Notice2025-19613
MCRGC, LLC; Decision and Order
Primary source
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Published
October 21, 2025
Issuing agencies
Justice DepartmentDrug Enforcement Administration
Full Text
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<title>Federal Register, Volume 90 Issue 201 (Tuesday, October 21, 2025)</title>
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[Federal Register Volume 90, Number 201 (Tuesday, October 21, 2025)]
[Notices]
[Pages 48431-48432]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19613]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
MCRGC, LLC; Decision and Order
On May 7, 2024, the Drug Enforcement Administration (DEA or
Government) issued an Order to Show Cause (OSC) to MCRGC, LLC, of New
Orleans, LA (Applicant). Request for Final Agency Action (RFAA),
Exhibit (RFAAX) 2, at 1, 6. The OSC proposed the denial of Applicant's
application for DEA registration, Control No. W16097592E, alleging that
Applicant's registration would be inconsistent with the public
interest. Id. at 1 (citing 21 U.S.C. 823(a)).
More specifically, the OSC alleged that Applicant did not have: (1)
a physical location for its establishment to grow marijuana that DEA
can inspect; (2) state licensure in any state for growing marijuana;
(3) a DEA Schedule I researcher certificate of registration; and (4) a
bona fide supply agreement with a registered DEA Schedule I researcher
with a DEA approved marijuana research protocol. Id. at 1 (citing 21
U.S.C. 822(f), 21 U.S.C. 823(a), and 21 CFR 1318.05(b)). On June 28,
2024, the Government submitted an RFAA requesting that the Agency issue
a default final order denying Applicant's application for registration.
RFAA, at 1.
After carefully reviewing the entire record and conducting the
analysis as set forth in more detail below, the Agency grants the
Government's request for final agency action and denies Applicant's
application for registration.
I. Default Determination
Under 21 CFR 1301.43, an applicant entitled to a hearing who fails
to file a timely hearing request ``within 30 days after the date of
receipt of the [OSC] . . . shall be deemed to have waived their right
to a hearing and to be in default'' unless ``good cause'' is
established for the failure. 21 CFR 1301.43(a), (c)(1). In the absence
of a demonstration of good cause, an applicant who fails to timely file
an answer also is ``deemed to have waived their right to a hearing and
to be in default.'' 21 CFR 1301.43(c)(2). Unless excused, a default is
deemed to constitute ``an admission of the factual allegations of the
[OSC].'' 21 CFR 1301.43(e).
Here, the OSC notified Applicant of its right to file a written
request for hearing, and that if it failed to file such a request, it
would be deemed to have waived its right to a hearing and be in
default. RFAAX 2, at 4-5 (citing 21 CFR 1301.43). As a preliminary
matter, the Agency finds that service of the OSC was adequate. On May
7, 2024, a DEA Diversion Investigator (DI) mailed a copy of the OSC to
Applicant's mailing address and emailed a copy to the email address
listed on the application. RFAA, at 2; RFAAX 3, 1-2, App. A-B. On the
same day, the DI received a reply email confirming receipt of the OSC.
RFAA, at 2; RFAAX 3, 2, App. C. After more than 30 days passed, the
Government asserted in the RFAA that Applicant did not timely request a
hearing. RFAA, at 2. Thus, the Agency finds that Applicant is in
default and therefore has admitted to the factual allegations in the
OSC. 21 CFR 1301.43(e).
II. Applicable Law
The Controlled Substances Act (CSA) states that the Agency shall
register an applicant to manufacture controlled substances in schedule
I or II if such registration is determined to be ``consistent with the
public interest and with United States obligations under international
treaties, conventions, or protocols in effect on May 1, 1971.'' 21
U.S.C. 823(a). The CSA provides six factors the Agency must consider in
determining the public interest. Id.
One of the required considerations is ``the existence in the
establishment of effective control against diversion,'' 21 U.S.C.
823(a)(5), and DEA is authorized to inspect an applicant's
establishment. 21 U.S.C. 822(f)(1); \1\ 21 CFR 1301.31. This inspection
is ``fundamental to the CSA's mandate to protect the public interest.''
Novelty Distributors, Inc., 73 FR 52689, 52701 (2008), pet. for rev.
denied sub. nom. Novelty, Inc. v. D.E.A., 571 F.3d 1176 (D.C. Cir.
2009).
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\1\ The HALT All Lethal Trafficking of Fentanyl Act, sec.
3(d)(1), Public Law 119-26, 139 Stat. 410, 414 (2025), modified this
subsection by inserting a subsection number.
