Feds Finalize New Rule Allowing Some Hemp Products As Medicare Advantage Benefits

Federal officials have finalized a rule that will allow coverage of some hemp products as specialized, non-primarily health-related benefits through Medicare Advantage (MA) plans.

In a filing set to be published in the Federal Register on Monday, the Centers for Medicare & Medicaid Services (CMS) is clarifying that certain cannabis products that are legal under both state and federal laws are eligible to be reimbursed under the Special Supplemental Benefits for the Chronically Ill (SSBCI) program.

Under a previous update to the program adopted in April 2025, CMS determined that all cannabis products are not eligible for coverage under certain health plans for chronically ill patients. But the new rule only prohibits coverage of “cannabis products that are illegal under applicable State or Federal law.”

The development is separate from a program CMS launched this week to allow Medicare coverage of hemp-derived CBD and THC products that meet certain requirements, with this one instead focusing on allowing MA organizations to offer hulled hemp seed, hemp seed protein powder and hemp seed oil as covered benefits.

Coverage under new policy is contingent on the Food and Drug Administration’s (FDA) determination that the products are generally recognized as safe (GRAS) and that they meet a standard on there being a “reasonable expectation of improving or maintaining the health or overall function” for SSBCI benefits.

“For example, there is evidence that hemp seed protein powder may offer nutritional benefits,” CMS said.

The agency’s filing notes that under the 2018 Farm Bill signed by President Donald Trump during his first term, hemp products with less than 0.3 percent delta-9 THC on a dry weight basis are legal under federal law but that a more recently approved change that’s set to take effect this November will recriminalize any products with more than 0.4 milligrams of total THC per container.

“Therefore, this regulation will allow MA organizations to offer hulled hemp seed, hemp seed protein powder, and hemp seed oil, consistent with FDA’s review of the GRAS notices, as SSBCI to qualifying enrollees, to the extent otherwise appropriate as SSBCI and under federal and applicable state law. Additionally, at the time of this rulemaking, any cannabis product with a delta-9 THC content above the 0.3 percent threshold is still considered marijuana, remains a Schedule I controlled substance, and therefore is illegal under federal law and would be subject to CMS’s prohibition. Barring subsequent legal changes, any product that does not comply with the amended definition of hemp after the November 12th, 2026 effective date will be a Schedule I controlled substance and therefore will be illegal under federal law and subject to CMS’s prohibition.”

The new rule, which was first proposed in November and is now being finalized, also clarifies that state laws that are more strict than federal law could narrow what types of products are eligible for coverage by MA organizations in their jurisdictions.

“The amended language also clarifies that MA organizations remain prohibited from covering any cannabis product, including any hemp-derived cannabis product, that is illegal under state law within their service area regardless of the product’s federal legal status,” it says.

The filing also contemplates the possible expansion of the types of products that could be able to be covered in the future.

“At the time of this rulemaking, there are only three products that are permissible under applicable state and federal law and therefore may be covered as SSBCI. Those products are hulled hemp seed, hemp seed protein powder, and hemp seed oil,” it says. “However, should additional products become allowable as the law continues to evolve, this regulation would allow MA plans in a subsequent plan year the option to increase their offerings without requiring additional rulemaking from CMS.”

“Therefore, should other cannabis-derived products become allowable as SSBCI due to changes in state or federal law, MA plans must wait until their next bid submission for the following plan year to add these items to their list of covered SSBCI,” the agency noted.

CMS also responded to a public comment about the potential impact of federal marijuana rescheduling under a still-ongoing process that Trump directed to be completed “in the most expeditious manner” in December.

“Should cannabis be rescheduled to Schedule III, this would change its status under the Controlled Substance Act,” CMS said. “However, rescheduling alone would not automatically make cannabis products allowable SSBCI unless the relevant products also meet other applicable State and Federal laws, including the” Federal Food, Drug, and Cosmetic Act.

