Scotts Miracle-Gro’s owner says Donald Trump, since he took office, has spoken to him personally “multiple time” about his intention to push through with the rescheduling of marijuana.
Scotts Miracle Gro’s CEO James Hagedorn said in an interview with Fox Business on Thursday, that Trump had privately told him and other people that he would still facilitate cannabis reform.
Hagedorn’s company, which has a cannabis unit, has been a long-time supporter of ending the federal prohibition of marijuana. He was then asked if he had any concern that Terrance Cole (the newly appointed head of the Drug Enforcement Administration, DEA), declined to list rescheduling as a top priority for the new agency, after being sworn into office.
“Well, I believe he is a law enforcement professional.” Hagedorn added, “I’m not shocked by this.” “I think there’s one person who could change it, and he’s told me and others that he will—and that’s the president of the United States, Donald Trump, who I’m a major fan of.”
I think that [Cole] needs to hear is a call from the president or the chief of staff saying, ‘This is a promise he made during the campaign, and promises made are promises kept,'” the gardening company CEO said.
“I believe that is exactly what we need to do. I don’t expect a law enforcement guy to lead with, ‘Let’s make pot legal,’ even though it’s legal in almost every state in the nation,” he said.
Hagedorn confirmed that they have discussed cannabis policy “multiple” times since Trump’s inauguration.
Scotts Miracle-Gro’s Hawthorne branch was also asked to explain how the current stalemate in the process of moving cannabis from Schedule I into Schedule III is affecting his business.
It’s really a story of two cities. It’s clear that the business is smaller. [federal law] The Schedule I. “The federal tax rate is 80%, so no one can profit,” said he. Everyone who invested as we did has lost everything. “There is therefore no real capital.”
“Everybody’s suffering because what we sell are mostly cultivation supplies, and those cultivation supplies are like capital—hard goods. “People are not investing, which is bad for our industry,” said he. It’s not so bad for us because our business now is profitable, after being unprofitable for some time. We’ve also had three quarters of profitability in a line. What we are trying to achieve is to use that business as a way for us to and others consolidate to a pure marijuana business. This will allow it to be separated from a lawn-and-garden business which can distract our investors.
“I don’t know if it’s big enough on our end to take this distraction. It’s profitable. It has a stable business. It has a good management team. It doesn’t have any tax issues because it’s not a pot business—it’s a supply business and it’s legal. And so it’s got no debt, which a lot of these companies have—both regular debt, which is kind of 15 percent debt, and they have tax debt. Our business as a new addition to the pot industry will help balance sheets and put it in the right place, with investors interested in marijuana and not gardeners who have grown tired of it all.
Hagedorn has also confirmed his “100% plan” to divide his gardening business into a “pure-pots unit,” that his oldest son, who will manage the division.
Hagedorn is not the only one who has made the point that reforms are likely to depend on an aggressive push from the President.
Cole, the DEA administrator, said during a confirmation hearing in April that examining the government’s pending marijuana rescheduling proposal would be “one of my first priorities” after taking office.
The Senate had approved the Trump nomination a day before Cole was sworn in last week. Nearly immediately following the swearing-in, the major marijuana trade association renewed its push for progress in the long-stalled federal cannabis scheduling process.
Notably, however, while Cole has said that examining the rescheduling proposal would be “one of my first priorities” if he was confirmed, he has so far refused to say what he wants the result to be—and has made past comments expressing concerns about the health effects of cannabis.
Last month, DEA informed a judge of the agency that marijuana rescheduling remains stalled in the Trump administration.
DEA Administrative Law Judge (ALJ) John Mulrooney—who announced his retirement last week, leaving the rescheduling process entirely to Cole—initially agreed to delay the proceedings after several pro-reform parties requested a leave to file an interlocutory appeal amid allegations that certain DEA officials conspired with anti-rescheduling witnesses who were selected for the hearing.
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Originally, hearings on the proposed rescheduling rule were set to commence on January 21, but those were cancelled when Mulrooney granted the appeal motion.
This appeal was filed after the court denied a request that DEA be removed from the rescheduling process. They argued it had been wrongly identified as the “chief proponent” given allegations about ex parte communication with anti-rescheduling witness that resulted in “an irrevocable taint”.
Meanwhile, the Justice Department told a federal court in January that it should pause a lawsuit challenging DEA’s marijuana rescheduling process after Mulrooney canceled the hearings.
Also in January, Mulrooney condemned DEA over its “unprecedented and astonishing” defiance of a key directive related to evidence it is seeking to use in the marijuana rescheduling proposal.
The issue is DEA’s refusal to digitally submit the tens and thousands of comments received by it in response to a proposed rule that would move cannabis from Schedule II to III.
Mulrooney is not shy in calling out DEA for various procedural mistakes throughout the rescheduling.
For example, in December he criticized the agency for making a critical “blunder” in its effort to issue subpoenas to force Food and Drug Administration (FDA) officials to testify in hearings—but he allowed the agency to fix the error and ultimately granted the request.
The House Appropriations Committee approved last month a bill that contained provisions to prevent the Justice Department from redistributing marijuana.
Re-scheduling has generated a lot of public interest. Although moving marijuana to Schedule III won’t make it legal at the federal level, this reform will allow cannabis-licensed businesses to claim federal tax breaks and eliminate certain research restrictions.
Meanwhile, two GOP senators introduced a bill in February that would continue to block marijuana businesses from taking federal tax deductions under Internal Revenue Service (IRS) code 280E—even if it’s ultimately rescheduled.
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