advances in the 

art of manufacturing these substances and the 

development of new substances; 

(4) Prior conviction record of applicant 

under Federal and State laws relating to the 

manufacture, distribution, or dispensing of 

such substances; 

(5) Past experience in the manufacture of 

controlled substances, and the existence in 

the establishment of effective controls against 

diversion; and 

(6) Such other factors as may be relevant 

to and consistent with public health and 

safety. 

Id. This Agency’s regulations further 

provide that ‘‘[a]t any hearing on an 

application to manufacture any 

controlled substance listed in Schedule 

I or II, the applicant shall have the 

burden of proving that the requirements 

for such registration pursuant to 

[§ 823(a)] are satisfied.’’ 21 CFR 

1301.44(a). 

As § 823(a) makes plain, even if an 

applicant satisfies its burden of proof 

with respect to the public interest 

inquiry, it cannot be granted a 

registration unless its proposed 

activities are consistent with the United 

States’ obligations under international 

treaties. The United States is a party to 


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49Under the Single Convention, ‘‘ ‘cannabis plant’ 

means any plant of the genus Cannabis.’’ Article 

1(c). The Single Convention defines ‘‘cannabis’’ to 

include ‘‘the flowering or fruiting tops of the 

cannabis plant (excluding the seeds and leaves 

when not accompanied by the tops) from which the 

resin has not been extracted, by whatever name 

they may be designated.’’ Article 1(b). This 

definition of ‘‘cannabis’’ under the Single 

Convention is less inclusive than the CSA 

definition of ‘‘marihuana.’’ See 21 U.S.C. 802(16). 

However, this distinction in inconsequential for 

purposes of the matters at issue in this proceeding. 

50The Single Convention’s use of the term 

‘‘Schedule IV’’ is not to be confused with the CSA’s 

use of the same term. Under the Convention, the 

terms ‘‘Schedule I, Schedule II, Schedule III and 

Schedule IV mean the correspondingly numbered 

list of drugs or preparations annexed to this 

Convention.’’ Single Convention, art. 1, para. 1(u). 

As the Convention further explains, ‘‘[t]he drugs in 

Schedule IV shall also be included in Schedule I 

and subject to all measures of control applicable to 

drugs in the latter Schedule’’ as well as the 

additional measures contained in article 2, 

paragraph 5. Id. art. 2, para. 5. 

Under Article 2, paragraph 5, the Convention 

requires that [a] Party shall adopt any special 

measures of control which in its opinion are 

necessary having regard to the particularly 

dangerous properties of a drug so included. Id. art. 

2, para. 5(a). The Convention further directs that: 

A Party shall, if in its opinion the prevailing 

conditions in its country render it the most 

appropriate means of protecting the public health 

and welfare, prohibit the production, manufacture, 

export and import of, trade in, possession or use of 

any such drug except for amounts which may be 

necessary for medical and scientific research only, 

including clinical trials therewith to be conducted 

under or subject to the direct supervision and 

control of the Party. 

Id. art. 2, para. 5(b). 

51Article 23 of the Convention further provides 

that ‘‘[a] Party that permits the cultivation of the 

opium poppy for the production of opium shall 

establish, if it has not already done so, and 

maintain, one or more government agencies * * * 

to carry out the functions required under this 

article.’’ Single Convention art. 23, para. 1. 

Moreover, ‘‘[a]ll cultivators of the opium poppy 

shall be required to deliver their total crops of 

opium to the Agency. The Agency shall purchase 

and take physical possession of such crops as soon 

as possible, but not later than four months after the 

end of the harvest.’’ Id. para. 2(d). 

the Single Convention. Accordingly, 

whether Respondent’s proposed 

activities are consistent with this 

Nation’s obligations under the 

Convention is a threshold question. 

A. Whether Respondent’s Proposed 

Registration Is Consistent With the 

Single Convention 

The Single Convention imposes a 

comprehensive series of measures to 

control narcotic drugs and other 

substances including marijuana (which 

is referred to in the Single Convention 

as ‘‘cannabis’’).49 Under the Convention, 

cannabis is both a Schedule I and 

Schedule IV 50 drug and is subject to the 

control measures applicable to each 

schedule. Single Convention, art. 2, 

para. 5; see also Secretary-General of the 

United Nations, Commentary on the 

Single Convention on Narcotic Drugs, 

1961, 65 (1973) (hereinafter, 

Commentary). Moreover, under article 

28, ‘‘[i]f a Party permits the cultivation 

of the cannabis plant for the production 

of cannabis or cannabis resin, it shall 

apply thereto the system of controls as 

provided in article 23 respecting the 

opium poppy.’’ Single Convention, art. 

28, Para. 1. As the Commentary further 

explains: 

The system of control over all stages of the 

drug economy which the Single Convention 

provides has two basic features: limitation of 

narcotic supplies of each country * * * to 

the quantities that it needs for medical and 

scientific purposes, and authorization of each 

form of participation in the drug economy, 

that is, licensing of producers, manufacturers 

and traders. * * * In the case of the 

production of opium, coca leaves, cannabis 

and cannabis resin, this regime is 

supplemented by the requirement of 

maintaining government monopolies for the 

wholesale and international trade in these 

drugs in countries which produce them. 

* * * 

Commentary at 263. 

Amongthese controls is the 

requirement that ‘‘[t]he Agency shall 

* * * have the exclusive right of 

importing, exporting, wholesale trading 

and maintaining stocks other than those 

held by manufacturers of opium 

alkaloids, medicinal opium or opium 

preparations.’’ Single Convention art. 

23, para. 2(e). The Convention further 

provides, however, that the ‘‘Parties 

need not extend this exclusive right to 

medicinal opium and opium 

preparations.’’ 51 Id. 

The Commentary to article 28 thus 

explains that ‘‘[a] Party permitting the 

cultivation of the cannabis plant for 

cannabis and cannabis resin must, 

pursuant to article 23, paragraph 

[2(e)(2)] in connexion with article 28, 

paragraph 1, grant its national cannabis 

agency the exclusive right of wholesale 

* * * trade in these drugs.’’ 

Commentary at 314 (emphasis added). 

The Commentary further explains that 

the Government ‘‘need not extend this 

exclusive right to extracts and tinctures 

of cannabis.’’ Id. 

Respondent raises several arguments 

as to why his registration would be 

consistent with the Single Convention. 

First, he argues that ‘‘the Convention 

clearly contemplates that more than one 

cultivator or bulk manufacturer may be 

licensed by the member nation’s 

licensing agency.’’ Resp. Prop. Findings 

at 66. Second, he argues that because his 

‘‘crop would be medical marijuana, 

grown and processed to be adapted for 

medicinal use, it is not subject to the 

agency’s ‘exclusive right’ for 

‘maintaining stocks.’ ’’ Id. at 67. 

Relatedly, Respondent argues that 

because DEA has granted Dr. ElSohly a 

registration to ‘‘grow marijuana for 

private purposes’’ and does not require 

him to ‘‘turn[] over those stocks to any 

government agency,’’ granting his 

application will likewise conform with 

the Single Convention. Respondent 

further contends that Dr. ElSohly has 

been able to grow marijuana outside of 

the NIDA contract and that ‘‘DEA would 

not have issued those licenses had they 

violated the Single Convention.’’ Id. at 

68. Respondent also argues that the 

United Kingdom, which is also Party to 

the Convention, has allowed marijuana 

to be grown by a private entity (GW 

Pharmaceuticals) without its 

government taking physical possession. 

Id. Likewise, in his Response to the 

Government’s exceptions to the ALJ’s 

recommended decision, Respondent 

argues that the ALJ ‘‘correctly held that 

Article 23 [para.] 2(d) does not require 

the government to take physical 

possession of [his] crop.’’ Respondent’s 

Resp. at 9. 

In concluding that the ‘‘Single 

Convention does not preclude 

registering Respondent,’’ the ALJ offered 

three reasons. First, based on the United 

Kingdom’s regulatory scheme, she 

reasoned that ‘‘it appears * * * that the 

parties to the Single Convention are free 

to construe the term ‘physical 

possession’ as they see fit.’’ ALJ 82. As 

for the remaining two reasons, the ALJ 

explained that ‘‘[i]t also appears, 

although it is not entirely clear, that the 

marijuana grown by the National Center 

or by any other registrant for utilization 

in research would qualify as either 

‘medicinal’ within the meaning of 

article 1, paragraph (1)(o), or a ‘special 

stocks’ within the meaning of article 1, 

paragraph (1)(x), and that therefore the 

government monopoly on importing, 

exporting, wholesale trading, and 

maintain stocks would not apply.’’ Id. 

Neither the ALJ’s rationales nor 

Respondent’s arguments are persuasive. 

As for the argument that the Single 

Convention does not require that the 

Government take physical possession, 

the argument provides no comfort to 

Respondent for two reasons. First, the 

argument ignores that taking possession 

and engaging in wholesale distribution 

are two separate activities under the 

Convention. Notably, in his briefs, 

Respondent does not even acknowledge 

the distinction. See Resp. Proposed 

Findings and Conclusion of Law at 64– 

70; Respondent’s Resp. at 9–12. 

Second, as Respondent’s evidence 

makes clear, his purpose for seeking a 

registration is not simply to grow 

marijuana, but to distribute it outside of 

the HHS system. Mr. Doblin’s testimony 


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52Under the CSA and DEA regulations, wholesale 

distribution and dispensing (retail distribution) are 

independent activities and require separate 

registrations. See 21 U.S.C. 802(11) (definition of 

‘‘distribute’’ excludes dispensing); compare 21 

U.S.C. 823(b) with 823(f) (separate registration 

required for distributor versus dispenser); see also 

21 CFR 1301.13(e) (listing categories of registration 

and authorized activities). Only a practitioner (and 

not a manufacturer or distributor) can dispense a 

controlled substance to a patient. See id. at 

1301.13(e)(1). 

Moreover, the Single Convention is a drug-control 

regime. The precise economic arrangements 

between Respondent, MAPS, and any other 

potential customers, are therefore irrelevant in 

determining whether his proposed activity would 

constitute wholesale trading. 

53There was a dispute between the parties as to 

the admissibility of the document Respondent 

submitted (attached to RX 26) purporting to set 

forth the United Kingdom’s explanation of how it 

carried out its obligation under the Single 

Convention to establish a national cannabis agency. 

Tr. 1812. After having the parties brief the issue, the 

ALJ noted, in a ‘‘Memorandum to Counsel and 

Ruling,’’ that one of the Government’s objections 

was that Respondent did ‘‘not explain how exhibit 

26 was issued or under what authority.’’ The ALJ 

concluded that ‘‘although the circumstances under 

which exhibit 26 came to be promulgated are not 

clear, it appears that the document is in effect in 

the United Kingdom.’’ Id. The ALJ did not explain 

her basis for this conclusion. See id. It is 

unnecessary to determine whether this ruling by the 

ALJ was proper because, even assuming, arguendo, 

that the document accurately represented the 

official position of the United Kingdom and was 

issued by the appropriate representative of the 

British Government, for the reasons explained 

above, reliance on this document for determining 

how to interpret the Single Convention for purposes 

of 21 U.S.C. 823(a) is inappropriate. 

54For this reason, it is unnecessary to expressly 

reject the interpretation contained in the document 

submitted by Respondent (attached to RX 26) titled 

‘‘United Kingdom National Cannabis Agency: 

Protocol.’’ 

55 In any event, there is no evidence that the 

British Government has allowed GW to engage in 

the type of activity for which Respondent seeks to 

become registered—the wholesale distribution of 

plant-form marijuana. Rather, as DEA has done with 

respect to the National Center and its project to 

supply THC extract to Mallinckrodt (GX 78), the 

British Government has granted GW a license to 

grow marijuana for the limited purpose of 

producing extract for a pharmaceutical product. Rx 

26, Ex. A at 2. 

56The above-quoted statement appears on page 

16, in paragraph 81, of the 2005 INCB Annual 

Report, which is available at http://www.incb.org/ 

pdf/e/ar/2005/incb_report_2005_2.pdf. I take 

official notice of the report. 

that ‘‘what we’re trying to do is get the 

[PHS] and NIDA out of the picture,’’ Tr. 

666, makes this plain. See also Tr. 225 

(testimony of Respondent; ‘‘I may very 

well be approached by other people 

with approved studies who need a 

source also.’’). Thus, Respondent’s 

contention that the Single Convention 

does not prohibit multiple cultivators is 

beside the point, since his proposed 

purpose for gaining authorization to 

grow marijuana (so that MAPS—rather 

than HHS/NIDA—can control 

distribution of the marijuana) would 

defy one of the central control 

provisions of the Single Convention 

with respect to cannabis cultivation. As 

the Commentary to the Single 

Convention states: 

Countries * * * which produce * * * 

cannabis * * * , [i]n so far as they permit 

private farmers to cultivate the plants * * *, 

cannot establish with sufficient exactitude 

the quantities harvested by individual 

producers. If they allowed the sale of the 

crops to private traders, they would not be 

in a position to ascertain with reasonable 

exactitude the amounts which enter their 

controlled trade. The effectiveness of their 

control re ́gime would thus be considerably 

weakened. In fact, experience has shown that 

permitting licensed private traders to 

purchase the crops results in diversion of 

large quantities of drugs into illicit channels. 

* * * [T]he acquisition of the crops and the 

wholesale and international trade in these 

agricultural products cannot be entrusted to 

private traders, but must be undertaken by 

governmental authorities in the producing 

countries. Article 23 * * * and article 28 

* * * therefore require a government 

monopoly of the wholesale and international 

trade in the agricultural product in question 

in the country which authorizes its 

production. 

Commentary at 278. Indeed, the central 

theme of Respondent’s argument— 

starting with the opening sentence of his 

Proposed Findings and Conclusion of 

Law and repeated throughout the 

document—is that the very Government 

monopoly over the wholesale 

distribution of marijuana that the Single 

Convention demands is the primary evil 

that Respondent seeks to defeat through 

obtaining a DEA registration. Thus, from 

the outset of the analysis, Respondent’s 

proposed registration cannot be 

reconciled with United States 

obligations under the treaty. 

Respondent offers no argument that 

his proposed distributions would not 

constitute wholesale trading under the 

Convention. See, e.g., GX 3, at 3 

(‘‘customers would include both MAPSsponsored research and research 

sponsored by other organizations.’’). 

Respondent’s proposed activity in 

distributing to researchers does not 

constitute retail trading because his 

customers are not the ultimate users of 

the marijuana, but rather researchers, 

who would then dispense the drugs to 

ultimate users. See Commentary at 329 

(A manufacturer’s ‘‘license does not in 

any event * * * include the retail trade 

in drugs.’’).52

In construing the meaning of ‘‘United 

States obligations under [the Single 

Convention]’’ in the context of 21 U.S.C. 

823(a), any reliance by the ALJ or 

Respondent on the United Kingdom’s 

practice is misplaced.53 For one, as set 

forth in § 823(a), Congress assigned to 

the Attorney General sole authority to 

determine whether a proposed 

registration under this provision is 

consistent with United States 

obligations under the Single 

Convention. Nowhere in the CSA does 

Congress call upon the Attorney General 

to rely on—or even consider—how other 

nations interpret the Single Convention 

as a basis for the Attorney General’s 

determination of what are the United 

States obligations under the treaty.54

Second, the Single Convention contains 

provisions that call upon each nation 

that is a party to the treaty to determine, 

in its own opinion, whether and how to 

tailor its control measures 

commensurate with the circumstances 

particularized to that country. For 

example, article 2, paragraph 5, of the 

Single Convention states the following 

with respect to drugs included in 

Schedule IV (including cannabis): 

(a) A Party shall adopt any special 

measures of control which in its opinion are 

necessary having regard to the particularly 

dangerous properties of a drug so included; 

and 

(b) A Party shall, if in its opinion the 

prevailing conditions in its country render it 

the most appropriate means of protecting the 

public health and welfare, prohibit the 

production, manufacture, export and import 

of, trade in, possession or use of any such 

drug except for amounts which may be 

necessary for medical and scientific research 

only, including clinical trials therewith to be 

conducted under or subject to the direct 

supervision and control of the Party. 

Thus, what the United Kingdom might, 

in its opinion, deem to be appropriate 

control measures to meet its obligations 

under the Single Convention given the 

circumstances involving cannabis in 

Britain might be distinct from what the 

United States finds, in its opinion, to be 

the appropriate control measures to fit 

the circumstances involving cannabis in 

the United States.55

If the United States were to look to 

any outside entity for guidance on 

compliance with the Single Convention, 

that entity would be the International 

Narcotics Control Board (INCB), which 

is the United Nations organ created by 

the Single Convention to implement, 

and monitor compliance with, the 

Convention. See Single Convention, 

articles 5, 9–15, 19–20. In its 2005 

Annual Report, the INCB reiterated: 

‘‘Articles 23 and 28 of the [Single] 

Convention provide for a national 

cannabis agency to be established in 

countries where the cannabis plant is 

cultivated licitly for the production of 

cannabis, even if the cannabis produced 

is used for research purposes only.’’ 56

Similarly, the INCB issued a statement 

in 2008 stating, with respect to the 

standards under the Single Convention 


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57This statement was made in an INCB press 

release issued on February 8, 2008, which is 

available at http://www.unis.unisvienna.org/unis/

pressrles/2008/usinar1023.html, and of which I take 

official notice. 

58There is also no listing of any opiumcontaining product in the latest edition (2008) of 

FDA’s ‘‘Orange Book,’’ which lists each drug 

product currently approved for marketing under the 

FDCA based on a determination by the FDA that the 

drug is safe and effective. See http://www.fda.gov/ 

cder/orange/obannual.pdf. 

59See also European Pharmacopoeia 1, § 1.1 (4th 

ed. 2001) (General Statements) (‘‘The active 

ingredients (medicinal substances), excipients 

(auxiliary substances), pharmaceutical preparations 

and other articles described in monographs are 

intended for human consumption and veterinary 

use (unless explicitly restricted to one of these 

uses)’’). 

relating to the control of cannabis, that 

‘‘[s]uch standards require, inter alia, the 

control of cultivation and production of 

cannabis by a national cannabis 

agency.’’ 57 As explained above, it is this 

control of the cultivation and 

production of cannabis by a national 

agency of the United States to which 

Respondent is fundamentally opposed, 

thereby demonstrating the inconsistency 

between his application and the Single 

Convention. 

The ALJ further reasoned that 

‘‘although it is not entirely clear,’’ the 

marijuana Respondent seeks to grow 

would be exempt from the 

Government’s exclusive right to engage 

in wholesale trading because it would 

qualify as either ‘‘medicinal’’ or ‘‘special 

stocks.’’ ALJ at 82. As explained below, 

the ALJ erred on both counts. 

In his response to the Government’s 

exceptions, Respondent contends that 

the ‘‘[t]he Single Convention defines 

‘medicinal’ marijuana as that ‘which has 

undergone the process necessary to 

adapt it for medicinal use.’ ’’ 

Respondent Resp. at 10 (quoting art I. 

para 1 (o)). The Single Convention, 

however, contains no such term. 

Rather, the Convention defines only 

the term ‘‘[m]edicinal opium.’’ Single 

Convention art 1, para.1(o) (defining 

‘‘medicinal opium’’ as ‘‘opium which 

has undergone the processes necessary 

to adapt it for medicinal use.’’). 

