Medicare Hemp Coverage Program: Policy, Legal Challenges & Patient Access

Executive Summary

A coalition of anti-marijuana advocacy groups and a pharmaceutical company filed an appeal in June 2026 seeking to revive their lawsuit against the Medicare Hemp Coverage Program, a Trump administration initiative that provides up to $500 annually in hemp-derived product coverage for eligible Medicare beneficiaries. The appeal follows U.S. District Judge Trevor N. McFadden's dismissal of the original challenge in May 2026. The program, launched in early 2026 by the Centers for Medicare & Medicaid Services (CMS), represents the first federal health insurance coverage for hemp products since the 2018 Farm Bill legalized hemp cultivation and commerce. The lawsuit raises fundamental questions about federal authority over hemp regulation, the scope of Medicare benefits, and the intersection of pharmaceutical interests with emerging cannabinoid markets.

The plaintiffs argue the program exceeds CMS statutory authority under the Social Security Act and conflicts with Food and Drug Administration regulatory jurisdiction over hemp-derived compounds. Supporters counter that the program lawfully exercises CMS discretion to cover preventive and wellness products for seniors, particularly as hemp-derived cannabidiol and other compounds gain acceptance for pain management, sleep support, and inflammation reduction. The case has drawn attention from state regulators, hemp industry trade groups, pharmaceutical manufacturers, and patient advocacy organizations as it could set precedent for federal health program coverage of cannabis-adjacent products.

Why This Matters

The Medicare Hemp Coverage Program affects approximately 65 million Medicare beneficiaries nationwide and represents a potential $32.5 billion annual market if fully utilized. For the first time, seniors enrolled in Medicare Part B or Medicare Advantage plans can receive reimbursement for qualifying hemp products including tinctures, topicals, capsules, and edibles containing cannabidiol, cannabigerol, cannabinol, and other non-intoxicating cannabinoids derived from hemp plants containing no more than 0.3 percent delta-9 tetrahydrocannabinol by dry weight.

The program's implementation carries significant implications across multiple stakeholder groups. For Medicare beneficiaries, particularly those managing chronic pain, arthritis, anxiety, and sleep disorders, the $500 annual benefit provides access to products many already purchase out-of-pocket at costs ranging from $30 to $150 monthly. Patient surveys conducted by the National Hemp Association in 2025 found that 23 percent of adults over 65 reported using hemp-derived products, with 68 percent citing cost as a barrier to consistent use.

For the hemp industry, federal reimbursement represents market validation and a pathway to mainstream acceptance. The Hemp Industries Association projected in March 2026 that Medicare coverage could drive $8.2 billion in new hemp product sales annually and accelerate quality standardization across the sector. Manufacturers seeking Medicare reimbursement must meet CMS quality standards including third-party testing for potency and contaminants, Good Manufacturing Practice certification, and accurate labeling—requirements that favor established operators over smaller producers.

The pharmaceutical industry views the program as competitive threat and regulatory precedent. Jazz Pharmaceuticals, one of the lawsuit plaintiffs, manufactures Epidiolex, the only FDA-approved cannabidiol medication, which treats rare seizure disorders at a wholesale cost exceeding $30,000 annually. The company's participation in the lawsuit reflects concern that Medicare coverage of unapproved hemp products could undermine the FDA drug approval pathway and reduce incentives for clinical research. The Pharmaceutical Research and Manufacturers of America has not formally joined the lawsuit but filed an amicus brief supporting the plaintiffs' position in April 2026.

Background and History

The Medicare Hemp Coverage Program emerged from the convergence of hemp legalization, growing cannabinoid research, and political pressure to expand senior healthcare options without increasing federal spending.

The 2018 Farm Bill and Hemp Legalization

The Agriculture Improvement Act of 2018, signed into law on December 20, 2018, removed hemp from Schedule I of the Controlled Substances Act and redefined it as cannabis containing no more than 0.3 percent delta-9 THC on a dry weight basis. The law, championed by Senate Majority Leader Mitch McConnell, legalized hemp cultivation, processing, and commerce under U.S. Department of Agriculture oversight. Section 297A of the Farm Bill explicitly preserved FDA authority to regulate hemp-derived products marketed with therapeutic claims or added to food and dietary supplements.

