The Centers for Medicare and Medicaid Services (CMS) will soon launch a pilot program Cover the costs of CBD products under certain federal health insurance plans for eligible patients. But the newly announced details of the effort indicate the policy could conflict with a separate law redefining hemp in a way that severely limits the amount of THC allowed.

CMS Administrator Mehmet Oz previously described the CBD coverage plan he is implementing in response to an executive order signed by President Donald Trump in December, which also directs the finalization of a federal rule to reorganize marijuana, saying the plan’s CBD components could be rolled out in April.

But as the agency prepares to offer cannabidiol coverage as part of the pilot program, it has set an initial limit of 3 milligrams of total THC (including delta-8, delta-9 and delta-10 THC, for example) per serving, first as Cannabis Wire. notify—that’s more than seven times the THC limit for hemp-derived cannabinoid products, as defined in the spending bill Trump signed last year.

The cannabis section of that agriculture-based spending bill limits total THC content to 0.4 milligrams per container. And that law, which takes effect in November, will effectively wipe out the market for edible cannabinoids, industry insiders say.

A CMS spokesperson told Cannabis Wire that the agency will “adjust its definition as required by law,” without clarifying how it arrived at the 3-milligram THC limit in the first place.

Bipartisan lawmakers and hemp industry advocates have it He pushed to delay the implementation of new hemp THC restrictions Trump signed it, but these efforts have not gained traction. An amendment on the matter was not accepted in the last House Committee’s markup of a new Farm Bill.

Marijuana Moment reached out to CMS to ask more about the THC policy dispute, but a representative was not immediately available.

The planned pilot program “specifically excludes respirable products,” the spokeswoman also said. And available “orally administered” CBD products would be subject to “state and local laws,” though that raises other questions given the complex patchwork of state-level hemp and cannabinoid policies.

In any case, the newly announced details about the yet-to-be-released rules for the pilot program come weeks after an executive at a hemp company working with CMS said the agency already has them. ended federal health insurance plans for cannabidiol.

“This pilot will help (the Food and Drug Administration, or FDA) move from uncertainty to a practical framework with clear dosing, risk reduction and clear manufacturing label expectations that end up rewarding responsible companies and ultimately protecting and serving the consumer,” said Jared Stanley, founder of cannabis company Charlotte’s Web.

“In terms of the population, it’s important to note in the memo that this is starting in a pilot, but it’s expected to expand beyond the pilot,” he said. “So that’s multiple signs that we’re hoping to see. And we’re very excited. It has amazing potential.”

Relatedly, a CMS spokesperson told Cannabis Wire that while he could not provide exact numbers on the number of patients who will be participating in the pilot program, those details will be released as they become available, and the agency will generally provide updates on the rollout “in the coming weeks.”

When asked about the state of CBD regulation last month, CMS directed Marijuana Moment to a website that describes the integration of hemp into a Beneficiary Engagement Incentive (BEI) program under the agency’s long-term ACO Enhanced Design (LEAD) Model.

“Substance Access BEI allows model participants to consult with their patients about the use of eligible hemp products,” the CMS page states. “Implementation of this BEI and any related distribution would be funded entirely at the participant’s expense; CMS would not cover the cost of these products. Additionally, CMS would have strict program integrity safeguards to ensure that these incentives do not result in program or patient abuse.”

“Substance access is only available to participants in states where BOTH eligible hemp products are considered legal,” it says.

While the broader rules for the CBD Medicare pilot program have not yet been released, the CMS website briefly outlines how it navigates hemp-related issues within the regulatory framework. LEADhas Accountability Accountable Organization (ACO) and Improving Oncology Modeling (EOM).

Oz, the CMS administrator, explained in December that the policy change “will make millions of Americans on Medicare eligible to receive CBD in April of next year, and for free, if their doctors recommend it.”

He added that the Medicare Advantage insurers contacted by CMS “also approve the use of CBD for the 34 million Americans they cover.”