Accordingly, Respondent’s argument 

rests solely on an analogy to the term 

‘‘medicinal opium.’’ Respondent’s 

reliance is misplaced as it ignores 

several critical distinctions between 

what was formerly known as ‘‘medicinal 

opium’’ and what it contends is 

‘‘medicinal marijuana.’’ 

As the Commentary explains: ‘‘The 

Single Convention follows earlier 

narcotics treaties in defining ‘medicinal 

opium’ as a special form of opium in 

which that drug is used in medical 

treatment.’’ Commentary at 21–22. The 

Commentary goes on to state that 

‘‘medicinal opium’’ is a form of opium 

powder to which lactose has been added 

‘‘to reduce its morphine content to the 

standard of about 10 percent prescribed 

for ‘medicinal opium.’ ’’ Id. (emphasis 

added). 

In a footnote, the Commentary further 

explains that ‘‘[t]he fifth edition of the 

Pharmacop*a Helvetica (1949) * * * 

defines ‘medicinal opium’ as opium 

powder reduced to a content of 9.2 to 

10.2 per cent of anhydrous morphine by 

the addition of lactose. This 

pharmacop*a calls ‘medicinal opium’ 

also ‘powdered opium.’ ’’ Commentary 

at 22 n.8. The Commentary then notes 

that ‘‘[t]he term ‘medicinal opium’ ha[d] 

been abandoned in’’ in favor of the 

terms ‘‘powdered opium’’ and 

‘‘standardized powered opium’’ in 

several pharmacop*as which had been 

published in the late 1960s. Id. (citing 

British Pharmacop*a 686 (1968), and 

Pharmacop*a Internationalis 403 (2d 

ed. 1967)). Of further note, the term is 

not used at all in more recent 

pharmacop*as.58 See, e.g., The United 

States Pharmacopeia 2008, at 2860–61 

(31st Rev. 2007); British Pharmacopoeia 

2008, at 1599–1601 (2007). 

Thus, the term ‘‘medicinal opium’’ is 

now obsolete. The term’s obsolescence 

itself provides ample reason to disregard 

it in determining the scope of the 

United States’ obligations with respect 

to marijuana. But even if the term is still 

relevant, Respondent ignores that the 

term referred to a product which had 

not only been extracted from the opium 

poppy but had also undergone several 

further processes (including the 

addition of another substance, lactose) 

to prepare it for use in other drugs and 

to obtain a specific and standardized 

content of morphine, its primary active 

ingredient. See British Pharmacopoeia 

2008, at 1599 (‘‘Raw opium is intended 

only as a starting material for the 

manufacture of galenical preparations. It 

is not dispensed as such.’’); GX 53, at 3 

(letter of GW Pharmaceuticals) 

(‘‘[O]pium is a Schedule II substance, 

but it merely provides the starting 

material for a number of pharmaceutical 

dosage forms that are lawfully marketed 

in the U.S. Herbal opium is not itself 

used directly by patients.’’). 

Indeed, the inclusion of ‘‘medicinal 

opium’’ in the various older 

Pharmacop*as indicates that there were 

recognized standards for the substance’s 

manufacture and composition and that 

the drug had an accepted medical use in 

humans. See, e.g., The United States 

Pharmacopeia (17th Rev. ed. 1965), at 

xxv (noting that federal law 

‘‘designate[s] the Pharmacopeia as 

establishing the standards of strength, 

quality, and purity of medicinal 

products recognized therein when sold 

in interstate commerce for medicinal 

use’’); 59 see also The United States 

Pharmacopeia 2008, at v (‘‘USP 31 

* * * contains science-based standards 

for drugs, biologics, dietary, and 

excipients used in dosage forms and 

products. With few exceptions, all 

articles for which monographs are 

provided in USP 31 * * * are legally 

marketed in the United States or are 

contained in legally marketed 

articles.’’); British Pharmacopoeia 2008, 

at 4 (‘‘The requirements stated in the 

monographs of the Pharmacopoeia 

apply to articles that are intended for 

medicinal use. * * * An article 

intended for medicinal use that is 

described by means of an official title 

must comply with the requirements of 

the relevant monograph.’’). 

In contrast, there are no recognized 

standards with respect to herbal 

marijuana. And consistent with the 

recognition in almost every country that 

marijuana has no accepted medical use, 

neither marijuana, cannabis, nor THC is 

listed in the various pharmacopeias. See 

The United States Pharmacopeia 2008, 

at 1620, 2588–2589, 3366–3367; British 

Pharmacopoeia 2008, at 375–376, 1373– 

1374, 2111–2112; European 

Pharmacopoeia, at 777, 1495, 1997. Cf. 

James Everard’s Breweries v. Day, 265 

U.S. 545, 562 (1924) (rejecting 

contention that Congress arbitrarily 

determined that ‘‘intoxicating malt 

liquors possessed no substantial and 

essential medicinal properties’’; 

‘‘Neither beer nor any other intoxicating 

malt liquor is listed as a medicinal 

remedy in the United States 

Pharmacopeia. They are not generally 

recognized as medicinal agents. There is 

no consensus of opinion among 

physicians and medical authorities that 

they have any substantial value as 

medical agents. * * * ’’). 

Moreover, it is beyond question that, 

in the United States, marijuana has no 

currently accepted medical use and 

there are no FDA-approved medical 

products consisting of marijuana. See 

OCBC, 532 U.S. at 491 (‘‘for purposes of 

the [CSA], marijuana has ‘no currently 

accepted medical use’ at all.’’); 66 FR at 

20052 (as stated by the FDA, ‘‘[t]here are 

no FDA-approved marijuana 

products.’’). Thus, by any plausible 

application of the term ‘‘medicinal 

opium’’ to cannabis, as a factual matter, 

there is currently no such thing in the 

United States as ‘‘medicinal cannabis.’’ 

Respondent effectively concedes this 

point, by describing the purpose of his 

proposed registration as being ‘‘to 

develop the marijuana plant into an 


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60The term ‘‘special stocks’’ is operative in the 

Single Convention only in ways that have no 

bearing on this adjudication. See art. 19, paras. 1(d) 

& 2(d) (requiring parties to furnish the INCB with 

annual estimates of, among other things, 

‘‘[q]uantities of drugs necessary for addition to 

special stocks’’ and amounts taken therefrom); art. 

20, para. 3 (parties’ statistical returns to INCB need 

not address those relating to special stocks); art. 21, 

para. 2 (explaining how to take into account special 

stocks for purposes of countries’ limitations on 

manufacture and importation). 

61The above-quoted 1999 MOA was issued with 

respect to the University of Mississippi’s 1998 

Continued 

FDA-approved prescription medicine.’’ 

GX 3, at 1 (emphasis added). 

Finally, even if all the foregoing 

considerations were ignored and DEA 

were to treat the marijuana that 

Respondent seeks to grow as akin to 

‘‘medicinal opium’’ for purposes of the 

Single Convention, Respondent’s 

proposed activity would still be 

inconsistent with the Convention for the 

following reason. As the Commentary 

explains: ‘‘Opium-producing countries 

may thus authorize private manufacture 

of, and private international and 

domestic wholesale trade in, medicinal 

opium and opium preparations. The 

opium other than medicinal opium 

needed for such manufacture must 

however be procured from the national 

opium agency.’’ Commentary at 284 

(emphasis added). Thus, under the 

Convention, even if ‘‘medicinal 

cannabis’’ may be privately traded, the 

treaty requires that the raw material 

needed to produce the ‘‘medicinal 

cannabis’’ (i.e., the marijuana plant 

material) must be obtained from the 

national cannabis agency. This again 

reflects the central theme of cannabis 

control under the Single Convention— 

that the national agency must control 

the production and distribution of the 

raw marijuana material used for 

research or any other permissible 

purpose. Respondent’s unwillingness to 

accept this principle illustrates how his 

proposed registration is fundamentally 

at odds with the treaty. 

The ALJ also reasoned that the 

marijuana Respondent seeks to grow 

would qualify under the Convention as 

‘‘special stocks’’ and thereby be exempt 

from the ‘‘exclusive government’s right 

to maintain stocks.’’ ALJ at 82. Even 

Respondent acknowledges the ALJ’s 

error on this point. See Respondent’s 

Resp. at 12 (‘‘[I]t is evident that [the 

ALJ] simply inadvertently referenced 

the wrong term from Article 1.’’). The 

term ‘‘special stocks’’ under the 

Convention refers to ‘‘drugs held in a 

country or territory by the Government 

of such country or territory for special 

government purposes and to meet 

exceptional circumstances.’’ Single 

Convention, Art. 1, para. 1(w). Neither 

party is suggesting, and there is no basis 

to conclude, that the marijuana 

Respondent seeks to produce fits into 

this definition.60

While recognizing that the ALJ 

misread the term ‘‘special stocks,’’ 

Respondent argues that the marijuana 

he seeks to produce nonetheless 

qualifies as retail ‘‘stocks,’’ because it is 

marijuana that will be held ‘‘ ‘by 

institutions or qualified persons in the 

duly authorized exercise of therapeutic 

or scientific functions.’ ’’ Id. (quoting 

Single Convention, art. 1, para. 1(x)). 

Respondent thus contends that the 

marijuana he seeks to produce is exempt 

from the government monopoly 

provisions of article 23, paragraph 2, 

subparagraph (e). 

Respondent is mistaken. The entire 

text of the relevant provision explains 

that the marijuana Respondent would 

maintain does not fall within the 

exception to the definition of ‘‘stocks.’’ 

What is excluded under the treaty from 

the definition of ‘‘stocks’’ are those 

drugs held ‘‘[b]y retail pharmacists or 

other authorized retail distributors and 

by institutions or qualified persons in 

the duly authorized exercise of 

therapeutic or scientific functions.’’ 

Single Convention, art. 1, para. 1(x)(iv). 

As this provision makes plain, the 

exemption applies only to the drugs 

held by those persons or entities who 

are authorized to dispense to ultimate 

users. 

Respondent is not, however, a 

licensed pharmacist or physician and 

obviously cannot legally seek a 

practitioner’s registration, which is 

required to dispense. See 21 U.S.C. 

823(f). Rather, he is seeking to produce 

raw cannabis plant material to supply 

researchers. His proposed activity thus 

does not fall within the exemption for 

‘‘qualified persons in the duly 

authorized exercise of therapeutic or 

scientific functions’’ within the meaning 

of the Single Convention. 

Moreover, even with respect to 

cannabis material acquired for retail 

purposes that does fit within the 

exception of article 1, paragraph (x)(iv), 

the treaty still requires that such 

material be obtained via the national 

agency. As the Commentary explains 

with respect to opium (and therefore 

also with respect to cannabis, by virtue 

of article 28), while ‘‘[t]he retail trade in, 

and other retail distribution of, opium 

* * * need not be in the hands of the 

monopoly[,] [r]etail traders or 

distributors must, however, acquire 

their opium from the’’ Government. 

Commentary at 284. Respondent’s 

arguments repeatedly fail to 

acknowledge or accept this concept that 

lies at the core of the Single Convention. 

Yet, there is no escaping that, by seeking 

through his application to dismantle the 

existing Government control over the 

distribution of cannabis produced by 

growers and turn a share of that control 

over to MAPS, Respondent’s goal is 

antithetical to the treaty. For the 

foregoing reasons, the provision of 

article 1, paragraph (x)(iv) exempting 

certain material from the definition of 

‘‘stocks’’ does not support Respondent. 

As for Respondent’s point that DEA 

has previously allowed the University of 

Mississippi to grow marijuana to 

produce ‘‘marijuana extracts that the 

University then sells to pharmaceutical 

companies to develop products’’ (Resp. 

Prop. Findings at 68), it is true that DEA 

has previously allowed such activity 

under a Memorandum of Agreement 

(MOA) that was entered into in 1999. 

GX 78. However, that MOA expressly 

states: 

In accordance with articles 23 and 28 of 

the Single Convention on Narcotic Drugs, 

1961 (‘‘Single Convention’’), private trade in 

‘‘cannabis’’ is strictly prohibited. Therefore, 

the Center shall not distribute any quantity 

of marijuana to any person other than an 

authorized DEA employee. 

The Single Convention does not prohibit 

private trade in ‘‘cannabis preparations,’’ 

however. A ‘‘cannabis preparation,’’ within 

the meaning of the Single Convention, is a 

mixture, solid or liquid containing cannabis, 

cannabis resin, or extracts or tinctures of 

cannabis. The THC that the Center will 

extract from marijuana would be considered 

such a ‘‘cannabis preparation.’’ Therefore, the 

Center may, in accordance with the Single 

Convention, distribute the crude THC extract 

to private entities (provided such 

distributions of THC by the Center comply 

with all requirements set forth in the CSA 

and DEA regulations). 

Id. at 2–3 (footnote explaining treaty 

definition of cannabis omitted). Thus, 

the MOA was specifically designed to 

ensure that the University of Mississippi 

would not be distributing cannabis 

outside of the Government-controlled 

system required by the Single 

Convention. See Single Convention, art. 

23, para. 1(e) (exempting ‘‘preparations’’ 

from government monopoly on 

wholesale distribution). In contrast, 

Respondent does not seek to distribute 

a cannabis extract or any other 

processed cannabis material that 

constitutes a ‘‘preparation’’ within the 

meaning of the Single Convention. 

Instead, Respondent seeks to grow and 

distribute marijuana plant material that 

has undergone no processing other than 

drying (and therefore does not come 

within the Single Convention definition 

of ‘‘preparation’’).61


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application to become registered to manufacture 

marijuana for the purposes of product development. 

GX 78, at 1–2. In 2005, the University of Mississippi 

applied for a new registration to manufacture 

marijuana ‘‘to prepare marihuana extract for further 

purification into bulk active [THC] for use in 

launching FDA-approved pharmaceutical 

products.’’ 70 FR 47232; see also Tr. 1521. DEA has 

not yet issued a final order as to this application 

and the University therefore does not currently 

have DEA authorization to undertake such activity. 

As with Respondent’s application, DEA may only 

grant the pending University of Mississippi 

application if the agency determines that the 

University has demonstrated that the registration 

would be consistent with United States treaty 

obligations and the public interest. See GX 79, at 

3. In making such determinations, DEA will not 

simply rely on the prior issuance of registration 

under the 1999 MOA but will consider the 

application anew, in view of the current 

circumstances and consistent with this final order. 

Among other things that must be considered with 

respect to the pending University of Mississippi 

application, I note that the Commentary to the 

Single Convention states the following with respect 

to the exemption for ‘‘opium preparations’’ under 

Article 23, paragraph (e): ‘‘Opium-producing 

countries may thus authorize private manufacture 

of, and private international and domestic 

wholesale trade in, medicinal opium and opium 

preparations. The opium other than medicinal 

opium needed for such manufacture must however 

be procured from the national opium agency.’’ 

Commentary at 284 (emphasis added). Whether the 

University of Mississippi’s proposed registration 

would be consistent with this aspect of the treaty 

has not yet been determined by DEA and is not the 

subject of this adjudication. 

62Though the above discussion provides ample 

basis on which to conclude that Respondent has 

failed to meet his burden of proving that his 

proposed registration is consistent with United 

States obligations under the Single Convention, I 

also note briefly the following statement in the 

Commentary regarding the obligation of the United 

States under article 23, paragraph 2(a) to designate 

the areas in which cultivation takes place: ‘‘It is also 

suggested that [such areas] should to the greatest 

extent possible be located in the same part of the 

country, and be contiguous, in order to facilitate 

more effective control.’’ Commentary at 280. Thus, 

in a situation in which a country that is a party to 

the treaty allows for multiple growers of opium or 

cannabis with the national agency maintaining 

control over the distribution of such material in 

accordance with the Single Convention, the 

Commentary suggests that proper adherence to the 

treaty would result in that country keeping the 

growers located as near as possible to one another. 

63For ease of exposition, the detailed analysis of 

the meaning of paragraph 823(a)(1) appears in a 

separate section of this discussion (part C), due to 

its length. 

64See note 65, infra, regarding Respondent’s 

proposed interpretation of paragraph 823(a)(1). 

65Because I have concluded, for the reasons set 

forth in part C of the discussion, that DEA is 

obligated under the text of paragraph 823(a)(1) to 

consider limiting the number of bulk manufacturers 

and importers of a given schedule I or II controlled 

substance to that which can produce an adequate 

and uninterrupted supply under adequately 

competitive conditions, I reject Respondent’s 

alternative reading of paragraph 823(a)(1). 

Specifically, I reject the interpretation of paragraph 

823(a)(1) under which ‘‘the registration should be 

granted without regard to’’ adequacy of competition 

and supply so long as the ‘‘registration would not 

interfere with DEA’s maintenance of effective 

diversion controls.’’ See Respondent’s Resp. at 13. 

Respondent cites Noramco v. DEA, 375 F.3d 1148 

(D.C. Cir. 2004) in support of this interpretation. Id.; 

Resp. Proposed Findings and Conclusion of Law at 

36. The Noramco decision is examined at length in 

part C of this discussion. Because I interpret 

paragraph 823(a)(1) to require consideration of the 

adequacy of supply and competition, I decline to 

undertake an analysis of the facts of this case 

whereby the adequacy of competition and supply 

is disregarded. However, as indicated above, 

Respondent has alternatively argued that there is a 

sufficient basis to grant his application when 

construing paragraph 823(a)(1) as requiring a 

showing of inadequate competition or supply, and 

that argument is addressed at length in this final 

order. 

As the foregoing demonstrates, while 

the Single Convention does not 

necessarily prohibit the registration of 

an additional manufacturer, what it 

does prohibit is the wholesale 

distribution of plant-form marijuana by 

any entity other than the United States 

Government. Respondent is not under 

contract with HHS to supply it with 

marijuana and has made clear that the 

purpose of his registration is to 

distribute marijuana outside of the HHS 

system. Because it is clear that 

Respondent’s proposed activity is not 

within one of the exemptions from the 

obligatory government monopoly 

imposed by the Convention, he has 

failed to show that his proposed 

activities would be consistent with the 

Single Convention.62 See 21 U.S.C. 

823(a). Accordingly, his proposed 

registration is precluded under Federal 

law. 

B. Whether Respondent’s Proposed 

Registration Is Consistent With the 

Public Interest 

As explained in the preceding section, 

Respondent’s registration is clearly 

inconsistent with the United States’ 

obligations under the Single 

Convention. While this ground alone 

compels DEA to deny the application, as 

explained below, an analysis of the 

public interest criteria of 21 U.S.C. 

823(a) leads to the conclusion that 

Respondent’s registration is inconsistent 

with the public interest. This provides 

a separate basis—independent of the 

treaty consideration—on which the 

application must be denied. 

As stated above, under § 823(a), there 

are six factors that must be evaluated in 

determining whether a proposed 

registration is consistent with the public 

interest. The public interest factors ‘‘are 

considered in the disjunctive.’’ 

Southwood Pharmaceuticals, Inc., 72 FR 

36487, 36497 (2007). I may rely on any 

one or a combination of factors and give 

each factor the weight I deem 

appropriate in determining whether to 

deny an application for a registration. 

See Green Acre Farms, Inc., 72 FR 

24607, 24608 (2007); ALRA 

Laboratories, Inc., 59 FR 50620, 50621 

(1994). Moreover, I am ‘‘not required to 

make findings as to all of the factors.’’ 

