Health Law Daily Wrap Up, ADMINISTRATION OF MEDICARE/MEDICAID PROGRAMS—D.D.C.: Advocacy groups fail to halt Medicare hemp program, (May 26, 2026)

By George Basharis, J.D.

A challenge to a federal Medicare pilot program involving hemp products failed after a Washington, D.C., federal court found that opponents alleged only speculative or ideological harms rather than the concrete injuries required for Article III standing.

Opponents of a new Medicare hemp initiative could not proceed with claims that the program unlawfully expands access to cannabis-derived products because none of the challengers showed a concrete, imminent injury tied to the policy. Dismissing the suit brought by advocacy groups, a physician, a Medicare beneficiary, and a cannabinoid pharmaceutical developer, the U.S. District Court for the District of Columbia concluded that the alleged harms rested on conjecture, disagreement with federal policy, or organizational spending choices that were insufficient to establish standing. The ruling leaves in place a voluntary federal program allowing certain Medicare providers to furnish qualifying beneficiaries with limited hemp products through a Center for Medicare and Medicaid Innovation model (Smart Approaches to Marijuana v. Kennedy, No. 1:26-cv-1081 (TNM) (D.D.C. May 22, 2026)).

In March 2026, federal health officials added the Substance Access Beneficiary Engagement Incentive, or BEI, as a voluntary component to three existing payment models administered through the Center for Medicare and Medicaid Innovation (CMMI). Under the initiative, participating providers may consult with eligible Medicare beneficiaries about hemp products and may furnish up to $500 in qualifying hemp products annually.

The challengers argued that the program violated the Administrative Procedure Act and the Constitution in multiple ways. They claimed that federal officials bypassed notice-and-comment procedures, exceeded statutory authority, acted arbitrarily and capriciously, conflicted with appropriations restrictions, and denied due process and equal protection. But the court did not reach the merits of those claims. Instead, it determined that every category of challenger failed to establish the threshold jurisdictional requirement for standing.

Hemp classification. The court traced the regulatory backdrop underlying the challenge, emphasizing Congress’s distinction between hemp and marijuana in the Agriculture Improvement Act of 2018. Although marijuana remains generally classified as a Schedule I controlled substance, the 2018 Farm Bill excluded hemp from the federal definition of marijuana so long as the cannabis derivative contains no more than 0.3 percent delta-9 tetrahydrocannabinol concentration on a dry-weight basis. That distinction allowed the federal government to treat hemp products differently from marijuana products for regulatory purposes.

The court also described the role of CMMI, which Congress created in 2010 to test innovative Medicare and Medicaid payment and service-delivery models designed to reduce costs while preserving or improving quality of care. CMMI models frequently operate on a voluntary basis. Providers may opt into qualifying programs through participation agreements with the Centers for Medicare & Medicaid Services. The federal government maintained that CMMI had never previously used notice-and-comment rulemaking for voluntary model components.

Speculative harms. One of the principal challengers was a 78-year-old Medicare beneficiary whose healthcare provider participated in an eligible CMMI model but had not joined the hemp initiative. The beneficiary alleged that if his provider eventually opted into the BEI program, he could be offered hemp products despite his opposition to expanded cannabis access. He also argued that the initiative could impair his relationship with his healthcare provider and potentially affect the nursing home he owns.

The court found those allegations too speculative to satisfy Article III requirements. It emphasized that the beneficiary’s provider had not opted into the BEI and that nothing in the record showed imminent participation. Even if the provider eventually joined the program, the possibility that hemp products might be recommended remained conjectural rather than certainly impending. The court concluded that disagreement with a provider’s recommendation would not amount to a concrete injury.

The beneficiary had long served as a director or consultant for several anti-marijuana organizations and had authored books on the subject. Given his “thoughtful, vociferous opposition,” the court stated, the possibility that he would involuntarily consume hemp products surpassed “the realm of hypothetical possibilities.” The court also rejected claims tied to the beneficiary’s nursing home operations, reasoning that it remained uncertain whether the facility even qualified for the program and observing that participation in the initiative remained voluntary.

