Anti-Marijuana Groups Sue to Block Medicare CBD Pilot as Judge Rejects Immediate Restraining Order

A coalition of prohibitionist organizations is moving to stop the Trump administration’s new plan to cover certain hemp-derived CBD and limited-THC products through Medicare, filing a federal lawsuit arguing that the initiative exceeds the government’s authority and violates administrative law. The legal challenge, first reported by Marijuana Moment, comes just as the Centers for Medicare and Medicaid Services (CMS) begins rolling out the Substance Access Beneficiary Engagement Incentive, a pilot that would allow eligible beneficiaries to receive up to $500 in hemp products each year.

Smart Approaches to Marijuana (SAM) and nine allied groups filed the complaint in the U.S. District Court for the District of Columbia, naming CMS Administrator Mehmet Oz and Health and Human Services Secretary Robert F. Kennedy Jr. as defendants. The organizations argue that CMS failed to follow required notice-and-comment procedures, ignored its own prior rule declaring cannabis products ineligible for supplemental Medicare coverage, and is attempting to authorize access to substances they characterize as illegal under the Controlled Substances Act. They also claim the program violates the Social Security Act by permitting Medicare patients to receive products containing THC without explicit congressional approval.

Lawsuit Seeks to Vacate Medicare CBD Program

The lawsuit seeks to vacate the program entirely and permanently enjoin CMS from implementing it. In the interim, the groups asked the court for a temporary restraining order to halt the pilot before its launch. Their filing also asserts organizational harm, arguing that the BEI undermines their advocacy efforts and forces them to divert resources. One plaintiff, SAM donor David Evans, says he was personally harmed because he was denied the opportunity to comment on the policy despite being a Medicare beneficiary.

CMS, meanwhile, has emphasized that the pilot is tightly structured. Participating providers must source CBD from legally compliant farms, ensure products contain no more than 0.3% delta-9 THC by dry weight and no more than 3 milligrams of total THC per serving, and furnish products directly rather than reimbursing retail purchases. The agency says the program is designed to support symptom management, particularly chronic pain, within existing Innovation Center models, and that it will adjust its definitions if federal hemp policy changes later this year.

Judge Denies Restraining Order

On Tuesday, the prohibitionist groups suffered their first setback. U.S. District Judge Trevor McFadden denied their request for an emergency restraining order, writing that they failed to meet the “extraordinary and drastic” standard required for such relief. The broader lawsuit continues, however, with a hearing on the motion for a preliminary injunction scheduled for April 20. The government briefing is due April 9, with plaintiffs’ reply due April 13.

The judge’s order means the BEI pilot proceeds for now, allowing participating providers in the ACO REACH and Enhancing Oncology models to begin offering CBD coverage this week. LEAD model participants will follow in 2027. The court will revisit whether the program should be paused pending litigation at the April 20 hearing.

Regulation vs. Reality

Advocates for patient access say the lawsuit illustrates a longstanding gap between real-world cannabinoid use and the clinical infrastructure needed to support it. Sasha Kalcheff-Korn, executive director of Realm of Caring, told IgniteIt that the CMS effort reflects a shift toward acknowledging that gap.

“For over a decade, Realm of Caring has witnessed patients navigating cannabinoid use without adequate clinical support or coverage. Efforts like the Substance Access BEI program from CMS reflect a growing recognition of this gap, and underscore the need for structured, evidence-based pathways that prioritize patient safety and informed access,” Kalcheff-Korn said in a written statement. “As this policy evolves, it is critical that provider education, transparency, and rigorous data collection remain central to implementation. Thoughtfully designed programs have the potential to bridge the divide between real-world use and clinical care.”

The Medicare pilot arrives at a moment of rapid federal movement on cannabis policy. President Donald Trump’s December directive ordering the attorney general to expedite marijuana’s move from Schedule I to Schedule III has already reshaped the regulatory landscape, and CMS officials say the BEI is part of a broader effort to integrate evidence-based cannabinoid options into care settings. Whether the courts allow the program to continue may determine how quickly that integration unfolds and how accessible hemp-derived products become for millions of seniors managing chronic conditions.