The Food and Drug Administration will not stand in the way of a new federal program that reimburses Medicare patients for hemp-derived CBD products, according to a memo issued by FDA Commissioner Martin Makary on April 1.
The memo, sent to senior FDA staff, confirmed the agency will exercise enforcement discretion and decline to enforce sections of the Federal Food, Drug, and Cosmetic Act that normally require premarket approval for a narrow category of orally administered CBD products used within the Medicare program.
What the Medicare Program Covers
The initiative, formally called the Substance Access Beneficiary Engagement Incentive, launched April 1. It allows participating accountable care organizations and oncology practices enrolled in select CMS models — including the Enhancing Oncology Model and ACO REACH — to furnish up to $500 per year in eligible hemp-derived products to Medicare patients under physician supervision.
Cornbread Hemp reportedly secured an exclusive contract with Alliant Purchasing, a group purchasing organization serving approximately 68,000 healthcare locations, to supply USDA organic CBD products for the program. Vantage Hemp Co. also announced plans to support real-world evidence collection tied to patient outcomes as the pilot progresses.
Conditions Still Apply
The FDA’s hands-off approach comes with strings attached. Products must comply with federal THC limits, be manufactured and labeled consistently with dietary supplement standards, and must not be contaminated or marketed in ways that appeal to children. The agency also preserved its broader authority to regulate hemp-derived compounds outside this specific program.
Legal Challenge Already Underway
The program faced opposition before it even launched. Smart Approaches to Marijuana, a cannabis prohibitionist organization, filed suit on March 30 seeking to stop the CMS pilot entirely. A federal judge in the District of Columbia denied the group’s request for a temporary restraining order, but a hearing on a preliminary injunction is scheduled for April 20.
The outcome of that hearing could determine whether the program continues or faces an early freeze. For consumers interested in understanding which CBD products currently meet federal quality standards, [FindMyCBD.com](https://findmycbd.com) offers independent product comparisons.
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Sources: Cannabis Business Times, Marijuana Moment, Canna Law Blog, The Marijuana Herald