Hoxie v. DEA, 419 F.3d 477, 482 (6th 

Cir. 2005); Morall v. DEA, 412 F.3d 165, 

173–74 (D.C. Cir. 2005). 

1. Public Interest Factor One 

The first public interest factor is the: 

maintenance of effective controls against 

diversion of particular controlled substances 

and any controlled substance in schedule I or 

II compounded therefrom into other than 

legitimate medical, scientific, research, or 

industrial channels, by limiting the 

importation and bulk manufacture of such 

controlled substances to a number of 

establishments which can produce an 

adequate an uninterrupted supply of these 

substances under adequately competitive 

conditions for legitimate medical, scientific, 

research, and industrial purposes. 

21 U.S.C. 823(a)(1) (emphasis added). 

As the ALJ observed, DEA has 

construed paragraph 823(a)(1) in two 

different ways in prior final orders, both 

of which were simultaneously upheld in 

a case that was reviewed by a United 

States Court of Appeals. ALJ at 82–83. 

Because of this, I have undertaken an 

extensive analysis of this provision, 

which is found in part C of this 

discussion.63 For the reasons explained 

therein, I believe that the most sound 

reading of the text of paragraph 

823(a)(1) requires DEA to consider 

limiting the number of bulk 

manufacturers and importers of a given 

schedule I or II controlled substance to 

that which can produce an adequate and 

uninterrupted supply under adequately 

competitive conditions. The 

Government so asserted in the Show 

Cause Order and throughout the 

proceedings. Although Respondent 

offered a different interpretation of 

paragraph 823(a)(1),64 he asserted that, 

under any interpretation, this factor 

weighed in favor of finding the 

proposed registration consistent with 

the public interest.65

As discussed at length in part C of 

this discussion, infra, to properly 

construe paragraph 823(a)(1), it must be 

viewed in comparison with § 823(d)(1). 

Whereas § 823(d)(1) contains no 

requirement that DEA consider limiting 

in any way the total number of 

registered manufacturers of controlled 

substances in schedules III, IV, and V, 

paragraph 823(a)(1) does require DEA to 

consider limiting the total number of 

bulk manufacturers of schedule I and II 

controlled substances. Specifically, 

paragraph 823(a)(1) calls upon DEA to 

consider ‘‘limiting’’ (i.e., placing an 

upper boundary on) the number of 

registered bulk manufacturers of a given 

schedule I or II controlled substance to 

that ‘‘which can produce an adequate 


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66Respondent appears to challenge the process by 

which NIDA supplies marijuana to researchers and 

the quality of the marijuana, rather than the 

quantity. See, e.g., Respondent’s Resp. at 15–16. 

The ALJ’s recommendation regarding the adequacy 

of supply also focused on the process by which 

NIDA supplies marijuana, and she was not of the 

opinion actual quantity of marijuana supplied by 

NIDA was inadequate. See ALJ at 84. Nonetheless, 

for the sake of completeness, and in accordance 

with 21 U.S.C. 823(a)(1), I am addressing the 

adequacy of supply from a quantitative perspective. 

67Tr. at 1626–28, 1635. In his testimony, Dr. Gust 

explained the term ‘‘peer review’’ as follows: ‘‘Peer 

review is a process that has been used, certainly by 

NIH, and I think in other agencies in the 

Department of Health and Human Services, and 

probably the Federal Government, where outside 

expertise is acquired and outside opinions on the 

scientific merit of specific research proposals.’’ Id. 

at 1627. Dr. Gust added that the NIH peer review 

committees ‘‘review proposals three times a year for 

the NIH, and there are—occasionally a Federal 

employee participates in one of those reviews, but 

probably 90 percent or more of the participants are 

researchers who are in the private sector, for the 

most part in academic institutions.’’ Id. at 1627–28. 

68Further, as discussed above, the evidence 

indicates that the denials involving of Dr. Abrams 

and Dr. Russo were based on HHS finding their 

protocols to be lacking in scientific merit. 

and uninterrupted supply of these 

substances under adequately 

competitive conditions for legitimate 

medical, scientific, research, and 

industrial purposes.’’ 

Thus, an applicant seeking to become 

registered to bulk manufacture a 

schedule I or II controlled substance 

bears the burden of demonstrating that 

the existing registered bulk 

manufacturers of a given schedule I or 

II controlled substance are unable to 

produce an adequate and uninterrupted 

supply of that substance under 

adequately competitive conditions. As a 

threshold matter, Respondent 

misconstrues this provision as placing 

the burden on DEA, whenever someone 

applies for registration under 21 U.S.C. 

823(a), to demonstrate that competition 

is already adequate within the meaning 

of paragraph 823(a)(1). See Resp. 

Proposed Findings and Conclusion of 

Law at 47 (in which Respondent 

contends that the ‘‘requirement’’ of 

‘‘adequately competitive conditions’’ ‘‘is 

not met by the by the current NIDA 

monopoly’’). In fact, the DEA 

regulations plainly state that every 

applicant seeking registration under 

§ 823(a) has ‘‘the burden of proving that 

the requirements for such registration 

pursuant to [this section] are satisfied.’’ 

21 CFR 1301.44(a). 

Accordingly, the analysis under 

paragraph 823(a)(1) (and Respondent’s 

burdens thereunder) must be divided 

into the following parts: (a) an analysis 

of the adequacy of supply and (b) an 

analysis of the adequacy of competition. 

If Respondent can demonstrate by a 

preponderance of the evidence that 

either supply or competition is 

inadequate within the meaning 

paragraph 823(a)(1), this weighs heavily 

in favor of granting the registration. If, 

however, Respondent fails to meet his 

burden with respect to both supply and 

competition, this weighs heavily against 

granting the registration. (See part C of 

this discussion.) 

(a) Adequacy of Supply Within the 

Meaning of Paragraph 823(a)(1) 

The first question under paragraph 

823(a)(1) is whether Respondent has 

demonstrated that the existing supply of 

marijuana is inadequate to meet the 

legitimate needs of the United States. As 

the parties essentially agree, the 

adequacy of supply of marijuana must 

be evaluated in two respects: (i) quantity 

and (ii) quality. 

(i) Adequacy of the Quantity of the 

Existing Supply 

With respect to the adequacy of the 

quantity of supply, the record 

establishes that as of the date of the 

hearing, there were approximately 1055 

kg of marijuana of various potencies in 

the NIDA vault. RX 53. Moreover, some 

of this marijuana apparently had been 

harvested as early as 1997, and it 

appears that as of the date of the 

hearing, no marijuana had been grown 

since 2001. Id. For the following 

reasons, this amount of existing supply 

far exceeds any present demand for 

research-grade marijuana as well as any 

reasonably anticipated demand for such 

marijuana in the foreseeable future. 

Lawful research involving marijuana 

can be divided into two categories: NIHfunded and privately funded. See GX 

31, at 3. With respect to NIH-funded 

research, Respondent does not contend, 

and there is no basis in the record to 

conclude, that NIDA has failed to 

provide, or is incapable of providing, an 

adequate quantity of marijuana. Rather, 

to the extent Respondent is claiming 

that NIDA is unable to provide an 

adequate quantity of marijuana,66 this 

claim relates to privately funded 

researchers. Yet, even as to this claim, 

the evidence indicates otherwise. 

The record reflects that since HHS 

changed its policies in 1999 to make 

marijuana more readily available to 

researchers (by, among other things, 

allowing privately funded researchers to 

obtain marijuana), every one of the 17 

CMCR-sponsored pre-clinical or clinical 

studies that requested marijuana from 

NIDA was provided with marijuana. GX 

31, at 3; Tr. 694–95. Significantly, 

according to one of the witnesses who 

testified on behalf of Respondent, CMCR 

funding of research involving marijuana 

has currently ended and it appears 

doubtful that a resumption of such 

funding is ‘‘on the horizon.’’ Tr. at 397– 

402, 441. Thus, the witness testified, 

once the research projects sponsored by 

CMCR that utilize NIDA marijuana 

reach their conclusion, ‘‘[i]t’s likely that 

the [CMCR] research is done.’’ Id. at 

401–02. Other than the CMCRsponsored research, the record reveals 

only one other instance in which a 

privately funded researcher sought 

marijuana from NIDA after HHS 

changed its policies in 1999 to make 

marijuana more readily available to 

researchers. That one other instance was 

the MAPS-sponsored request submitted 

by Chemic to obtain marijuana to 

conduct research on the Volcano. See 

RX 52B. According to Mr. Doblin, 

Chemic ‘‘applied to NIDA to purchase 

ten grams’’ of marijuana. Tr. 531; RX 14. 

Although, as discussed above, HHS 

denied that request on scientific 

grounds (see RX 52B), there is no basis 

to conclude that NIDA was incapable of 

providing Chemic with the quantity of 

marijuana it was seeking. Indeed, the 

ten grams of marijuana that Chemic 

requested is less then one 100,000th of 

the amount of marijuana that NIDA has 

available to supply researchers. See RX 

53. 

Accordingly, the evidence 

overwhelmingly establishes that NIDA 

is capable of providing an adequate 

quantity of marijuana to meet all current 

and foreseeable research needs of the 

United States. And while NIDA’s 

existing system for supplying marijuana 

is quantitatively adequate regardless of 

how much or how little additional 

marijuana Respondent seeks to produce, 

it is notable that the approximately 1055 

kg of marijuana currently on hand is 

more than 90 times the amount of 

marijuana that Respondent proposes to 

grow. 

Respondent nonetheless contends that 

the process by which HHS provides 

marijuana to researchers—which 

involves a peer review of the scientific 

merits of the research proposal 67— 

results in a barrier to research that 

effectively renders the supply of 

marijuana inadequate. Respondent 

points to three prior incidents to 

support his contention that the HHS 

scientific review process impedes 

research. As discussed above, the first 

two of these incidents (those involving 

Dr. Abrams and Dr. Russo) are irrelevant 

as they occurred before HHS adopted its 

new procedures in 1999 for making 

marijuana more widely available to 

researchers.68 The third incident 

involved the application of Chemic to 

obtain marijuana to conduct research on 

the Volcano. As discussed above, HHS 


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69 It is not even clear whether Respondent 

continues to cite the Chemic situation of an 

example of supposedly ‘‘legitimate research’’ for 

which HHS declined to provide marijuana. While 

Respondent did so characterize the Chemic 

situation in his proposed findings of fact and 

conclusions of law (at 14), in his subsequently filed 

response to the Government’s exceptions to the ALJ 

recommendation, he listed only Dr. Abrams and Dr. 

Russo as examples of ‘‘legitimate research’’ for 

which marijuana was not supplied. Respondent’s 

Resp. at 16. As noted, the incidents involving Dr. 

Abrams and Dr. Russo occurred prior to HHS’s 

promulgation of the 1999 guidelines. As such, these 

incidents are not probative of the current 

availability of research-grade marijuana from HHS. 

70Respondent points out that the Secretary of 

HHS has delegated to the FDA Commissioner the 

Secretary’s functions under 21 U.S.C. 823(f) relating 

to research with controlled substances in schedule 

I. Respondent’s Resp. at 4–5 (citing FDA Staff 

Manual Guides 1410.10). While this is correct as a 

general matter for schedule I controlled substances, 

the record plainly indicates that with specific 

regard to research involving marijuana, HHS has 

retained its authority to determine the 

qualifications and competency of the researcher, as 

well as the merits of the research protocol, for 

purposes of § 823(f). See GX 24. Indeed, the 1999 

HHS announcement of its policies for providing 

marijuana to researchers expressly states: ‘‘To 

receive such a registration [under § 823(f)], a 

researcher must first be determined by HHS to be 

qualified and competent, and the proposed research 

must be determined by HHS to have merit.’’ Id. at 

1 (emphasis added). Dr. Gust’s testimony confirms 

that, in fact, HHS—through its peer review 

process—does make these determinations for 

persons seeking to conduct research with 

marijuana. Tr. 1626–35. 

Moreover, as discussed above, Respondent 

produced no evidence showing that HHS has 

denied marijuana to any clinical researcher with an 

FDA-approved protocol subsequent to the adoption 

of the 1999 guidelines. The lone applicant whose 

post-1999 request for marijuana was denied 

(Chemic) submitted its request to, and had it 

reviewed by HHS—not FDA. See GXs 49 & 52B. For 

all these reasons, it is unfounded for Respondent to 

suggest that the supply of marijuana is somehow 

inadequate because HHS has not assigned FDA sole 

responsibility for determining what research 

proposals involving marijuana are scientifically 

meritorious. 

71Any suggestion that the HHS scientific review 

process is unduly rigorous is belied by the 

testimony of Dr. Gust that the ‘‘scientific bar has 

been set very low, [so] that any project that has 

scientific merit is approved,’’ and that ‘‘anything 

that gets approved gets NIDA marijuana’’ (Tr. at 

1700–01) as well as the uncontroverted evidence 

that every one of the 17 CMCR-sponsored research 

protocols submitted to HHS was deemed 

scientifically meritorious by HHS and was supplied 

with marijuana (GX 31, at 3; Tr. 694–95). 

72For the same reasons, I find wholly 

unpersuasive the ALJ’s recommended finding that 

the supply of marijuana is inadequate because of 

the HHS scientific review process. 

73 Despite Respondent’s suggestion that human 

research subjects should be given marijuana of 

higher potencies than that supplied by NIDA (see, 

e.g., Tr. 552, 567 (testimony of Mr. Doblin)), there 

is no basis in the record to conclude that it would 

be medically or scientifically appropriate to do so. 

To the contrary, Dr. ElSohly testified that he was 

told by CMCR researchers that they did not want 

Dr. ElSohly to supply them with marijuana with a 

THC content as high as eight percent because, based 

on their prior observations of research subjects 

being given NIDA marijuana containing eight 

percent THC, ‘‘the subject couldn’t tolerate that, 

and if we can make a six percent, that would be 

more appropriate.’’ Tr. 1280. Dr. ElSohly also 

testified that other scientists expressed the same 

opinion that six percent THC content was 

preferable because the research subjects ‘‘would not 

tolerate’’ marijuana with eight percent THC. Tr. 

1295. Large doses of marijuana (in terms of the 

amount of THC administered) have been found to 

cause adverse mood reactions, including anxiety, 

paranoia, panic, depression, dysphoria, 

depersonalization, delusions, illusions, and 

hallucinations. RX 1, at 102. A primary reason that 

researchers are required to submit an IND to FDA 

prior to engaging in research with human subjects 

is ‘‘to assure the safety and rights of subjects.’’ 21 

CFR 312.22(a). 

declined to supply Chemic with 

marijuana in 2005 based on scientific 

considerations, finding that Chemic’s 

then-latest proposed study was 

duplicative of prior and ongoing 

research and not likely to provide useful 

data. Thus, the success of Respondent’s 

claim that the HHS scientific review 

process renders the existing supply of 

marijuana inadequate depends on 

whether one accepts Respondent’s 

assumption that anyone in the United 

States who has a proposed research 

project involving marijuana should be 

entitled to obtain marijuana—regardless 

of whether the competent Government 

authority finds the research to be 

lacking in scientific merit.69

Respondent’s assumption about who 

is entitled to conduct research with 

marijuana is directly undercut by the 

text of the CSA. As set forth in 21 U.S.C. 

823(f), persons seeking to conduct 

research with schedule I controlled 

substances (such as marijuana) may 

only obtain a DEA registration ‘‘for the 

purpose of bona fide research’’ 

(emphasis added), with the Secretary of 

HHS being responsible for determining 

‘‘the qualifications and competency’’ of 

the applicant ‘‘as well as the merits of 

the research protocol.’’ The process 

HHS has established to assess the 

scientific merit of proposed research 

studies involving marijuana is that 

described in the 1999 HHS 

announcement of its new procedures.70

GXs 24 & 31; Tr. at 1626–35. That 

Respondent finds this process to be 

scientifically rigorous 71—and thereby 

not automatically accepting of any 

proposed study sponsored by MAPS— 

provides no basis for any valid objection 

or any contention that the HHS supply 

of marijuana is inadequate.72

(ii) Adequacy of the Quality of the 

Existing Supply 

As for Respondent’s contention that 

the quality of marijuana supplied by 

NIDA is unsatisfactory and that this 

renders the supply of marijuana 

inadequate within the meaning of 21 

U.S.C. 823(a)(1), the ALJ rejected this 

contention, finding that a 

preponderance of the evidence 

established that ‘‘the quality is generally 

adequate.’’ ALJ at 84. In this regard, 

Respondent contended that NIDA’s 

marijuana was of inconsistent potency, 

that it was of too low a potency, that it 

included stems and seeds, that it was 

not fresh, and that some of the patients 

had complained that it ‘‘was the worst 

marijuana they had ever sampled.’’ 

Resp. Proposed Findings at 16–27 & 49. 

As found above, Respondent’s 

contentions rest largely on snippets 

taken from questionnaires which were 

completed by a number of researchers. 

On balance, however, the researchers 

indicated their overall satisfaction with 

NIDA’s marijuana and noted that the 

agency had been accommodating and 

responsive to their concerns. See, e.g., 

GX 16, at 6 & 19. Moreover, most of the 

researchers indicated that the potency of 

NIDA’s product was adequate and had 

not compromised their research. See, 

e.g., GX 16, at 6 & 15; GX 17, at 9. 

Furthermore, while Respondent notes 

that several researchers stated that it 

would be beneficial to evaluate a higher 

potency product, he produced no 

evidence that any researcher had 

obtained approval from FDA and other 

reviewing authorities to conduct clinic 

trials with such a product. See GX 21, 

at 9 (researcher explaining that he 

‘‘wanted to use a higher potency 

product but there were questions from 

the [scientific review board] and the’’ 

CMCR). In any event, the evidence 

establishes that NIDA’s stock includes 

substantial quantities of high THC 

content marijuana and that its 

contractor is capable of producing 

marijuana with a THC content of up to 

twenty percent.73 Tr. 1203–05. 

Related to this argument, Respondent 

also contends that NIDA’s marijuana has 

stems and seeds and that some patients 

complained that ‘‘that the marijuana is 

inferior in sensory qualities (taste, 

harshness) than the marijuana they 

smoke outside the laboratory. Some 

have stated it was the worst marijuana 

they had ever sampled.’’ Resp. Proposed 

Findings at 20 (other citation omitted); 

see also id. at 49. The evidence 

establishes, however, that the contractor 

has rectified the problem with respect to 

the stems and seeds. Tr. 1301. 

As for the complaints regarding the 

sensory qualities of NIDA’s products, 

only a small percentage of the numerous 

studies’ subjects complained about the 

harshness of NIDA’s marijuana, and as 

one researcher explained, it is not clear 

whether it was placebo or actual 

marijuana that was the cause of the 

complaints. GX 18, at 7. Relatedly, it 

seems a strained argument for 

Respondent to make that experienced 


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74Moreover, Respondent presented no evidence 

to show that he is capable of producing marijuana 

with any degree of quality control—let alone the 

type of evidence that would allow an inference that 

he could improve upon the quality of marijuana 

produced at the University of Mississippi. To the 

contrary, as explained below in the discussion of 

public interest factor five, Respondent’s lack of 

experience in growing marijuana is in stark contrast 

to Dr. ElSohly’s decades of experience in 

manufacturing, analyzing, and publishing scientific 

articles on the subject. 

