1. Sign-on Letter with list of signatories
2. November 22, 2005: Grover Norquist letter to DEA
3. Organizations Writing to DEA Supporting Prof. Craker
4. Case For A Sign-On Letter to DEA Administrator Karen Tandy supporting Proposed UMASS Amherst Marijuana Production Facility
5. Background on the University of Massachusetts Amherst Marijuana Production Facility Project
6. Statement Of Frederic M. Scherer, professor emeritus at the John F. Kennedy School of Government, Harvard University.
7. August 27, 2005,  New York Times Op-Ed, "Marijuana Pipe Dreams," by John Tierney.
8. MAPS/Craker/DEA hearing transcripts
   

Click for a copy of the final letter sent December 6, 2005, PDF Format

DEA Administrator Karen P. Tandy
Drug Enforcement Administration
Mailstop: AXS
2401 Jefferson Davis Highway
Alexandria, VA 22301

Dear Administrator Tandy,

We are writing to express our strong support for the application from Professor Craker, of the University of Massachusetts-Amherst, for licensing as a bulk manufacturer of marijuana for distribution exclusively to federally-approved researchers. We believe the DEA licensing of Prof. Craker's privately-funded facility would be in the public interest.

At present, the National Institute on Drug Abuse (NIDA) has an unjustifiable monopoly on the production of marijuana for legitimate medical and research purposes in the United States, grown under contract to NIDA at the University of Mississippi. Federal law clearly requires adequate competition in the manufacture of Schedule I and II substances. (See 21 U.S.C. § 823(a)(1); see also 21 C.F.R. § 1301.33(b).) The licensing of Prof. Craker's facility would provide privately-funded sponsors of FDA-approved research the necessary opportunity to conduct studies with a strain of marijuana of their own choosing, with immediate access to the strain for all FDA-approved studies and for possible prescription use. None of this is the case under NIDA's monopoly. Until an alternative source of supply is available, important privately-funded research into the therapeutic effects of marijuana for patients undergoing chemotherapy or suffering from AIDS, glaucoma, multiple sclerosis, or other diseases will not be initiated.

The University of Massachusetts-Amherst is one of the nation's distinguished research universities, and it is highly qualified to manufacture marijuana for legitimate medical and research purposes with effective controls against diversion. NIDA's monopoly makes very little sense given that the DEA has licensed privately-funded manufacturers of virtually all other Schedule I drugs, including LSD, MDMA (Ecstasy), and psilocybin.

As one of your predecessors, DEA Administrator Robert Bonner, stated, "Those who insist that marijuana has medical uses would serve society better by promoting or sponsoring more legitimate scientific research, rather than throwing their time, money and rhetoric into lobbying public relations campaigns and perennial litigation." We urge you to grant Prof. Craker's application for registration as a bulk manufacturer so that such legitimate and privately-funded scientific research can be conducted.

Respectfully,

PDF Version | MS WORD Version

November 22, 2005
DEA Administrator Karen P. Tandy
Drug Enforcement Administration
Mailstop: AXS
2401 Jefferson Davis Highway
Alexandria, VA 22301

Dear Administrator Tandy:

I am writing today to urge the DEA to license a privately-funded medical marijuana production facility, thus ending the government monopoly on the supply of marijuana legal for FDA and DEA-approved research. This would allow more controlled medical research using cannabis plants. When in a controlled laboratory facility, any agricultural product should be fair game for research and experimentation.

Over four years ago, Prof. Lyle Craker, University of Massachusetts-Amherst, sought permission from DEA to grow cannabis for privately-funded medicinal research. As a controlled substance, the DEA has discretion to grant permission to grow the cannabis plant. The licensing of this facility would provide privately-funded sponsors of FDA-approved research the necessary opportunity to conduct studies with a strain of cannabis of their own choosing, with immediate access to that strain for all FDA-approved studies and for possible prescription use.

Scientific research on agricultural products should not be influenced by politics. If the test subject in question were dandelions, there would be no controversy here. The fact that some choose to abuse the cannabis plant illegally is immaterial. The use of controlled substances for legitimate research purposes is well-established, and has yielded a number of miracle medicines widely available to patients and doctors. This case should be no different. It’s in the public interest to end the government monopoly on marijuana legal for research.

