Federal Court Dismisses Challenge to Medicare Hemp Coverage
A federal judge has dismissed a lawsuit challenging a Trump administration initiative designed to provide Medicare hemp coverage for eligible patients, according to a report by Marijuana Moment. Judge Trevor N. McFadden ruled on Friday, May 22, 2026, that the plaintiffs, including Smart Approaches to Marijuana (SAM) and MMJ International Holdings, lacked Article III standing to bring the case. The judge determined that the claimed injuries were either too abstract or too remote to warrant judicial intervention, leading to the dismissal of the entire suit and rendering a preliminary injunction motion moot.
The lawsuit targeted the Centers for Medicare & Medicaid Services (CMS) Substance Access Beneficiary Engagement Incentive (BEI) program. This initiative, which Hemp Gazette previously reported on, explores the provision of hemp-derived products, primarily cannabidiol (CBD) with a permissible amount of tetrahydrocannabinol (THC), to eligible patients.
The Substance Access Beneficiary Engagement Incentive (BEI) Program
The BEI program allows for the coverage of up to US$500 worth of hemp-derived products annually for eligible Medicare patients. The program specifically permits products containing no more than 0.3 percent delta-9 THC by dry weight and up to 3 milligrams of total THC per serving. Inhalable preparations are not permitted under the current guidelines.
CMS clarified that the BEI operates within a shared-savings framework. Participating providers furnish eligible products at their own cost, subject to the US$500 annual cap per beneficiary. 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. This model involves no new federal appropriation and creates no new entitlement, with providers absorbing losses if cost reductions are not achieved.
The THC limits within the program could be subject to change. A law signed by President Trump late last year, scheduled to take effect in November, could further restrict the types of cannabis products currently permitted under the 2018 Farm Bill, potentially limiting total THC to 0.4 milligrams per container.
Plaintiff Arguments and Future Implications
Judge McFadden’s ruling detailed the lack of standing for all plaintiffs. For organizational plaintiffs like SAM, the judge stated that while they claimed to have diverted resources in response to the BEI’s implementation, they failed to establish that such diversion interfered with their core activities or prevented them from pursuing their stated purpose. Regarding MMJ International Holdings, the judge noted that the company was not a direct and current competitor in the Medicare-beneficiary market for hemp products.
Individual plaintiffs, including anti-marijuana lawyer David Evans, also failed to establish concrete harm. Judge McFadden wrote that even if Evans’s
Disclaimer: This article is for informational purposes only and does not constitute medical advice. Hemp Gazette does not provide medical recommendations, diagnoses, or treatment plans. Always consult a qualified healthcare practitioner before making any decisions regarding your health or any medical condition. Statements concerning the therapeutic uses of hemp, cannabis, or cannabinoid-derived products have not been evaluated by Australia’s Therapeutic Goods Administration (TGA). Medicinal cannabis products in Australia are accessed via prescription pathways under TGA regulation.