75See Penick Corporation Inc., 68 FR 6947 (2003); 

Roxane Laboratories, Inc., 63 FR 55891 (1998). 

76Hearings Before the Subcomm. to Investigate 

Juvenile Delinquency of the Comm. on the 

Judiciary, United States Senate, 91st Cong. 372 

(1969) (discussed more fully in part C of this 

discussion). 

77According to Dr. ElSohly, where marijuana is 

supplied to privately funded researchers, ‘‘the 

researchers would just pay the production costs.’’ 

RX 5, at 2. 

78See Penick Corporation, supra; Roxane 

Laboratories, supra (both of which are examined in 

part C of this discussion). As one DEA scientist 

testified in this proceeding, based on his 

experience, when the agency has historically 

considered the adequacy of competition within the 

meaning of paragraph 823(a)(1), the analyses ‘‘all 

seem to be geared around the economics.’’ Tr. at 

945. 

marijuana smokers reported, after 

consuming a hallucinogenic substance, 

that they found NIDA’s marijuana to be 

less pleasing to their senses than the 

marijuana they had illegally obtained 

and used. People generally take 

medicines—which marijuana is not—for 

their therapeutic benefits and not their 

taste. And in any event, Respondent has 

not established that NIDA’s products 

were unsuitable for their intended use.74

For these reasons, I accept the ALJ’s 

recommended finding that Respondent 

did not meet his burden of 

demonstrating that NIDA is incapable of 

providing marijuana of sufficient quality 

to meet the legitimate research needs of 

the United States. 

Thus, I conclude that the evidence 

does not support Respondent’s 

contention that the supply of marijuana 

is inadequate—in terms of quantity or 

quality—within the meaning of 

paragraph 823(a)(1). 

(b) Adequacy of Competition Within the 

Meaning of Paragraph 823(a)(1) 

The second question under paragraph 

823(a)(1) is whether Respondent has 

demonstrated that the existing supply of 

marijuana is not being produced under 

adequately competitive conditions to 

meet the legitimate needs of the United 

States. Again, as explained below in 

part C of this discussion, paragraph 

823(a)(1) does not require DEA simply 

to register as many bulk manufacturers 

of a given schedule I or II controlled 

substance as the market will bear. Nor 

does paragraph 823(a)(1) require the 

registration of an additional bulk 

manufacturer based merely on the 

assertion the additional registration will 

result in some vague, theoretical 

incremental increase in competition. If 

such a theoretical assertion would 

suffice, then the language of paragraph 

823(a)(1) requiring DEA to consider 

‘‘limiting’’ the number of registered bulk 

manufacturers would be rendered 

meaningless. This is because every 

person seeking to enter the market as a 

new bulk manufacturer of a given 

schedule I or II controlled substance 

could make the theoretical claim that 

every new registrant increases the 

overall amount of competition. 

Thus, to avoid reading the limiting 

language of paragraph 823(a)(1) in a 

superfluous manner, in final orders 

where DEA has analyzed competition 

under paragraph 823(a)(1), DEA has 

looked to empirical data; specifically, 

DEA has focused on the historical and 

present prices charged to those who 

lawfully acquire the controlled 

substance from the existing registered 

bulk manufacturers.75 This approach is 

consistent with the following statement 

made by the Department of Justice 

stated during Congressional hearings 

leading up to the enactment of the CSA: 

There is no reason to assume that the 

Attorney General will prejudice his primary 

objectives of effective control by excessive 

licensing. Nor will he undertake direct price 

control. He will be empowered to take 

cognizance of evidence showing that prices 

are clearly and persistently excessive. The 

criteria for determining whether prices far 

exceed that which is reasonable relate to 

reasonable costs and reasonable profits. 

* * * If evidence indicates that additional 

licensing will result in more reasonable 

prices with no significant diminution in the 

effectiveness of drug control, the Attorney 

General should be able to license the 

additional manufacturers.76

Here, the evidence demonstrates that 

NIDA has always provided marijuana to 

researchers at cost or for free—and at no 

profit to NIDA. Privately funded 

researchers receive marijuana at NIDA’s 

cost 77 and HHS-funded researchers 

(who have historically comprised the 

bulk of the marijuana recipients) receive 

the marijuana at no cost. GX 24, at 2; GX 

31, at 3; Tr. 1212, 1633, 1670–71. Thus, 

there is no basis to suggest that the cost 

to any researcher under the existing 

supply arrangement is unreasonable. 

Respondent himself does not so 

contend; nor does he claim that the cost 

to any researcher of obtaining marijuana 

would be lower if Respondent became 

registered to grow marijuana. 

Respondent hypothesizes that ‘‘if 

another manufacturer could produce 

suitable medical marijuana for a lower 

cost, competitive conditions would, as 

they usually do, benefit the researcherconsumer.’’ Resp. Prop. Findings at 48. 

However, Respondent provides no 

evidentiary basis for the proposition 

that he (or anyone else) could produce 

marijuana at a lower cost than NIDA. 

Moreover, Mr. Doblin acknowledged 

that MAPS would have a ‘‘profitmaking’’ motivation as part of its 

‘‘operation’’ to supply marijuana for the 

purposes of drug development, and that 

this would impact ‘‘costs.’’ Tr. 605–606. 

In contrast, there is no evidence that 

HHS or NIDA is driven in any respect 

by a profit motive in deciding to whom 

and at what cost to supply marijuana. 

Even accepting, arguendo, Mr. Doblin’s 

testimony that ‘‘we [MAPS] would 

either provide [marijuana] free or at cost 

through donations to MAPS to other 

researchers who are not doing MAPS 

funded projects’’ (Tr. at 589), this would 

still not demonstrate a lowering of the 

cost to researchers. This is because, if 

MAPS were so willing to fund all 

researchers, they could do so under the 

existing system by paying NIDA on a 

cost-reimbursable basis for the 

marijuana, allowing the researchers to 

obtain the marijuana at no cost to the 

researchers. Thus, Respondent has not 

demonstrated that competition is 

inadequate in the way that other 

applicants for registration under § 823(a) 

have successfully done in prior final 

orders; i.e., by focusing on prices 

charged by the existing registrants that 

supply the market for the schedule I or 

II controlled substance in question and 

showing those prices to be 

unreasonable.78

Respondent also claims that the 

process by which the NIDA contract is 

awarded is not adequately competitive 

because the contract requires not only 

that the contractor manufacture 

marijuana, but also that it analyze 

marijuana samples sent in by law 

enforcement agencies. Id. at 48. 

Respondent further contends that the 

NIDA process ‘‘does not ensure that 

researchers pay a competitive price 

[because] NIDA sets the price and there 

is no evidence as to how that price is 

set.’’ Id. Finally, Respondent rehashes 

his argument regarding the quality of 

NIDA’s marijuana contending that 

granting his application would promote 

competition and improvement in the 

quality of research marijuana. Id. at 49. 

The ALJ agreed with Respondent and 

rejected the Government’s contention 

that the NIDA process provides for 

adequate competition because demand 

for research grade marijuana is limited, 

the contract is periodically put up for 


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79The University of Mississippi subcontracts to 

another entity, Research Triangle Institute (RTI), the 

responsibilities under the contract to produce the 

marijuana cigarettes (using marijuana supplied by 

the University of Mississippi) and deliver them to 

authorized recipients. Tr. 1162–65, 1168–69; see 

also 72 FR 73369 (notice of registration for RTI). 

80As discussed above, Respondent failed to put 

forth any evidence demonstrating that he is capable 

of any type of quality control relating the 

manufacture of marijuana and his lack of 

experience and expertise in this field compared to 

that of Dr. ElSohly suggests that he is incapable of 

improving on the quality of marijuana produced by 

the University of Mississippi. 

81 I also note Respondent’s contention that the 

NIDA process ‘‘does not ensure that researchers pay 

a competitive price [because] NIDA sets the price 

and there is no evidence as to how that price is set.’’ 

Resp. Prop. Findings at 48. Even if marijuana were 

not subject to the Convention’s requirement, I 

would still reject the argument because Respondent 

had the burden of proving that the prices are 

excessive. 

82See H.R. Rep. 1444 (91st. Cong., 2d Sess.), 

reprinted at 1970 U.S.C.C.A.N. 4566, 4572. 

competitive bidding, and the 

Convention requires that the 

Government maintain a monopoly on 

the wholesale distribution of the 

substance. More specifically, the ALJ 

reasoned that ‘‘[t]he question is not 

* * * whether the NIDA process 

addresses that agency’s needs, but 

whether marijuana is made available to 

all researchers who have a legitimate 

need for it in their research.’’ ALJ at 85. 

Based on her finding that NIDA denied 

marijuana to two researchers, the ALJ 

‘‘answer[ed] that question in the 

negative.’’ Id. 

The ALJ also reasoned that analyzing 

marijuana samples was ‘‘a separate 

activity from cultivating marijuana for 

research purposes and a requirement 

that a qualified cultivator may not be 

able to fulfill.’’ Id. The ALJ thus 

concluded that ‘‘the NIDA contractual 

process does not * * * render 

competition in the manufacture of 

marijuana adequate.’’ Id. 

I reject both the ALJ’s legal 

conclusions and Respondent’s 

arguments. As for the ALJ’s (and 

Respondent’s) reasoning that the NIDA 

contractual process does not render 

competition adequate because the 

contract requires the analyzing of 

marijuana samples, in executing its 

authority under § 823(a), DEA does not 

act as a board of contract appeals. In any 

event, the contract does not prohibit the 

contractor from subcontracting this 

function. See GX 15, at 4 (Request for 

Proposal) (‘‘As this procurement may 

require expertise in several scientific 

areas, offerors are encouraged to solicit 

subcontractors or expert consultants as 

appropriate.’’) (emphasis added).79

Finally, as for the contention that 

granting his application would provide 

for competition and thereby promote 

improvement in the quality of researchgrade marijuana,80 if Respondent 

believes that he can produce a higherquality product than the current 

contractor, he should bid on the 

contract.81 If he prevails, and 

demonstrates that his project will 

implement effective controls against 

diversion, he can establish that his 

registration would be consistent with 

the public interest. Respondent, 

however, has not been awarded a 

contract to supply NIDA, which, 

consistent with the Single Convention, 

is the only lawfully authorized 

wholesale distributor of plant-form 

marijuana. 

Thus, whether viewing the 

competition aspect of paragraph 

823(a)(1) by considering the 

reasonableness of prices paid by those 

who lawfully acquire bulk marijuana for 

research or by considering the adequacy 

of the competitiveness of the process by 

which persons may bid to become the 

grower of marijuana for NIDA, 

Respondent has failed to meet his 

burden. This combined with his failure 

to meet his burden of demonstrating 

inadequate supply within the meaning 

of paragraph 823(a)(1) weighs heavily 

against granting his application. 

Nonetheless, Respondent raises a host of 

arguments under the heading of 

paragraph 823(a)(1) which—though not 

actually germane to paragraph 

823(a)(1)—are addressed below. 

(c) Additional Arguments Raised by 

Respondent Under the Heading of 

Paragraph 823(a)(1) 

In lieu of presenting evidence to show 

that competition is inadequate by virtue 

of unreasonable prices for researchgrade marijuana or any other economic 

data, Respondent argues that 

competition should be deemed 

inadequate within the meaning of 

paragraph 823(a)(1) based on his 

objection to the to ‘‘government 

monopoly’’ whereby HHS distributes 

marijuana to researchers. In other 

words, the very monopoly over the 

wholesale distribution of marijuana that 

is mandated by the Single Convention 

(indeed, the element that is at the heart 

of the structure of cannabis control 

under the treaty) is the central basis on 

which Respondent relies in attempting 

to meet his burden of demonstrating 

inadequate competition within the 

meaning of paragraph 823(a)(1). This 

argument is flawed in the following 

respects. As explained above and in part 

C of this discussion, the competition 

analysis set forth in paragraph 823(a)(1) 

must be based on actual economic 

considerations in the existing market— 

not policy questions about the wisdom 

of having the Federal Government 

control the wholesale distribution of 

marijuana. 

In addition, Respondent’s suggestion 

that paragraph 823(a)(1) can be used to 

defeat the Single Convention’s 

requirement of a government monopoly 

over wholesale marijuana distribution 

mistakenly construes the treaty criterion 

§ 823(a) as being in competition with 

the public interest criterion. In fact, as 

explained above, an applicant for 

registration under § 823(a) must 

demonstrate that the proposed 

registration is consistent with both the 

Single Convention and the public 

interest—and neither criterion is at odds 

with the other. Both the Single 

Convention and the United States Code 

are the ‘‘supreme law of the land,’’ U.S. 

Const. art VI, and in enacting the CSA, 

Congress made clear that § 823(a) 

should be interpreted in a manner that 

is consistent with the United States’ 

obligations under the Convention. The 

Agency’s interpretation of paragraph 

823(a)(1) must therefore recognize not 

only the Convention’s specific 

provisions applicable to marijuana, 

which expressly prohibit competition in 

the wholesale distribution of the 

substance, but also the background 

principles which underlie both the 

Convention and the CSA. Accordingly, 

I reject Respondent’s invitation to 

interpret § 823(a) in a manner that 

would abrogate the United States’ 

obligation under the Convention to 

maintain a monopoly in the wholesale 

trade of marijuana. 

While § 823(a) was enacted 

subsequent to the Convention—indeed 

it implements the Convention 82—it is a 

provision of general applicability and 

contains no explicit reference to 

marijuana. Under settled principles of 

statutory construction, while a later 

enacted law can sometime repeal an 

earlier provision, ‘‘ ‘[r]epeals by 

implication are not favored’ and will not 

be presumed unless the ‘intention of the 

legislature to repeal [is] clear and 

manifest.’ ’’ National Ass’n of Home 

Builders v. Defenders of Wildlife, 127 

S.Ct. 2518, 2532 (2007) (quoting Watt v. 

Alaska, 451 U.S. 259, 267 (1981)). 

Accordingly, courts ‘‘will not infer a 

statutory repeal ‘unless the later statute 

expressly contradict[s] the original act’ 

or unless such a construction is 

‘absolutely necessary * * * in order 

that [the] words [of the later statute] 

shall have any meaning at all.’ ’’ Id. 

(quoting Traynor v. Turnage, 485 U.S. 

535, 548 (1988) (int. quotations and 

other citations omitted)). 


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Here, this rule applies with added 

force for two reasons. First, 

Respondent’s construction would 

derogate the sovereign authority of the 

United States. See, e.g., E. I. Du Pont de 

Nemours & Co. v. Davis, 264 U.S. 456, 

462 (1924) (noting that in taking over 

the railroads, ‘‘the United States did so 

in its sovereign capacity * * * and it 

may not be held to have waived any 

sovereign right or privilege unless 

plainly so provided’’); cf. Federal Power 

Comm’n v. Tuscarora Indian Nation, 

362 U.S. 99, 120 (1960) (quoting United 

States v. United Mine Workers of 

America, 330 U.S. 258, 272 (1947) 

(‘‘There is an old and well-known rule 

that statutes which in general terms 

divest pre-existing rights or privileges 

will not be applied to the sovereign 

without express words to that effect.’’); 

Sea-Land Service, Inc., v. The Alaska 

R.R., 659 F.2d 243, 245 (D.C. Cir. 1981) 

(holding that ‘‘[t]he Sherman Act * * * 

does not expose United States 

instrumentalities to liability, whether 

legal or equitable in character, for 

conduct alleged to violate antitrust 

constraints’’). 

Second, Respondent’s construction 

would result in the abrogation of the 

Convention’s provision. While Congress 

may abrogate a treaty, the ‘‘legislation 

must be clear to ensure that Congress— 

and the President—have considered the 

consequences.’’ Roeder v. Islamic 

Republic of Iran, 333 F.3d 228, 238 (D.C. 

Cir. 2003). The D.C. Circuit has further 

explained that ‘‘[t]he ‘requirement of [a] 

clear statement assures that the 

legislature has in fact faced, and 

intended to bring into issue, the critical 

matters involved in the judicial 

decision.’ ’’ Id. (quoting Gregory v. 

Ashcroft, 501 U.S. 452, 461 (1991)). See 

also Vimar Seguros y Reaserguros, S.A. 

v. M/V Sky Reefer, 515 U.S. 528, 539 

(1995) (‘‘If the United States is to be able 

to gain the benefits of international 

accords and have a role as a trusted 

partner in multilateral endeavors, its 

courts should be most cautious before 

interpreting its domestic legislation in 

such manner as to violate international 

agreements.’’); George E. Warren Corp. 

v. U.S. E.P.A., 159 F.3d 616, 624 (D.C. 

Cir. 1998) (upholding agency rule which 

‘‘avoid[ed] an interpretation that would 

put a law of the United States into 

conflict with a treaty obligation of the 

United States,’’ and observing that that 

‘‘[s]ince the days of Chief Justice 

Marshall, the Supreme Court has 

consistently held that congressional 

statutes must be construed wherever 

possible in a manner that will not 

require the United States to violate the 

law of nations’’) (internal quotations 

and other citations omitted). 

As explained above, § 823(a) is not 

limited to applicants who seek a 

registration to manufacture marijuana, 

but rather is a provision that applies to 

every person who seeks a registration to 

manufacture any one of the hundreds of 

other controlled substances listed in 

schedules I and II. Paragraph 823(a)(1)’s 

direction to the Attorney General to 

consider the adequacy of competition 

does not provide a clear statement of 

congressional intent to abrogate the 

Convention’s requirement that the 

United States Government maintain a 

monopoly on the wholesale trade in 

marijuana. Absent the requisite clear 

statement, I conclude that to the extent 

the CSA seeks to promote adequate 

competition in the supply of marijuana, 

the NIDA process satisfies Congress’ 

purpose by putting the contract up for 

competitive bidding at periodic 

intervals then supplying the marijuana 

to researchers for free or at NIDA’s cost. 

Respondent also contends that the 

current NIDA supply is ‘‘inadequate 

because a pharmaceutical developer 

could not reasonably rely on NIDA 

marijuana to take [plant-form] marijuana 

through the FDA new drug approval 

process.’’ Respondent’s Resp. at 16; see 

also Respondent Proposed Findings at 

45 (‘‘no rational drug sponsor seeking to 

develop botanical marijuana as an FDAapproved product could proceed 

without seeking a source of supply 

alternative to NIDA’s’’). Of note in this 

regard, Mr. Doblin testified that MAPS 

could take plant-form marijuana 

through the FDA-approval process for a 

cost of $5 to $10 million 

notwithstanding ample evidence that 

the actual costs would be considerably 

more, and that he ‘‘disagree[d]’’ with the 

IOM’s conclusion that defined and 

purified cannabinoid compounds ‘‘are 

preferable to plant products, which are 

of variable and uncertain composition.’’ 

Tr. 654; RX 1, at 22. See also GX 53 

(letter of GW Pharmaceuticals; ‘‘[H]erbal 

cannabis should comprise only the 

starting material from which a bona fide 

medical product is ultimately 

derived.’’). Mr. Doblin also testified that 

the safety of smoked marijuana would 

be only ‘‘slightly different’’ from that of 

drugs containing cannabinoid extracts, 

Tr. at 605, notwithstanding the IOM’s 

further conclusion that smoking ‘‘is a 

crude THC delivery system that also 

delivers harmful substances’’ such as 

those found in tobacco, and that ‘‘there 

is little future in smoked marijuana as 

a medically approved medication.’’ RX 

1, at 195. 

