A U.S. District Court judge denied Smart Approaches to Marijuana’s (SAM) motion for a temporary restraining order on March 31, allowing the Centers for Medicare and Medicaid Services’ (CMS) CBD pilot program to commence on April 1.
The federal pilot program is to allow doctors to recommend hemp-derived CBD products to older Americans as an alternative treatment, including up to $500 per year in coverage for those products.
CMS Administrator Mehmet Oz orchestrated the adoption of the new policy in conjunction with President Donald Trump’s executive order in December that directed Attorney General Pam Bondi to reclassify cannabis as a Schedule III drug. Trump also directed the U.S. Department of Health and Human Services (HHS), which includes the CMS, to help improve access to safe hemp-derived cannabinoid products.
“CMS is committed to innovation that meets patients where they are while maintaining strong safeguards and clinical oversight,” Oz said with the April 1 launch. “Under the President’s leadership, we’re expanding the tools available to improve patients’ health while generating important insights into how providers can use these tools safely and effectively in real-world care settings.”
Eligible products under the CMS program include those containing no more than 0.3% delta-9 THC and no more than 3 milligrams per serving of total THC (including delta-8, delta-10 and THCA) in orally transmitted form. Inhalable products are “expressly excluded.”
SAM plans to stop the program in its tracks.
“We and a group of our trusted partners are suing to stop [the CMS] from implementing its terrible pilot program to cover some CBD and THC products,” the group announced this week on social media. “The program is anti-science, likely in violation of federal law, and will seriously damage public health. Lose-lose-lose . . . except for the addiction industries who pushed for it.”
SAM and 10 other plaintiffs filed the lawsuit on March 30 in the U.S. District Court for the District of Columbia, naming Oz, the CMS, Health Secretary Robert F. Kennedy Jr. and the HHS as defendants.
In the lawsuit, SAM argued that the CMS pilot program, called the Substance Access Beneficiary Engagement Incentive (BEI), “imposes binding rules on participating health care providers,” and violates the Administrative Procedure Act (APA) in three ways:
- The CMS failed to solicit notice and comment;
- The CMS reversed its prior rule without explanation; and
- The BEI exceeds the CMS’s statutory authority by sanctioning the possession and use of “illegal and dangerous Schedule I substances by Medicare patients.”
“CMS’s action represents an unprecedented and unlawful assertion of binding decision-making authority that will profoundly affect the health of elderly Americans,” SAM argues in the lawsuit. “CMS took this action without the guardrails imposed by the administrative process, without any reasoned explanation, in conflict with the agency’s own recent APA-compliant determination, and without statutory authority.”
The plaintiffs asked the court to vacate the BEI, declare it unlawful, and permanently enjoin its implementation.
While District Judge Trevor N. McFadden denied the plaintiffs’ motion for a temporary restraining order on Tuesday, the court set an April 20 hearing date.
McFadden said a temporary restraining order is an “extraordinary and drastic remedy,” so the standard for issuing one is “very high,” adding that a party seeking such an order must make a “clear showing that four factors, taken together, warrant relief: likely success on the merits, likely irreparable harm in the absence of preliminary relief, a balance of the equities in its favor, and accord with the public interest.”
McFadden determined that SAM did not meet the four-factor standard but said the court will consider the plaintiffs’ motions for a preliminary injunction and a stay.
In the lawsuit, SAM also argued that the BEI’s allowance of hemp-derived products containing up to 3 milligrams of THC conflicts with the 2026 Agriculture Appropriations Act that Trump signed in December, which, once implemented on Nov. 12, will federally prohibit any hemp-derived products containing more than 0.4 milligrams of total THC per serving.
However, once the federal government’s forthcoming ban on intoxicating hemp products is implemented later this year, the CMS indicated it would change its rules to align with federal law.
In addition, SAM argued that hemp-derived cannabinoid products have “established and documented health risks” for Medicare populations; are “pervasively contaminated and mislabeled;” are absent of an FDA regulatory framework; and are “derived by distilling delta-9 THC and other cannabinoids from hemp plants into a concentrated substance and mixing it into consumable products,” making them federally illegal Schedule I substances, among other claims.
“The BEI’s potential reach across multiple models covering substantial Medicare populations, the unprecedented nature of CMS facilitating access to any specific consumer product, and the absence of any prior Innovation Center precedent for distributing specific products to beneficiaries all confirm that this is an extraordinary assertion of authority requiring clear congressional authorization,” the plaintiffs argued in the lawsuit.
The BEI is an optional program that allows participating organizations to consult with eligible Medicare beneficiaries about the possible use of eligible hemp products. The participants must submit and maintain a CMS-required implementation plan for approval. These plans must include specifics on products, dosing, beneficiary eligibility criteria, and safeguards/oversight to be implemented.
Medicare does not pay the participating organizations for the products, nor should the beneficiaries be asked to submit a Medicare claim for the products, according to the CMS policy. Instead, “eligible hemp products must be furnished and provided directly by a qualified physician affiliated with the participant organization, as specified by the model participation agreements.”
When Trump signed his executive order in December, he directed the HHS to coordinate with its umbrella agencies, including the CMS, FDA and the National Institutes of Health, to develop research methods and models “utilizing real-world evidence” to improve access to hemp-derived cannabinoid products.
“We’re also asking Congress to reconsider its classification of hemp-derived CBD to ensure seniors can access CBD products,” the president said. “They have found [the products to be] beneficial for pain and other reasons. Some people are literally dying with tremendous pain, and this can, in many cases, literally stop it, and they have their senses about them, as opposed to painkillers, which don’t allow that – don’t allow them to die with dignity, frankly.”
