[Federal Register: March 28, 2003 (Volume 68, Number 60)]
[Notices]
[Page 15225-15226]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28mr03-97]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 02-15]
Genesis 1:29 Corporation; Denial of Application
On December 13, 2001, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to Genesis 1:29 Corporation (Respondent) of
Petaluma, California, proposing to deny its application for DEA
Certificate of Registration as a manufacturer of marijuana and
tetrahydrocannaboinois (``THC''), both Schedule I controlled
substances. The statutory basis for the Order to Show Cause was
Respondent's lack of state authorization to manufacture controlled
substances in the State of California. 21 U.S.C. 824(a)(3). In
addition, the Order to Show Cause alleged that Respondent's
registration would be inconsistent with the public interest, as the
term is used in 21 U.S.C. 823(a) and 824(a)(4).
By letter dated January 9, 2002, the Respondent, acting pro se
through its CEO Robert G. Schmidt (Mr. Schmidt), requested a hearing on
the issues raised by the Order to Show Cause. The matter was then
docketed before Administrative Law Judge Gail A. Randall (Judge
Randall). In its request for hearing, Mr. Schmidt on behalf of the
Respondent indicated that with respect to medical grade cannabis, the
Respondent's interest in the instant proceeding was ``to develop a
federally approved and federally regulated dispensary model and
research facility.'' The Respondent further indicated that its position
on the pending DEA application was ``flexible since there are no
federally established guidelines for dispensing medical cannabis to
patients other than for research purposes.''
On January 25, 2002, Judge Randall issued an Order for Prehearing
Statements. Following the filing of Prehearing Statements by the
respective parties, on April 30, 2002, the Government filed its Request
for Stay of Proceedings and Motion for Summary Judgment (``motion'').
On May 23, 2002, Respondent filed its response to the Government's
motion. On June 26, 2002, Judge Randall issued her Opinion and
Recommended Ruling, granting the Government's motion, and recommending
that Respondent's application for registration as a manufacturer be
denied. Neither party filed exceptions to Judge Randall's Opinion and
Recommended Ruling and on August 8, 2002, Judge Randall transmitted the
record of these proceedings to the Deputy Administrator. The Deputy
Administrator has considered the record in its entirety, and pursuant
to 21 CFR 1316.67, hereby issues his final order based upon findings of
fact and conclusions of law as hereinafter set forth.
In its motion, the Government asserted that on November 11, 2001,
DEA transmitted a series of written questions to the Respondent
regarding its method of operations and intended customers. The
Government attached to its motion a copy of the Respondent's November
26, 2001 response letter to DEA's questionnaire. In the attached
response letter, Respondent indicated that the intended purpose of its
bulk manufacture of marijuana was to ``supply clinical cannabis to
physician's patients operating within California state laws and
guidelines established by California Public Health and Safety Code
11362.5 including 11362.7 and 11362.9 * * *'' The letter further
[[Page 15226]]
outlined that Respondent's intended customers were ``Medical Patients''
referred under California's Compassionate Use Act of 1996.
The Government argued, inter alia, that California law requires the
Respondent to obtain state licenses to manufacture marijuana or THC for
human consumption, pursuant to the Consumer Product Safety Section,
California Department of Health Services, and from the State Board of
Pharmacy. In support of its argument, the Government attached to its
motion a declaration from Susan Bond, Section Chief of the Consumer
Product Safety Section, Department of Health Services, Food and Drug
Branch for the State of California. Ms. Bond stated that a state
license to manufacture marijuana and THC was required under California
Health and Safety Code Section 111615, and according to state records,
the Respondent neither held such license, nor submitted an application
to obtain such license. Ms. Bond concluded that the Respondent did not
possess valid state authority in California to manufacture marijuana or
THC for medical use in that state. The Government also attached eight
Certifications of Non-Licensure, in which the Executive Officer for the
California Board of Pharmacy certified that Respondent was not
currently licensed with the California Board of Pharmacy.