The separate CMS hemp product coverage initiative rolled out this week is being challenged in a lawsuit filed by a coalition of anti-marijuana organizations. A federal judge denied their motion for a temporary restraining order to halt it from launching, but scheduled a hearing for April 20 on their separate request for a preliminary injunction.

Meanwhile, the White House Office of Management and Budget is holding a series of meetings this week and next week about an FDA CBD products enforcement policy.

Also this week, FDA issued guidance making clear that it does not intend to interfere with implementation of the Medicare hemp-derived products coverage plan.

North Carolina Governor Steps Up Push For Marijuana Legalization As State Commission Issues New Report

A governor-appointed cannabis commission in North Carolina has issued an interim report after holding months of meetings focused on the issue. The group is recommending that the state move away from a criminalization-based approach to cannabis and toward a system of “robust” regulations that provide for adults’ legal access to THC products.

The North Carolina Advisory Council on Cannabis, which Gov. Josh Stein (D) convened last year, says in the new document approved on Thursday that the current “absence of regulation for North Carolina’s intoxicating cannabis market raises numerous concerns,” noting that hemp products are readily available yet largely unregulated and that marijuana remains prohibited altogether in the state, even for medical use.

“North Carolina’s intoxicating cannabis market currently exists in a dangerous policy gap that is neither true prohibition nor meaningful regulation.”

“Compared to regulated marijuana frameworks in other states, this environment presents identifiable risks,” the report says. “While some operators voluntarily implement consumer protection protocols, these safeguards are not required under state law.”

Stein, for his part, thanked the group for its “expertise, hard work, and thoughtful deliberation” in a press release and reiterated his support for legalizing marijuana.

“Last year, I charged this group with developing a comprehensive solution to the unregulated sale of cannabis that is grounded in public health and public safety, with a special focus on keeping young people safe,” the governor said. “This report provides the General Assembly with guidance and makes clear that a well-regulated market, including both oversight and enforcement authority, is a safer market for our state.”

“Our state’s unregulated cannabis market today is the Wild West and is crying for order,” he said. “Let’s get this right. Let’s protect our kids and create a safe, legal, and well-regulated market for adults.”

The council’s report notes that North Carolina is “at a pivotal moment,” given that the state is one of only 10 that does not allow legal and regulated marijuana access for either recreational or medical use.

“In the absence of a recognized, regulated marijuana market, North Carolina has one of the largest illicit marijuana markets in the United States, with an estimated $3 billion spent on illegal marijuana in 2022, ranking second in the nation. Additionally, North Carolina’s current market for intoxicating hemp-derived cannabinoid products is robust. These products have proliferated across the state through retail storefronts, vape shops, convenience stores, and online vendors. Intoxicating hemp-derived cannabinoid products, often marketed as legal alternatives to marijuana, are being sold in an environment without any uniform standards for manufacturing, testing, labeling, packaging, or age verification, and absent any enforcement or oversight authority.”

Under the prohibition approach that the state currently has, the report notes that there is an absence of age restrictions, packaging rules, purchase limits, licensing requirements, zoning guidelines and supply chain oversight. There is also a lack of tax revenue that can be used to address any health and safety concerns associated with marijuana use and commerce.

Looking ahead, the interim report recommends that rather than construct separate frameworks for hemp and marijuana, the state should enact molecule-based regulation focused on THC itself, saying that “the plant source is irrelevant and should not drive different treatment when the intoxicating compound is the same.”

It also suggests that when choosing how to regulate THC and cannabis, North Carolina should enact “an adult access market with protections for medical consumers.”

The panel, however, “does not view a medical-only program as an effective interim step or compromise solution,” and the state should proceed to adult-use access immediately while considering the “availability of medical-consumer protections” as “an important component of a broader regulatory structure.”

