The long and arduous journey to regulate cannabidiol (CBD) in Europe, which began in 2018 with the European Union’s classification of CBD as a ‘novel food’, is now playing out in the courtrooms of the United States.
A federal judge heard the oral arguments in Washington on 1 May 2026 in an important court case that will determine whether or not a US Government programme to integrate hemp-derived CBD in Medicare-funded healthcare should be stopped.
Smart Approaches to Marijuana, a longtime industry activist, argues that the initiative was forced without proper safety reviews, consultations with the public, or FDA oversight.
Charlotte’s Web is at the heart of this case. The market leader for US CBD has been trying to prove the safety of its products to the European Food Safety Authority since 2005.
CBD is being criticized in America for similar reasons. that have halted the regulatory process in the EU and in the UK, which, since Brexit, has come The United States is the closest country in terms of officially regulating CBD.
The program without the process
The Substance Access Beneficiary Engagement Incentive was published on the (Centres for Medicare & Medicaid Services) CMS website on 20 March 2026 with an effective date of 1 April. The Federal Register did not contain any information about the program, nor was there a notice of proposed rules.
CMS gave industry only 11-day notice about CBD.
Under physician supervision, the BEI permits participating Medicare providers, such as ACO REACH, Enhancing Oncology Model and ACO REACH, to provide patients with hemp-derived CBD product worth up to US$500 per year.
This was done under Section 1115A of Social Security Act. It is designed to evaluate payment and delivery model, but not to provide federally sanctioned consumer access.
SAM has three grounds to stop the action. CMS first violated Administrative Procedure Act (APA) by avoiding notice-and comment rulemaking. CMS could not avoid this procedural requirement by incorporating a substantive change into a participation contract.
Second, that the BEI is arbitrary and capricious, it reverses a CMS final rule from April 2025 that explicitly stated cannabis products ‘cannot be covered by Medicare Advantage organisations as they are illegal substances under federal law,’ does not explain the reversal, and operates in direct conflict with the incoming hemp ban’s 0.4mg per container THC ceiling, a limit the BEI’s 3mg per serving standard exceeds more than sevenfold.
Thirdly, the CMS exceeded its authority under Major Questions Doctrine as established in West Virginia v. EPAThe first time ever, federal approval was not required to access cannabis.
In addition to the US procedural laws, the complaint targets the safety of CBD and drags with it the industry in the same debate that has played out over Europe for eight years.
Charlotte’s Web first announced in December of 2025 its intent to become a BEI supplier, many months prior to any announcement. Co-founder Jared Stanley confirmed in February 2026 that the programme had been ‘internally finalised’ by CMS in the prior weeks.
The complaint alleges that the company ‘collaborated with CMS in shaping and finalising the BEI’, an opportunity that was not granted to the public.
On 31 March Judge Trevor N. McFadden rejected an initial temporary restraining orders, but he confirmed he’d consider the preliminary order after receiving briefing. The industry awaits a decision after the 1 May oral argument.
READ MORE…
‘Safety cannot be established’
Charlotte’s Web, likely the largest consumer CBD business on the planet, is now fighting this very same battle on multiple continents.
Charlotte’s Web applied to the EFSA for approval five years ago. At that time, European novel foods were in full swing.
Around 2019 or 2020, the European Commission began to receive a flood of CBD applications. In June 2022, EFSA halted its assessment due to persistent gaps in data regarding liver toxicity and neurodevelopmental effects. The agency determined that it was unable to establish whether CBD could be consumed by the general public and, until recently, remained silent.
In December 2025, EFSA updated its safety statement. For the first time it established a safe intake provisional of 2mg for a 70kg-adult, using an uncertainty factor (400) that was double the margin of safety. It also concluded that the safety of individuals below 25 could not be determined.
The following are some of the ways to get in touch with us. MEDCAN24 According to a report in February, this limit effectively renders the majority of commercial CBD products unviable within the EU. Epidyolex is the only CBD product that has been approved for sale in Europe. It’s a prescription medication used to treat certain forms of epilepsy.
Charlotte Web’s case, which was submitted to EFSA back in March of 2021, finally received a ruling on the 4th March, 2026. This resulted in disappointing news for CBD.
‘The safety of the NF cannot be established,’ the Panel stated in its opinion, published in the EFSA Journal.