One outstanding question is about coverage eligibility. As the administrator described in December, it would affect those 65 and older who are eligible for Medicare, but the exact conditions were not specified. There were repeated mentions of chronic pain, particularly in relation to cancer, but the CBD eligibility criteria may include additional conditions.

At the signing ceremony, Oz paid tribute to Howard Kessler, founder of The Commonwealth Project, who joined him. Trump shared a video about the benefits of cannabidiol for the elderly Truth Social last year and apparently pressured the president to reform to expand access to cannabis.

While CMS issued a previous final rule this past April specifically stipulating that marijuana, as well as CBD derived from federal law hemp, are ineligible For coverage of the Medicare Advantage program and other services, the agency is revising that policy.

CMS already announced some changes as part of a rulemaking process filed late last year, It affects “marketing and communications, drug coverage, enrollment processes, special needs plans and other programming areas.” for the insurance programs it oversees. One of these changes concerned the coverage of cannabidiol.

The proposed rule would change the regulations, which currently say that “cannabis products” cannot be covered. The policy would “prevent coverage of cannabis products that are illegal under applicable state or federal law, including the Food, Drug, and Cosmetic Act.” Because hemp and its derivatives like CBD are federally legal, the change suggests that patients in states where these products are legal can make valid insurance claims to pay for alternative treatment options, as long as the product is federally legal.

Meanwhile, following the White House’s announcement in December, Oz spoke to NewsNation about the policy change, responding to a question about the Trump administration’s aggressive efforts to stem the flow of other illegal drugs, particularly fentanyl, as the broad decision to re-regulate marijuana.

“We think they go hand in hand,” he said. “This is really research, specifically CBD, hemp-derived endocannabinoids (sic) – that Americans deserve to use them,” he said. “It’s hard to do some of that work, especially with medical marijuana. And this is not about legalizing marijuana.”

“There is no legalization language at all,” he added. “It’s a reprogramming of this product class to make it easier to research.”

The idea that marijuana, as currently defined as a Schedule I drug, has no medical value is “significantly wrong for marijuana,” he said, noting that the Food and Drug Administration (FDA) has approved some cannabis-based drugs for conditions like epilepsy that “work quite well.”

“It’s just a wrong place to put that belief that Schedule I should be,” he said. “Schedule III seemed to make sense to the president. He argued that it allows us to do research more easily.”

“We’re finding a way to make some of these products available to Medicare beneficiaries. And so within Medicare, we have the ability, for the first time, and today we’re making good on this promise to the president, to allow doctors to recommend hemp-derived CBD for, for example, cancer patients who are in a lot of pain.”

The administrator said surveys show that most seniors who take CBD for pain management find it beneficial, and the White House wants to “make it easier for patients to access it” and allow them to access the cannabinoid “at no charge” through the federal health insurance program.

Meanwhile, Oz took a different tone when he warned that last month “there will be consequences” as more Americans choose marijuana over alcohol– Including problems caused by “high dose hemp and CBD”.

In the background, the US Department of Health and Human Services (HHS) and the FDA has recently presented a proposed regulation on CBD enforcement and compliance With the White House Office of Management and Budget (OMB) and the Office of Information and Regulatory Affairs (OIRA). There has been speculation that the rule may be related to the CMS pilot program, but this has not been confirmed. And the proposal may be tied to Congress’s mandate for the FDA to produce a list of known cannabinoids ahead of the federal redefinition of hemp.

user photo Nanny Kimzy.

Farm Girl Greens launched in Auburn, New York in late 2019 as a vertical hydroponic leafy greens operation supplying restaurants and farmers markets. The business remained profitable due to changing sales channels, fluctuating grant funding and rising energy costs, but the financial model was becoming increasingly difficult to predict.

When New York legalized adult cannabis and implemented a micro-business licensing structure, the regulatory landscape changed. The subsequent pivot was not sudden, according to co-owner Abby Lepak, but rather the activation of a long-considered opportunity. “When we decided to start our hydroponic farm, we were always open to growing cannabis,” he explains. “At the time, cannabis wasn’t legal in New York state, so our initial business plan was focused on leafy greens.”

