Federal Health Officials Seek Dismissal of Lawsuit Challenging Medicare Hemp Coverage Program

Federal health officials have moved to dismiss a lawsuit filed by anti-marijuana groups challenging a new Medicare initiative that covers up to $500 annually in hemp-derived products for eligible patients. The Centers for Medicare & Medicaid Services (CMS) program, launched under the Trump administration, primarily focuses on CBD but permits a limited amount of THC in qualifying products. The initiative aims to broaden access to hemp products for Medicare beneficiaries while setting strict product guidelines

Legal representatives for Health and Human Services Secretary Robert F. Kennedy Jr. and CMS Director Mehmet Oz submitted a brief arguing that the organizations leading the lawsuit, including Smart Approaches to Marijuana (SAM), lack standing. The brief asserts that these advocacy groups and the individual plaintiff, anti-marijuana attorney David Evans, have not suffered any direct harm from the policy. "No one will force Mr. Evans to consume a hemp product. No one will force his provider to offer him one. His alleged injury is thus not that the [Medicare hemp program] will cause him any physical, monetary, or regulatory harm. His alleged injury is that he might be offered a product he will decline. That is not an Article III injury. It is an offense to his sensibilities," the government brief states

The federal government's filing also rejects the plaintiffs' claim that they are forced to divert resources to oppose the Medicare hemp initiative, arguing that advocacy against cannabis access is central to their mission. The brief emphasizes, "The BEI did not divert these organizations from some unrelated core activity. It gave them exactly the kind of government action they exist to oppose." Furthermore, the government points out that the plaintiffs are conflating their opposition to illegal marijuana with legal hemp, clarifying, "Hemp is not marijuana. Equally important, even accepting SAM’s mischaracterization, its argument is that a separate government action under separate statutory authority has made SAM’s advocacy in a different proceeding less effective. That is not Article III injury. It is a complaint that law and policy landscape has shifted in a direction SAM dislikes."

The CMS initiative is not subject to administrative or judicial review under current statutes, according to the government. The agencies further note that the program is voluntary and does not involve new federal appropriations or create new entitlements. Providers can choose to offer eligible hemp products at their own expense, with the potential for shared savings if patient care costs are reduced. Products covered under the program must not exceed 0.3 percent delta-9 THC by dry weight or 3 milligrams of total THC per serving, with future changes possible under recently enacted legislation

Efforts by the plaintiffs to add new parties, such as MMJ International Holdings and its subsidiaries, have not changed the government's position. The filing maintains that MMJ's claimed injuries are speculative, as the company has not yet entered the relevant market or developed qualifying products. Meanwhile, the government continues to oppose delays in legal proceedings, emphasizing that the case lacks substantive grounds. Judge Trevor N. McFadden has already denied a temporary restraining order to halt the program's launch, and the White House and FDA have both indicated no intent to interfere with the initiative

From the OG Lab newsroom perspective, the outcome of this lawsuit could set an important precedent for how hemp-derived products are integrated into federal healthcare programs. As regulatory and legal battles over cannabis and hemp access continue, the industry should closely watch how the courts interpret standing and injury in cases involving advocacy groups and evolving government policies. The resolution of this case could influence future efforts to expand or restrict coverage for cannabis-related therapies in public health insurance programs