The Centers for Medicare & Medicaid Services officially launched a first-of-its-kind pilot program on April 1, 2026, making hemp-derived CBD available at no cost to eligible Medicare beneficiaries — even as a legal challenge from a prominent anti-marijuana group seeks to shut it down before it can take root.
The pilot, administered through CMS’s Innovation Center (CMMI) under the ACO REACH and Enhancing Oncology Model care frameworks, allows participating healthcare organizations to furnish hemp-derived CBD products to Medicare beneficiaries up to $500 per year. The program covers approximately 70 million Medicare enrollees, with an additional 34 million Medicare Advantage beneficiaries potentially eligible depending on their plan’s participation.
Cornbread Hemp, a USDA-certified organic Kentucky-based hemp company, has been named as the exclusive CBD supplier for the program’s provider network.
The Lawsuit: SAM Challenges Federal Authority
Smart Approaches to Marijuana (SAM), the Washington-based advocacy organization that has long opposed marijuana and hemp legalization, filed suit to block the program, arguing that CMS lacks the legal authority to cover a substance that has not received formal FDA approval as a drug.
SAM’s central argument points to the FDA’s existing regulatory framework: the agency has approved only one CBD-based drug — Epidiolex, for treatment-resistant pediatric epilepsy — through its standard drug approval process. SAM contends that covering other CBD formulations through a federal healthcare program effectively circumvents the FDA’s drug approval authority and sets a dangerous precedent.
MMJ International Holdings, a cannabis industry company with competing interests in the CBD market, has taken an opposing position, arguing that CMS is well within its authority to test innovative care models through the CMMI Innovation Center structure, which was specifically designed by Congress to allow coverage experiments outside the standard rulemaking process.
CMS Response and Oz’s Role
CMS Administrator Dr. Mehmet Oz, appointed by President Trump, has been the public face of the program since its announcement. Oz, a physician and media personality known for his advocacy of integrative and alternative medicine, championed the pilot as a commonsense expansion of care options for seniors.
The program traces directly to a Trump Executive Order signed December 18, 2025, which directed CMS to explore expanded coverage of hemp-derived products under federal healthcare programs. CMS has argued that the CMMI’s broad congressional mandate — to test innovative payment and service delivery models — provides sufficient legal authority to operate the pilot without a separate FDA rulemaking.
The agency has emphasized that all products covered under the program must comply with 2018 Farm Bill definitions: hemp-derived, containing ≤0.3% Delta-9 THC by dry weight or ≤3mg per serving, and independently lab-tested with published Certificates of Analysis.
What Happens Next
As of the program’s launch date, no federal court has issued an emergency injunction pausing the pilot. Without such an order, CMS is legally permitted to continue enrolling providers and delivering benefits to eligible beneficiaries.
The SAM lawsuit is expected to move through federal district court over the coming months. Legal observers note that CMMI’s authority has historically received significant judicial deference, but the case raises novel questions at the intersection of Medicare innovation authority and FDA drug regulation that no court has directly addressed.
CMS has stated it will use data collected through the pilot to evaluate outcomes and cost-effectiveness, with the possibility of expanding the program permanently if results support it. The agency has not commented publicly on the litigation beyond reaffirming its legal basis for the program.
For the estimated millions of Medicare beneficiaries whose providers are already enrolled, the program is live and benefits are being delivered — legal challenge notwithstanding.