© Green farm girls
Farm Girl Greens grow room showing off ZipGrow mobile tower trellis under LED lighting

Market volatility and margin pressure
The farm planted the first seeds in November 2019. By March 2020, the restaurant and farmers market channels had either closed or switched to takeout. “Running a business in the early 2020s was a challenge for any small business owner,” says Lepak. “We were successful in the beginning because of the grocery store supply chain and consumers wanting to buy directly from farmers.”

Farm Girl Greens focused on weekly home deliveries through a distributor as well as its own logistics. As restaurants reopened, sales shifted to food service accounts, reducing margins compared to direct-to-consumer channels. “It was profitable but not so predictable,” says Lepa about the green phase.

An additional outlet was operated by a non-profit nonprofit that supplied food pantries at retail prices by paying subsidies rather than consumers. “The food was free to the consumer, but the funding was unpredictable and then dwindled.”
Utility costs added further pressure. Rising energy bills prompted the farm to build a grant-funded solar installation. The system remains in effect today. “New York state is seeing energy costs double from one month to the next right now,” Lepak says. “Not just for companies.” Profitable but subject to fluctuating demand, unstable funding streams and rising operating costs, the green model became more difficult to plan.

© Green farm girls

A microenterprise license changes the model
Legalization introduced another option. Farm Girl Greens obtained a Micro Business License from the Office of Cannabis Management, New York’s governing body for adult cannabis. “The emerging market of adult-use cannabis cultivation has a bright future,” says Lepak. “The Bureau of Cannabis Management has taken steps to prevent large growers from flooding the market. Because we are a small grower and a predominantly female-owned business, we have been able to take advantage of training and fees at reduced prices and sometimes at no cost.”

The license allows cultivation, processing, distribution and retailing under one structure. For now, the farm is cultivating and shaking the flowers, using a third-party processor to extract them, and selling wholesale to pharmacies. As an indoor micro-business, the production covers 3,500 square feet of space and processes 1,700 pounds of cannabis per year.

Different crop, different system
Change required new infrastructure. The ZipGrow tower system used for leafy greens has been replaced with a high-pressure aeroponic recirculation system designed by Current Culture, along with a vertical rack from Pipp Horticulture.

“The leafy greens in our ZipGrow system didn’t require as much space and had a shorter seed-to-harvest cycle,” says Lepak. At peak production, the farm harvested the equivalent of 1,500 heads of lettuce per week while planting another 1,500 seeds.

Indoor cannabis works on a longer cycle, usually between 90 and 100 days. With a flower room currently in operation, the farm expects five harvests a year at full production. A second flower room is planned. Once built, a staggered planting schedule would allow ten harvests per year.

© Green farm girls

Higher margins, higher limits
Per square foot, cannabis offers stronger margins than leafy greens, Lepak says. But regulatory costs and add-ons dampen this advantage. “We expect margins to increase as cannabis legalization and additional fees decrease. These fees are very close to being cost prohibitive.”

Compliance-related packaging requirements and limited access to banking continue to weigh on profitability. Job applications have also changed. Leafy greens required a steady weekly workforce to manage the cycles and distribution of perishable crops. Growing cannabis involves less daily handling, but requires more concentrated work during the harvest and processing periods.

© Green farm girls
A member of the Farm Girl Greens team transplants seedlings (left) and inside a Matrix Media ZipGrow tower channel (right)

Looking back
Despite the transition, Lepa says he would still start with green leaves. “I enjoyed learning the process of indoor growing and selling at farmers markets,” she says. “Being a grower that delivers product directly to a consumer was a joy for me.”

Farm Girl Greens is selling its ZipGrow tower inventory as it consolidates its cannabis growing operations. “We have a total of 630 towers and associated lights and are willing to sell 450 towers, 180 towers or all 630 together,” says Lepak. “The eight-foot towers are mounted in 21 racks of 30 units. Complete system purchase of all 630 towers includes additional climate control equipment at no additional cost: CO2 generator and vertical V-Flow fans.”