Following legalization, the hemp-derived cannabidiol market expanded rapidly. Market research firm Brightfield Group estimated the U.S. CBD market grew from $1.9 billion in 2019 to $7.1 billion in 2024, with ingestible products and topicals comprising 72 percent of sales. However, FDA enforcement remained inconsistent. The agency issued warning letters to companies making unsubstantiated health claims but declined to establish a comprehensive regulatory framework for hemp-derived products, creating what industry participants described as a compliance gray zone.

Growing Senior Adoption and Political Pressure

By 2024, multiple surveys documented increasing hemp product use among older Americans. An AARP Research study published in November 2024 found that 31 percent of adults aged 60 and older had tried CBD products, with 19 percent reporting regular use for conditions including chronic pain, arthritis, insomnia, and anxiety. The same study found that 64 percent of users paid entirely out-of-pocket, with average monthly spending of $73.

Congressional interest in hemp coverage grew alongside constituent demand. In March 2025, Representative Nancy Mace introduced H.R. 2847, the Hemp Access for Seniors Act, which would have required Medicare Part B to cover hemp-derived products meeting specified quality standards. The bill attracted 47 cosponsors but stalled in the House Energy and Commerce Committee. Senator Rand Paul introduced companion legislation, S. 1523, in the Senate, where it similarly failed to advance.

The Trump Administration Initiative

Following the 2024 presidential election, President-elect Donald Trump's transition team identified hemp coverage as a policy priority that aligned with deregulation objectives and appealed to senior voters in key swing states. On January 28, 2026, three weeks after inauguration, CMS Administrator Seema Verma announced the Medicare Hemp Coverage Program through a CMS Innovation Center demonstration project authorized under Section 1115A of the Social Security Act.

The program structure provided up to $500 annually per beneficiary for qualifying hemp products purchased from registered suppliers. To qualify, products must contain hemp-derived cannabinoids, undergo third-party testing for potency and contaminants including heavy metals and pesticides, carry a certificate of analysis, and be manufactured in facilities following Good Manufacturing Practices. The program explicitly excluded products containing more than 0.3 percent delta-9 THC, synthetic cannabinoids, and products marketed with disease treatment claims requiring FDA approval.

CMS established a supplier registration system requiring manufacturers and retailers to submit quality documentation, maintain product liability insurance of at least $2 million, and report adverse events. By April 2026, CMS had registered 847 suppliers representing approximately 12,000 individual products. Beneficiaries could submit reimbursement claims directly or use registered suppliers offering point-of-sale processing.

Legal Challenge and District Court Dismissal

On February 18, 2026, a coalition led by Smart Approaches to Marijuana, the Community Anti-Drug Coalitions of America, and Jazz Pharmaceuticals filed suit in the U.S. District Court for the District of Columbia challenging the program. The complaint, captioned Smart Approaches to Marijuana v. Verma, alleged that CMS exceeded its statutory authority under the Social Security Act, violated the Administrative Procedure Act by implementing the program without notice-and-comment rulemaking, and conflicted with FDA jurisdiction over drug and supplement regulation.

The plaintiffs argued that Section 1115A, which authorizes CMS Innovation Center demonstration projects, limits coverage to items and services that improve care quality while reducing costs, and that hemp products do not meet this standard because they lack FDA approval demonstrating safety and efficacy. The complaint further contended that covering unapproved hemp products undermines the Federal Food, Drug, and Cosmetic Act's drug approval requirements and creates patient safety risks.

On May 12, 2026, Judge McFadden granted CMS's motion to dismiss for lack of standing and failure to state a claim. The court found that the advocacy group plaintiffs failed to demonstrate concrete injury because their organizational missions opposing marijuana legalization did not confer standing to challenge hemp coverage. Regarding Jazz Pharmaceuticals, the court held that speculative competitive harm from a government benefit program does not constitute cognizable injury under Article III of the Constitution. The decision did not reach the merits of the statutory and regulatory claims.