Sincerely,

Grover Norquist
President, Americans for Tax Reform
www.atr.org

CASE FOR A SIGN-ON LETTER TO DEA ADMINISTRATOR KAREN TANDY SUPPORTING PROPOSED UMASS-AMHERST MARIJUANA PRODUCTION FACILITY

GENERAL POLICY ISSUE: Should the controversy over the medical use of marijuana be resolved through FDA-approved scientific research or through legal and political struggles? Should the federal government facilitate or obstruct scientific research?

SPECIFIC POLICY ISSUE: Is it in the public interest for DEA to license Prof. Lyle Craker, Director, Medicinal Plant Program, Dept. of Plant, Soil and Insect Sciences, University of Massachusetts Amherst, to establish a privately-funded facility to produce marijuana exclusively for federally-approved and privately-funded research, or should the federal government, through the National Institute on Drug Abuse (NIDA), retain its unique monopoly on the supply of marijuana that can legally be used in research?

CONTEXT: On June 6, 2005, the US Supreme Court ruled, in Gonzales v. Raich, that the federal government can arrest patients who use marijuana with their doctor’s recommendation even if it is legal under state law. On June 29, 2005, the US House of Representatives defeated the Hinchey Amendment, 161-264, which would have prohibited the use of federal funds for the prosecution of medical marijuana users in states that have passed laws allowing medical marijuana programs.

Currently, the only process that could result in marijuana becoming legal as a medicine under federal law is for privately-funded sponsors to conduct scientific research with the aim of obtaining FDA approval for its use as a prescription medicine. Unfortunately, NIDA’s monopoly on the supply of legal marijuana is a fundamental obstruction to privately-funded research, none of which is currently taking place despite strong interest. The DEA wants to have it both ways, denying that marijuana is a medicine because the FDA has not approved it while simultaneously blocking research by refusing to allow the University of Massachusetts Amherst to manufacture marijuana for medical research.

NIDA’s monopoly is against the public interest and may be contrary to federal law, which clearly requires adequate competition in the manufacture of Schedule I and II substances for research purposes. [See 21 U.S.C. § 823(a)(1); see also 21 C.F.R. § 1301.33(b).] Researchers have unobstructed access to other Schedule I and II drugs and marijuana should be no exception. Professor Craker is suing the DEA in a DEA Administrative Law Judge hearing, but the DEA can approve the project at any time.

MONOPOLY PROBLEMS: NIDA’s monopoly results in arbitrary and lengthy delays or refusals in providing research material. Chemic Labs, a DEA-licensed analytical lab, was made to wait over two years for a reply to its request to purchase 10 grams for research into vaporizers, a non-smoking delivery system which the Institute of Medicine report recommended be developed. On July 27, 2005, NIDA refused to sell Chemic Labs the 10 grams, preventing the study from taking place. NIDA has also refused to provide marijuana to two FDA-approved protocols (Dr. Abrams, UC San Francisco, marijuana for AIDS wasting syndrome-IND #43-542; Dr. Russo, U. Montana, marijuana for migraines –IND #58,177). NIDA’s monopoly prevents sponsors from conducting research with the strain of marijuana they believe has the most potential. Furthermore, NIDA can legally provide marijuana for research but is not authorized to provide it for prescription use, should FDA approve such use. As a result, the strain of marijuana NIDA provides for research might not even be available for prescription use, an unacceptable uncertainty to sponsors.

RECOMMENDATION: The FDA cannot consider approving marijuana for medical use until the federal government’s unique monopoly on the production of marijuana for medical research is broken. Members of Congress should sign onto a letter to DEA Administrator Karen Tandy urging the DEA to approve Professor Craker’s application in order to facilitate medical marijuana research.

At present, the National Institute on Drug Abuse (NIDA) has a monopoly on the supply of marijuana that can be used in research, seriously hindering medical marijuana research. NIDA provides inferior, low-potency marijuana to researchers whose protocols it approves and denies marijuana even to FDA-approved protocols it doesn't approve, preventing those studies from taking place.

