CMS Continues Beneficiary Engagement Incentive for Hemp-Derived Products amid Federal Concerns

The Centers for Medicare & Medicaid Services (CMS) is continuing its Substance Access Beneficiary Engagement Incentive (BEI) program, distributing hemp-derived cannabinoid products to Medicare recipients, despite upcoming federal restrictions. This decision has sparked concerns regarding safety and regulatory compliance from both U.S. and European regulators.

Duane Boise, CEO of MMJ International Holdings, criticized a recent court decision permitting the program's progression without evaluating its legal standing. He pointed out the lack of safety or legality determinations for the products and questioned their alignment with congressional intent.

On November 12, 2025, Congress introduced Section 781 of the Continuing Appropriations and Extensions Act of 2026, impacting the federal hemp market by limiting hemp-derived cannabinoid products to 0.4 milligrams of total THC per container. This regulatory shift compels significant portions of the industry to meet the new standard by November 2026.

Earlier this year, the European Food Safety Authority (EFSA) raised safety concerns about a prominent hemp extract product due to incomplete toxicology data, adding pressure to U.S. market dynamics as CMS continues its program. A recent lawsuit against the continuation of the BEI program was dismissed on grounds of insufficient injury claims by the plaintiffs, with lead plaintiff Smart Approaches to Marijuana considering appeal options.

MMJ International Holdings, which focuses on FDA-regulated cannabinoid pharmaceuticals, has heavily invested in federal compliance, contrasting with the less rigorous oversight of the BEI program. The industry's discourse now centers on CMS's decision to distribute hemp-derived products without FDA approval amid legislative and international safety concerns, as stakeholders await further regulatory and judicial clarification.