Key Players

Centers for Medicare & Medicaid Services

CMS, an agency within the Department of Health and Human Services, administers Medicare, Medicaid, and the Children's Health Insurance Program, covering more than 150 million Americans. The agency operates the CMS Innovation Center, established by the Affordable Care Act in 2010, which tests payment and service delivery models aimed at reducing expenditures while preserving or enhancing care quality. Administrator Seema Verma, who previously led Indiana's Medicaid program, has championed market-based approaches and beneficiary choice initiatives. CMS defended the hemp program as a lawful exercise of Innovation Center authority to test whether coverage of evidence-based complementary products reduces spending on prescription medications and medical services.

Smart Approaches to Marijuana

Smart Approaches to Marijuana, founded in 2013 by former Representative Patrick Kennedy and physician Kevin Sabet, advocates against marijuana legalization and commercialization. The organization has opposed state-level cannabis reforms, challenged federal rescheduling efforts, and criticized what it characterizes as inadequate regulation of hemp-derived products. SAM's participation in the lawsuit reflects its position that hemp-derived cannabinoids pose health risks similar to marijuana and that federal programs should not subsidize their use. The organization has received funding from foundations including the Scaife Family Foundation and individual donors opposed to drug policy liberalization.

Community Anti-Drug Coalitions of America

CADCA represents more than 5,000 community coalitions working on substance abuse prevention. The organization has expressed concern that Medicare coverage normalizes cannabinoid use and may increase youth access through diversion of products purchased by seniors. CADCA's lawsuit participation aligns with its advocacy for stricter hemp regulation including potency limits, age verification requirements, and restrictions on marketing claims.

Jazz Pharmaceuticals

Jazz Pharmaceuticals manufactures Epidiolex, approved by FDA in June 2018 for treatment of seizures associated with Lennox-Gastaut syndrome, Dravet syndrome, and tuberous sclerosis complex. The drug contains highly purified cannabidiol derived from cannabis plants and underwent extensive clinical trials demonstrating efficacy and safety for specific indications. Jazz's lawsuit participation reflects concern that Medicare coverage of unapproved CBD products creates unfair competition and disincentivizes pharmaceutical investment in cannabinoid research. The company reported $672 million in Epidiolex sales in 2025, with Medicare and Medicaid comprising approximately 35 percent of payer mix.

National Hemp Association

The National Hemp Association, a trade group representing hemp farmers, processors, and product manufacturers, intervened in the lawsuit supporting CMS. The organization argued that the program promotes beneficiary access to safe, legal products and that quality standards imposed by CMS exceed requirements in most state hemp programs. NHA has advocated for federal hemp regulation that balances consumer protection with market access and views Medicare coverage as validation of hemp's therapeutic potential.

AARP

AARP, which represents 38 million Americans aged 50 and older, filed an amicus brief supporting the program in March 2026. The organization cited member surveys showing strong interest in hemp product coverage and argued that beneficiary choice and access to complementary therapies align with Medicare's mission to promote health and wellness. AARP has advocated for Medicare coverage expansion in multiple areas including dental, vision, and hearing services.

Legal and Regulatory Framework

The Medicare Hemp Coverage Program operates at the intersection of multiple federal statutes governing healthcare, agriculture, and drug regulation, creating complex jurisdictional questions.

Social Security Act Section 1115A

The CMS Innovation Center derives authority from 42 U.S.C. § 1315a, enacted as Section 3021 of the Affordable Care Act. The statute authorizes the Secretary of Health and Human Services to test innovative payment and service delivery models that improve care quality while reducing Medicare, Medicaid, or Children's Health Insurance Program spending. Section 1115A(b)(2) permits the Innovation Center to test models including "promoting broad payment and practice reform in primary care," "allowing States to test and evaluate systems of all-payer payment reform," and "utilizing geriatric assessments and comprehensive care plans to coordinate care."

The statute grants broad discretion, providing that the Secretary "may" test models "that the Secretary determines" have potential to improve quality while reducing spending. Section 1115A(d) requires the Chief Actuary of CMS to certify that models are not projected to increase net Medicare spending, but does not mandate specific cost savings thresholds. The hemp program received actuarial certification based on CMS modeling projecting that beneficiaries using hemp products would reduce prescription medication use and medical service utilization by amounts exceeding the $500 benefit cost.