No privately-funded sponsor (such as MAPS or alternatively a for-profit pharmaceutical company) will invest significant sums in a realistic drug development research program aimed at obtaining FDA-approval for the prescription use of marijuana without first obtaining its own independent source of supply of a drug whose quality, price and availability it determines. There have been no US-based privately-funded marijuana production facilities since 1942, when marijuana was removed from the US Pharmacopoeia and its medical use was prohibited.

Dr. Lyle Craker originally submitted the application for a license to DEA in June 2001. In December 2001, DEA claimed it was lost. Subsequently a photocopy was resubmitted but UMASS/MAPS were told in February 2002 that the photocopied application was invalid since it didn't have an original signature. In July 2002, the original application was returned, unprocessed, with a DEA date stamp showing it had been received in June 2001. Dr. Craker resubmitted the original application to DEA on August 20, 2002, which DEA finally acknowledged receiving.

UMASS/MAPS worked with the Marijuana Policy Project on a Congressional sign-on letter to the DEA expressing support for the UMass Amherst license. The letter was submitted to DEA Administrator Asa Hutchinson on June 6, 2002 (attached).

DEA Administrator Asa Hutchinson responded in a letter to Rep. Barney Frank on July 1, 2002 (attached). DEA questioned whether this new facility would be in the public interest, since NIDA currently grows marijuana for research. In response, MAPS drafted a document explaining why it would be in the public interest for DEA to grant a license for the UMass Amherst facility, and submitted the document to DEA, the Office of National Drug Control Policy (ONDCP) and NIDA.

The DEA has also indicated that granting such a license might conflict with US international treaty obligations, specifically the Single Convention on Narcotic Drugs. In response, UMASS/MAPS worked with Graham Boyd of the ACLU Drug Policy Litigation Project and Peter Barton Hutt and Alexei Silverman, of the DC law firm Covington & Burling, on the development of a legal document detailing why US international treaty obligations do not prevent the licensing of the UMass Amherst facility.

On July 24, 2003, DEA finally filed a notice in the Federal Register about Prof. Craker's application, with a public comment period ending on September 23, 2003. On October 23, 2003, Senators Kennedy and Kerry wrote a letter to the Administrator of the DEA expressing their strong support for DEA licensing of the facility. UMASS/MAPS expected DEA’s approval or rejection of Dr. Craker's application sometime before the end of 2003 but that did not occur as DEA delayed any decision as long as possible.

On July 21, 2004, MAPS, Prof. Craker and Valerie Corral filed lawsuits against DEA and also against HHS/NIH/NIDA for obstructing medical marijuana research. On July 29, 2004, MAPS filed a motion to consolidate the lawsuit against the DEA and the lawsuit against HHS, NIH and NIDA. Shortly thereafter, on November 22, 2004, the Court required DEA to respond by December 22, 2004 to the portion of the lawsuit against DEA about the UMass Amherst marijuana production facility.

On December 3, 2004, MAPS mailed petitions for reconsideration to the DC Circuit Court of Appeals, asking again for the Court to pressure HHS and DEA for not responding in 17 ½ months to their applications to purchase 10 grams and import 10 grams, respectively, in both cases for marijuana vaporizer research.

On December 10, 2004, DEA finally rejected the application from Dr. Lyle Craker, UMass Amherst, seeking a license to establish a MAPS-sponsored facility to produce marijuana for federally-approved research, 3 and 1/2 years after the application was initially filed.

On February 28, 2005, DEA filed its pre-hearing statement in the DEA Administrative Law Judge (ALJ) hearing. In DEA's initial "Order to Show Cause" explaining its rationale for rejecting Prof. Craker's application, DEA claimed that it would be against the public interest for it to approve the license, and that, in any case, US international treaty obligations prevented DEA from issuing the license.

On April 22, 2005, UMass (Prof. Lyle Craker) filed his pre-hearing statement to the DEA Administrative Law Judge for the hearing with assistance from lead lawyer Julie Carpenter of Jenner & Block, Allen Hopper of the ACLU Drug Law Reform Project, and Emanuel Jacobowitz, Steptoe & Johnson, all working on a pro-bono basis.

