A coalition of anti-marijuana groups and a cannabis-focused biopharmaceutical corporation are asking a federal appeals court to overturn a judge’s dismissal of their lawsuit challenging a new Trump administration initiative to cover up to $500 worth of hemp-derived products each year for eligible Medicare patients.
Last month, Judge Trevor N. McFadden dismissed the challenge to the program that’s implemented by the Centers for Medicare & Medicaid Services (CMS) that focuses largely on CBD but also allows a certain amount of THC in products.
He ruled that prohibitionist groups and activists, led by Smart Approaches to Marijuana (SAM), as well as a cannabis-focused biopharmaceutical corporation MMJ International Holdings and its subsidiaries, “have not established standing to bring this case.”
Now, the plaintiffs are appealing to the U.S. Court of Appeals for the District of Columbia Circuit.
“Notice is hereby given that Plaintiffs Smart Approaches to Marijuana, Cannabis Industry Victims Educating Litigators, Hillsborough County Anti-Drug Alliance, MMJ International Holdings, Inc., MMJ Biopharma Cultivation, Inc., and MMJ Biopharma Labs, Inc. hereby appeal to the United States Court of Appeals for the District of Columbia Circuit from the judgment of this court entered on May 22, 2026 in favor of Defendants against said Plaintiffs,” the short document filed on Friday says.
SAM CEO Kevin Sabet said in a press release that “this fight is far from over, and we will not stand by while CMS allows for non-FDA-approved products to be given out to seniors.”
“This program puts CMS in bed with Big Tobacco and Big Weed, and it puts American seniors at risk,” he argued. “CMS has a mandate to promote public health, and this program would degrade it. This move would not only put seniors at risk but also send the wrong message to the American people about the safety of these products, which have been found to have a whole host of negative side effects.”
In April, lawyers for Health and Human Services Sec. Robert F. Kennedy Jr. and CMS Director Mehmet Oz filed a brief arguing that the anti-cannabis organizations that filed the suit against the Medicare hemp coverage policy do not have standing to bring the case.
Outside of the challenge to the CMS hemp program, SAM and MMJ filed separate lawsuits challenging the Trump administration’s move to federally reschedule marijuana.
Beyond the advocacy organizations and MMJ, the CMS hemp case involves individual plaintiffs, including anti-marijuana lawyer David Evans, who claims he had standing to challenge the new Substance Access Beneficiary Engagement Incentive (BEI) as a Medicare recipient.
Previously, McFadden had rejected the plaintiffs’ request for a temporary restraining order to halt the program from launching on April 1.
Notably, the government’s motion to dismiss the case says it was prepared in part by Matthew Zorn, a lawyer for HHS who before taking on the federal job led numerous cases suing government agencies on behalf of plaintiffs seeking marijuana and drug policy reform.
The CMS initiative comes after President Donald Trump signed an executive order in December calling on the attorney general to finalize a rule federally rescheduling marijuana, which is now underway, that also contained components to “improve access” to full-spectrum CBD products.
Under the program, inhalable preparations are not allowed, and products can contain no more than 0.3 percent delta-9 THC by dry weight and can have up to 3 milligrams of total THC per serving.
The THC limit could potentially change if a law the president signed late last year takes effect as scheduled this November. That policy would strictly limit the types of cannabis products that are currently permitted under the 2018 Farm Bill that Trump signed in his first term, expressly prohibiting hemp derivatives containing more than 0.4 milligrams of total THC per container.
This week, the White House called on Congress to take action to amend the planned ban to maintain legal access to hemp-derived full-spectrum CBD products.
In a brief in the CMS hemp lawsuit, federal agencies noted that “CMS does not pay for hemp products under the BEI.”
“The participating provider furnishes eligible products at its own cost, subject to the $500 annual cap per beneficiary. The BEI operates within the shared-savings framework that defines the underlying models. If a provider’s investment in beneficiary engagement reduces the beneficiary’s total cost of care, the provider and CMS share in the resulting savings. If it does not, the provider absorbs the loss. No new federal appropriation is involved. No new entitlement is created. The BEI is, at its core, a decision by willing providers that a particular intervention can reduce downstream claims.”
Meanwhile, the White House Office of Management and Budget recently held a series of meetings about a Food and Drug Administration (FDA) CBD products enforcement policy.
FDA also issued guidance making clear that it does not intend to interfere with implementation of the Medicare hemp-derived products coverage plan.
CMS separately finalized a rule that will allow coverage of some hemp products as specialized, non-primarily health-related benefits through Medicare Advantage plans.
Read the filing appealing the dismissal of the lawsuit challenging the Medicare hemp program below:
Photo courtesy of Kimzy Nanney.