Mr. Doblin’s testimony hardly 

suggests that he is a ‘‘rational drug 

developer.’’ But even ignoring his 

testimony, Respondent’s argument is 

meritless. Respondent’s contention that 

‘‘MAPS can have no confidence * * * 

that NIDA would authorize MAPS to 

rely on’’ NIDA’s Drug Master File, Resp. 

Proposed Findings at 44–45, ignores 

that under the HHS Guidance, NIDA is 

required to ‘‘provide the researcher with 

authorization to reference’’ it. GX 24, at 

4. Moreover, neither Federal law nor 

FDA’s regulations require that a drug 

developer submit a Drug Master File. 

FDA, Guideline for Drug Master Files, at 

2. 

Respondent further contends that 

NIDA would not be willing to serve as 

supplier to a drug developer because 

doing so is not part of its mission. It is, 

however, HHS, and not NIDA (which is 

only a subcomponent therein) which 

sets policy on whether to provide 

marijuana. As for Respondent’s 

insinuation that HHS is biased against 

research that seeks to develop plantform marijuana into a prescription 

medicine, it is true that Dr. Gust 

testified that HHS ‘‘strongly endorse[s]’’ 

the IOM’s view that if marijuana is to 

provide the basis for a prescription 

medicine, it will be in a medicine which 

uses ‘‘a purified constituent’’ and a nonsmokable delivery system. Tr. 1722. A 

view based on science is not bias. 

Moreover, Dr. Gust’s testimony made 

clear that PHS does not have a bias 

against research that is directed at 

developing plant-form marijuana, id. at 

1719–20, 1722; and that whether plantform marijuana should be approved as 

a prescription medicine is a question for 

the FDA-approval process. Id. at 1720. 

Respondent’s contention to this effect is 

therefore rejected. 

In sum, under the text of 21 U.S.C. 

823(a)(1), to maintain effective controls 

against diversion, DEA is obligated to 

consider limiting the number of 

registered bulk manufacturers of any 

given schedule I or II controlled 

substance to that which can produce an 

adequate and uninterrupted supply of 

the substance under adequately 

competitive conditions. Thus, every 

applicant for registration under § 823(a) 

bears the burden of demonstrating that 

either the existing supply or 

competition is inadequate within the 

meaning of paragraph 823(a)(1). For the 

reasons provided above, Respondent has 

failed to meet this burden. Accordingly, 

factor one weighs heavily against 

granting his application. 

2. Public Interest Factor Two 

The second public interest factor is 

‘‘compliance with applicable State and 

local law.’’ 21 U.S.C. 823(a)(2). The ALJ 

stated: ‘‘There is neither evidence nor 


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83Analogous to federal law, Massachusetts law 

provides that ‘‘every person who manufactures 

* * * any controlled substance within the 

commonwealth shall upon payment of a fee, * * * 

register with the commissioner of public health, in 

accordance with his regulations, said registration to 

be effective for one year from the date of issuance.’’ 

Mass. Gen. Laws Ann. ch. 94C, § 7(a) (West 2008). 

Massachusetts has adopted the CSA schedules of 

controlled substances, making marijuana a schedule 

I controlled substance under state law. See Mass. 

Gen. Laws Ann. ch. 94C, § 2(a). 

84Even with respect to Dr. Abrams—who MAPS 

seems to believe was improperly denied marijuana 

in the pre-1999 era (before HHS changed its policy 

for providing marijuana to researchers)— 

Respondent produced no evidence that HHS’s 

denial was lacking in scientific basis. To the 

contrary, as indicated above, the evidence indicates 

that NIDA initially denied Dr. Abrams’ request 

based on valid concerns about the design and 

scientific merit of his protocol. See note 24, supra, 

and accompanying text. The record further reflects 

that Dr. Abrams corrected these deficiencies to 

NIDA’s satisfaction upon submitting a revised 

protocol and, as a result, received marijuana from 

NIDA in 1997; NIDA also supplied Dr. Abrams with 

marijuana for subsequent studies. Id. 

contention that Respondent has not 

complied with applicable laws and I 

therefore find that this factor weighs in 

favor of granting Respondent’s 

application.’’ ALJ at 85. In view of this 

statement, it must be repeated that at 

any hearing on an application to 

manufacture a schedule I or II 

controlled substance, the applicant has 

the burden of proving that the 

requirements for registration under 21 

U.S.C. 823(a) are satisfied. 21 CFR 

1301.44(a). Moreover, the issue under 

the second public interest factor is not 

merely whether an applicant has 

complied in the past with applicable 

State and local law, but also whether the 

applicant will do so if he becomes 

registered. Thus, it was imprecise for 

the ALJ to suggest that the absence of 

evidence regarding past compliance 

with applicable State and local law 

constitutes a favorable showing on 

behalf of the applicant for purposes of 

the second public interest factor. 

However, the record is not entirely 

silent with respect to this factor. As the 

ALJ noted (ALJ at 57), and as 

Respondent has emphasized (Resp. 

Prop. Findings at 57), Respondent did 

testify that he met with ‘‘state 

investigators’’ who told him that ‘‘a state 

permit would depend on a federal 

permit being granted.’’ Tr. 45. Given 

that the Government did not contest this 

part of Respondent’s testimony, I will 

give Respondent the benefit of the doubt 

by inferring that what he intended to 

convey was that Massachusetts state 

officials indicated to him that he would 

be able to obtain a ‘‘registration’’ under 

Massachusetts law to manufacture 

marijuana if and when he were to obtain 

a DEA registration to do so.83 I do so 

despite the fact that Respondent did not 

indicate in his testimony or through the 

submission of any documentary exhibits 

whether he had actually filed an 

application with the state and submitted 

the appropriate fee for such state 

registration. Thus, consistent with the 

ALJ’s recommendation, I find 

Respondent has put forth some evidence 

which (being unrefuted) allows for a 

conclusion that his proposed activities 

would be in compliance with State and 

local law. 

The Government took exception, 

however, to the ALJ’s recommendation 

that this factor (paragraph 823(a)(2)) be 

weighed in favor of granting 

Respondent’s application. Gov. 

Exceptions at 12–13. The Government 

argues that this factor ‘‘is most often 

relevant’’ in cases in which practitioners 

have lost their state controlled 

substance authorization. Id. at 13. 

Further, the Government contends, 

‘‘[w]hile the failure to have a required 

state or local license would prove fatal 

to an application, * * * an expectation 

by Respondent that the required state 

license will ineluctably follow the 

granting of a DEA registration and a 

promise to comply with state and local 

law in the future simply renders this 

factor irrelevant and does not weigh in 

favor of either party.’’ Id. In response 

thereto, Respondent asserts that the lack 

of evidence of noncompliance with state 

or local law should indeed support a 

finding that this factor weighs in favor 

of registration. Respondent’s Resp. at 

18–19. 

It is certainly true, as both parties 

agree, that the evidence relating to 

Respondent’s proposed activities cannot 

be deemed as weighing against the 

pubic interest for purposes of paragraph 

823(a)(2). However, whether one 

characterizes the evidence relevant to 

this factor as weighing in favor of 

granting Respondent’s application or 

simply neutral seems somewhat a 

matter of semantics. Given the nature of 

the evidence here (Respondent’s mere 

testimony that he anticipates 

authorization from the state and that he 

promises to comply with state law), I 

accept the characterization that the 

evidence is favorable as to the second 

public interest factor, with the caveat 

that this factor is of limited weight 

commensurate with the nature of the 

evidence. 

3. Public Interest Factor Three 

The third public interest factor is 

‘‘promotion of technical advances in the 

art of manufacturing these substances 

and the development of new 

substances.’’ 21 U.S.C. 823(a)(3). The 

ALJ found that Respondent has 

‘‘considerable experience in cultivating 

medicinal plants, which might promote 

technical advances in the cultivation of 

marijuana or developing new 

medications from it.’’ ALJ at 85–86. The 

ALJ nonetheless found that ‘‘there is not 

sufficient evidence in the record on 

which to base a finding as to whether 

granting Respondent’s registration 

would promote technical advances.’’ Id. 

at 86. When asked by his own counsel 

how his registration would promote 

technical advances, Respondent 

answered in a vague manner: 

Well, I think there is two answers to that 

as far as I’m concerned. One is that, yes, it 

would make an advance in the understanding 

any possible clinical use of marijuana if we 

were able to supply this to investigators to 

run trials, and, secondly, as I’ve explained to 

DEA agents that visited, that we would learn 

more about how the environment affects the 

constituents in the plant material which 

would enable, if this does become at some 

stage down the road here, becomes a useful 

drug, and that the manufacturer of it has to 

be controlled under security conditions, they 

would know the environment it needs to be 

grown under to produce a clinical marijuana, 

medical marijuana. 

Tr. at 75–76. In the first part of the 

above answer, it appears that 

Respondent is simply accepting the 

word of his sponsor, Mr. Doblin, that his 

obtaining a DEA registration would 

result in marijuana being provided to 

researchers who would not otherwise 

obtain it. If so, Respondent is relying on 

a false premise. As discussed at length 

above, the evidence demonstrates that 

not one bona fide researcher within the 

meaning of the CSA (i.e., one whose 

protocol has been determined by HHS to 

be scientifically meritorious) has ever 

been denied marijuana 84 and that, 

under the new procedures adopted by 

HHS in 1999, the ‘‘scientific bar’’ has 

been set relatively low, allowing 

marijuana to be provided to 17 privately 

funded researchers. As for the second 

part of his answer, in which Respondent 

attempted to explain how his 

registration would result in learning 

‘‘more about how the environment 

affects the constituents in the plant 

material,’’ this explanation is noticeably 

lacking in detail and without any 

discernable scientific basis. By his own 

admission, Respondent is ‘‘not 

experienced in growing this plant 

(marijuana).’’ Tr. at 40. In comparison, 

Dr. ElSohly, who has been the principal 

investigator under the NIDA contract 

and has overseen the National Center’s 

work with marijuana since 1980 

(employing a wide variety of 


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85The National Center grows marijuana both 

indoors and outdoors and has done so using 

conventional soil planting from seeds and 

seedlings, as well as using hydroponics (without 

soil), vegetative propagation (using cuttings to 

retain the genetic identity of the ‘‘mother plant’’), 

and micropropagation (vegetative propagation using 

a very small part of plant material rather than a 

cutting). Tr. 1187–1263, 1328–30. It has also 

utilized a variety of harvesting, drying, fertilization, 

and storage methods to affect the THC content of 

the marijuana, to promote more effective rolling of 

cigarettes, and to isolate certain cannabinoids. Id. 

It also has in its inventory seeds from different parts 

of the world, which can produce marijuana of 

various potencies. Id. Respondent did not identify 

any cultivation, harvesting, or other manufacturing 

techniques relating to marijuana in which the 

National Center lacks expertise. 

86While the ALJ correctly observed that 

Respondent has no experience in the in the 

manufacture of controlled substances, she stated 

that Respondent ‘‘does have experience in growing 

medicinal plants.’’ ALJ at 86. It is unclear whether 

the ALJ was taking this into account for purposes 

of factor 5, or simply noting it in passing, because 

she ultimately recommended that I conclude ‘‘there 

is not sufficient evidence in the record on which 

to base a finding as to whether granting 

Respondent’s registration would promote technical 

advances.’’ Id. In any event, under the text of 

paragraph 823(a)(5), experience in the manufacture 

of anything other than ‘‘controlled substances’’ is 

immaterial for purposes of factor 5. 

87The CSA and DEA regulations impose a 

complex and comprehensive scheme to protect 

against diversion. These include not only 

requirements pertaining to the physical security of 

manufacturing facilities, see 21 CFR 1301.73, and 

employee screening procedures, id. 1301.90, but 

also extensive inventory, record keeping, and 

reporting requirements. See 21 CFR 1304.04 

(maintenance of records and inventories); id. 

1304.11 (inventory requirements); 1304.22(a) 

(records for manufacturers); 1304.33 (ARCOS 

reports); 1301.74(c) (reporting of theft). 

88Respondent notes the Government’s argument 

that ‘‘ ‘[i]n no case involving applications to handle 

controlled substances, has ‘prior experience’ with 

non-controlled substances ever been considered as 

support for granting an application.’ ’’ Respondent’s 

Resp. at 24. Respondent maintains that ‘‘this 

argument is simply wrong,’’ and that ‘‘[i]n Chattem 

Chemicals, Inc., 71 FR 9834, 9838 (2006) * * * the 

applicant had no prior experience in processing 

opium alkaloids, the controlled substance for which 

it sought a manufacturer’s registration.’’ 

Respondent’s Resp. at 24–25. That much is true. 

Respondent ignores, however, that Chattem already 

held registrations to manufacture schedule II 

controlled substances including morphine, codeine 

and oxycodone, and to import other controlled 

substances. See 71 FR at 9836. In contrast to 

Respondent, who has no relevant experience, 

Chattem had extensive experience in the regulatory 

scheme and the effective implementation of 

controls against diversion. 

Respondent also notes Dr. ElSohly’s testimony to 

the effect that when the University of Mississippi 

first applied in 1968 for the contract to grow 

marijuana for NIDA’s predecessor, ‘‘he lacked 

experience and expertise in security measures 

relating to controlled substances.’’ Respondent 

Resp. at 27. Respondent ignores, however, that the 

registration belongs to the University of Mississippi 

and was issued to it 12 years before Dr. ElSohly 

took over the project and under a different statutory 

scheme and further that Dr. ElSohly had been 

working on the marijuana project for four years at 

the time he succeeded his predecessor. See Tr. at 

1131–32, 1152. 

89Cf. Stephen J. Heldman, 72 FR 4032, 4034 

(2007) (noting that even ‘‘[w]ere there no evidence 

of Respondent having engaged in illicit activity 

* * * his lack of experience bars his registration’’). 

90As explained in part C of the discussion 

section, this aspect of paragraph 823(a)(5) requires 

DEA to consider, among other things, whether 

Respondent has demonstrated that he will have in 

place appropriate physical security and employee 

screening as required by the DEA regulations and 

as confirmed through a DEA on-site inspection of 

the premises. Also as explained in part C, this 

aspect of paragraph 823(a)(5)—which involves an 

evaluation of the applicant’s particular facility, 

proposed security measures, and other controls 

against diversion to be implemented by the 

applicant—is best viewed as being distinguished 

from the requirement under paragraph 823(a)(1) 

that DEA maintain effective controls against 

diversion ‘‘by limiting the importation and bulk 

manufacture of such controlled substances to a 

number of establishments which can produce an 

adequate and uninterrupted supply of these 

substances under adequately competitive 

conditions.’’ 

manufacturing techniques),85 has at 

least seven patents relating to the 

manufacture and identification of 

marijuana and its derivatives, and has 

authored numerous articles on these 

subjects that have been published in 

scientific journals. Tr. 1136–38, 1331– 

36; GXs 65–71, 93. Respondent’s lack of 

experience in growing marijuana does 

not preclude a finding under paragraph 

823(a)(3) that his proposed activities 

would promote technical advances in 

the art of manufacturing marijuana and 

developing new substances. Nor does 

Respondent’s lack of expertise in this 

area compared to that of Dr. ElSohly 

preclude such a finding as it is 

conceivable that a newcomer to a field 

could make scientific discoveries that 

others have failed to make. However, 

Respondent’s lack of experience and 

expertise combined with the vagaries of 

his testimony as to how he would 

promote technical advances in the art of 

manufacturing marijuana and 

developing new substances do not 

support a finding that he would do so. 

Thus, I concur with the ALJ’s 

recommendation as to this factor and 

conclude that Respondent has failed to 

meet his burden of demonstrating that 

his proposed activities would promote 

technical advances in the art of 

manufacturing marijuana and 

developing new substances. 

4. Public Interest Factor Four 

The fourth public interest factor is 

‘‘prior conviction record of applicant 

under Federal and State laws relating to 

the manufacture, distribution, or 

dispensing of such substances.’’ 21 

U.S.C. 823(a)(4). I adopt the ALJ’s 

recommended finding that it was 

‘‘undisputed that Respondent has never 

been convicted of any violation of any 

law pertaining to controlled substances’’ 

and therefore this factor weighs in favor 

of granting the application. I reject the 

Government’s contention that the 

historical and ongoing activities of Mr. 

Doblin and MAPS relating to controlled 

substances (which the Government 

asserts are improper but for which there 

is no evidence in the record of any 

criminal convictions) should be 

considered under this factor. 

5. Public Interest Factor Five 

The fifth public interest factor is ‘‘past 

experience in the manufacture of 

controlled substances, and the existence 

in the establishment of effective control 

against diversion.’’ 21 U.S.C. 823(a)(5). 

Both parties and the ALJ agree that 

Respondent has no past experience in 

the manufacture of controlled 

substances, and I so find.86

Consideration of such experience serves 

two purposes. First, the review of an 

applicant’s track record provides 

substantial information as to prior 

violations and the likelihood of its 

future compliance with the Act and 

regulations. See ALRA Laboratories, Inc. 

v. DEA, 54 F.3d 450, 452 (7th Cir. 1995) 

(‘‘An agency rationally may conclude 

that past performance is the best 

predictor of future performance.’’). 

Second, the experience factor recognizes 

that the regulatory scheme is complex 

and that having effective controls 

against diversion requires more than 

simply having a secure building and a 

policy and procedures manual.87

Rather, having effective controls 

requires that those controls be properly 

performed. Thus, Respondent’s lack of 

experience in the manufacture of 

controlled substances cannot be 

dismissed as inconsequential.88 Indeed, 

there is agency precedent for 

concluding, in appropriate 

circumstances, that lack of such 

experience can be an independent basis 

for denial of registration.89 However, I 

find in this case that Respondent’s lack 

of experience in handling controlled 

substances—while a factor weighing 

against granting his application—should 

not disqualify him from obtaining a 

registration to bulk manufacture 

marijuana. 

As to whether there would be, within 

Respondent’s establishment, effective 

control against diversion,90 Respondent 

testified that, although he ‘‘did not have 

a full-blown plan when [he] applied for 

the [DEA registration],’’ when DEA 

personnel conducted an on-site 

inspection of his premises, he assured 

them that he ‘‘understood the need for 

security’’ and that they thought that his 

proposed room for growing marijuana 

‘‘could be made secure with no 

problems.’’ Tr. 44–45, 355–56. 

Respondent further testified that he 


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91Because the DEA regulations require all 

registered manufacturers of controlled substances to 

have certain control measures in place at all times 

(21 CFR 1301.71–.74, .76), DEA may not issue a 

certificate of registration to a new applicant until 

the required security measures are actually in place. 

Moreover, while I acknowledge that Respondent 

testified that he would secure the growing area and 

meet ‘‘appropriate security conditions’’ (Tr. 79), and 

I find it is highly unlikely that Respondent would 

personally divert, this does not establish that the 

risk of diversion is minimal. Respondent testified 

that he usually does not go down to the greenhouse 

to water the plants but leaves this task to a 

technician. Tr. at 254. Moreover, the graduate 

students and technicians ‘‘would probably do the 

transplanting’’ and the ‘‘daily check on any 

environmental controls.’’ Id. at 254–55. 

