Appeals Court Sets Briefing Schedule in Medicare Hemp Coverage Suit

August 28, 2026

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The fight over Medicare's first-ever hemp benefit just got a firm calendar attached to it. The D.C. Circuit Court of Appeals issued an order this week laying out a briefing schedule for the appeal challenging the Centers for Medicare & Medicaid Services' hemp coverage program, with the appellants' opening brief due October 5 and the government's response due a month later, on November 4. It's a procedural step, not a ruling, but it sets the clock running on a case that could shape how future cannabis and hemp policy fights get litigated in federal court.

The case traces back to a dismissal handed down in May 2026 by U.S. District Judge Trevor McFadden, who tossed the lawsuit on standing grounds before ever reaching the substance of the dispute. That underlying dispute is over a genuinely novel policy: a $500-per-year Medicare benefit covering hemp-derived CBD and low-THC products, the first program of its kind to put cannabis-adjacent goods inside the traditional federal health insurance system. Whether that program survives this appeal intact, gets narrowed, or eventually faces a real merits fight depends a lot on what happens in the briefs now due this fall.

What the New Court Order Actually Says

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The order itself, issued Wednesday by the D.C. Circuit clerk's office, does exactly one thing: it sets the litigation calendar for the appeal. It doesn't touch the merits of standing, doesn't weigh in on whether the Medicare hemp program is lawful, and doesn't hint at how the panel is likely to rule. It's the kind of housekeeping order appellate courts issue constantly, but in a case this closely watched, even the housekeeping gets attention.

Under the schedule, the appellants -- Smart Approaches to Marijuana (SAM), the Cannabis Industry Victims Educating Litigators (CIVEL), the Hillsborough County Anti-Drug Alliance, MMJ International Holdings, and individual plaintiff David Evans -- have until October 5 to file their opening brief. That's the document where they have to lay out every argument they intend to make about why Judge McFadden got the standing question wrong and why the case should be revived. The government appellees then get until November 4 to respond, after which a reply period follows before the case is fully briefed and, eventually, scheduled for oral argument.

One detail worth flagging for anyone tracking this closely: the order specifies that all issues and arguments have to be raised in that opening brief. That's a standard notice in federal appellate procedure, but it matters here because it effectively locks the plaintiffs into whatever theory of injury they present in October. If they leave out an argument or hedge on a theory of standing, they generally can't introduce it later in the reply brief or at oral argument. Given that the entire case was dismissed over a failure to show the kind of concrete injury Article III requires, how carefully that opening brief is constructed may end up mattering as much as anything else in the case.

How We Got Here: The BEI Program and the Standing Dismissal

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To understand why standing became the whole ballgame, you have to go back to what CMS actually built. The Substance Access Beneficiary Engagement Incentive, or BEI, took effect April 1, 2026, and lets eligible Medicare beneficiaries access up to $500 annually toward hemp-derived products -- mostly CBD, but with some allowance for low-THC items as well. It was designed as a supplemental incentive program rather than a core Medicare benefit, but it still marked the first time hemp-derived cannabinoids had a direct line into federal health insurance reimbursement.

The plaintiffs moved fast to try to stop it. They initially sought a temporary restraining order to block the program before it launched, which was denied, and the case proceeded to a hearing on the merits before Judge Trevor McFadden on May 1, 2026. Ilya Shapiro argued for the plaintiffs; Matthew Zorn represented the government. Three weeks later, on May 22, 2026, McFadden dismissed the suit, ruling that none of the plaintiffs -- individually or collectively -- had established the kind of concrete, particularized injury that Article III standing requires.

The reaction from the plaintiffs' side was pointed. SAM CEO Kevin Sabet publicly called the ruling wrong, arguing that every party involved in the case had demonstrated injury well beyond the constitutional threshold. That disagreement turned into action: the plaintiffs filed their formal notice of appeal to the D.C. Circuit on June 5, 2026, which is what set up this week's scheduling order and the briefing fight now underway.