In response to the Government's motion, the Respondent highlight
its participation in various research projects, specifically in the
area of whole plant utilization. However, the Respondent did not
dispute that it currently lacks state authorization to manufacture
marijuana and THC. The Respondent further argued that the granting of
the Government's motion would be premature, impede future research,
deny the Respondent the right to a fair trial, and cause irreparable
injury to the Respondent's patients and associates.
Pursuant to 21 U.S.C. 823(a), DEA shall register an applicant to
manufacture controlled substances in Schedule I or II if it determines
that such registration is consistent with the public interest. Included
among the six public interest factors is ``compliance with applicable
State and local law.'' 21 U.S.C. 823(a)(2). In addition 21 CFR 1307.02
provides that DEA will not authorize any person ``to do any act which
such person is not authorized or permitted to do under * * * the law of
the State in which he/she desires to do such act.''
Section 823(a) contains no express threshold requirement of state
authorization. Nonetheless, DEA has previously determined that where as
here state law requires manufacturers of controlled substances to
obtain a state license, it would be pointless to grant a Federal
registration when the Respondent lacked state authority. Michael
Schumacher, 60 FR 13171 (1995); see also Church of the Living Tree, 63
FR 69,674 (1998).
In her Opinion and Recommended Ruling, Judge Randall agreed with
the Government that state licenses are required in California prior to
manufacturing marijuana or THC. Judge Randall found that consistent
with DEA regulations, as well as the agency's discussions in Michael
Schumacher and Church of the Living Tree, DEA will not authorize the
Respondent to engage in the manufacture of a Schedule I controlled
substance in California since the Respondent lacks authority from that
state to conduct such an activity. Therefore, Judge Randall concluded
that summary disposition was proper.
The Deputy Administrator concurs with the Administrative Law
Judge's grant of the Government's Motion for Summary Judgement. It is
well settled, that when no question of material fact is involved, or
when the material facts are agreed upon, a plenary, adversary
administrative proceeding involving evidence and cross-examination of
witnesses is not obligatory. See Gilbert Ross, M.D., 61 FR 8664 (1996);
Philip E. Kirk, M.D., 48 FR 32,887 (1983), aff'd sub nom Kirk v.
Mullen, 749 F.2d 297 (6th Cir. 1984); NLRB v. International Association
of Bridge, Structural and Ornamental Ironworkers, AFL-CIO, 549 F.2d 634
(9th Cir. 1977).
The Deputy Administrator also finds, and the parties do not
dispute, that the State of California requires a manufacturer of
marijuana or THC to obtain state licenses before engaging in such
activity. It is clear from the record in this proceeding that the
Respondent is not licensed as a manufacturer of Schedule I controlled
substances in California. Thus, as Judge Randall noted, there is no
material question of fact in dispute concerning this aspect of the
case. Because the Respondent does not meet a necessary precondition for
DEA registration, a hearing in this matter is unnecessary. Therefore,
Respondent's pending application for DEA Certificate of Registration
must be denied.
In its motion, the Government further argued that the Respondent's
application should be denied because marijuana and THC have no accepted
medical use under the Controlled Substances Act. However, as noted
above, DEA has indicated in previous final orders that an application
to manufacture marijuana would be denied if the Respondent lacked state
authority for such activity. Because the Respondent is not entitled to
a DEA registration due to its lack of state authorization to
manufacture Schedule I controlled substances in California, the Deputy
Administrator concludes that it is unnecessary to address whether
Respondent's application for DEA registration should be denied based
upon the other grounds asserted in the Order to Show Cause and the
Government's Motion for Summary Judgement. See Samuel Silas Jackson,
D.D.S., 67 FR 65145 (2002); Nathaniel-Aikens-Afful, M.D., 62 FR 16871
(1997).
Accordingly, the Deputy Administrator of the Drug Enforcement
Administration, pursuant to the authority vested in him by 21 U.S.C.
823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that the
application for DEA Certificate of Registration submitted by Genesis
1:29 Corporation, be, and it hereby is, denied. This order is effective
April 28, 2003.
Dated: March 13, 2003.
John B. Brown III,
Deputy Administrator.
[FR Doc. 03-7389 Filed 3-27-03; 8:45 am]
BILLING CODE 4410-09-M