MMJ Challenges CMS Over Medicare Program Funding Non-FDA-Approved Cannabinoid Products While Demanding FDA Approval Pathway
核心洞察
CMS Administrator Dr. Oz publicly endorsed FDA approval as the "right way forward" for cannabinoid drug development while his agency simultaneously operates a Medicare program that funds non-FDA-approved hemp-derived cannabinoid products.
The CMS Substance Access Beneficiary Engagement Incentive allows Medicare beneficiaries to receive up to $500 annually in orally administered hemp-derived products containing up to 3 mg THC per serving, without FDA review.
MMJ International Holdings (搜索) has spent over $10 million and nearly a decade pursuing formal FDA approval for cannabinoid therapeutics targeting Huntington's disease (搜索) and multiple sclerosis (搜索), yet remains without a decision.
WASHINGTON, DC — A growing contradiction at the Centers for Medicare & Medicaid Services (CMS) has drawn sharp criticism from a pharmaceutical company that has spent nearly a decade and more than $10 million pursuing formal FDA approval for cannabinoid-based therapeutics. CMS Administrator Dr. Mehmet Oz recently urged United States senators to oppose an amendment that would allow a hemp product ban to proceed, defending a Medicare program that provides beneficiaries access to non-FDA-approved cannabinoid products — even as he publicly stated that "approaching FDA for formal approval is the right way to move forward" with cannabinoid drug development.
The tension between these two positions lies at the heart of a legal challenge brought by MMJ International Holdings (搜索), a company developing standardized oral cannabinoid medicines for Huntington's disease (搜索) and multiple sclerosis (搜索).
The CMS Program Under Scrutiny
Under the CMS Substance Access Beneficiary Engagement Incentive, participating healthcare organizations may furnish eligible Medicare beneficiaries with up to $500 annually in orally administered hemp-derived cannabinoid products that have not been approved by the FDA. The products are selected to improve symptom control, furnished through an affiliated physician, and may contain up to 3 milligrams of total THC per serving.
In his letter to senators, Administrator Oz wrote that the proposed amendment would "undo significant gains that have been made to make clinically-appropriate full-spectrum hemp-derived CBD accessible to the senior citizens and individuals with disabilities that rely on the Medicare program," and would "rip away from millions of seniors and disabled Americans the opportunity to benefit from these new programs." He identified the conditions at issue as "cancer, debilitating seizure disorders, and other chronic pain."
The same letter states that CMS is "committed to innovation that meets patients where they are while maintaining strong safeguards and clinical oversight," and that officials "remain focused on preventing dangerous products from reaching Americans."
Hemp Status Is Not FDA Approval
Eligible products under the CMS program are defined principally by reference to federal hemp law — derived from hemp, no more than 0.3 percent delta-9 THC by dry weight, and no more than 3 milligrams of total THC per serving when taken orally. However, removal from the Controlled Substances Act does not authorize a product to be furnished for therapeutic use under the Federal Food, Drug, and Cosmetic Act.
The FDA has stated that cannabis-derived products promoted to diagnose, cure, mitigate, treat or prevent disease are drugs subject to the same approval requirements as any other drug, and has warned that unapproved cannabis-derived products have not been reviewed for safety, efficacy, manufacturing consistency, dosing, labeling or drug interactions.
"Hemp status answers a Controlled Substances Act question," said Duane Boise, Chief Executive Officer of MMJ International Holdings (搜索). "It does not answer the FDA question. The Farm Bill is not a substitute for clinical trials, an approved application, or proof that a specific product is safe and effective for a specific use. Strong safeguards and clinical oversight are exactly what the FDA review process provides — and these products did not go through it."
An Approved Precedent Already Exists
Seizure disorders are among the conditions the Administrator named. An FDA-approved, cannabis-derived prescription medicine already exists for certain seizure disorders. It reached patients only after its sponsor conducted controlled clinical trials and established chemistry, manufacturing, safety, efficacy, dosing and labeling. That sponsor was not permitted to substitute a certificate of analysis or physician discretion for approval.
"That company approached FDA for formal approval — the right way to move forward, in the Administrator's words," Boise said. "It cost years and a great deal of money, and the result is a medicine physicians prescribe with confidence. CMS is now facilitating physician-directed access to different cannabinoid products for the same category of vulnerable patients, without requiring any of it."
A Real Commercial Market
The market created by the CMS program is not hypothetical. Cornbread Hemp has publicly announced an exclusive supply agreement with Alliant Purchasing, a national group purchasing organization reporting approximately 68,000 healthcare locations served, under which members may purchase its products through an established institutional supply chain, subject to each organization's CMS-approved implementation plan. Other hemp companies have publicly positioned products for the initiative.
MMJ does not allege that any supplier has violated the law. It contends these arrangements demonstrate that the federal program has created a real commercial market — one MMJ is excluded from because it chose the pathway the Administrator endorsed.
The Legal Challenge
MMJ International Holdings (搜索) et al are plaintiff-appellants in Smart Approaches to Marijuana v. Kennedy, No. 26-5205, pending in the U.S. Court of Appeals for the D.C. Circuit. The district court dismissed the action on May 22, 2026, holding that plaintiffs had not demonstrated an injury sufficient for Article III standing.
"CMS is telling Congress this program is important enough to protect because millions of Americans may benefit from it," Boise said. "The government cannot simultaneously tell a court that the same program is too insignificant to injure a company developing competing medicines. Both statements are being made by the same administration in the same month."
MMJ is separately among the petitioners challenging the April 2026 Marijuana Rescheduling Order in consolidated D.C. Circuit Nos. 26-1106, 26-1130 and 26-1136, contending the Attorney General extended Schedule III treatment — carrying potential relief from Internal Revenue Code Section 280E and expedited DEA registration — to marijuana handled under qualifying state licenses without FDA approval of the resulting products.
Calls for Transparency
MMJ has called on CMS, HHS and FDA to make public seven categories of information: every organization approved to implement the program and every product and manufacturer named in approved implementation plans; every supplier, distributor and purchasing organization furnishing products, along with amounts paid or committed; the scientific evidence supporting each approved product, dose and intended use; all FDA legal or regulatory analyses addressing these products' status under the Food, Drug, and Cosmetic Act; communications among CMS, FDA, the White House and commercial hemp companies concerning the program; the evidentiary basis for the $500 annual limit and the 3-milligram total-THC-per-serving ceiling; and the safeguards used to monitor adverse events, drug interactions, product variability and long-term exposure.
MMJ's Development Pipeline
MMJ is developing standardized oral cannabinoid medicines for Huntington's disease (搜索) and multiple sclerosis (搜索). Its investigational soft-gelatin capsule contains defined quantities of cannabidiol and tetrahydrocannabinol. The company has manufactured pharmaceutical-grade capsules, completed chemistry and stability work, maintained Investigational New Drug programs, received FDA Orphan Drug Designation, and operates a DEA-registered Schedule I analytical laboratory. MMJ's own federal bulk-manufacturer application, filed in December 2018 to support FDA-regulated pharmaceutical research, remains undecided after more than seven years.
"We approached FDA for formal approval. We are still waiting," Boise said. "MMJ is not asking for a shortcut. MMJ is asking why the federal government built one for everyone else. If FDA approval is the right way to move forward, it has to be the right way for every company — not only the ones without a faster option."