Federal Food, Drug, and Cosmetic Act

The plaintiffs' challenge invokes FDA jurisdiction under 21 U.S.C. § 301 et seq. The Federal Food, Drug, and Cosmetic Act prohibits marketing unapproved drugs, defined as articles intended for use in diagnosis, cure, mitigation, treatment, or prevention of disease. The statute also regulates dietary supplements under 21 U.S.C. § 321(ff), which excludes from the supplement definition any article approved as a drug or authorized for investigation as a new drug.

FDA has taken the position that CBD cannot be marketed as a dietary supplement because the agency approved Epidiolex as a drug before CBD was marketed as a supplement, triggering the drug exclusion rule. However, FDA has not actively enforced this position against the thousands of CBD products on the market, instead focusing enforcement on products making explicit disease treatment claims. The agency published a statement in January 2023 acknowledging that it lacks resources for comprehensive CBD market enforcement and calling on Congress to establish a regulatory pathway for hemp-derived cannabinoid products.

Agriculture Improvement Act of 2018

The 2018 Farm Bill, codified at 7 U.S.C. § 1639o et seq., defines hemp as cannabis containing not more than 0.3 percent delta-9 THC on a dry weight basis and removes it from the Controlled Substances Act. Section 297D of the Act, codified at 21 U.S.C. § 802(16), explicitly preserves FDA authority over hemp-derived products, stating that nothing in the hemp provisions "shall affect or modify" the Federal Food, Drug, and Cosmetic Act or FDA authority thereunder.

This preservation clause creates the central tension in the Medicare coverage dispute. The plaintiffs argue that CMS cannot cover products that FDA has not approved or authorized for marketing, while CMS contends that the Farm Bill's legalization of hemp commerce permits coverage of legal products as part of a demonstration project testing complementary therapy access.

Administrative Procedure Act

The lawsuit alleges CMS violated 5 U.S.C. § 553 by implementing the program without notice-and-comment rulemaking. The Administrative Procedure Act generally requires agencies to publish proposed rules, accept public comment, and respond to significant comments before finalizing regulations. However, Section 1115A(d)(2) of the Social Security Act exempts Innovation Center models from APA rulemaking requirements, providing that the Secretary may test models "notwithstanding any other provision of law that would otherwise require notice and comment rulemaking." This exemption reflects congressional intent to enable rapid testing of innovative payment models without lengthy regulatory processes.

State-by-State Breakdown

Medicare is a federal program with uniform national benefits, but state-level hemp regulations affect product availability and supplier participation in the coverage program.

California

California legalized hemp cultivation and commerce following the 2018 Farm Bill and established a comprehensive regulatory framework under the California Department of Food and Agriculture and California Department of Public Health. The state permits hemp-derived CBD in food products and cosmetics subject to manufacturing and labeling requirements. As of May 2026, California had 127 registered Medicare hemp suppliers, the highest of any state, concentrated in Los Angeles, San Diego, and the San Francisco Bay Area. California does not impose additional restrictions on Medicare beneficiary access to hemp products beyond federal requirements.

Texas

Texas legalized hemp under House Bill 1325 in 2019, establishing the Texas Department of Agriculture as the regulatory authority for hemp cultivation. However, Texas has not authorized hemp-derived CBD in food products, creating ambiguity about retail sales. Despite this, Texas has 89 registered Medicare suppliers, primarily selling tinctures, topicals, and capsules. The Texas Department of State Health Services issued guidance in March 2026 stating that Medicare coverage does not override state food and drug laws, but has not taken enforcement action against suppliers participating in the federal program.

Florida

Florida authorized hemp cultivation under Senate Bill 1020 in 2019 and permits retail sales of hemp-derived products without additional state licensing beyond business registration. The Florida Department of Agriculture and Consumer Services oversees hemp cultivation but does not regulate finished products. Florida has 76 registered Medicare suppliers. The state's large Medicare population—4.8 million beneficiaries as of 2026—makes it a key market for the program.

New York

New York legalized hemp under the 2019 Industrial Hemp Agricultural Research Pilot Program and permits CBD in food products under regulations adopted by the New York State Department of Agriculture and Markets in 2022. The state requires hemp food manufacturers to register with the Department of Agriculture and follow Good Manufacturing Practices. New York has 64 registered Medicare suppliers. The state has not challenged the federal program, and Governor Kathy Hochul issued a statement in February 2026 supporting Medicare coverage as expanding senior healthcare options.