Respondent’s testimony begs the question of who 

would be supervising these workers. Furthermore, 

while Respondent has promised to meet 

appropriate security conditions, it is undisputed 

that he has no experience in the manufacture of 

controlled substances and the regulatory scheme. 

As he testified: ‘‘I have no experience in the control 

against diversion.’’ Tr. 79. 

Thus, my finding under factor five that 

Respondent would have in place effective controls 

against diversion might be viewed as being 

generous toward Respondent. 

92By its terms, paragraph 823(a)(6) is not limited 

to conduct on the part of the applicant. Rather, its 

broad wording indicates that it is a catchall 

provision that calls on the agency to consider ‘‘such 

other factors [not covered by factors (a)(1) through 

(a)(5)] as may be relevant to and consistent with the 

public health and safety.’’ 

93Further indication that MAPS is the driving 

force behind this application is that, when asked to 

explain the meaning of one of his written answers 

to the questions submitted by DEA as a follow up 

to the application, Respondent admitted that he had 

‘‘no idea’’ whether he was referring to Chemic when 

he answered that one of the proposed recipients of 

the marijuana that he seeks to produce would be an 

entity that would use ‘‘marijuana delivered through 

a vaporizer device.’’ Tr. at 225–26. Nor did 

Respondent know if this entity was authorized 

under the law to conduct such research or the 

amount of marijuana that would be needed for this 

research. Id. at 229. Respondent said that such 

questions would have to be referred to Mr. Doblin. 

Id. at 226. Respondent acknowledged that the only 

entity he had in mind as a recipient of the 

marijuana he seeks to grow was the researcher that 

would test the vaporizer. Tr. at 235. 

94 21 U.S.C. 844; Mass. Gen. Laws Ann. ch. 94C, 

§ 34 (West 2008). Mr. Doblin lives in Massachusetts. 

Tr. 472. 

agreed to meet all DEA security 

requirements. Tr. 79. The Government 

did not dispute these assertions. I 

therefore find that Respondent has met 

his burden of demonstrating that, if the 

registration were granted, he would 

have in place effective controls against 

diversion.91 In sum, the evidence 

bearing on factor five weighs both in 

favor of and against Respondent’s 

application: it indicates that he has no 

past experience in the manufacture of 

controlled substances but that he will 

have in the establishment effective 

controls against diversion. 

6. Public Interest Factor Six 

The sixth and final public interest 

factor is ‘‘such other factors as may be 

relevant to and consistent with the 

public health and safety.’’ 21 U.S.C. 

823(a)(6). At the outset, it should be 

noted that, because the text of this 

provision calls on me to consider ‘‘such 

other factors,’’ I will not restate in the 

discussion of factor six the evidence 

that I have already taken into account 

for purposes of the first five public 

interest factors—even though such 

evidence might be relevant to the 

determination of whether Respondent’s 

proposed registration would be 

consistent with the public health and 

safety. 

The most notable evidence relevant to 

factor six is that relating to Mr. Doblin.92

Before addressing this evidence, it 

needs to be made clear that I consider 

irrelevant for purposes of this 

application whether Mr. Doblin, in the 

expression of his political viewpoints, 

supports the legalization of marijuana 

and other controlled substances. I also 

consider irrelevant the political 

activities of the organization he heads, 

MAPS. The expression of political 

viewpoints enjoys the protection of the 

first amendment. However, it is 

certainly relevant for purposes of factor 

six whether a person who might be in 

a position to directly influence the 

activities of a registrant has engaged in 

actual conduct involving controlled 

substances that fails to comply with the 

federal or state law. 

The evidence indicates that Mr. 

Doblin has been significantly involved 

in Respondent’s application process and 

plans to retain a key role in 

Respondent’s activities if the 

registration is granted. Mr. Doblin came 

up with the idea of sponsoring an 

applicant for a DEA registration who 

would be a supplier of marijuana other 

than NIDA, and he selected Respondent 

to be that applicant. Tr. 210–12, 219. 

Mr. Doblin assisted Respondent in 

filling out the application, supplied 

answers to DEA’s supplemental written 

questions, and agreed, on behalf of 

MAPS, to ‘‘cover all the costs’’ 

associated with the registered activities, 

including the costs of equipment, 

manufacturing, and security 

installations. Tr. 221–22, 351–52; 383, 

583; GX 3, at 1. Respondent has agreed 

that Mr. Doblin, in his role as head of 

MAPS, will take an active role in 

deciding to whom Respondent will 

supply the marijuana. Tr. 224–26, 358– 

360. Respondent described the process 

of applying for the DEA registration and 

the ‘‘project of developing marijuana’’ as 

a ‘‘joint effort’’ by Mr. Doblin and 

himself. Tr. 390–91. Indeed, Respondent 

testified that his ‘‘understanding’’ of his 

‘‘role,’’ as well as that of Mr. Doblin, 

was that dictated to him by Mr. 

Doblin.93 Id. at 358. Another part of Mr. 

Doblin’s role would be to ‘‘route’’ the 

‘‘investigators’’ (those seeking marijuana 

for research) to Respondent. Id. Mr. 

Doblin would also decide for 

Respondent the ‘‘strains’’ of marijuana 

to produce and ‘‘allocate’’ the marijuana 

produced in accordance with MAPS’s 

priorities. Tr. 589. 

In short, Mr. Doblin has mapped out 

and assisted in most acts, if not every 

act, that Respondent has taken toward 

applying for a registration to 

manufacture marijuana and, if the 

registration were granted, Mr. Doblin 

would continue to maintain 

responsibility for managing and 

monitoring the activities of the 

registrant. Given this level of 

involvement by Mr. Doblin—and the 

passive, if not subservient, nature of 

Respondent’s involvement—it is 

appropriate under factor six to consider 

the following conduct by Mr. Doblin 

relating to controlled substances. First, 

Mr. Doblin admits that he smokes 

marijuana for ‘‘recreational use’’ on a 

weekly basis. Tr. 716, 718–19. Thus, Mr. 

Doblin violates federal and state laws 

relating to controlled substances on a 

weekly basis.94 This demonstrates that 

Mr. Doblin has disregard for the 

controlled substances laws. It is simply 

inconceivable that DEA would— 

consistent with its obligations under the 

CSA—grant a registration to engage in 

certain activities involving controlled 

substances where it is clear that a 

person who will have any role in the 

oversight and management of such 

activities routinely engages in the illegal 

use of controlled substances. It is still 

more untenable where that person has 

the level of oversight and management 

that Mr. Doblin would have—and where 

the controlled substance he illegally 

uses is the very controlled substance the 

applicant seeks to produce. Indeed, it is 

remarkable that Mr. Doblin would— 

given his admitted illegal involvement 

in controlled substances—ask DEA to 

effectively grant him permission to take 

on such a prominent role in the 

manufacture of the most widely abused 

illegal controlled substance in the 

United States. 

Respondent points to Mr. Doblin’s 

testimony that MAPS has previously 

sponsored research by DEA registrants 

involving schedule I controlled 

substances other than marijuana. 

Respondent’s Resp. at 23 (citing Tr. 

482–491). Respondent characterizes 

such research as having taken place ‘‘all 

without a hint of * * * diversion.’’ Id. 

at 23–24. However, there is nothing in 

the record that confirms or refutes this 


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95Respondent does not appear to contend that 

DEA granted the prior registrations to MAPSsponsored researchers knowing that MAPS was the 

sponsor with Mr. Doblin having the same level of 

involvement that he seeks here, and he cites no part 

of the record for such a proposition. 

96Pursuant to 21 U.S.C. 871(a), functions vested 

in the Attorney General by the CSA have been 

delegated to the Administrator of DEA. 28 CFR 

0.100(b). The function of issuing final orders 

regarding applications for registration has been 

further delegated to the Deputy Administrator. 28 

CFR 0.104, appendix to subpart R, sec. 7(a). 

97Merriam-Webster OnLine, http:// 

www.merriam-webster.com/dictionary (2008). 

98 Id. 

99 21 U.S.C. 812(b). 

characterization; nor does the record 

indicate exactly what role Mr. Doblin 

played in the prior MAPS-sponsored 

research.95 In any event, even assuming 

that MAPS has previously sponsored 

DEA-registered researchers without 

incident, this does not undo the 

legitimate concerns that came to light in 

this proceeding about Mr. Doblin’s 

fitness for directing, at least in part, the 

activities of a DEA-registered bulk 

manufacturer of marijuana, given Mr. 

Doblin’s routine illegal use of 

marijuana. 

Thus, Mr. Doblin’s ongoing illegal 

marijuana use, by itself (i.e., even 

putting aside the treaty considerations 

and Respondent’s failure to demonstrate 

inadequate supply or competition 

within the meaning of paragraph 

823(a)(1)), provides a sufficient 

independent basis upon which DEA 

may deny the application. 

Accordingly, based on a consideration 

of all six pubic interest factors set forth 

in 21 U.S.C. 823(a), I conclude the 

Respondent has failed to meet his 

burden of demonstrating that his 

proposed registration is consistent with 

the public interest. To the contrary, the 

evidence is compelling that the 

registration is inconsistent with the 

public interest. 

C. The Meaning of 21 U.S.C. 823(a)(1) 

This section of the discussion 

contains a far more extensive analysis of 

21 U.S.C. 823(a)(1) (hereafter, 

‘‘paragraph 823(a)(1)’’) than DEA has 

previously published. As indicated 

above, for ease of exposition, due to the 

length of this analysis, it is being 

presented here as a separate section of 

the discussion rather than inserting it 

directly into the above discussion of the 

public interest factors. 

1. The Text of the Statute 

The appropriate starting point for the 

analysis of any statute is the text of the 

statute itself. The text of § 823(a) 

remains the same today as it was when 

the CSA was enacted by Congress in 

1970. It states: 

(a) Manufacturers of controlled substances in 

schedule I or II 

The Attorney General shall register an 

applicant to manufacture controlled 

substances in schedule I or II if he 

determines that such registration is 

consistent with the public interest and with 

United States obligations under international 

treaties, conventions, or protocols in effect on 

May 1, 1971. In determining the public 

interest, the following factors shall be 

considered: 

(1) Maintenance of effective controls 

against diversion of particular controlled 

substances and any controlled substance in 

schedule I or II compounded therefrom into 

other than legitimate medical, scientific, 

research, or industrial channels, by limiting 

the importation and bulk manufacture of 

such controlled substances to a number of 

establishments which can produce an 

adequate and uninterrupted supply of these 

substances under adequately competitive 

conditions for legitimate medical, scientific, 

research, and industrial purposes; 

(2) Compliance with applicable State and 

local law; 

(3) Promotion of technical advances in the 

art of manufacturing these substances and the 

development of new substances; 

(4) Prior conviction record of applicant 

under Federal and State laws relating to the 

manufacture, distribution, or dispensing of 

such substances; 

(5) Past experience in the manufacture of 

controlled substances, and the existence in 

the establishment of effective control against 

diversion; and 

(6) Such other factors as may be relevant 

to and consistent with the public health and 

safety. 

Thus, the statute allows DEA to 

register an applicant to bulk 

manufacture a schedule I or II 

controlled substance only if the Deputy 

Administrator 96 determines that the 

proposed registration would be 

consistent with both (i) the Single 

Convention and (ii) the public interest. 

In determining whether the proposed 

registration is consistent with the public 

interest, the statute requires DEA to 

evaluate the above six factors. The first 

factor, set forth in 21 U.S.C. 823(a)(1) 

(referred to in this discussion as 

‘‘paragraph 823(a)(1)’’), requires the 

Deputy Administrator to consider 

‘‘maintenance of effective controls 

against diversion * * * by limiting the 

* * * bulk manufacture of such 

controlled substances to a number of 

establishments which can produce an 

adequate and uninterrupted supply of 

these substances under adequately 

competitive conditions for legitimate 

medical, scientific, research, and 

industrial purposes.’’ (Emphasis added.) 

Thus, Congress stated in paragraph 

823(a)(1) that—in order to maintain 

effective controls against diversion of a 

given schedule I or II controlled 

substance—DEA must consider limiting 

the number of registered bulk 

manufactures of the substance to that 

‘‘which can produce an adequate and 

uninterrupted supply of these 

substances under adequately 

competitive conditions.’’ 

While the above-quoted text of 

paragraph 823(a)(1) is relatively 

straightforward, consulting the 

dictionary helps to confirm the 

meaning. The word ‘‘limiting’’ (or 

‘‘limit’’), when used as a verb, is defined 

as ‘‘to assign certain limits to; 

prescribe,’’ ‘‘to restrict the bounds or 

limits of,’’ or ‘‘to curtail or reduce in 

quantity or extent.’’ 97 The word ‘‘limit,’’ 

when used as a noun, is defined as 

‘‘something that bounds, restrains or 

confines’’ or ‘‘the utmost extent.’’ 98

Thus, the command under paragraph 

823(a)(1) that DEA consider ‘‘limiting’’ 

the number of registered bulk 

manufacturers of a given schedule I or 

II controlled substance can be construed 

to mean that the upper boundary on the 

number of such manufacturers is that 

‘‘which can produce an adequate and 

uninterrupted supply of these 

substances under adequately 

competitive conditions for legitimate 

medical, scientific, research, and 

industrial purposes.’’ 

It is notable that, by requiring DEA to 

consider limiting the number of bulk 

manufactures of a given schedule I 

controlled substance to that ‘‘which can 

produce an adequate and uninterrupted 

supply * * * under adequately 

competitive conditions,’’ paragraph 

823(a)(1) does not allow DEA simply to 

register as many bulk manufacturers of 

a given schedule I or II controlled 

substance as the market will bear. 

Rather, DEA is obligated under 

paragraph 823(a)(1) to consider 

disallowing additional entrants into the 

schedule I and II bulk manufacturing 

market unless DEA concludes that 

addition of a particular applicant is 

necessary to produce ‘‘an adequate and 

uninterrupted supply of [a given 

substance] under adequately 

competitive conditions.’’ 

This reading of paragraph 823(a)(1) is 

also consistent with the overall 

structure of the CSA. The Act places 

each controlled substance into one of 

five schedules based on: whether the 

substance has a currently accepted 

medical use in the United States; the 

substance’s relative potential for abuse; 

and the extent to which abuse of the 

substance may lead to psychological or 

physical dependence.99 As the United 

States Supreme Court has stated, ‘‘[t]he 

Act then imposes restrictions on the 


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100OCBC, 532 U.S. at 492 (2001). 

101 21 U.S.C. 826 & 828. 

102See 21 CFR 1301.71–1301.93. 103As discussed below, some prior DEA final 

orders have construed paragraph 823(a)(1) to 

require consideration of the existence in the 

establishment of effective control against diversion. 

While this factor must be considered in evaluating 

any application for registration under § 823(a), it is 

best considered only for purposes of paragraph 

823(a)(5) and not mingled with the analysis under 

paragraph 823(a)(1). 

104 74 Stat. 55 (1960). 

105To be precise, the text of the CSA (in contrast 

to that of the 1960 Act) does not unambiguously 

impose an absolute ceiling on the number of 

registered manufacturers (that which can produce 

an adequate and uninterrupted supply under 

adequately competitive conditions). Rather, as 

indicated above, the text of the CSA requires DEA 

manufacturing and distribution of the 

substance according to the schedule in 

which it has been placed.’’ 100

‘‘Schedule I,’’ as the Court observed, ‘‘is 

the most restrictive schedule.’’ This is 

commensurate with the fact that 

schedule I controlled substances are the 

only controlled substances with no 

currently accepted medical use in 

treatment in the United States. Schedule 

II restrictions are the next most 

restrictive (less restrictive than those for 

schedule I controls but more restrictive 

than those for schedules III, IV, and V)— 

commensurate with schedule II 

substances having the highest potential 

for abuse of those controlled substances 

that have a currently accepted medical 

use (those in schedules II through V). 

Consistent with this basic CSA 

principle of applying greater controls to 

the substances that are most subject to 

abuse and most harmful when abused, 

the CSA is structured to apply certain 

critical control provisions to schedule I 

and II substances but not to those in 

schedules III, IV, and V. For example, 

the CSA imposes quota restrictions and 

order form requirements for schedule I 

and II controlled substances but not for 

those in schedules III, IV, and V.101

Paragraph 823(a)(1) is another example 

of this principle. The required 

consideration in paragraph 823(a)(1) of 

limiting the number of bulk 

manufacturers of schedule I and II 

controlled substances (to that which can 

produce an adequate and uninterrupted 

supply of a given substance under 

adequately competitive conditions) is 

noticeably absent from paragraph 

823(d)(1), which governs the registration 

of manufacturers of schedule III, IV, and 

V controlled substances. This contrast 

between the presence of the ‘‘limiting’’ 

language in paragraph 823(a)(1) and its 

absence from paragraph 823(d)(1) 

underscores the importance of this 

requirement—particularly in view of 

Congress’s overall scheme of placing the 

greatest restrictions on substances in 

schedules I and II. 

Another consideration when 

interpreting the language of paragraph 

823(a)(1) is a comparison of its terms 

with those of paragraph 823(a)(5). As 

indicated above, paragraph 823(a)(5) is 

one of the six factors DEA must consider 

when evaluating an application for 

registration to bulk manufacture a 

schedule I or II controlled substance. 

Paragraph 823(a)(5) requires 

consideration of, among other things, 

‘‘the existence in the establishment of 

effective control against diversion.’’ 

(Emphasis added.) The plain meaning of 

this language is that the Deputy 

Administrator must evaluate whether 

the particular facility in which the 

applicant proposes to manufacture the 

schedule I or II controlled substance 

will have in place effective safeguards to 

prevent diversion. This would include, 

among other considerations, appropriate 

physical security and employee 

screening as required by the DEA 

regulations 102 as confirmed through a 

DEA on-site inspection of the premises. 

That paragraph 823(a)(5) expressly 

requires the Deputy Administrator to 

consider ‘‘the existence in the 

establishment of effective control 

against diversion’’ is a further indication 

that paragraph 823(a)(1) is not intended 

to cover precisely the same 

consideration. To restate this 

interpretation somewhat, whereas 

paragraph 823(a)(1) can be viewed as 

preventing diversion on a registrantwide scale (by directing the agency to 

consider limiting the total number of 

registered bulk manufacturers and 

importers of schedule I and II controlled 

based on the principle—discussed 

below—that fewer registrants decreases 

the likelihood of diversion), paragraph 

823(a)(5) can be viewed as preventing 

diversion on an individual-registrant 

basis (by directing the agency to 

consider whether the applicant will 

have in place, in its particular 

establishment, effective controls against 

diversion).103

In sum, for the preceding reasons, 

examining the text of paragraph 

823(a)(1) can lead squarely to the 

conclusion that it requires DEA to 

maintain effective controls against 

diversion by considering ‘‘limiting the 

* * * bulk manufacture of [schedule I 

and II] controlled substances to a 

number of establishments which can 

produce an adequate and uninterrupted 

supply of these substances under 

adequately competitive conditions.’’ 