“Under this framework, adults would be permitted to legally purchase, possess, and use cannabis through state-licensed retail outlets. An adult-use market provides the state with a full regulatory framework and the tools necessary to manage it responsibly. The recommended system also incorporates rigorous medical-grade safeguards, including low-THC product options, comprehensive testing standards, expanded product warnings, recall authority, and access to qualified medical consultation, among others. Importantly, this model would provide the most robust regulatory framework for the state, providing the oversight tools necessary to manage the industry responsibly while generating state revenue. It allows for structured licensing fees and tax revenue to support oversight, the development of clear and enforceable rules, sustained public health messaging grounded in prevention and education, and dedicated resources for compliance and enforcement. This recommendation provides a structure to reign in the rampant hemp market that exists today, while providing necessary guardrails for both public safety and public health.”

“Of all possible regulation models, an adult access model would bring the most revenue to the state, which could support public health education campaigns and enforcement efforts,” the advisory council recommended.

The report also noted problems that could be caused by the fact that the state is lagging behind its neighbors that are moving ahead with enacting marijuana policy reforms.

“If surrounding states adopt regulated cannabis programs while North Carolina does not, the state could effectively become a prohibition jurisdiction situated among regulated markets, a dynamic that may complicate enforcement and influence the flow of products and consumers across state lines,” the report said.

Because the council only has the ability to recommend policies and not to actually enact them, members put the onus on state lawmakers to do so.

“Ultimately, the authority to bring order to the unregulated, unsafe cannabis market rests with the General Assembly,” the report notes. “The question before policymakers—and this Council—is not whether intoxicating cannabinoid products will exist in the marketplace in North Carolina. They already do. Rather, the question is whether the General Assembly will allow intoxicating products to continue to be sold without enforceable state standards, or whether it will establish a regulatory system designed to protect public health and public safety.”

https://www.youtube.com/watch?v=5aQ-f-XXJVo

The advisory council was formed after Stein issued an executive order last year, and is comprised of legislators, law enforcement officials, agriculture industry stakeholders, health experts, tribal representatives, advocates and others charged with exploring possible regulatory models for adult-use marijuana and hemp.

The governor’s order said there’s a need for reform because the “current lack of regulation, including age, potency, and purity limitations, poses a threat to all North Carolinians, particularly our youth.” And “rather than allowing this unsafe and unregulated market to continue, smart and balanced regulation presents an opportunity not only to protect the health and well-being of our people, but also to generate revenue that can benefit our state.”

Members are tasked with developing and submitting initial recommendations on a “comprehensive cannabis policy, including any proposed legislation,” with a final report due by December 31 of this year.

The interim report approved this week says that the final document “will incorporate continued stakeholder engagement, data analysis, and policy development and will present a research-based and data-driven comprehensive framework intended to bring structure, accountability, and public confidence to a future North Carolina cannabis marketplace.”

In the meantime, the council is continuing its work with new subcommittees focused on regulatory structure, enforcement and criminal justice reform and revenue and federal compliance.

During his time as the state’s attorney general, Stein led a separate task force under then-Gov. Roy Cooper (D) that examined racial injustice issues and ultimately recommended decriminalizing marijuana and studying broader legalization in response to racially disparate enforcement trends.

In recent legislative sessions, multiple limited medical marijuana legalization bills advanced through the Senate, only to stall out in the House.

Meanwhile, a tribe in North Carolina, the Eastern Band of Cherokee Indians, launched the state’s first marijuana dispensary in 2024—despite the protests of certain Republican congressional lawmakers.

Photo courtesy of Philip Steffan.

FBI Says Agents Can Invest And Work In Hemp Companies But Not Marijuana Industry, Newly Declassified Memo Shows

FBI agents received specific guidance prohibiting them investing in marijuana companies—but not necessarily those that make hemp or CBD products—according to a 2022 memo that the agency released last week for reasons that are unclear.

The allowance for hemp investments and work contains an exception blocking involvement with companies whose packaging  “promotes marijuana”—including any depiction of a cannabis leaf, however.