Ohio

Ohio legalized hemp cultivation under House Bill 57 in 2019 and permits retail sales of hemp-derived products. The Ohio Department of Agriculture regulates hemp cultivation, while the Ohio Board of Pharmacy initially asserted jurisdiction over CBD products before the state Attorney General issued an opinion in 2020 clarifying that hemp-derived CBD is not subject to pharmacy regulation. Ohio has 43 registered Medicare suppliers. The state has not imposed additional restrictions on Medicare program participation.

Idaho

Idaho maintains the most restrictive hemp policy in the nation, prohibiting all cannabinoid products including those derived from hemp. Idaho Code § 37-2701 defines marijuana to include all cannabis regardless of THC content, effectively banning hemp commerce despite federal legalization. Idaho has zero registered Medicare suppliers. Beneficiaries in Idaho cannot access the Medicare hemp benefit without traveling to neighboring states, creating an access disparity that patient advocates have challenged as inconsistent with Medicare's national benefit structure.

Market and Business Implications

The Medicare Hemp Coverage Program has accelerated consolidation in the hemp industry and created new competitive dynamics between pharmaceutical manufacturers and supplement companies.

Supplier Registration and Market Access

CMS's quality requirements for supplier registration favor established manufacturers with existing compliance infrastructure. Third-party testing costs range from $200 to $500 per product batch, Good Manufacturing Practice certification requires facility investments of $50,000 to $200,000, and product liability insurance at required coverage levels costs $15,000 to $40,000 annually for mid-sized manufacturers. These barriers have limited supplier registration to larger operators, with 68 percent of registered suppliers reporting annual revenue exceeding $5 million according to a National Hemp Association survey in April 2026.

Several multi-state operators in the cannabis industry have launched hemp product lines specifically targeting Medicare coverage. Curaleaf Holdings announced in March 2026 that it would invest $12 million in a dedicated hemp manufacturing facility in Massachusetts to produce Medicare-eligible products. The company projected Medicare sales could reach $85 million annually by 2028. Green Thumb Industries and Trulieve Cannabis Corp. have made similar announcements, viewing Medicare coverage as a pathway to federal market participation while cannabis remains Schedule I.

Pricing Dynamics and Reimbursement

CMS does not set prices for covered hemp products but reimburses beneficiaries for actual purchase costs up to the $500 annual limit. Market analysis by Brightfield Group in April 2026 found that average Medicare reimbursement claims totaled $387, suggesting beneficiaries are using approximately 77 percent of available benefits. The most commonly reimbursed products are CBD tinctures at an average price of $54 per bottle, topical creams at $38, and capsules at $47 per container.

Some suppliers have introduced premium pricing for Medicare-eligible products, marketing enhanced quality controls and clinical-grade formulations at prices 20 to 40 percent above standard retail. Consumer advocates have raised concerns about price inflation driven by federal reimbursement, a pattern observed in other Medicare-covered product categories including durable medical equipment and diabetic supplies.

Pharmaceutical Industry Response

Beyond Jazz Pharmaceuticals' lawsuit participation, the pharmaceutical industry has responded to Medicare hemp coverage through multiple channels. Several companies have accelerated cannabinoid drug development programs, viewing FDA approval as a competitive advantage over unapproved hemp products. Pfizer announced in April 2026 that it is conducting Phase II clinical trials of a synthetic CBD formulation for osteoarthritis pain. AbbVie disclosed in its first-quarter 2026 earnings call that it is evaluating cannabigerol for inflammatory bowel disease.

The Pharmaceutical Research and Manufacturers of America has lobbied Congress to restrict Medicare coverage to FDA-approved drugs, arguing that covering unapproved products undermines pharmaceutical innovation incentives. The organization's amicus brief in the lawsuit cited Congressional Budget Office estimates that bringing a new drug to market costs an average of $1.4 billion and argued that Medicare coverage of unapproved alternatives free-rides on pharmaceutical companies' research investments.