2. Legislative History of the Statute 

Congress derived paragraph 823(a)(1) 

from the Narcotics Manufacturing Act of 

1960 104 (which was superseded by the 

CSA in 1970). Under the 1960 Act, a 

person seeking to manufacture a basic 

class of narcotic drugs was required to 

obtain a license from the Secretary of 

the Treasury Department. Within the 

Treasury Department, this function was 

delegated to the Commissioner of the 

Bureau of Narcotics (a predecessor of 

DEA). Section 8 of the 1960 Act set forth 

the criteria that the Commissioner was 

required to consider in determining 

whether to issue a narcotics 

manufacturing license. Paragraph (a)(1) 

of section 8 of the 1960 Act was the 

analog to paragraph 823(a)(1) of the 

CSA. Paragraph (a)(1) provided that, in 

determining whether to issue a license 

to an applicant seeking to manufacture 

a basic class of narcotic drug, the 

Commissioner was required to consider: 

Maintenance of effective controls against 

the diversion of the particular basic class of 

narcotic drug and of narcotic drugs 

compounded therefrom into other than 

legitimate medical and scientific channels 

through limitation of manufacture of the 

particular basic class of narcotic drug to the 

smallest number of establishments which will 

produce an adequate and uninterrupted 

supply of narcotic drugs of or derived from 

such basis class of narcotic drugs for medical 

and scientific purposes, consistent with the 

public interest. 

(Emphasis added.) 

As the italicized language above 

indicates, the 1960 Act reflected the 

then-policy of the United States to limit 

the number of licensed manufacturers 

‘‘to the smallest number of 

establishments which will produce an 

adequate and uninterrupted supply’’— 

without regard to whether there was 

adequate competition. Plainly, there are 

both similarities to and distinctions 

between this provision of the 1960 Act 

and its counterpart in the CSA. The CSA 

carried forward the concept of 

‘‘limiting’’ the number of registered 

manufacturers (with respect to schedule 

I and II controlled substances). 

However, the CSA modified this 

requirement by providing that this 

limitation on the number of 

manufacturers be based not only on that 

which can produce ‘‘an adequate and 

uninterrupted supply,’’ but also on that 

which provides for ‘‘adequately 

competitive conditions.’’ Put slightly 

differently, when Congress enacted the 

CSA, it raised the ceiling on the number 

of manufacturers from that which can 

produce ‘‘an adequate and 

uninterrupted supply’’ to a 

consideration of that which can produce 

‘‘an adequate and uninterrupted supply 

* * * under adequately competitive 

conditions.’’ 105 The policies underlying 


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to ‘‘consider * * * limiting’’ the number of 

manufacturers to such a number (along with 

considering the other public interest factors). It 

should also be noted that, whereas the 1960 Act 

referred to allowing only ‘‘the smallest number of 

establishments which will produce an adequate and 

uninterrupted supply’’ (emphasis added), the CSA 

does not contain the term ‘‘smallest’’ in paragraph 

823(a)(1). Nonetheless, as explained above, the use 

of the term ‘‘limiting’’ in paragraph 823(a)(1) can be 

construed to mean that DEA, when evaluating an 

application under § 823(a), must consider keeping 

as the upper boundary on the number of 

manufacturers that which can produce an adequate 

and uninterrupted supply under adequately 

competitive conditions. In other words, even 

though Congress when it enacted the CSA did not 

carry forward from the 1960 Act the term 

‘‘smallest,’’ because it did carry forward the term 

‘‘limiting,’’ it retained the concept of an upper limit 

on the number of manufacturers as a factor to be 

considered when evaluating an application for 

registration under § 823(a). 

106Hearings Before the Subcomm. to Investigate 

Juvenile Delinquency of the Comm. on the 

Judiciary, United States Senate, 91st Cong. 261–262 

(1969). 

107 Id. at 372. Although this statement by the 

Department of Justice was commenting on an earlier 

version of the bill, the modified version of the bill 

that ultimately was enacted retained the same 

principles as the earlier version under which the 

adequacy of competition would become a 

consideration in determining whether to grant 

applications to become registered to manufacture 

schedule I or II controlled substances. 

108Controlled Dangerous Substances Act of 1969: 

Report of the Comm. on the Judiciary, United States 

Senate, 91st Cong. 7 (1969). 

109As the statute states, an application for 

registration under § 823(a) may only be granted if 

DEA determines that such registration is consistent 

with both the public interest and United States 

obligations under the Single Convention. Thus, 

even if a proposed registration were found by DEA 

to be consistent with the public interest based on 

a consideration of the six public interest factors of 

§ 823(a), the registration must be denied if DEA 

finds it would be inconsistent with United States 

obligations under the Single Convention. 

110Also illustrative of this point are the following 

statements contained in a 1979 resolution issued by 

the United Nations Commission on Narcotic Drugs, 

which DEA has cited in a prior Federal Register 

publication: ‘‘Recalling the relevant provisions of 

Continued 

this change in the law are summarized 

in the following exchange during the 

Congressional hearings on the 

enactment of the CSA. The exchange 

was between Senator Hruska (one of the 

co-sponsors of the various bills that led 

up to the CSA) and then-Attorney 

General Mitchell: 

Senator Hruska: We have two national 

policies involved here. One is the 

anticompetitive situation policy. The 

antitrust law is a very well-established 

concept * * * . We also have another 

national policy have we not, Mr. Attorney 

General? We have entered into a global series 

of agreements in which we undertake in joint 

action with other nations the business of 

controlling the manufacture and distribution 

of the opiates and final derivatives of opium. 

Among those agreements is this principle: 

That we urge upon nations to keep the 

number of producers down to as low a point 

as possible to facilitate and to make more 

certain their ability to control and supervise 

the output and to keep it in normal and 

proper legal channels. We have these two 

national policies involved here, have we not? 

Mr. Mitchell: Yes sir, you have both of 

them, and there is no intention on the part 

of the Justice Department nor the Bureau of 

Narcotics and Dangerous Drugs by this 

provision to expand beyond necessity, and of 

course those are the key words, any 

manufacturers in this particular area. We felt 

it was necessary to maintain the protection 

of the consumer from the price structure 

point of view and that is why the additional 

provisions have been added.106

During that same hearing, the 

Department of Justice submitted in 

writing its position regarding a 

proposed version of what would become 

paragraph 823(a)(1). In that document, 

the Department of Justice stated the 

following with respect to the thenpending proposal to deviate in the CSA 

from the 1960 Act by adding the 

consideration of adequacy of 

competition, and how the Department 

would carry out such proposal, if 

enacted: 

There is no reason to assume that the 

Attorney General will prejudice his primary 

objectives of effective control by excessive 

licensing. Nor will he undertake direct price 

control. He will be empowered to take 

cognizance of evidence showing that prices 

are clearly and persistently excessive. The 

criteria for determining whether prices far 

exceed that which is reasonable relate to 

reasonable costs and reasonable profits. No 

explicit statement of criteria is needed. If 

evidence indicates that additional licensing 

will result in more reasonable prices with no 

significant diminution in the effectiveness of 

drug control, the Attorney General should be 

able to license the additional 

manufacturers.107

Consistent with the foregoing 

statements made during the Senate 

hearings, a subsequent Senate report 

contained the following statement, 

which echoes the language of what is 

now in paragraph 823(a)(1): ‘‘[T]he 

Attorney General must limit the 

importation and manufacture of 

schedules I and II substances to a 

number of establishments which can 

produce an adequate and uninterrupted 

supply under adequately competitive 

conditions for legitimate purposes.’’ 108

Thus, the legislative history reaffirms 

several principles already evident from 

the text of paragraph 823(a)(1) and 

expands upon those principles. The 

legislative history confirms that 

paragraph 823(a)(1) indeed was 

designed to require the Attorney 

General to take into account limiting the 

number of bulk manufacturers (and 

importers) of schedule I and II 

controlled substances. However, this 

limit was not as restrictive as under the 

law that preceded the CSA. Whereas 

under the 1960 Act, additional 

manufacturers could only be added if 

supply was inadequate, the CSA added 

the consideration of adequacy of 

competition. Nonetheless, as the 

legislative history reflects, Congress 

under the CSA placed the burden on the 

applicant seeking to become registered 

to bulk manufacture a schedule I or II 

controlled substance to put forth 

evidence demonstrating either 

inadequate supply or inadequate 

competition. 

The legislative history also reflects the 

recognition by Congress of a crucial 

principle underlying paragraph 

823(a)(1): That the risk of diversion 

tends to increase with each new 

registered bulk manufacturer of a 

schedule I or II controlled substance. At 

the same time, the language of 

paragraph 823(a)(1) reflects the 

determination by Congress that—despite 

the increased risk of diversion resulting 

from the addition of each new registered 

manufacturer—it is beneficial to the 

public interest to allow the registration 

of additional manufacturers where the 

Attorney General finds that doing so is 

necessary to produce an adequate and 

uninterrupted supply of a given 

substance under adequately competitive 

conditions.109

3. Treaty Considerations 

The principle that limiting the 

number of producers of narcotics and 

other schedule I and II controlled 

substances tends to promote more 

effective control has long been a part of 

United States policy and incorporated 

into the international drug control 

treaties to which the United States has 

been a party and which predate the 

CSA. Under the Single Convention, 

article 29 addresses the manufacture of 

narcotic drugs. Paragraph 2(b) of article 

29 requires parties to the treaty to 

‘‘[c]ontrol under license the 

establishment and premises in which 

such manufacture may take place.’’ 

With respect to this provision, the 

Commentary to the Single Convention 

states: ‘‘It is suggested that, in order to 

facilitate control, the licensing system 

under subparagraph (b) should be 

employed to ensure that the 

manufacture of drugs, their salts and 

preparations is restricted to as small a 

number of establishments and premises 

as is practicable.’’ Commentary at 322 

(emphasis added); see also id. at 319 

(discussing how the concept of limiting 

the number of manufacturers of narcotic 

drugs was inherent in the international 

drug control treaties that preceded the 

Single Convention).110 This is the same 


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the Single Convention * * * to limit cultivation, 

production, manufacture and use of narcotic drugs 

to an amount required for medical and scientific 

purposes * * *’’ and ‘‘Bearing in mind that the 

treaties which establish this system are based on the 

concept that the number of producers of narcotic 

materials for export should be limited in order to 

facilitate effective control. * * *’’ Cited in 44 FR 

33695 (1979) and available at http:// 

daccessdds.un.org/doc/RESOLUTION/GEN/NR0/ 

638/29/IMG/NR063829.pdf?OpenElement. 

111 It is unclear why subsection 1301.33(b) was 

written in the manner that it was. Given that the 

regulation was promulgated shortly after the 

enactment of the CSA in 1970, it is possible that 

it was written to emphasize how paragraph 

823(a)(1) represented a departure from the 

provision it superseded in the 1960 Narcotic 

Manufacturing Act. As explained above, the 1960 

Act limited the number of licensed manufacturers 

‘‘to the smallest number of establishments which 

will produce an adequate and uninterrupted 

supply’’—without regard to whether there was 

adequate competition. In contrast, when Congress 

enacted the CSA, it raised the ceiling on the number 

manufacturers to that which can produce an 

adequate and uninterrupted supply under 

adequately competitive conditions. Subsection 

1301.33(b) seems to emphasize this distinction 

between the 1960 Act and the CSA by pointing out 

that, under the latter, DEA may not deny an 

application based solely on the existence of an 

adequate and uninterrupted supply. 

In 2004, the Department of Justice provided 

Congress with an explanation of subsection 

1301.33(b) that is consistent with the explanation 

principle as that referred to in the 

legislative history of the CSA (in the 

above-quoted exchange between Senator 

Hruska and the then-Attorney General). 

4. Pertinent Provision of the DEA 

Regulations 

The only applications for registration 

for which the DEA regulations require 

the agency to publish notice in the 

Federal Register are those by persons 

seeking to bulk manufacture and import 

schedule I and II controlled substances. 

21 CFR 1301.33(a) & 1301.34(a). These 

are the applications governed by 21 

U.S.C. 823(a). In the cases of such 

applications, the regulations further 

require DEA to mail (simultaneously 

with the publication in the Federal 

Register) a copy of the Federal Register 

notice to each person registered as a 

bulk manufacturer of the particular 

schedule I or II controlled substance and 

to each person who has submitted a 

pending application therefor. Id. Any 

such person may also file written 

comments or objections to the proposed 

registration. Id. 

That the regulations provide the 

foregoing procedures in the case of 

applications filed pursuant to 21 U.S.C. 

823(a)—and for no other categories of 

applications—is indicative of the 

distinction between the statutory factors 

for registration contained in subsection 

823(a) and those contained in all other 

subsections of § 823. As explained 

above in the discussion of the text of the 

statute, whereas paragraph 823(a)(1) 

requires DEA to consider limiting the 

number of registered bulk 

manufacturers and importers of a given 

schedule I or II controlled substance to 

that which can produce an adequate and 

uninterrupted supply under adequately 

competitive conditions, this 

consideration appears nowhere else in 

§ 823 (i.e., it is inapplicable to all other 

applications for registration). Moreover, 

the consideration of adequacy of supply 

and competition is the only factor that 

is unique to subsection 823(a). It is 

therefore implicit that the notice-andcomment provisions of the regulations 

listed above (those contained in 21 CFR 

1301.33(a) and 1301.34(a)) are designed 

to effectuate the consideration by DEA 

of adequacy of supply and competition. 

This implication is also consistent with 

the view that, in addition to DEA and 

the applicant itself, those registrants 

that constitute the existing suppliers 

(bulk manufacturers) of a given 

schedule I or II controlled substance 

have the requisite knowledge to 

comment on whether the existing 

market is capable of producing an 

adequate and interrupted supply under 

adequately competitive conditions. 

Thus, the notice-and-comment 

provisions of 21 CFR 1301.33(a) and 

1301.34(a) provide further support for 

interpreting paragraph 823(a)(1) as 

requiring DEA to consider, for purposes 

of determining the public interest, 

limiting the number of registered bulk 

manufacturers and importers of 

schedule I and II controlled substances 

to that which can produce an adequate 

and uninterrupted supply under 

adequately competitive conditions. 

Another provision of the regulations 

that warrants discussion is 21 CFR 

1301.33(b), which states: 

In order to provide adequate competition, 

the Administrator shall not be required to 

limit the number of manufacturers in any 

basic class to a number less than that 

consistent with maintenance of effective 

controls against diversion solely because a 

smaller number is capable of producing an 

adequate and uninterrupted supply. 

Although this provision is somewhat 

awkwardly phrased, a careful 

examination reveals that it is merely a 

corollary to paragraph 823(a)(1). In 

construing subsection 1301.33(b), it is 

important to bear in mind that an 

agency regulation cannot deviate from 

any mandate imposed by Congress 

under the statute that the regulation 

implements. Thus, any reading of 

subsection 1301.33(b) must be 

consistent with Congress’s direction in 

paragraph 823(a)(1) that DEA consider 

limiting the number of bulk 

manufacturers of schedule I and II 

controlled substances to that which can 

produce an adequate and uninterrupted 

supply under adequately competitive 

conditions. 

With the foregoing principles in 

mind, subsection 1301.33(b) can be 

broken down into its constituent 

elements for purposes of analysis as 

follows: 

■ ‘‘In order to provide adequate 

competition’’; i.e., if it has been 

determined under paragraph 823(a)(1) 

that granting a particular applicant a 

registration to bulk manufacture a given 

schedule I or II controlled substance is 

necessary to provide an adequate and 

uninterrupted supply of that substance 

under adequately competitive 

conditions, 

■ ‘‘The Administrator shall not be 

required to limit the number of 

manufacturers in any basic class to a 

number less than that consistent with 

maintenance of effective controls 

against diversion’’; i.e., if granting the 

applicant’s registration (based on a 

finding of inadequate competition) will 

bring the total number of registered bulk 

manufacturers of a given schedule I or 

II controlled substance to a number 

which remains consistent with 

maintenance of effective controls 

against diversion, DEA is not obligated 

to keep the total less than that number, 

■ ‘‘Solely because a smaller number is 

capable of producing an adequate and 

uninterrupted supply’’; i.e., based solely 

on the fact that the existing number of 

manufacturers already produces an 

adequate and uninterrupted supply (but 

under inadequately competitive 

conditions). 

Viewing these elements together, it is 

apparent that subsection 1301.33(b) 

merely states what are direct outgrowths 

of 21 U.S.C. 823(a)(1): 

(1) That the existence of an adequate 

and uninterrupted supply of a given 

schedule I or II controlled substance is 

not a sufficient basis to deny an 

application by a person seeking to 

become an additional manufacturer of 

that substance (since inadequate 

competition may provide an 

independent basis for registration under 

paragraph 823(a)(1)) and 

(2) That DEA need not keep the 

number of registered bulk 

manufacturers to a number below that 

which is consistent with maintenance of 

effective controls against diversion 

where adding an additional 

manufacturer is necessary to provide for 

adequate competition. 

Thus, 21 CFR 1301.33(b) can be 

reconciled with the statutory text 

(paragraph 823(a)(1))—as must be the 

case for the regulation to be valid.111


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provided in the text above. See Marijuana and 

Medicine: The Need for a Science-Based Approach: 

Hearing Before the Subcomm. on Criminal Justice, 

Drug Policy and Human Resources, 108th Cong. 208 

(2004) (letter from Assistant Attorney General 

William Moschella to Subcomm. Chairman Rep. 

Souder) (‘‘The meaning of [21 CFR 1301.33(b)] can 

be restated as follows: If DEA determines there is 

inadequate economic competition among the 

existing manufacturers of the particular controlled 

substance that the applicant seeks to produce (e.g., 

substantial overcharging by the existing 

manufacturers due to an insufficient number of 

competing manufacturers of that controlled 

substance), and provided further that granting the 

applicant’s registration (and thereby increasing the 

total number of manufacturers) is consistent with 

maintenance of effective controls against diversion, 

DEA is not required to deny the application solely 

because the number of manufacturers currently 

registered can adequately supply the market for that 

controlled substance in terms of quantity and 

quality of product.’’) (emphasis in original). 

112See also 21 U.S.C. 958(a) (a registration to 

import a schedule I or II controlled substance must 

be consistent with the public interest, based on 

consideration of the six criteria of § 823(a)). Further, 

21 U.S.C. 952(a)(2)(B) requires a person seeking to 

become registered to import a schedule I or II 

controlled substance to demonstrate not only that 

competition among domestic manufacturers of the 

particular substance is inadequate but also that 

competition ‘‘will not be rendered adequate by the 

registration of additional [domestic] manufacturers 

under section 823.’’ Thus, an applicant to import 

a schedule I or II substance must make an 

additional showing beyond that required for an 

applicant to bulk manufacture such a substance. 

However, as § 823(a) indicates, both the applicant 

seeking to import and the applicant seeking to bulk 

manufacture are subject to the same 823(a) criteria, 

including the same determination under paragraph 

823(a)(1) regarding the adequacy of competition. 

113That the existing supply of cocaine 

hydrochloride was adequate within the meaning of 

paragraph 823(a)(1) was not in dispute in Roxane. 

114As indicated above, because Roxane involved 

an application to import a schedule II controlled 

substance, the applicant was required demonstrate 

that competition was inadequate not only within 

the meaning of paragraph 823(a)(1), but also within 

the meaning of 21 U.S.C. 952(a)(2)(B). As to the 

latter, the DEA regulations require consideration of 

the factors set forth in 21 CFR 1301.34(d). These 

factors are specifically designed to assess 

competition in the context of an import application. 

