Anti-Marijuana Groups, Pharma Firm Push Appeal of Medicare Hemp CBD Plan

October 7, 2026

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A coalition of anti-marijuana advocacy groups and a small pharmaceutical developer is making another run at killing a Medicare benefit that lets seniors buy hemp-derived CBD and THC products with federal help. On Monday, Oct. 5, 2026, lawyers for Smart Approaches to Marijuana (SAM) and biopharma company MMJ International Holdings filed a new brief with the U.S. Court of Appeals for the D.C. Circuit, asking the appellate panel to revive a lawsuit that a district judge threw out back in May.

At the center of the fight is a Centers for Medicare and Medicaid Services initiative called the Substance Access Beneficiary Engagement Incentive, or BEI, which allows eligible Medicare beneficiaries to receive up to $500 a year in coverage for hemp-derived CBD and THC products. The program has been operating since April, and the coalition wants it stopped — or at least wants a court to say their original case deserved a real hearing rather than a dismissal for lack of standing. This appeal doesn't exist in isolation. It's running alongside a separate set of SAM and MMJ lawsuits targeting the Trump administration's push to reschedule marijuana federally, part of a broader pattern of the same plaintiffs challenging nearly every lever the administration has pulled on cannabis and hemp policy this year.

What the Medicare Hemp Benefit Actually Covers

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The benefit at the heart of this fight is narrower than it might sound, but it's still a meaningful shift for how Medicare treats cannabinoids. Starting April 1, 2026, CMS began allowing coverage of hemp-derived CBD and THC products through the Substance Access Beneficiary Engagement Incentive, a program built to let eligible beneficiaries put federal dollars toward products that, until recently, sat entirely outside the traditional pharmacy benefit structure. The dollar figure is capped at $500 annually per eligible beneficiary — not unlimited, but enough to cover a steady supply of hemp-derived tinctures, capsules, or similar products for someone managing chronic pain, anxiety, or other conditions where patients have already been turning to CBD on their own dime.

The named defendants in the underlying suit are CMS Administrator Mehmet Oz and HHS Secretary Robert F. Kennedy Jr., both of whom opponents argue greenlit a program that never should have cleared internal review in the first place. Before the program ever launched, SAM and its allies tried to stop it cold, seeking a temporary restraining order in district court. That request failed. The judge declined to block the rollout, and CMS moved forward with implementation on schedule, which is part of why this appellate fight matters now — the benefit has already been live and in use by seniors for roughly six months while the legal challenge works its way through the courts.

How the Lawsuit Got Here

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The legal path here matters as much as the substance. SAM, joined by nine other drug prevention organizations, filed suit in the U.S. District Court for the District of Columbia on March 31, 2026, just one day before the BEI program was set to take effect, seeking an emergency order to halt it. That request went nowhere, and the broader case didn't fare much better once the judge looked at the merits of who actually had the right to sue.

In May, U.S. District Judge Trevor N. McFadden dismissed the case in full, finding that none of the organizational plaintiffs could show the kind of concrete, particularized injury that federal courts require before they'll even consider a claim. Groups that argued the program forced them to divert staff time and resources toward counter-messaging or advocacy didn't meet the bar either — McFadden wrote that they'd never demonstrated the BEI actually interfered with their core organizational activities, as opposed to simply giving them something new to campaign against.

MMJ International Holdings tried a different theory, arguing it had competitor standing as a company developing cannabinoid-based treatments. McFadden rejected that too, pointing out that MMJ has no approved product currently available on the Medicare market and no clear timeline for when, or if, one might arrive. Individual plaintiff David Evans, an attorney known for anti-marijuana advocacy work, attempted to establish standing simply as a Medicare recipient himself. The judge wasn't persuaded by that argument either, closing off every avenue the plaintiffs had tried.

The New Appellate Brief's Arguments

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The brief filed Monday with the D.C. Circuit represents the coalition's attempt to convince a higher court that McFadden got it wrong. It was submitted by attorneys representing SAM, the Center for Individual and Civic Education and Leadership (CIVEL), the Hillsborough County Anti-Drug Alliance, and MMJ International Holdings along with its subsidiaries — essentially the same lineup from the original suit, now arguing their case deserved to survive a motion to dismiss.

The core of the appeal is a straightforward claim that the district court applied standing doctrine too strictly, failing to credit injuries the plaintiffs say are real even if they're not the kind of textbook, line-item financial harm courts typically look for. Beyond standing, the brief leans into a procedural argument: that CMS adopted the BEI program without going through the rulemaking steps that federal law requires for changes of this scale, effectively building a half-billion-dollar-scale benefit expansion without the notice-and-comment process that usually accompanies major agency action.