On August 15, 2005, Chemic Laboratories received an official letter indicating that NIDA refused to sell it10 grams of marijuana for MAPS-sponsored research into the use of marijuana vaporizers. Chemic Labs had applied to purchase the 10 grams more than two years before.

The initial round of hearings took place August 22-26, 2005, with an additional week December 12-16, 2005, for DEA to present its witnesses

During the August hearings, DEA seemingly abandoned the claim that US international treaty obligations prevent it from licensing Prof. Craker’s facility, with a DEA official testifying on the stand that there is nothing in DEA law or policy that prevents it from licensing individual researchers from growing different strains of marijuana. The central issue remaining is whether it is in the public interest for DEA to license the UMass Amherst facility or whether NIDA should retain its monopoly on supply, a monopoly that clearly obstructs research.

Statement Of Frederic M. Scherer

in re Professor Lyle Craker
Drug Enforcement Administration Docket No. 05-16
September 15, 2005

1. I have been asked by representatives of Professor Craker to submit this analysis in connection with the Docket 05-16 proceedings before the Drug Enforcement Administration (DEA). I do so pro bono publico. I am professor emeritus at the John F. Kennedy School of Government, Harvard University, and visiting professor at Haverford College, teaching a course on the economics of industry. Copies of my short-form biography and a list of my testimony in judicial and regulatory proceedings are attached as Appendices A and B.

2. The issue, as I understand it, is fourfold. First, DEA has the legal authority to designate production sources for the lawful production of such controlled substances as marijuana and is mandated under by 21 U.S.C. 823(a)(1) to "limit the importation and bulk manufacture of such controlled substances to a number of establishments which can produce an adequate and uninterrupted supply of these substances under adequately competitive conditions for legitimate medical, scientific, research, and industrial purposes." Second, I understand that DEA has licensed a single source, Professor El Sohly at the University of Mississippi, to produce marijuana under contract to the National Institute on Drug Abuse (NIDA), the output of which is allocated by NIDA. Third, DEA has recently licensed Professor El Sohly to grow marijuana for lawful commercial purposes under contract to private industry. Fourth, I understand that Dr. Craker is seeking authorization to establish an alternative competitive source at the University of Massachusetts, whose output is to be used solely for lawful experimental purposes. That application has been denied, but is under review by the DEA in this proceeding.

3. I have been asked to address the testimony on August 25, 2005, of Mr. Matt Strait of DEA. Mr. Strait testified in effect that a problem of deficient competition does not exist because the DEA-licensed University of Mississippi source "provides marijuana to researchers at a not for profit basis.... I just don't necessarily see the argument for competition." In other words, because supplies are provided at cost, there is no lack of competition, since, according to Mr. Strait, the words used in the Code of Federal Regulations "all seem to be geared around the economics."

4. My interpretation of this rather imprecise testimony is that, since the University of Mississippi source prices its supplies of marijuana at cost rather than above cost, there is no monopoly problem; the requisites of competition are satisfied.

5. My understanding is that, in addition to providing only marijuana of relatively low potency, NIDA has in the past denied applications for marijuana supplies to be used solely for legitimate research. For those applications, the supply is constrained to zero. When there is a market demand for a commodity and there is no supply, any reputable economist would agree that the true price is the so-called shadow price, also called the implicit price, that is, the price consistent with finite demand but zero supply. Under the circumstances here, the shadow price is infinity for certain demand functions, i.e., those derived from Cobb-Douglas utility functions (Paul Douglas was a U.S. senator in the 1950s), or in other special cases, the price just above the price at which the demander's demand is choked off to a quantity of zero. In either case, such a shadow price is higher, usually much higher, than the price at which a monopoly would maximize its profits. And the monopoly price is higher than a competitive price. Thus, when a monopoly supplier denies supplies to legitimate demanders, there is a very significant impairment of competition -- more significant than if the supplier merely levied a monopoly price.

