DEA Denies MedPharm Research Bid for Bulk Marijuana Manufacturing

The Drug Enforcement Administration has denied the application of MedPharm Research, LLC, of Denver, Colorado, for registration as a bulk manufacturer of marijuana in its Schedule I form, granting the Government’s Request for Final Agency Action after the company did not respond to an Order to Show Cause. The Decision and Order published in the Federal Register on October 7, 2026, was signed October 2, 2026, by DEA Administrator Terrance C. Cole and takes effect November 6, 2026.

The order, published at 91 FR 64176 as Document No. 2026-20553, denies the pending application, Control No. W16089931E, as well as any other pending application of MedPharm Research, LLC to amend or modify that application or to obtain additional registration in Colorado. Heather Achbach, DEA’s Federal Register Liaison Officer, signed and submitted the document electronically for publication.

Show Cause Order and Default

On September 17, 2025, DEA issued an Order to Show Cause proposing to deny the application, alleging that the company’s registration would be inconsistent with the public interest under 21 U.S.C. 823(a). The Order to Show Cause alleged that the applicant’s parent and sibling entities had handled marijuana for years without DEA registration and that the sibling entity had engaged in diversion by manufacturing marijuana for the recreational market.

According to a declaration from a DEA Diversion Investigator cited in the order, the investigator personally served a copy of the Order to Show Cause on the applicant at its proposed registered address on September 19, 2025. The applicant’s Director of Pharmacology, identified in the order as Mr. D.M., signed a DEA-12 receipt form acknowledging receipt.

The applicant did not request a hearing, file an answer, or respond to the Order to Show Cause in any way. On July 21, 2026, the Government submitted its Request for Final Agency Action asking the agency to issue a default final order denying the application.

Under 21 CFR 1301.43, a party entitled to a hearing that fails to file a timely request within 30 days after receiving an Order to Show Cause is deemed to have waived the right to a hearing and to be in default unless it establishes good cause, and an unexcused default is deemed an admission of the factual allegations in the Order to Show Cause. The agency found service on MedPharm Research adequate and the company in default, and therefore treated the allegations in the Order to Show Cause as admitted.

Findings and Public-Interest Reasoning

Among the findings deemed admitted through the default, on or about September 12, 2016, Mr. A.G., the chief executive officer of the applicant’s parent company, submitted the application on the applicant’s behalf. A notice of the application was published in the Federal Register on August 27, 2019, at 84 FR 44920.

The applicant is a wholly-owned subsidiary of MedPharm Holdings, LLC, which does business as Bud & Mary’s Cannabis. MedPharm Holdings also owns a second subsidiary, MX, LLC, and Mr. A.G., as CEO of the parent company, oversees both subsidiaries. Neither the applicant, nor MedPharm Holdings, nor MX is or has ever been registered by DEA to manufacture marijuana.

MX holds numerous licenses from the State of Colorado and the consolidated city-county of Denver to research, grow, manufacture, and sell marijuana in Colorado’s recreational and medicinal markets, and it has been growing and selling marijuana in Colorado since 2016. On December 22, 2023, DEA requested additional information from the applicant, including documentation of its authority to manufacture marijuana under state law. The applicant provided a Colorado marijuana research and development license, MMJ R&D Cultivation No. 408C-00001, that had been issued to MedPharm Holdings rather than to the applicant. The applicant proposed to conduct its operations at the same facility where MX operates under the parent company’s control, a location that has operated and continues to operate as a cultivation facility growing medical and recreational marijuana sold to third-party dispensaries in Colorado’s market.

The Controlled Substances Act requires annual registration to manufacture a controlled substance and directs DEA to register a Schedule I or II manufacturer only when registration is consistent with the public interest and with U.S. obligations under international treaties. The statute lists six public-interest factors, covering maintenance of effective controls against diversion, compliance with state and local law, promotion of technical advances in manufacturing, the applicant’s prior conviction record, past experience in manufacturing controlled substances together with effective controls against diversion, and other factors relevant to public health and safety. DEA regulations place “particular emphasis” on whether an applicant has demonstrated prior compliance with the CSA and agency regulations, and they provide that a marijuana manufacturing registration does “not authorize the manufacture, distribution, dispensing, or use of marijuana or products containing marijuana for non-medical purposes.” The burden rests on the applicant to establish that registration would be consistent with the public interest.

The order notes that marijuana, marijuana extract, and tetrahydrocannabinols are Schedule I controlled substances unless they are in a product approved by the U.S. Food and Drug Administration or are subject to a state medical marijuana license under 21 CFR 1308.13(g) as Schedule III controlled substances. It describes the CSA as a closed regulatory system that makes it unlawful to manufacture, distribute, dispense, or possess a controlled substance except as authorized, citing the Supreme Court’s 2005 decision in Gonzales v. Raich.

In its discussion, the agency stated that MedPharm Holdings and MX have manufactured marijuana without DEA registration for at least the past 10 years and have been engaged in the manufacture of marijuana for sale in the recreational market. The order states that manufacturing marijuana without a DEA registration violates the CSA and DEA regulations, and that manufacturing marijuana for the recreational market violates federal law and constitutes diversion of a Schedule I controlled substance. Citing the public-interest factor at 21 U.S.C. 823(a)(6) and the regulatory emphasis on prior compliance, the agency determined that issuing MedPharm Research a bulk manufacturer registration for marijuana would not be consistent with the public interest. One footnote states that because the company defaulted, it presented no evidence that its registration would serve the public interest, and another cites DEA precedent holding that the agency may look behind an entity’s ownership structure to evaluate the conduct of the people making decisions about the controlled-substance side of the business.

In April 2026, the Acting Attorney General issued a Final Rule, published at 91 FR 22714, that among other things established an expedited registration process for entities holding state medical marijuana licenses. The order states that MedPharm Research’s 2016 application was reviewed under the application requirements for Schedule I bulk manufacturers of marijuana, and a closing footnote adds that the denial does not prohibit the company from submitting an application through the new state-license framework, if applicable.