Physician standing. A physician challenger likewise failed to establish standing. The pain-management physician argued that the BEI lacked sufficient clinical guidelines for physicians evaluating hemp products and contended that participation in the program could expose providers to malpractice liability and increased emergency-room visits stemming from hemp overuse. The alleged harm rested on multiple layers of speculation, the court concluded.

The physician had not opted into the voluntary initiative, and the court noted that nothing required him to participate. His concerns that patients would leave his practice if he refused to recommend hemp products also remained hypothetical because he had not lost any patients and had not even received requests for BEI-related products.

The court compared the physician’s assertions to arguments rejected by the U.S. Supreme Court in FDA v. Alliance for Hippocratic Medicine, 602 U.S. 367 (2024), the 2024 abortion-drug standing decision that played a central role throughout the ruling. Quoting Hippocratic Medicine, the court observed that an emergency-room physician could not challenge a speed-limit increase simply because more accidents might someday lead to additional emergency-room patients. The court also found tension between the physician’s allegations that he would refuse to recommend hemp products absent regulatory guidance and his assertion that patients might later sue him for overprescribing them.

Resource diversion. Most of the plaintiffs consisted of anti-marijuana advocacy organizations that claimed the hemp initiative forced them to divert staff time and organizational resources toward researching, monitoring, educating the public about, and opposing the federal program. The court rejected those claims as insufficient under longstanding standing precedent.

Relying heavily on Hippocratic Medicine, the court explained that organizations cannot “spend [their] way into standing” merely by devoting resources to opposing a policy they dislike. The ruling distinguished cases where government conduct directly interfered with an organization’s ability to carry out core activities from situations where advocacy groups simply chose to dedicate resources toward policy opposition.

For example, plaintiff Smart Approaches to Marijuana alleged that the BEI forced it to redirect staff and resources away from existing educational programming to analyze and respond to the hemp initiative. The court concluded that those activities fell squarely within the organization’s existing mission of conducting policy analysis and public education regarding marijuana issues. “Monitoring,” “analyzing,” and disseminating information about hemp policy, the court reasoned, amounted to a continuation of the organization’s core work rather than a legally cognizable injury.

The court similarly rejected standing theories advanced by organizations including Cannabis Industry Victims Educating Litigators, Drug Free America Foundation, Save Our Society From Drugs, Drug Watch International, Illinois Family Institute, Hillsborough County Anti-Drug Alliance, and several related advocacy groups. Some organizations alleged that the initiative would increase hemp-related injuries and future litigation, thereby requiring additional educational and advocacy efforts. But the court found that those allegations depended on speculative chains of future events and, even if true, still described activities consistent with the organizations’ existing missions. Others alleged only generalized diversion of resources without explaining how the BEI concretely interfered with operational activities. The court stated that shifts in internal organizational priorities resulting from changes in public policy do not themselves create constitutional injury. “If that were the case,” the court explained, “an organization could claim injury-in-fact nearly any time there was a change in the law relevant to its mission.”

Pharmaceutical standing. The final plaintiff group consisted of MMJ International Holdings Inc. and affiliated entities developing cannabinoid-based therapeutics through the FDA’s botanical drug-development framework. MMJ alleged that it had invested more than $10 million pursuing FDA-regulated cannabinoid therapies targeting Huntington’s disease and multiple sclerosis. The company argued that the BEI unlawfully permitted distribution of hemp-derived cannabinoid products outside the FDA drug-approval process while MMJ remained subject to extensive regulatory requirements.

The court concluded that MMJ also lacked standing. None of MMJ’s products had reached the commercial market, and several remained tied up in regulatory review or clinical holds. As a result, the company could not plausibly allege competitive injury from the BEI. The court characterized MMJ’s theory as an attempt to challenge a regulatory disparity untethered to any concrete market harm.

Although the challengers raised a broad array of statutory and constitutional objections to the hemp initiative, the court concluded that the dispute ultimately reflected policy disagreement rather than the type of particularized injury necessary to invoke federal jurisdiction.

The case is No. 1:26-cv-1081 (TNM).

Judge: McFadden, T.

Attorneys: Ilya Shapiro (Manhattan Institute) for Smart Approaches To Marijuana. Xinyu Yang, U.S. Department of Justice, for Robert F. Kennedy, Jr.

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