6. Scholars of all ideological shades who accept the basic premises favoring a market economy agree that refusal to supply by an entity with monopoly power is at least as undesirable as supplying at a monopoly price. As Friedrich A. Hayek observed in his book, The Road to Serfdom (1976 University of Chicago revised edition, p. 93):

Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his mercy. And an authority directing the whole economic system would be the most powerful monopolist conceivable. While we need probably not be afraid that such an authority would exploit this power in the manner in which a private monopolist would do so, while its purpose would presumably not be the extortion of maximum financial gain, it would have complete power to decide what we are to be given and on what terms... The power conferred by the control of production and prices is almost unlimited.

Professor Hayek's book is considered the bedrock of contemporary conservative economics. And I hardly need to say that Hayek abhorred the kind of power he was describing. On the more liberal side (by a modern, not 19th Century, definition of the term), consider the 1959 treatise by Carl Kaysen and Donald F. Turner, Antitrust Policy: An Economic and Legal Analysis, p. 14:

The demand for limiting business power springs more often from those who feel themselves at a disadvantage in interbusiness transactions than it does from households ... Competition in this context is desirable because it substitutes an impersonal market control for the personal control of powerful business executives, or for the personal control of government bureaucrats. The impersonality of market regulation makes it fair in the eyes of those subject to it; the sense of fairness is greater when the same restriction on conduct is imposed by the market than when it is viewed as the result of a personal decision by a powerful individual.

Shortly after publishing the book, Kaysen became an economic adviser to President Kennedy; Turner was Assistant Attorney General for Antitrust during the Johnson Administration.

7. In declaring under 21 U.S.C. 823(a) that controlled substances should be supplied under "adequate competitive conditions" for lawful purposes, the U.S. Congress was following a four-century legal tradition. The seminal case is Darcy v. Allein, 1603, which is reprinted in my compendium, Monopoly and Competition Policy, vol. I, pp. 6-11. It condemned as contrary to the common law a grant by Queen Elizabeth I of a monopoly over the supply of playing cards in England. That and other High Court decisions led the Parliament in 1623 to pass the Statute of Monopolies, which singled out patents and copyrights as the sole allowable monopoly grants government could make under English law. That policy was implicitly endorsed by the U.S. Founding Fathers when they authorized Congress in Article I, Section 8, of the Constitution to grant for limited times the exclusive right to authors and inventors in their writings and discoveries, but articulated expressly no other situations in which the government was to confer exclusive rights.

8. It is my understanding that no exclusive patent rights limit the supply of marijuana to lawful scientific users. Even for the principal type of monopoly grant sanctioned in the U.S. Constitution, Congress declared an explicit exemption in the Hatch-Waxman Drug Price Competition and Patent Term Restoration Act of 1984 (Public Law 98-417). The so-called Bolar amendment exempts would-be generic suppliers of a drug from the exclusive rights of drug product patent holders for the purpose of carrying out clinical trials in advance of patent expiration so that their generic products can be ready for marketing at the time valid patents expire.

9. A considerable part of my professional career has been devoted to studying the relationships between market structure and technological progress. One of my most important findings has been that innovation, quality, and diversity of product characteristics satisfying consumers' demands are more likely to be achieved when there are multiple producers than when there is only one, i.e., a monopoly. For a summary, see F. M. Scherer and David Ross, Industrial Market Structure and Economic Performance (3rd edition: 1990), pp. 600-607 and 639-660.

10. To conclude, I believe Mr. Strait is quite wrong in testifying that there is no impairment of competition when legitimate supplies of marijuana are sold at cost to authorized customers. Competitive problems emerge when costs are higher than those of alternative sources, or when supplies are denied -- i.e., the quantity supplied is zero -- to other would-be buyers who meet the scientific and/or medical criteria of the Food and Drug Administration (FDA) or, in the case of laboratory research, have the necessary DEA licenses. Denial of a license to the University of Massachusetts to produce marijuana for lawful scientific and medical purposes is contrary to both the spirit of 21 U.S.C. 823(a)(1) and to sound public policy.

11. I swear that the statements in para. 1-10 above are true to the best of my knowledge.

_____________________________
Frederic M. Scherer

John Tierney
August 27, 2005
New York times

When the Supreme Court ruled in June that states could not legalize marijuana for medical uses, Justice Stephen Breyer voted with the majority. But during oral arguments, he suggested an alternative way for patients to get it: let the federal Food and Drug Administration decide if marijuana should be a prescription drug.

