Officials with the Drug Enforcement Administration (DEA) have begun conducting on-site inspections at marijuana businesses that have registered for federal protections in line with the Trump administration’s cannabis rescheduling process.
The Mississippi Medical Marijuana Association (3MA) told Marijuana Moment that two of its members were visited by federal officials last week after they filled out a DEA registration form for medical marijuana dispensaries.
“They were told that they were among the first in the country to be visited,” Henry Crisler, director of 3MA, said. “Both dispensaries were visited by 5-6 representatives, and the general tone was collaborative/inquisitive.”
“It seems that the DEA is taking a very slow/curious approach to the entire deal,” he said. “They had a lot of questions regarding general practices.”
DEA agents spent about six hours at High Street Dispensary in Jackson, Mississippi, owner David Fowler said.
The officials were “very cordial” and “did not come in overbearing,” he told Marijuana Moment. “I’m not threatened. It’s just another set of eyes and ears, except it’s at the federal level—really not different than the state side of it.”
Fowler said he gave the agents a full tour of his facility, and that they had a lot of questions for him—such as why the dispensary stays open so late on certain days and why he stocks such a wide variety of different products for patients to choose from.
He described the DEA officials as “new to this whole process too,” saying they had an attitude of “we’re gonna work on it together.”
“Overall I think as a business it’s going to be very beneficial for us to be able to get the tax breaks that we need to be successful, just like any other business,” Fowler said, referring to the fact that Schedule III status will allow the operation to deduct expenses from its taxes that it cannot take advantage of under Schedule I status.
Legally Rooted in Meridian also received a visit from DEA, according to 3MA.
“They requested a good bit of documentation from both dispensaries,” Crisler said. “They did not provide either with a comprehensive list, but instead made requests during the visit for different documents.”
3MA compiled a list of some of the documentation that DEA is requesting from the businesses that were visited and provided it to Marijuana Moment:
• Documentation on any license transfers/ownership changes since the license was issued
• Any communication to/from regulators regarding fines, violations, etc.
• List of all owners of the license, their contact information, SSN, and any other businesses that the owners have interest in, regardless of medical marijuana affiliation
• Narrative of the business history (how the business was started, what motivated owners to start the business)
• List of ALL products in inventory (must provide a complete list of inventory to DEA every 2 years)
• List of all vendors that dispensary purchases from
• Description of ordering process
• Narrative of how the dispensary determines what products to buy
• Narrative of the patient dispensary process (intake, purchasing, tracking)
• METRC purchase history
• Narrative of how sales records are stored
• Training documents
• Documentation of all employee records
• Complete security plan, including the names/version of hardware and software used within the dispensary
• A sign must be displayed outside of the dispensary stating that the facility is under 24 hour surveillance
Marijuana Moment reached out to DEA to find out more about how many inspections the agency has carried out so far, and which states those actions have occurred in, but a representative was not immediately available.
The agency launched its initial registration form for dispensaries in April, days after Acting Attorney General Blanche issued an order immediately moving marijuana products regulated by a state medical cannabis license from Schedule I of the Controlled Substances Act (CSA) to Schedule III, along with marijuana products that are approved by the Food and Drug Administration (FDA). A hearing starting later this month will consider broader marijuana rescheduling.
DEA also said it will soon be rolling out new forms for additional types of state-licensed medical marijuana businesses beyond dispensaries, such as manufacturers, distributors and laboratories.
The currently available registration form for state-licensed medical marijuana dispensaries asks for information about their processes for storage, ordering, dispensing, inventory, maintenance of records and other aspects of their businesses.
The application asks about specific details about security measures such as vaults, safes, secure storage rooms, access controls, alarm systems and on-site security personnel.
Applicants can choose whether they are requesting to handle marijuana, marijuana extracts or naturally derived delta-9 THC.
While only medical marijuana is currently being moved to Schedule III, the application also asks potential registrants whether their firms handle or dispense recreational marijuana.
The DEA application also asks businesses to submit information about their state cannabis licenses and to answer questions about criminal and disciplinary histories.
It also asks: “Has anyone who will be involved in the ownership or operation of the firm previously manufactured, distributed, and/or dispensed any controlled substance without a DEA registration authorizing such activity?”
Presumably, every currently operational state-legal cannabis business has key personnel who have done so, since medical marijuana was, until recently, a Schedule I controlled substance that DEA did not broadly authorize manufacturing, distribution and dispensation of.
Applicants must additionally list suppliers from which they intend to procure marijuana, and to disclose whether they anticipate repackaging or relabeling cannabis products.
They also need to provide lists of individuals with the business that are anticipated to have “access to controlled substances,” including their dates of birth, social security numbers, criminal histories related to drugs.
Meanwhile, the U.S. Department of the Treasury and Internal Revenue Service (IRS) said they plan to issue new tax guidance for the marijuana industry following the rescheduling announcement. Rescheduling will benefit state-licensed marijuana businesses by allowing them to take federal tax deductions they’re currently barred from under an IRS code known as 280E that doesn’t apply to Schedule III substances.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) also recently posted a draft update to gun purchase form to acknowledge the federally legal status of medical marijuana under rescheduling.
The Congressional Research Service published a report on the marijuana rescheduling move’s scope and limitations.
The post DEA Begins On-Site Inspections At Marijuana Businesses That Applied For Federal Protections Under Trump’s Rescheduling Move appeared first on Marijuana Moment.