The now-unclassified policy directive also details restrictions for agents who work or volunteer outside their roles at FBI, stipulating that they could not take employment opportunities “with any company cultivating, processing, or distributing marijuana, regardless of the legal status of marijuana under local, state, tribal or foreign law.”

For both the investment and employment guidance, there are carve-outs—with certain caveats—for products and businesses that deal with hemp or the non-intoxicating cannabinoid CBD, which were federally legalized under the 2018 Farm Bill during President Donald Trump’s first term.

The document states that FBI workers can “invest, without restriction, in companies that maintain a financial interest in the CBD industry” unless that interest involves CBD products containing more than 0.3 percent THC by dry weight, which is how federal law currently distinguishes between illegal marijuana and legal hemp. Agents also can’t invest in CBD businesses or products that promote marijuana for medical or recreational purposes.

“The determination of whether or not a product promotes marijuana depends on various circumstances, but may be indicated by the product (or advertising for the product) displaying words, images, or associations with marijuana. For example, a product depicting a marijuana leaf on its label is considered promotion of marijuana, and would therefore be impermissible. Employees must consult their [chief division counsel] or the [Office of Integrity and Compliance] to determine whether the company is promoting marijuana.”

Under the policy directive, FBI workers are also “prohibited from engaging in outside employment (or any other outside activity [such as volunteering]) with any company cultivating, processing, or distributing marijuana, regardless of the legal status of marijuana under local, state, tribal, or foreign law.”

FBI treats marijuana differently from hemp-derived CBD given its legalization under federal law. Workers who make a request to work or volunteer at a business associated with the manufacturing or distribution of cannabidiol products would need to use a specific reporting tool to obtain approval.

“Approving authorities must consider such requests on a case-by-case basis and must deny any request to engage in outside employment (or an outside activity) that could create an appearance of violating the law or violating ethical standards, or is otherwise incompatible with maintaining a security clearance. For example, an FBI employee’s request to work for or volunteer with a company producing a drink that contains 0.3 percent or less CBD, but depicts a marijuana leaf on the label, must be denied due to the appearance of promoting illegal drug use.”

That component of the directive appears to include a key error by referencing drinks containing up to 0.3 percent of CBD. That trace percentage is typically associated with THC, not CBD, when talking about federal hemp and marijuana policy. Hemp drinks with more than 0.3 percent CBD would typically be considered federally legal, unless they also happened to contain more than 0.3 percent THC.

Marijuana Moment reached out to FBI for comment, but a representative was not immediately available.

FBI also said in the guidance that workers’ requests to “work at a grocery store that sells products containing CBD (amongst other unrelated products) may be approved if all other applicable criteria” are met.

Workers who violate the policy “may be subject to disciplinary or administrative action, including suspension or revocation of security clearance,” the agency said.

Again, it’s unclear why FBI declassified this guidance at this point in time, or whether it remains in effect as written. But it’s possible it may need to be revisited in the near future given that the federal definition of hemp and its derivatives are set to become significantly more restrictive, effectively banning all consumable cannabinoid products, under a law Trump signed last year that takes effect in November.

Also in 2022, meanwhile, FBI announced that the recent use of marijuana—and even CBD—automatically disqualified people from working at the federal agency. People interested in joining FBI must have abstained from consuming cannabinoids, including the non-intoxicating kind, for at least a year before submitting an application.

That guidance didn’t include mention of another marijuana employment rule that FBI previously instituted that rendered applicants ineligible for a job at the agency if they’ve used marijuana more than 24 times after turning 18.

In general, FBI’s gradual loosening of its marijuana employment policies has been interpreted as a more practical decision, rather one that necessarily reflects shifting opinions on cannabis within the agency.

Then-FBI Director James Comey suggested in 2014 that he wanted to loosen the agency’s employment policies as it concerns marijuana, as potential skilled workers were being passed over due to the requirement.