"Medicine by regulation is better than medicine by referendum," he said. In theory, that sounds reasonable. But what if the officials doing the regulation are afflicted with a bad case of Reefer Madness?

If you doubt this possibility, you should have been at a hearing that began this week at the Drug Enforcement Administration's headquarters. Lyle Craker, a professor of plant and soil sciences at the University of Massachusetts, asked an administrative judge to overrule the agency so he could grow marijuana for F.D.A.-approved research projects by other scientists.

Dr. Craker is a well-regarded agronomist who's being supported by the American Civil Liberties Union and both of his senators, Edward Kennedy and John Kerry. But for four years he's been stymied by the D.E.A., which first stalled and then finally denied his request for a permit.

There are precedents for his re quest, because researchers already get supplies of other drugs - like heroin, LSD and Ecstasy - from independent laboratories licensed to make them. But researchers who want marijuana have only one legal source: a crop grown in Mississippi and dispensed by the National Institute on Drug Abuse.

Scientists say they need an alternative partly because the government's marijuana is of such poor quality - too many seeds and stems - and partly because the federal officials are so loath to give it out for research into its medical benefits.

Discovering benefits, after all, would undermine the great anti-marijuana campaign that has taken hold in Washington. Marijuana is deemed to be such a powerful "gateway" to other drugs that it's become the top priority in the federal drug war, much to the puzzlement of many scientists, not to mention the police officers who see a lot of worse drugs on the streets.

People with glaucoma and AIDS have sworn by the efficacy of marijuana, and there have been studies by state health departments showing that smoking marijuana is especially good at controlling nausea. Scientists would like to test these effects, but they can't do good studies until they get good marijuana.

Critics of medical marijuana say that it's unnecessary because patients can obtain the benefits of its active ingredient, THC, through a drug that's already available, Marinol. But many patients say it doesn't work as well. They point to the case of the writer Peter McWilliams, who said smoking marijuana was the only way to control the nausea brought on by the mix of drugs he took for AIDS and cancer.

He was forced to switch to Marinol after a D.E.A. investigation led to his conviction for violating federal laws against marijuana. In 2000, several weeks before he was to be sentenced, he was found dead in his bathroom. He had choked on his own vomit.

Phillip Alden, a writer living in Redwood City, Calif., told me that marijuana was a godsend for him in dealing with the effects of AIDS. He said it eased excruciating pains in his fingertips, controlled nausea and enabled him to avoid the wasting syndrome that afflicts AIDS patients who are unable to eat enough food.

But Mr. Alden said only some kinds of marijuana worked - not the weak variety provided by the federal government, which he smoked during a research study.

"It was awful stuff," he said. "They started out with a very low-grade plant, rolled it up with stems and seeds, and then freeze-dried it so that they probably ruined any of the THC crystals. All it did was give me headaches and bronchitis. The bronchitis got so bad I had to drop out of the study."

Mr. Alden was scheduled to testify at this week's hearing, but he told me he had to withdraw because the D.E.A. refused to give him legal immunity if he admitted using marijuana not from the government. It's a shame the judge will be making a decision without hearing him, but I can understand Mr. Alden's hesitancy.

D.E.A. officials have already shown they're quite capable of persecuting someone who uses marijuana to deal with AIDS, and they may well be even more eager to go after someone who encourages research into their least favorite drug. When it comes to marijuana research, the federal policy is "Just Say Know-Nothing."

• Transcript of court hearing, Monday, August 22, 2005
  Craker opening statement by Julie Carpenter, Witnesses are Lyle E. Craker and Irwin G. Martin
  
• Transcript of court hearing, Tuesday, August 23, 2005
  Witnesses are Lyle E. Craker, Barbara Roberts, John Vasconcellos, Dale Gieringer
  
• Transcript of court hearing, Wednesday, August 24, 2005
  Witness is Rick Doblin
  
• Transcript of court hearing, Thursday, August 25, 2005
  DEA opening statement by Brian Bayly, Witness is Matthew Strait
  
• Transcript of court hearing, Friday, August 26, 2005
  Witness is Matthew Strait