According to EFSA between 20 and 30 percent of the weight of the product remained uncharacterised. Stability and toxicological tests were conducted using a hemp-extract produced by a different method, the isopropanol extract, as opposed to the CO2 extraction that Charlotte’s Web wanted to use.
The Panel found that the material used for testing was not representative. The Panel concluded that no human intervention studies had been submitted and that the allergenicity was not known.
Charlotte’s Web has a complete dossier and isn’t a tiny operator. It is the market leader in US CBD, a company that has spent years advocating for federal regulation and positions itself, in its own words, as advancing ‘safe, high-quality, science-backed hemp options.’ EFSA’s ruling doesn’t say that the product is harmful. The company claims that the necessary evidence for proving its safety has never been provided.
CMS released the BEI 16 days after EFSA’s conclusion. On the same day, Charlotte’s Web issued a press release welcoming it as ‘science-driven policymaking that prioritises consumer safety.’ It was noted that the EFSA decision had not been mentioned.
The UK, meanwhile, has followed its own course post-Brexit. The FSA novel food programme, which has been running for five years with 15 safety evaluations that were positive, produced no final approvals. The FSA has zero final approvals after five years of the novel food programme. MEDCAN24 In March it was reported that only three applications – RP07, (Pureis), and RP350, (Cannaray), (EIHA Consortium) – had a chance to be approved by the ministerial before the SPS agreement took over. Most of the positively evaluated applications will never be implemented.
Charlotte’s Web, through its UK distributor Savage Cabbage and dossiers RP230 & RP231, appeared on FSA’s Public List in 2022. According to reports at the time in March 2025 58 of Charlotte’s Web products were taken off the public list. The reasons for this were kept secret.
After safety assessments for the products were stalled in Europe, and UK, this company now fights a familiar battle against the FDA who has already rejected their New Dietary Ingredient notifications in 2021.
EFSA failed to prove safety in the EU. The UK removed the product without any explanation. In the US the FDA has rejected their notification for a New Dietary Ingredient in 2021. Charlotte’s Web is now in a position to capitalize on the BEI, as it represents the biggest commercial opportunity for Charlotte’s Web since those previous doors were closed.
Charlotte’s Web’s results for the full year of 2025, which were filed by the company on 31 March, 2026 (the same day that Judge McFadden refused the temporary restraining orders), showed revenue of US$49.9 against a loss of US$20.3, and cash reserves at US$8. Million, a drop from US$22.6 millions a year ago. This company has a deficit of US$331.3million. The company raised US$10 million from British American Tobacco specifically, in its own words, ‘to support the Company’s participation in the anticipated CMMI Medicare pilot programme.’
CEO Bill Morachnick described the BEI as ‘a landmark breakthrough’ and positioned it as the gateway to a market of approximately 67 million Medicare beneficiaries.
Different arguments in the same setting
Charlotte’s Web experience isn’t unique. But it’s a good example of what the US may be headed for in terms of regulatory chaos.
The same procedure has been followed by hundreds of businesses in both the EU and UK with similar results.
EFSA’s conclusion that Charlotte’s Web’s product’s safety ‘cannot be established’ is not a finding that the product is dangerous. The regulator has determined that there were not enough data available to make a decision.
In controlled settings, short-term studies have shown that CBD pharmaceutical grade in moderate and high dosages does not cause acute liver toxicity.
The safety concerns cited in court by EFSA as well as the FSA are primarily related to exposure over a long period of time in the population at large, to drug interactions among people taking multiple medications and to effects on the most vulnerable, especially the young and old.
Epidyolex is the only CBD approved product within the EU. It demonstrates CBD’s ability to meet safety regulations, however, it can only be done under the pharmaceutical path, which includes full characterization of the drug, standardised dosage, and safety information for humans. Charlotte’s Web’s DeFloria subsidiary is following exactly the same path for AJA001 which is a cannabinoid-based treatment for Autism Spectrum Disorder. AJA001 cleared phase 1 and should enter Phase2 trials by mid-2026.
CBD is safe, but the problem with regulation is that it has not been established. The problem is not that CBD is unsafe, but rather the fact that the market for consumer supplements was built around a product with a population-level safety at commercial doses which hasn’t been proven by regulators. The EFSA in 2022 identified a gap of evidence which it has been unable to fill. Now, the same evidentiary issue is being brought before a Washington federal judge, under a slightly different legal structure.