Prohibitionists are suing to stop seniors from getting hemp CBD through Medicare. Let that land for a second. SAM, CIVEL, the Hillsborough County Anti Drug Alliance, and a pharma company called MMJ International Holdings just filed an appeals brief challenging a CMS program that covers up to $500 a year in hemp products for eligible Medicare patients.
What does the Medicare hemp program actually do?
The program is called the Substance Access Beneficiary Engagement Incentive, and it focuses largely on CBD while allowing up to 3mg of total THC per serving. Inhalable products are out.
Here is the part that surprises people: CMS does not pay for the hemp products. Participating providers furnish them at their own cost, subject to the $500 annual cap, inside a shared savings framework. If the provider’s investment reduces the patient’s total cost of care, provider and CMS share the savings. If not, the provider eats the loss. No new federal appropriation, no new entitlement.
It came out of a December executive order in which President Trump told the attorney general to finalize rescheduling and told agencies to improve access to full spectrum CBD products. CMS separately finalized a rule allowing some hemp products as supplemental benefits through Medicare Advantage plans.
Why did the first lawsuit fail?
In May, Judge Trevor N. McFadden dismissed the challenge for lack of standing, ruling that every plaintiff’s claimed injury was too abstract or too remote to open the courtroom doors. His sharpest line was aimed at MMJ: the company has no product on the Medicare market and no sense of when it might, making it “not a direct and current competitor with anyone selling hemp to Medicare beneficiaries.”
The new appeals brief fires back that MMJ is no speculative future entrant: $10 million invested over eight years, Orphan Drug Designation secured, IND applications filed for two cannabinoid therapeutics, and a DEA Schedule I analytical laboratory registration held. Their best line in the brief is that the government’s own eight year delay on a bulk manufacturing application caused the pre approval status, so “the government should not profit from its own obstruction.”
The DC Circuit appeal also challenges McFadden’s standing rulings for the organizational plaintiffs. The government’s opening brief is due November 4.
What is the deeper irony here?
The same White House whose CMS program is being sued has been lobbying Congress to protect the program’s supply chain. The administration wants lawmakers to amend the planned hemp THC ban to preserve legal access to full spectrum hemp derived CBD, and CMS Director Dr. Oz personally pressed senators to delay the ban’s effective date so regulators can build a framework instead of a cliff. Keeping the ban on schedule, Oz wrote, would undo significant gains in making clinically appropriate full spectrum CBD accessible to the seniors and disabled Americans who rely on Medicare.
So prohibitionists are suing to kill a program that the sitting administration is simultaneously trying to protect from its own party’s hemp ban. Meanwhile a bipartisan group in Congress just asked for guidance on whether medical cannabis itself could be covered by Medicare. The Overton window is not just shifting. It is being litigated from both sides at once.
For more on where medical cannabis policy is heading, browse the medical cannabis collection, including Tennessee’s 99 page medical cannabis proposal explained for operators and a Minnesota study on medical cannabis for autism patients, with caveats.
Frequently Asked Questions
- What does the CMS hemp program cover? Up to $500 a year in hemp derived products for eligible Medicare beneficiaries, focused on CBD with up to 3mg total THC per serving. Inhalables are excluded, and providers furnish products at their own cost within a shared savings model.
- Who is trying to block it? Smart Approaches to Marijuana (SAM), Cannabis Industry Victims Educating Litigators (CIVEL), the Hillsborough County Anti Drug Alliance, MMJ International Holdings and its subsidiaries, plus individual plaintiff David Evans, an anti marijuana lawyer claiming standing as a Medicare recipient.
- Why was the case dismissed? Judge Trevor N. McFadden ruled in May that no plaintiff showed a concrete Article III injury, calling each claimed harm too abstract or too remote. He found MMJ had no product on the market and was not a current competitor.
- What is MMJ’s counterargument on standing? That it invested over $10 million across eight years, obtained Orphan Drug Designation, filed IND applications for two cannabinoid therapeutics, and holds a DEA Schedule I lab registration, so it is no speculative future entrant. It blames its pre approval status on the DEA’s own eight year delay.
- What happens next? The government’s opening brief is due November 4 at the DC Circuit. The bigger collision is the planned federal hemp THC cap, which could outlaw the very products the Medicare program covers unless Congress amends it to preserve full spectrum CBD access.
Source: Marijuana Moment on the lawsuit challenging hemp CBD coverage in Medicare