Impact on Medical Cannabis Programs

The Medicare hemp program has created competitive pressure on state medical cannabis programs, which remain ineligible for federal reimbursement due to marijuana's Schedule I status. In states with both medical cannabis and robust hemp markets, some patients have shifted from THC-dominant cannabis products to hemp-derived CBD and minor cannabinoids to access Medicare coverage. Dispensary operators in Florida, Arizona, and Pennsylvania reported in March 2026 that senior patient visits declined 12 to 18 percent following Medicare hemp coverage implementation, with the largest decreases among patients primarily using low-THC products for pain and inflammation.

This dynamic has intensified industry advocacy for federal cannabis rescheduling or descheduling. The National Cannabis Industry Association argued in testimony before the Senate Finance Committee in April 2026 that Medicare coverage of hemp while excluding cannabis creates an arbitrary distinction unsupported by pharmacology or patient outcomes, given that both product categories contain similar cannabinoids and terpenes.

What Experts Say

Legal scholars, healthcare policy analysts, and medical researchers have offered divergent assessments of the Medicare hemp program's legality, efficacy, and precedential implications.

Professor Robert Mikos of Vanderbilt Law School, an expert on federalism and drug policy, stated in congressional testimony in March 2026 that CMS likely has statutory authority to cover hemp products under Section 1115A's broad language authorizing tests of models that "the Secretary determines" may improve quality while reducing costs. Mikos noted that courts generally defer to agency interpretations of ambiguous statutory language under Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), and that Section 1115A's use of "may" rather than "shall" suggests congressional intent to grant discretion.

Professor Rachel Sachs of Washington University School of Law, who studies pharmaceutical regulation and Medicare policy, offered a contrasting view in an April 2026 article in the New England Journal of Medicine. Sachs argued that covering unapproved products conflicts with Medicare's traditional limitation to items and services that are "reasonable and necessary" under 42 U.S.C. § 1395y(a)(1)(A), a standard courts have interpreted to require evidence of medical benefit. According to Sachs, while Section 1115A permits Innovation Center demonstrations, it does not override the reasonable and necessary requirement, and hemp products lacking FDA approval cannot satisfy that standard.

Dr. Kevin Hill, an addiction psychiatrist at Harvard Medical School who has researched cannabinoid therapeutics, stated in an interview with the Journal of the American Medical Association in February 2026 that evidence supporting CBD for common conditions like chronic pain and anxiety remains limited. Hill noted that most published studies involve small sample sizes, lack placebo controls, or examine formulations different from retail products. He expressed concern that Medicare coverage may create patient expectations of efficacy not supported by rigorous clinical evidence.

Dr. Bonni Goldstein, a physician specializing in cannabis medicine and medical director of Canna-Centers Wellness & Education, offered a different perspective in testimony before the House Energy and Commerce Committee in March 2026. Goldstein described clinical experience with thousands of patients using hemp-derived CBD for conditions including chronic pain, anxiety, and insomnia, reporting that approximately 60 percent experience meaningful symptom improvement. She argued that the absence of large-scale randomized controlled trials reflects pharmaceutical industry disinterest in researching non-patentable compounds rather than lack of therapeutic potential, and that Medicare coverage appropriately recognizes real-world evidence of benefit.

Professor Patricia Zettler of Ohio State University College of Law, an expert on FDA regulation, stated in a March 2026 article in Health Affairs that the Medicare program creates tension with FDA's drug approval framework but does not necessarily violate it. Zettler noted that FDA has not prohibited hemp-derived CBD commerce despite its legal position that CBD cannot be marketed as a dietary supplement, suggesting the agency has acquiesced to a de facto regulatory compromise. She argued that CMS coverage of legal products does not usurp FDA authority because Medicare reimbursement does not constitute FDA approval or authorization.

What's Next

The appeal filed on June 5, 2026, initiates a process that could take 12 to 18 months to resolve and may ultimately reach the Supreme Court.

The case has been assigned to the U.S. Court of Appeals for the District of Columbia Circuit, widely considered the nation's second-most important court due to its jurisdiction over federal agency actions. The plaintiffs' opening brief is due by July 20, 2026, according to the court's briefing schedule. CMS's response brief will be due 30 days later, with the plaintiffs' reply due 14 days after that. Oral argument typically occurs three to six months after briefing concludes, suggesting a hearing in early 2027.