The brief also tries to broaden the harm narrative, arguing the program damages market competitors who've invested in FDA-approved cannabinoid treatments, creates confusion or risk for healthcare providers now fielding questions about hemp products from patients, and potentially exposes elderly Americans to inconsistently regulated products without the safety data that typically accompanies a covered Medicare benefit.

MMJ International's Competing Interest

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MMJ International Holdings isn't just a bystander plaintiff here — it has a direct commercial stake that shapes its argument. The company is a clinical-stage cannabinoid pharmaceutical developer currently running two active FDA Investigational New Drug applications, the regulatory track required before any drug can move toward approval and market access in the United States. One of its lead programs holds Orphan Drug Designation, a status reserved for treatments targeting rare diseases, and centers on a soft-gel cannabinoid formulation aimed at Huntington's disease, a progressive neurological condition with few existing treatment options.

CEO Duane Boise has framed the company's objection in fairly blunt terms: MMJ is spending years and significant capital running the kind of rigorous clinical trials the FDA demands, while CMS is simultaneously extending Medicare dollars toward hemp-derived products that never went through that approval pipeline at all. From his vantage point, that's not a level playing field — it's a federal health program effectively subsidizing one category of cannabinoid product while companies like his absorb the cost and risk of proving safety and efficacy through the traditional regulatory channel.

Whether or not the D.C. Circuit buys the standing argument, this tension is real and isn't going away. Federal law treats hemp-derived products with low THC content very differently than it treats cannabis-derived drugs moving through FDA review, and Medicare's new benefit sits right at that fault line — a reminder that the regulatory categories built around cannabinoids still don't line up neatly with how these products actually reach patients.

What Happens Next

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For now, the case sits with the D.C. Circuit, and no ruling date has been reported. Appellate review of a standing dismissal can move relatively quickly or drag on for a year or more depending on the court's calendar, so there's no telling yet whether beneficiaries will see any disruption to the $500 hemp benefit in the near term.

This appeal isn't happening in a vacuum. SAM and MMJ are also pursuing separate litigation challenging the Trump administration's broader push to reschedule marijuana under federal law, a case where a federal court has likewise declined to block the administration's plans. Add to that reports that the White House Office of Management and Budget held its own meetings earlier this year on a related FDA enforcement policy touching CBD products, and the picture that emerges is one of overlapping fights happening across multiple agencies and courts simultaneously, all tied to the same underlying question of how federal policy should treat cannabinoids.

If the D.C. Circuit sides with the coalition, the case would get sent back for further proceedings rather than resulting in an immediate shutdown of the program — but it would reopen the door to the substantive arguments about CMS's rulemaking process that never got addressed the first time around. If the court affirms the dismissal, the $500 benefit continues as is, at least until the next legal challenge comes along.

Worth remembering: hemp and CBD legality, along with what's actually covered under programs like this, varies by state and shifts quickly at the federal level too. Anyone relying on this benefit, or considering it, should check current state and federal rules rather than assume today's coverage will look the same next year.

Strip away the policy noise and this case is really about a narrow, technical question: did anyone suing show the kind of concrete injury that gives them standing to be in court at all? That's a much drier inquiry than the underlying debate over whether hemp CBD actually helps seniors manage pain or anxiety, but it's the question that will decide this appeal. Judge McFadden's dismissal wasn't a ruling on the merits of hemp coverage — it was a ruling that the plaintiffs hadn't cleared the threshold needed to get merits review in the first place, and that's exactly what the D.C. Circuit will be weighing.

MMJ International's position captures something genuinely unresolved in federal cannabinoid policy. Here's a company doing the expensive, years-long work of FDA drug development, holding Orphan Drug Designation, running IND-stage trials — watching a federal health program extend coverage to hemp products that never went through anything close to that scrutiny. That's not a frivolous complaint, even if the legal vehicle for raising it (a standing argument in federal court) is a difficult fit.

Whatever the D.C. Circuit decides, this won't be the last lawsuit testing how far federal cannabinoid policy can move before the legal framework underneath it catches up. Between rescheduling litigation, Medicare coverage fights, and FDA enforcement questions still working through the White House budget office, cannabis and hemp policy keeps outpacing the regulatory scaffolding meant to support it — and that gap is where litigation like this keeps finding its footing.