"The question before the Court is simple: Can CMS put cannabinoids into Medicare for reimbursement without FDA approval, without safety analysis, and without public rule making?" stated Duane Boise, CEO MMJ International Holdings.
WASHINGTON, D.C. / ACCESS Newswire / April 25, 2026 / A significant new filing submitted today in the U.S. District Court for the District of Columbia seeks an immediate injunction blocking the Centers for Medicare & Medicaid Services' controversial Substance Access Beneficiary Engagement Incentive (BEI) program, arguing the agency unlawfully created the first federal pathway allowing cannabinoid consumer products into Medicare without FDA approval or public rule making procedures.
The filing, submitted by Burke Law Group on behalf of multiple plaintiffs including MMJ International Holdings, directly challenges CMS's authority and asserts that the program causes ongoing competitive harm to FDA pathway drug developers.
The motion requests the Court:
preliminarily enjoin CMS from implementing the BEI program
stay the program pending judicial review
and deny the government's motion to dismiss the case
as detailed in the April 24 Reply Brief filed with the Court in Case No. 1:26-CV-01081-TNM.
Court Filing Asserts MMJ International Holdings Has Competitor Standing - A Critical Legal Threshold
The April 24 reply brief argues that MMJ International Holdings qualifies as a direct market competitor harmed by CMS's actions - a position that could determine whether the case proceeds past jurisdictional challenges.
According to the filing:
"Parties suffer constitutional injury in fact when agencies lift regulatory restrictions on their competitors or otherwise allow increased competition."
The brief explains that MMJ:
has invested more than $10 million
holds active Investigational New Drug (IND) submissions
possesses Orphan Drug Designation
maintains a DEA Schedule I analytical laboratory registration
and is therefore a current competitor in the cannabinoid therapeutics market, even with the FDA product final approval process continuing.
This argument directly rebuts the government's claim that pharmaceutical pathway developers cannot establish injury from CMS's hemp access program.
Filing Warns CMS Created "Federally Supported Pathway" for Non-Approved Cannabinoid Products
The plaintiffs' reply brief states that the BEI program fundamentally changed the regulatory landscape by introducing cannabinoid consumer products into Medicare populations previously reachable only through FDA-regulated therapeutic pathways.
According to the filing:
"Before the BEI, no such pathway existed."
The brief argues this shift:
floods the cannabinoid therapeutics market with non FDA approved products
disadvantages companies pursuing FDA authorization
and alters competition within the Medicare patient population
including patients targeted by MMJ's Huntington's disease and Multiple Sclerosis development programs.
Plaintiffs Argue CMS Violated Federal Rulemaking Requirements
The filing asserts that CMS adopted the BEI program:
without notice-and-comment rulemaking
without safety analysis
without a supporting administrative record
and without identifying responsible oversight authorities
despite imposing binding eligibility requirements and product specifications on participating providers.
The brief cites longstanding D.C. Circuit precedent holding agencies cannot:
"hide behind [their] authority to contract in order to evade the Administrative Procedure Act."
Court Asked to Block Distribution of THC-Containing Products Through Medicare
The filing further argues CMS authorized distribution of products containing up to 3 mg delta-9 THC per serving, which plaintiffs say may conflict with federal statutory limits and upcoming changes under the FY2026 Agriculture Appropriations Act establishing a 0.4 mg total THC container limit effective November 2026.
The plaintiffs contend that distributing products potentially inconsistent with federal law renders the program arbitrary and capricious under the Administrative Procedure Act.
Major Questions Doctrine Argument Raises Stakes of Litigation
The brief also invokes the Supreme Court's major questions doctrine, arguing CMS has never previously used Innovation Center authority under Section 1115A to distribute consumer cannabinoid products through Medicare.
According to the filing:
CMS "has pointed to no clear congressional authorization" for creating such a program.
If accepted by the Court, this argument could significantly limit CMS's ability to expand cannabinoid access through the demonstration model authority without explicit congressional approval.
Plaintiffs Warn of Irreparable Harm to FDA-Pathway Drug Development
The filing states that every day the BEI program remains active:
"unvalidated cannabinoid products gain market access in the Medicare population, undermining the commercial viability of the FDA-approved products MMJ is developing."
The plaintiffs argue this constitutes ongoing irreparable competitive injury justifying immediate judicial intervention.
Court Now Asked to Halt CMS Program Pending Review
The plaintiffs' motion requests the Court:
enjoin implementation of the BEI program
stay its effective date during litigation
deny dismissal of the case
and restore the regulatory status quo that existed prior to April 1, 2026
pending full judicial review.
A decision on preliminary relief could determine whether Medicare continues operating the first federally supported cannabinoid access pathway outside the FDA approval framework.
About MMJ International Holdings
MMJ International Holdings, Inc. is a pharmaceutical company developing plant-derived cannabinoid therapeutics for Huntington's disease and multiple sclerosis under active FDA Investigational New Drug programs and Orphan Drug designation. The company's regulatory strategy follows the FDA Botanical Drug Development Guidance and federal DEA research-registration framework.
Madison Hisey
MHisey@mmjih.com
203-231-8583
SOURCE: MMJ International Holdings
Related Documents:
- 2026.04.24 [Dkt 34] Reply ISO Motion for PI and Stay
View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/healthcare-and-pharmaceutical/group-seeking-court-order-to-halt-cms-medicare-thc-hemp-marijuana-pro-1161181