Who's Suing and Why It's an Unusual Coalition

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What makes this case worth watching beyond the procedural mechanics is who actually signed on as plaintiffs. SAM is one of the country's most prominent anti-legalization advocacy groups, built around opposing cannabis policy expansion at every level. MMJ International Holdings, by contrast, is a cannabis biopharmaceutical company -- the kind of entity you'd expect to be pushing for broader cannabinoid access, not fighting a Medicare benefit that expands it. Seeing them on the same side of a lawsuit is not something that happens often in cannabis litigation.

Rounding out the group are CIVEL, short for Cannabis Industry Victims Educating Litigators, and the Hillsborough County Anti-Drug Alliance, both anti-marijuana advocacy organizations with a track record of opposing cannabis policy liberalization. Individual plaintiff David Evans, an attorney long associated with anti-marijuana legal advocacy, claims his own standing as a Medicare beneficiary directly affected by the program.

MMJ International Holdings' involvement makes more sense once you look at its broader litigation footprint. The company and its subsidiaries, MMJ Biopharma Cultivation and MMJ Biopharma Labs, have separately sued over the Trump administration's move to reschedule marijuana, suggesting a company willing to use litigation aggressively across multiple fronts of federal cannabis policy, not just this one program.

What ties this odd coalition together isn't ideology -- it's outcome. Whatever their disagreements about cannabis policy generally, all of these parties share an interest in slowing or unwinding federal moves that normalize cannabis and hemp products, whether that's a Medicare coverage program or a rescheduling decision. It's a reminder that litigation alliances in this space often form around opposition to a specific action rather than any shared vision of what cannabis policy should look like.

The Bigger Picture: Congress, FDA, and Medicare Advantage

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This lawsuit isn't happening in isolation -- it's one thread in a broader tangle of federal activity around hemp and cannabinoids this year. A bipartisan group of members of Congress sent a letter to Trump administration officials this year pressing for clarity on whether medical cannabis itself could eventually be covered by Medicare, a question well beyond the current hemp-only BEI program but one that signals appetite on Capitol Hill for pushing further.

Separately, the White House Office of Management and Budget held meetings this year on a proposed FDA enforcement policy covering CBD, the kind of regulatory review that typically precedes a formal guidance document or rule. FDA has since issued guidance clarifying that it does not intend to interfere with the Medicare hemp coverage plan, which effectively gives CMS's program room to keep operating without a competing federal enforcement threat hanging over it.

CMS has also moved on a related front, finalizing a rule that allows Medicare Advantage plans to cover certain hemp products as supplemental benefits -- categorized as specialized, non-primarily health-related offerings rather than core medical coverage. It's a narrower category than BEI, but it extends the same basic logic of hemp-derived products having a legitimate place in Medicare-adjacent coverage decisions.

Taken together, these moves paint a picture of federal agencies quietly building out infrastructure to accommodate hemp-derived products inside the country's largest health insurance program, even as this lawsuit questions whether the flagship piece of that infrastructure was ever built on solid legal ground.

None of this changes anything about BEI's operation right now. The program continues running exactly as it has since April 2026, and it will keep running through the appeal, which -- based on this week's schedule -- won't be fully briefed until at least December, with oral argument and a ruling realistically pushing into 2027. Nothing in the D.C. Circuit's order pauses the benefit or forces CMS to change course.

The legal question at the center of this case is narrower than it might seem, and that's precisely what makes it interesting beyond this one program. Whether opponents of a federal hemp or cannabis policy can show the kind of concrete, particularized injury Article III demands is a recurring obstacle in this space, and how the D.C. Circuit handles it here could shape how similar challenges to future cannabis policy get litigated, regardless of whether BEI itself survives.

For patients currently using the $500 benefit and for businesses selling into it, the practical advice is straightforward: mark October 5 and November 4 on the calendar, but don't expect a resolution before 2027 at the earliest. In the meantime, it's worth remembering that hemp-derived CBD and low-THC product legality still varies considerably by state, independent of what Medicare does at the federal level -- so anyone relying on this benefit should confirm how their own state treats these products before assuming federal coverage settles the question locally.