A DEA denial in Colorado is not a ban on medical registration

DEA denied a Colorado cannabis company's federal application this week. It'll get passed around as DEA shutting the door on state operators.

It isn't. But read why DEA said no. It's about the company you keep.

Watch the timing. On October 5, DEA opened its new Form 225 applications for state-licensed medical manufacturers, distributors, and testing labs, as Cannabis Business Times reported. Two days later, on October 7, this denial hit the Federal Register. A lot of operators are about to fill out that form. This order tells you how DEA reads the people standing next to you when you do.

Read it yourself: DEA Decision and Order, MedPharm Research, LLC. Administrator Terrance Cole signed it October 2. It takes effect November 6.

What actually happened

MedPharm Research applied in September 2016 to be a DEA-registered bulk manufacturer of marijuana. The old Schedule I path. Then the application sat. For years.

In December 2023, DEA asked for proof of state authority. The company sent a Colorado marijuana research and development license. That license belonged to the parent company.

Then DEA looked at the building. MedPharm planned to work out of the same facility as its sister company. Same parent. Same CEO. That sister has grown and sold medical and recreational marijuana in Colorado since 2016.

DEA issued an order to show cause on September 17, 2025, and served it two days later. The company never asked for a hearing. Never answered. Never responded at all.

That's a default. Under DEA's rules, a default counts as admitting the facts DEA alleged in the order to show cause.

So DEA found that the parent and the sister had been manufacturing marijuana without DEA registration for at least ten years. It found that growing for the recreational market is diversion of a Schedule I substance. And it leaned on something DEA has long held: it "can look behind" an ownership structure to the people making the decisions on the controlled-substance side. Application denied.

Three ways people will misread this

"DEA is denying Colorado cannabis companies." No. DEA denied one application, filed in 2016, on a default, under the old Schedule I bulk-manufacturer rules. Footnote 8 says the denial doesn't stop the company from applying through the new state-license path, if it qualifies. That's not a door closing. That's DEA pointing at a different door.

"My state medical license gets me in." Partly. Under the April rule, a state license is "conclusive evidence" that you're authorized under state law. DEA "shall register" you unless registration is inconsistent with the public interest. That last clause is the whole ballgame. Your state license answers whether you're allowed. DEA still decides whether it trusts you. Read the April 28 rescheduling rule, new 21 CFR 1301.13(k).

"Our adult-use side is a separate LLC, so it's not in the file." This is the one that should keep you up at night. DEA didn't pin the recreational grow on the applicant. It pinned it on the sister and the parent. Then it counted that conduct against the applicant anyway, because they shared a parent, a CEO, and a building. And the new rule says it flat out: these registrations "do not authorize" manufacturing, distribution, dispensing, or use "for non-medical purposes."

If you're dual-licensed, this is about you

The April rule moved two things to Schedule III: FDA-approved marijuana products, and marijuana covered by a state medical license. It didn't move adult-use. Federally, adult-use marijuana is still Schedule I.

Most operators I know who'd file a Form 225 run medical and adult-use under one roof, or under one parent. So when DEA reviews you, your adult-use half isn't background noise. It's part of the record.

Marijuana Moment reports the new Form 225 asks whether you'll handle medical, recreational, or both. Answer it like someone's going to read your answer next to this order. Because someone will.

What I'd do before you file

Draw your org chart. The honest one. Every entity, every owner, every manager, every license, every address. If the same people run medical and adult-use, assume DEA sees that on day one.

Map your premises. Where is medical product grown, made, stored, and moved? Where is adult-use? If the answer is "same rooms," talk to counsel before you submit. Not after.

Separate your records. Lot by lot, you should be able to show which plants and which products were medical and which weren't. If DEA asks and you can't show it, you're asking an investigator to take your word for it. They won't.

Don't sit on paper from DEA. MedPharm lost on default. It never made its case. Under DEA's rules you get 30 days after you receive an order to show cause to ask for a hearing. Miss that, and the facts in the order become your facts.

And price it in. Cannabis Business Times reports the one-year, nonrefundable fee is $3,699 for a manufacturer, $1,850 for a distributor, and $296 for a lab. That's real money to burn on an application nobody prepared.

What I expect next

This part is my read and my prediction. It isn't law, and I could be wrong on the timing.

I expect more cleanup orders like this one. There are old Schedule I bulk applications still sitting from that era, and I'd bet some come from companies with adult-use affiliates.

I expect the real test to be the first contested denial under the new state-license path. Somebody with a dual license will actually show up and argue that their state's diversion controls are enough. The April rule gives them something to stand on: it says registering an applicant in a state regime with robust diversion, record-keeping, and inspection protections generally won't be inconsistent with the public interest. MedPharm never argued anything. The next company will.

And I expect DEA to publish answers on how it treats affiliates and shared facilities. That'll be guidance, not law. Read it anyway. Guidance tells you where they plan to look.

One denial. One default. One footnote that matters more than the headline.

If you want a second set of eyes on your org chart, your premises map, and your Form 225 before you pay DEA, reach out to us at https://www.thynk.guru/contact-us. And if keeping medical and adult-use records apart, lot by lot, is the headache, that's the kind of work https://thynkflow.io is built for.

Disclaimer: This post is from Thynk Industries and is for general information only. It is not legal advice, and Thynk Industries is not a law firm. Reading it doesn't create an attorney-client relationship. Talk to a licensed attorney about how DEA's registration rules apply to your own licenses, entities, and premises before you file.