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The CSA's implementing regulations further provide that the Agency
shall place ``particular emphasis'' on certain enumerated criteria in
determining applicant selection consistent with the public interest
with respect to marijuana growers and manufacturers. 21 CFR
1318.05(b)(2)-(3). In situations where ``an applicant seeks
registration to grow cannabis for its own research or product
development,'' one of the criteria of
[[Page 48432]]
``particular emphasis'' is that ``the applicant must possess
registration as a schedule I researcher with respect to marihuana under
[21 CFR 1301.32].'' 21 CFR 1318.05(b)(3)(ii). Additionally, the Agency
must consider whether the applicant has ``a bona fide supply agreement
with a registered researcher or manufacturer,'' to assist the Agency in
assessing ``the extent to which any applicant is able to supply
cannabis or its derivatives in quantities and varieties that will
satisfy the anticipated demand of researchers and other registrants in
the United States.'' 21 CFR 1318.05(b)(3)(i).
III. Findings of Fact
In light of Applicant's default, the factual allegations in the OSC
are deemed admitted.\2\ 21 CFR 1301.43(e). Accordingly, Applicant
admits that it does not have a physical location for its establishment
to grow marijuana that DEA can inspect, it does not hold a DEA Schedule
1 researcher certificate of registration (nor does Principal and
Founding Member Dr. D.J.), and it does not have a bona fide supply
agreement with a registered DEA schedule 1 researcher with a DEA-
approved marijuana research protocol. RFAAX 2, at 1, 4. Applicant
further admits that it has ``failed to submit a full, accurate, or
complete bulk manufacturer application'' for the Agency to consider.
Id. at 4.
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\2\ According to the CSA, ``[f]indings of fact by the [DEA
Administrator], if supported by substantial evidence, shall be
conclusive.'' 21 U.S.C. 877. Here, where Applicant is found to be in
default, all of the factual allegations in the OSC are deemed to be
admitted. These uncontested and deemed admitted facts constitute
evidence that exceeds the ``substantial evidence'' standard of 21
U.S.C. 877; it is unrebutted evidence.
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IV. Discussion
Here, Applicant ``does not have a physical location for its
establishment to grow marijuana'' that DEA can inspect under 21 U.S.C.
822(f)(1) and 21 CFR 1301.31. RFAAX 2, at 4. Moreover, Applicant does
not have a bona fide supply agreement with a registered researcher or
manufacturer for the Agency to consider under 21 CFR 1318.05(b)(3)(i).
RFAAX 2, at 4. Although there is no indication in the record that
Applicant ``seeks registration to grow cannabis for its own research or
product development,'' nevertheless, Applicant does not possess the
schedule I researcher registration that would be required if it was
seeking to do so. 21 CFR 1318.05(b)(3)(ii); RFAAX 2, at 4. Therefore,
these criteria under Agency consideration weigh against Applicant. 21
U.S.C. 823(a)(1), (5); 21 CFR 1318.05(a), (b)(3).
Considering the public interest factors of 21 U.S.C. 823(a), the
Agency determines that the issuance of a manufacturer registration to
Applicant would not be consistent with the public interest.\3\
Accordingly, the Agency will order the denial of Applicant's
application for registration.
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\3\ The Agency declines to consider Applicant's lack of state
licensure in any state for growing marijuana. RFAA, at 1, 3; RFAAX
2, at 4. The Government failed to propose a legal basis for this
fact to weigh against Applicant (e.g., the existence of a relevant
state requirement for licensure and how that state requirement would
apply to this Applicant). 21 U.S.C. 823(c)(1)(B)(vii).
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Order
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21
U.S.C. 823(a), I hereby deny the application for a DEA Certificate of
Registration, Control No. W16097592E, submitted by MCRGC, LLC, as well
as any other pending application of MCRGC, LLC, to amend or modify this
application. This Order is effective November 20, 2025.
Signing Authority
This document of the Drug Enforcement Administration was signed on
October 9, 2025, by Administrator Terrance Cole. That document with the
original signature and date is maintained by DEA. For administrative
purposes only, and in compliance with requirements of the Office of the
Federal Register, the undersigned DEA Federal Register Liaison Officer
has been authorized to sign and submit the document in electronic
format for publication, as an official document of DEA. This
administrative process in no way alters the legal effect of this
document upon publication in the Federal Register.
Heather Achbach,
Federal Register Liaison Officer, Drug Enforcement Administration.
[FR Doc. 2025-19613 Filed 10-20-25; 8:45 am]
BILLING CODE 4410-09-P
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</html>Indexed from Federal Register on October 21, 2025.
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