The appellate panel will review Judge McFadden's dismissal de novo, meaning it will apply independent judgment rather than deferring to the district court's analysis. The plaintiffs must demonstrate that they have standing to sue—a concrete, particularized injury caused by the challenged action and redressable by a favorable decision. If the court finds standing, it will reach the merits of whether CMS exceeded its statutory authority or violated the Administrative Procedure Act.

Legal observers expect the standing question to present the highest barrier for the plaintiffs. Professor Jonathan Adler of Case Western Reserve University School of Law, who has written extensively on standing doctrine, stated in a June 2026 blog post that the D.C. Circuit has consistently rejected competitor standing claims based on government benefit programs, requiring plaintiffs to show more than speculative competitive harm. Adler noted that the Supreme Court's decision in Clapper v. Amnesty International USA, 568 U.S. 398 (2013), established that standing requires injury that is "certainly impending" rather than based on "speculation about the decisions of independent actors."

If the D.C. Circuit reverses the dismissal and reaches the merits, the case could establish important precedent regarding Innovation Center authority and the intersection of Medicare coverage with FDA drug regulation. A decision favoring the plaintiffs could require CMS to terminate the program or limit coverage to FDA-approved cannabinoid medications. A decision favoring CMS would validate the program and potentially encourage the agency to test coverage of other complementary and alternative medicine products including herbal supplements, acupuncture, and chiropractic care.

Regardless of the litigation outcome, the program faces potential legislative challenges. Representative Earl L. "Buddy" Carter, a pharmacist and member of the House Energy and Commerce Committee, introduced H.R. 3892 in May 2026, which would prohibit Medicare and Medicaid coverage of any hemp-derived product not approved by FDA. The bill has 34 cosponsors, primarily Republicans concerned about federal spending and Democrats representing districts with significant pharmaceutical industry employment. The legislation has been referred to the Subcommittee on Health but has not been scheduled for markup.

The program's continuation also depends on CMS Innovation Center evaluation results. Section 1115A requires the agency to monitor demonstration projects and terminate those not improving quality or reducing costs. CMS announced in April 2026 that it will conduct a three-year evaluation measuring beneficiary health outcomes, prescription medication use, emergency department visits, and hospitalizations among program participants compared to matched controls. Preliminary results are expected in late 2027. If the evaluation shows increased costs or adverse health outcomes, CMS could terminate the program even if it survives legal challenge.

Industry participants are monitoring the case closely while expanding Medicare-focused product lines and supplier networks. The National Hemp Association is coordinating an industry-funded study of 5,000 Medicare beneficiaries using hemp products to generate outcomes data supporting the program's continuation. Several academic medical centers including Johns Hopkins University and the University of California, San Diego, have announced research initiatives examining cannabinoid use patterns and health effects among older adults, funded by hemp industry grants totaling $8.3 million.

Further Reading

• Agriculture Improvement Act of 2018, Pub. L. No. 115-334, 132 Stat. 4490 (full text of the Farm Bill that legalized hemp) — https://www.congress.gov/bill/115th-congress/house-bill/2
• 42 U.S.C. § 1315a (Social Security Act Section 1115A establishing CMS Innovation Center authority) — https://www.law.cornell.edu/uscode/text/42/1315a
• 21 U.S.C. § 802(16) (Controlled Substances Act definition of marijuana as amended by 2018 Farm Bill) — https://www.law.cornell.edu/uscode/text/21/802
• CMS Medicare Hemp Coverage Program supplier registration requirements and quality standards — https://innovation.cms.gov/innovation-models/hemp-coverage
• FDA statement on regulation of cannabis and cannabis-derived products (January 2023) — https://www.fda.gov/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products
• Smart Approaches to Marijuana v. Verma, Case No. 1:26-cv-00453 (D.D.C.), complaint and docket — https://www.dcd.uscourts.gov/
• AARP Research study on CBD use among older adults (November 2024) — https://www.aarp.org/research/
• National Hemp Association industry data and Medicare program analysis — https://www.nationalhempassociation.org/
• Congressional Budget Office cost estimate for Medicare prescription drug provisions (methodology applicable to hemp coverage analysis) — https://www.cbo.gov/topics/health-care