Wednesday, 02 September 2026 01:55 PM
Company Update
The federal governments policy contradiction is unavoidable:
The federal government is conferring the legitimacy and financial benefits of Schedule III medicine on state-licensed operators while three of the industry's largest companies defend allegations that they used an orchestrated medical narrative to lure recreational consumers into buying their products.
Motions to dismiss remain pending.
WASHINGTON, D.C. / ACCESS Newswire / September 2, 2026 / A filing entered on August 24, 2026 in the United States District Court for the Northern District of Illinois has placed the marketing of state-licensed recreational cannabis at the center of a contested discovery dispute, at the same moment the federal government has extended Schedule III treatment and its accompanying economic benefits to state-licensed operators.
The filing is Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Stay Discovery Pending Ruling on Motions to Dismiss, entered as Document 56 in Murray, et al. v. Cresco Labs Inc., et al., No. 3:26-cv-50184 (N.D. Ill.), before the Honorable Rebecca R. Pallmeyer and Magistrate Judge Margaret J. Schneider. The defendants - Cresco Labs Inc., Green Thumb Industries Inc., and Verano Holdings - are described in the filing as three manufacturers and sellers of recreational cannabis products headquartered in Illinois. The underlying class action complaint, filed May 4, 2026, names forty-one putative class representatives from twelve states.
MMJ International Holdings is not a party to the litigation.
What the filing says
The plaintiffs' memorandum describes the case in its own words: "This case is about a concerted campaign by Defendants and allied third parties to convince the public that recreational cannabis products are 'medicine,' whose use confers health benefits those products do not confer."
The memorandum states that the alleged misrepresentations are "not specific to a particular product" but instead "apply to Defendants' recreational cannabis business" and are disseminated "through Defendants' websites, blogs, social media channels, and literature funded by Defendants." It further alleges that "[n]one of Defendants' product labels contain a relevant warning."
The filing points to specific public marketing materials described in the complaint, including a narrative on one defendant's website titled "Cannabis as Medicine"; claims of "therapeutic benefits" for conditions including PTSD, migraines, chronic pain and inflammation; a claim that dispensaries employ "cannabis pharmacists" with "specialized knowledge in medical cannabis"; and strain descriptions marketed as helping to "manage anxiety and stress" or to treat depression. The plaintiffs allege that defendants, "together and with the assistance of paid third parties, create and publish pseudo-research identifying cannabis' purported health benefits."
What the plaintiffs actually asked the Court for
The defendants moved to stay discovery pending rulings on their motions to dismiss. The plaintiffs' August 24 memorandum asks the Court to deny that motion or, in the alternative, to permit limited discovery consisting of: negotiation and submission of a protective order and an electronically stored information (ESI) protocol; service of initial Requests for Production and negotiation of their scope; and negotiation of search terms and custodians.
An ESI protocol is the agreement - usually entered as a court order - that governs how a company's electronic records are preserved, searched and produced: whose email and messaging accounts are searched, over what date range, using which search terms, across which systems, and in what format the results are handed over. In a case built on an alleged marketing campaign rather than a defective product, the ESI protocol is what determines whether the internal record of that marketing is ever examined. That is why the parties are fighting over it before anything else.
Those are the requests on the page. The memorandum argues that because the alleged misrepresentations concern a marketing campaign rather than individual products, "the precise number of cannabis products manufactured and sold by Defendants will not meaningfully affect the scope of discovery."
The Court has not ruled on the stay motion, and the motions to dismiss remain pending. The case may be dismissed in whole or in part.
The allegations are unproven
Every characterization above is an allegation contained in a court filing. No court has found that any defendant made a false statement, coordinated messaging with any other party, or violated any law. The defendants dispute the claims and have moved to dismiss them. Nothing in this release should be read as a statement that the allegations are true.
Why MMJ is commenting
"I want to be careful about what this is and what it is not," said Duane Boise, President and Chief Executive Officer of MMJ International Holdings. "It is a discovery dispute in a case that may not survive a motion to dismiss. It is not a finding, and I am not going to pretend otherwise. What makes it worth noticing is the timing."
The April 2026 rescheduling order extended Schedule III treatment to marijuana subject to a qualifying state medical marijuana license. The economic consequences are substantial and immediate.
Section 280E relief. Section 280E of the Internal Revenue Code disallows business deductions and credits for any trade or business trafficking in a Schedule I or Schedule II controlled substance. State-licensed operators were therefore taxed on gross profit rather than net income, producing effective tax rates far above the statutory rate. Schedule III is outside 280E's reach. The Department of the Treasury and the Internal Revenue Service have said they intend to issue guidance for the industry following rescheduling. This is a direct, recurring cash benefit that requires no FDA approval, no clinical data and no demonstration of efficacy.
Expedited federal registration.
The order directs that a qualifying state license be treated as conclusive evidence of compliance with state law, and creates an expedited DEA registration process carrying a presumption of grant. In May 2026, Green Thumb Industries publicly announced that it had filed applications with the DEA to register certain state-licensed medical cannabis operations under that framework.
Access to capital markets.
In June 2026, the first U.S.-operating cannabis company began trading on a major U.S. exchange. Exchange listing brings institutional ownership, index eligibility and a lower cost of capital - none of which were available while the underlying products remained in Schedule I.
"The federal government has conferred the legitimacy and the economics of medicine on an industry while a federal court is being asked to decide whether that same industry's medical claims can be examined in discovery," Boise said. "Those two facts belong in the same sentence, and almost nobody is putting them there."
MMJ International Holdings has pursued FDA botanical drug development and DEA registration exclusively through federal pathways for more than eight years, with an investment exceeding $10 million. The company holds a DEA Schedule I analytical laboratory registration through MMJ BioPharma Labs, has had an application for DEA bulk manufacturing registration pending through MMJ BioPharma Cultivation since December 27, 2018, and is pursuing Investigational New Drug programs for Huntington's disease and multiple sclerosis. MMJ is seeking to demonstrate the safety and efficacy of its investigational cannabinoid formulation through the FDA process; the product is not approved and is not available for patient use.
"MMJ is not anti-marijuana," Boise said. "We are a pharmaceutical company developing cannabinoid medicines, and we would welcome an evidence-based framework arrived at through a lawful process. What we oppose is bad science and fake process - and the possibility that patients cannot tell the difference between a medicine that was reviewed and a product that was marketed."
About MMJ International Holdings
MMJ International Holdings, Inc. is a pharmaceutical development company advancing proprietary cannabinoid-based medicines through the FDA investigational new drug pathway for Huntington's disease and multiple sclerosis. Its affiliated companies include MMJ BioPharma Cultivation, Inc. and MMJ BioPharma Labs, Inc.
CONTACT:
Madison Hisey
[email protected]
203-231-8583
Sources
Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Stay Discovery Pending Ruling on Motions to Dismiss, ECF No. 56, Murray et al. v. Cresco Labs Inc. et al., No. 3:26-cv-50184 (N.D. Ill., filed Aug. 24, 2026)
Class Action Complaint, ECF No. 1, Murray et al. v. Cresco Labs Inc. et al., No. 3:26-cv-50184 (N.D. Ill., filed May 4, 2026)
Rescheduling order, 91 Fed. Reg. 22,714 (April 2026)
Green Thumb Industries Inc., "Green Thumb Industries Files Applications for DEA Registration Following Historic Rescheduling of Medical Cannabis" (May 4, 2026)
SOURCE: MMJ International Holdings