However, as § 823(a) indicates, an application to 

import a schedule I or II controlled substance must 

also be evaluated under paragraph 823(a)(1) 

regarding the adequacy of competition. 

115As Johnson Matthey had applied to import 

narcotic raw materials, the application also had to 

be evaluated under 21 U.S.C. 952(a)(1). 

5. Prior DEA Statements Regarding the 

Meaning of Paragraph 823(a)(1) 

As discussed above, I now conclude 

that the text of paragraph 823(a)(1) 

indicates a directive, which is 

confirmed by the legislative history, that 

the agency consider limiting the number 

of registered bulk manufacturers and 

importers of controlled substances in 

schedules I and II to that which can 

produce an adequate and uninterrupted 

supply under adequately competitive 

conditions. Yet, in various final orders 

and other statements issued by DEA 

over the years, the agency has at times 

followed this approach and at other 

times failed to do so. 

For example, in Roxane Laboratories, 

Inc., 63 FR 55891 (1998), the agency 

applied paragraph 823(a)(1) consistent 

with the interpretation that requires the 

applicant to demonstrate that the 

existing manufacturer of the controlled 

substance in question is unable to 

provide an adequate and uninterrupted 

supply of the substance under 

adequately competitive conditions. 

Roxane Laboratories, Inc. (Roxane) was 

a company that applied to become 

registered to import cocaine 

hydrochloride, a schedule II controlled 

substance, for use in pharmaceutical 

products. As § 823(a) states, both an 

application to import a schedule I or II 

controlled substance and an application 

to bulk manufacture such a substance 

must be evaluated under the same 

criteria set forth in § 823(a).112 Thus, in 

Roxane, the Acting Deputy 

Administrator had to evaluate whether 

the proposed registration was consistent 

with the public interest in view of the 

six public interest factors of § 823(a), 

including paragraph 823(a)(1). 

Consistent with the interpretation of 

paragraph 823(a)(1) under which the 

adequacy of supply and competition 

must be considered, the parties in 

Roxane presented extensive evidence as 

to whether there was adequate 

competition within the meaning of the 

statute.113 Toward that end, much of the 

testimony and other evidence 

introduced in the proceedings focused 

on the historical and prevailing prices 

for bulk cocaine hydrochloride charged 

by what was then the only registered 

importer of that substance. In addition 

to presenting factual evidence regarding 

such prices, each side presented its own 

economic expert to testify whether, in 

view of the prices, competition in the 

market was adequate within the 

meaning of paragraph 823(a)(1).114

Ultimately, the Acting Deputy 

Administrator found that the applicant 

had met its burden under paragraph 

823(a)(1) of demonstrating that 

competition was inadequate and, in 

view of all the applicable statutory 

factors, granted Roxane’s application to 

become registered as an importer of 

cocaine hydrochloride. 

Four years later, in Johnson Matthey, 

Inc., 67 FR 39041 (2002), DEA again 

addressed the paragraph 823(a)(1) issue. 

As in Roxane, Johnson Matthey had 

applied to become registered as, among 

other things, an importer of schedule II 

controlled substances. Thus, as in 

Roxane, one of the central issues in 

Johnson Matthey was whether granting 

the application was necessary to 

provide adequate competition within 

the meaning of paragraph 823(a)(1).115

The application was opposed by two 

firms that were already registered as 

importers of the same substances that 

Johnson Matthey sought to import. 

These competing firms contended at the 

administrative hearing that they 

maintained an adequate and 

uninterrupted supply of the substances 

under adequately competitive 

conditions. The two firms therefore 

objected to the proposed registration 

under paragraph 823(a)(1), among other 

grounds. 

The final order in Johnson Matthey 

contains no description of the evidence 

presented by the parties during the 

administrative hearing on the 

competition issue as the final order 

expressly declared such evidence to be 

irrelevant. Nor does the Johnson 

Matthey final order contain a recitation 

of the text of paragraph 823(a)(1) or an 

independent analysis of the statutory 

text. Instead, the Johnson Matthey final 

order simply adopted a proposed rule 

that was published 18 years earlier by 

DEA and subsequently withdrawn by 

the agency. In that subsequently 

withdrawn 1974 proposed rule (39 FR 

12138 (1974)), DEA proposed to revise 

its regulations to state that, during an 

administrative hearing on an 

application to manufacture a controlled 

substance in schedule I or II, if the ALJ 

determines that the registration would 

be consistent with maintenance of 

effective controls against diversion, he 

shall exclude as irrelevant evidence 

bearing on whether existing 

manufacturers are capable of producing 

an adequate and uninterrupted supply 

under adequately competitive 

conditions. 

The Johnson Matthey final order 

failed to state that, two months after 

DEA published the aforementioned 

proposed rule in 1974, the agency 

published a notice in the Federal 

Register that three firms (which were 

then registered bulk manufacturers 

under § 823(a)) filed objections to, and 

requested a hearing on, the proposed 

rule, asserting that ‘‘the Controlled 

Substances Act requires a finding 

respecting the adequacy of competition 

prior to registering any person to engage 

in the bulk manufacture of a schedule 

I or II substance.’’ 39 FR 20382 (1974). 

These objections that were submitted in 

response to the 1974 proposed rule 

reflect precisely the same conclusion 

regarding the meaning of paragraph 

823(a)(1) that I find—for the reasons 

discussed above—to be most 


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116The notice of withdrawal of the proposed rule 

stated that DEA was in the midst of reviewing and 

revising all the agency regulations in their entirety 

and that the proposed amendments regarding the 

competition issue ‘‘are withdrawn so that all 

proposed changes to the regulations may be 

published together.’’ However, DEA never again 

proposed to amend its regulations to eliminate the 

consideration—that paragraph 823(a)(1) mandates— 

of adequacy of supply and competition. 

117 68 FR at 6950. 118 375 F.3d at 1152 (citing Chevron U.S.A, Inc. 

v. Natural Res. Def. Council, 467 U.S. 837, 842–43 

(1983)). 119 Id. 

120 375 F.3d at 1153. 

121 375 F.3d at 1157 n.8. 

122 467 U.S. at 843 n.11. 

123 71 FR at 9838. 

124While it is certainly preferable that an agency 

interpret a statutory provision that it administers in 

a consistent manner throughout the agency’s 

existence, the head of an agency ‘‘is not estopped 

from changing a view she believes to have been 

grounded upon a mistaken legal interpretation.’’ 

See Thomas Jefferson University v. Shalala, 512 

U.S. 504, 517 (1994); cf. Chevron, 467 U.S. at 863 

(‘‘The fact that the agency has from time to time 

reconcilable with the text of the statute. 

That DEA withdrew the 1974 proposed 

rule a month after publishing these 

objections (39 FR 26031 (1974)) is 

consistent with the conclusion that the 

proposed rule could not be firmly 

reconciled with the statute.116

Thus, the Johnson Matthey final order 

appears to have been flawed both 

procedurally (by relying entirely upon a 

proposed rule that was withdrawn) and 

substantively (by relying on an 

interpretation of paragraph 823(a)(1) 

that is, in my view, difficult to reconcile 

with the statutory text). Nonetheless, it 

must be recognized that the Johnson 

Matthey final order was upheld on 

appeal in Noramco v. DEA, 375 F.3d 

1148 (D.C. Cir. 2004). Examining the 

Noramco decision is therefore 

warranted. Before doing so, however, it 

is necessary to review another DEA final 

order that was issued shortly after 

Johnson Matthey. 

In Penick Corporation Inc., 68 FR 

6947 (2003), DEA evaluated the 

paragraph 823(a)(1) issue in a different 

manner than it had done eight months 

earlier in the Johnson Matthey final 

order. As in Roxane and Johnson 

Matthey, Penick had applied with DEA 

to become registered as, among other 

things, an importer of schedule II 

controlled substances. Also as in 

Roxane and Johnson Matthey, the 

applicant’s competitors (who were 

already in the market as registered 

importers of the same substances) 

objected to the proposed registration 

contending, among other things, that the 

applicant had failed to demonstrate the 

existence of inadequate competition 

within the meaning of paragraph 

823(a)(1). However, in contrast to the 

Johnson Matthey final order, the Penick 

final order did not disregard the 

competition issue as irrelevant. Nor did 

the Penick final order mention the 1974 

proposed rule (that was subsequently 

withdrawn), which was relied upon in 

Johnson Matthey. Rather, the Penick 

final order did examine the evidence 

presented on the competition issue and 

ultimately concluded: ‘‘Having found 

that the market is not adequately 

competitive, the Deputy Administrator 

concludes that this factor weighs in 

favor of granting Penick’s application, 

even though Noramco and Mallinckrodt 

are capable of maintaining an adequate 

and uninterrupted supply.’’ 117 The 

Penick final order did not address the 

Johnson Matthey final order or why the 

two final orders took a differing 

approach as to the competition issue. 

Both the Johnson Matthey final order 

and the Penick final order were 

challenged by a competitor (Noramco) 

in Noramco v. DEA. The United States 

Court of Appeals for the D.C. Circuit 

consolidated Noramco’s two petitions 

for review into one appellate 

proceeding. With respect to the Johnson 

Matthey final order, Noramco contended 

that DEA erred by failing to consider the 

adequacy of competition and limit the 

number of importers to that which can 

produce an adequate and uninterrupted 

supply under adequately competitive 

conditions as paragraph 823(a)(1) 

requires. The D.C. Circuit panel 

reviewed DEA’s decision ‘‘under the 

familiar two-step Chevron 

framework.’’ 118 Under this framework, 

if the reviewing court finds that the 

statute does not directly address ‘‘the 

precise question at issue’’ (step one), the 

court must sustain the agency’s 

interpretation if it is ‘‘based on a 

permissible construction of the statute’’ 

(step two).119 The court of appeals in 

Noramco upheld the Johnson Matthey 

final order, under Chevron step two, 

finding that DEA’s decision to disregard 

competition to be a ‘‘permissible 

interpretation’’ of paragraph 

823(a)(1).120 Simultaneously, the court 

of appeals in Noramco upheld the 

Penick final order after reciting how 

DEA did consider the competition issue 

as paragraph 823(a)(1) directs. That the 

final orders in Johnson Matthey and 

Penick were inconsistent with one 

another as to the interpretation of 

paragraph 823(a)(1) was rejected by the 

court of appeals as a basis for 

reversal.121

It is especially important to note here 

that, under Chevron step two, ‘‘[t]he 

court need not conclude that the agency 

construction was the only one it 

permissibly could have adopted to 

uphold the construction, or even the 

reading the court would have reached if 

the question initially had arisen in a 

judicial proceeding.’’ 122 Accordingly, 

when the court in Noramco upheld the 

final order in Johnson Matthey, it was 

not offering an opinion whether that 

final order had interpreted paragraph 

823(a)(1) in the best manner; rather, the 

court was merely stating that DEA 

(being owed the measure of Chevron 

deference accorded to an agency that 

administers a statute) had put forth a 

‘‘permissible interpretation’’ of the 

statute. This point is underscored by the 

fact that the court in Noramco also 

upheld the Penick final order, which 

interpreted paragraph 823(a)(1) in a 

notably different manner than did the 

Johnson Matthey final order. 

Thus, nothing in the Noramco 

decision constrains DEA from 

concluding, as I now do, that the most 

sound reading of the text of paragraph 

823(a)(1) is that which requires the 

agency to consider limiting the number 

of bulk manufacturers and importers of 

schedule I and II controlled substances 

to that which can produce an adequate 

and uninterrupted supply of a given 

substance under adequately competitive 

conditions. 

In 2006, another final order was 

issued involving the competition issue. 

In Chattem Chemicals, Inc., 71 FR 9834 

(2006), petition for review denied, 

Penick Corp., Inc. v. DEA, 491 F3d 483 

(D.C. Cir. 2007), the applicant sought to 

become registered to import a schedule 

II controlled substance, just as Roxane, 

Johnson Matthey, and Penick had 

previously done. In the final order, 

which I issued, I followed the Johnson 

Matthey approach of declining to 

consider the adequacy of competition or 

supply. In doing so, I expressly noted 

that this approach had been ‘‘approved 

by the appellate court in Noramco.’’ 123

Upon review of the Chattem final order, 

the court of appeals likewise reaffirmed 

that, under Noramco, this approach of 

not considering adequacy of 

competition was a permissible reading 

of the statute. Penick, 491 F.3d at 491 

n.11. However, for the reasons 

discussed at length above, I now believe 

that this approach—though deemed 

permissible upon Chevron review— 

must be rejected in favor of that which 

more accurately follows the text of the 

statute; i.e., the approach that was taken 

in Roxane and Penick of considering 

limiting the number of bulk 

manufacturers and importers of a given 

schedule I or II controlled substance to 

that which can produce an adequate and 

uninterrupted supply under adequately 

competitive conditions.124 In addition 


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changed its interpretation of [a statutory provision] 

does not * * * lead us to conclude that no 

deference should be accorded the agency’s 

interpretation of the statute.’’). 

125 DEA has never invoked the ‘‘limiting’’ 

language of paragraph 823(a)(1) as a basis to revoke 

the registration of an existing bulk manufacturer 

that is currently utilizing its registration to supply 

the market for a given schedule I or II controlled 

substance, and this final order should not be 

construed as suggesting a departure from such 

practice. 

to finding this interpretation to be that 

which most closely mirrors the text of 

the statute, I believe that, upon 

consideration of the legislative history 

and treaty considerations discussed 

above, this interpretation most 

effectively achieves the principles 

underlying the statutory text: Balancing 

the overarching goal of preventing the 

United States from being a source of 

domestic and international diversion by 

limiting the number of bulk 

manufacturers of schedule I and II 

controlled substances with the desire to 

ensure a level of competition adequate 

to prevent legitimate purchasers of these 

substances from being charged 

unreasonable prices.125 The alternative 

interpretation, though found to be 

permissible, does not give full effect to 

these principles and provides no 

mechanism to prevent the proliferation 

of bulk suppliers of schedule I and II 

controlled substances beyond that 

necessary to adequately supply the 

legitimate United States demand for 

these materials under adequately 

competitive conditions. It is axiomatic 

that the proliferation of suppliers of 

bulk schedule I and II controlled 

substances heightens the risk of 

oversupply, which in turn increases the 

risk of diversion. The alternative 

interpretation, therefore, does not 

effectuate the statute and its underlying 

purposes as well as the interpretation 

followed in this final order. 

D. Summary of the Discussion 

For the reasons indicated above, I 

have determined that Respondent’s 

proposed registration is inconsistent 

with United States obligations under the 

Single Convention and with the public 

interest based on a consideration of the 

factors set forth in 21 U.S.C. 823(a). 

With respect to the Single Convention, 

Respondent’s desire to become 

registered in order to achieve MAPS’s 

goal of ending the Federal Government’s 

monopoly on the wholesale distribution 

of marijuana cannot be squared with the 

requirement under the Convention that 

there be precisely such a monopoly. 

With respect to the public interest, 

Respondent’s failure to demonstrate that 

the longstanding existing system in the 

United States of producing and 

distributing research-grade marijuana 

under the oversight of HHS and NIDA 

is inadequate within the meaning of 21 

U.S.C. 823(a)(1) weighs heavily against 

granting his application. Also with 

respect to the public interest, the 

admitted conduct relating to controlled 

substances of Respondent’s sponsor, Mr. 

Doblin (in particular, Mr. Doblin’s past 

and ongoing conduct relating to 

marijuana) is unacceptable for anyone 

seeking to have a prominent role in 

overseeing the controlled substance 

activities of a DEA registrant— 

especially where the registrant’s 

proposed activities are the manufacture 

and distribution of the very drug 

marijuana. In sum, there are three 

independent grounds, any of which, 

standing alone, provide a sufficient 

(indeed, compelling) legal basis for 

denying Respondent’s application. 

Order 

Pursuant to the authority vested in me 

by 21 U.S.C. 823(a), as well as 28 CFR 

0.100(b) & 0.104, appendix to subpart R, 

sec. 7(a), I order that the application of 

Lyle E. Craker, Ph.D., for a DEA 

certificate of registration as a 

manufacturer of marijuana be, and 

hereby is, denied. This order is effective 

February 13, 2009. 

Dated: January 7, 2009. 

Michele M. Leonhart, 

Deputy Administrator. 

[FR Doc. E9–521 Filed 1–13–09; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF JUSTICE 

Foreign Claims Settlement 

Commission of the United States 

Privacy Act of 1974; System of 

Records 

AGENCY: Foreign Claims Settlement 

Commission of the United States. 

ACTION: Notice of a New System of 

Records. 

SUMMARY: Pursuant to the Privacy Act of 

1974 (5 U.S.C. 552a), the Foreign Claims 

Settlement Commission (Commission), 

Department of Justice, proposes to 

establish a new system of records to 

enable the Commission to carry out its 

statutory responsibility to determine the 

validity and amount of the claims 

submitted to the Commission against 

Libya. The Claims Against Libya System 

will include documentation provided by 

the claimant as well as background 

material that will assist the Commission 

in the processing of their claims. The 

system will also include the final 

decision of the Commission regarding 

the claim. 

DATES: In accordance with 5 U.S.C. 

552a(e)(4) and (11), the public is given 

a 30-day period in which to comment; 

and the Office of Management and 

Budget (OMB), which has oversight 

responsibility under the Act, requires a 

40-day period in which to conclude its 

review of the system. Accordingly, 

please submit any comments by 

February 17, 2009. 

ADDRESSES: The public, OMB, and 

Congress are invited to submit any 

comments to the Foreign Claims 

Settlement Commission of the United 

States, 600 E Street, NW., Suite 6002, 

Washington, DC 20579. 

FOR FURTHER INFORMATION CONTACT: The 

Administrative Office, Foreign Claims 

Settlement Commission, U.S. 

Department of Justice, 600 E Street, 

NW., Suite 6002, Washington, DC 

20579, or by telephone at 202–616– 

6975. In accordance with 5 U.S.C. 

552a(r), the Department has provided a 

report to OMB and the Congress on the 

new system of records. 

Dated: January 9, 2009. 

Mauricio Tamargo, 

Chairman. 

JUSTICE/FCSC–29 

SYSTEM NAME: 

Libya, Claims Against. 

SYSTEM LOCATION: 

Offices of the Foreign Claims 

Settlement Commission, 600 E Street, 

NW., Suite 6002, Washington, DC 

20579. 

CATEGORIES OF INDIVIDUALS COVERED BY THE

SYSTEM: 

Persons with claims against Libya 

covered by the August 14, 2008 Claims 

Settlement Agreement Between the 

United States of America and the Great 

Socialist People’s Libyan Arab 

Jamahiriya and referred by the 

Department of State to the Foreign 

Claims Settlement Commission. 

CATEGORIES OF RECORDS IN THE SYSTEM: 

Claim information, including name 

and address of claimant and 

representative, if any; date and place of 

birth or naturalization; nature of claim; 

description of loss or injury including 

medical records; and other evidence 

establishing entitlement to 

compensation. 

AUTHORITY FOR MAINTENANCE OF THE SYSTEM: 

Authority to establish and maintain 

this system is contained in 5 U.S.C. 301 

and 44 U.S.C. 3101, which authorize the 

Chairman of the Commission to create 


sroberts on PROD1PC70 with NOTICES