Those interested in buying towers can go directly to Lepak (email protected).

A video tour of the Farm Girl Greens farm setup

© Green farm girls
Complete design of the ZipGrow tower system inside the farm

For more information:
Green Farm Girls
Abby Lepak, co-owner
(email protected)
www.instagram.com/farmgirlgreens

Colorado lawmakers have rejected a bill that would have put a measure on the state’s November ballot that would have asked voters. increase taxes on marijuana and alcohol to support mental health treatment.

Following the recommendation of the bicameral Capital Development Committee (CDC) last week, members of the House Health and Human Services Committee on Wednesday defeated the legislation in a 7-6 vote by Senators Bob Marshall (D) and Judy Amabile (D).

“We’ve made our criminal system the default mental health system for people over 18. It’s been a travesty,” Marshall said Wednesday before the panel’s vote to reject his bill. “It’s been a known plague for years and years and years, and yet nothing is happening to fix the problem.

“At the end of the day, this is something that has to be done,” the sponsor said of HB 1301, which would raise taxes on substances and raise additional revenue to create a mental health fund overseen by the state Department of Human Services (DHS). “And if we don’t do it now, the problem will only get worse.”

If it had advanced in the Legislature, voters across the state would have decided to raise the state’s retail marijuana sales and excise tax by 0.42 percentage points on the November ballot. Taxes on alcohol would also rise for the first time in more than 30 years, at varying levels depending on the type of product.

“The bill requires the treasurer to transfer to the hospital support account created in the capital building fund an amount equal to the tax revenue obtained as a result of the bill,” the summary summarizes. measure he said DHS would be able to spend the funds “in order of priority,” starting with establishing a mental health institute in Aurora, then going toward the institute’s operational costs and a “long-term civil commitment facility” in Mesa County.

Under the amendments passed in committee on Wednesday, the tax increase on alcohol would be reduced slightly, but not for cannabis. The bill’s title was also revised in response to input from the state attorney general, and a fiscal note was added to the $14,000 in programmatic costs, which the sponsor said would come out of the general fund.

At last week’s CDC meeting, Rep. Tammy Story (D), the panel’s vice chairwoman, asked Marshall’s House bill sponsor how the proposal to raise marijuana taxes reconciles the fact that the state has seen a decline in cannabis sales and resulting revenue in recent years. Marshall said he appreciated the concerns, but had no plans to decriminalize cannabis.

“In looking back maybe a the sales the tax maybe be be better,” Marshall admitted Wednesday. “But is in the year has the title now—‘the tax good harmful substances’—and we put marijuana in the year there in has the suggestion of a couple of has sheriffs, simply to share it has pain, so to talk.”

Marijuana industry representatives have it criticize The bill’s marijuana tax provision is partly because the state already imposes significant taxes on cannabis sales compared to other states and products. Making it more expensive for consumers to buy marijuana from licensed dealers could also hurt efforts to stamp out the illegal market by drawing buyers to unlicensed sources that won’t generate tax dollars for the state.

In the meantime the state is expected to exceed $1 billion in marijuana sales by 2025, a milestone the governor announced in December.—tax revenue from cannabis sales has steadily declined over the past five years as more states have implemented legalization and intoxicating hemp products have grown in popularity. However, cannabis brings in more tax dollars than alcohol or cigarettes.

Adult marijuana is currently taxed at three levels in Colorado: a 15 percent excise tax, a 15 percent excise tax, and a general state sales tax of 2.9 percent. As one of the first states to legalize recreational marijuana, Colorado’s revenue from such sales “grew steadily over the first eight years of legalization to $424.4 million by 2020-21,” according to a state report released last month.

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Meanwhile, the Colorado House of Representatives sent a bill to the governor last week allow terminally ill patients to use medical marijuana in healthcare facilities such as hospitals. Advocates have been critical of the changes made throughout the legislative process; for example, arguing that hospitals would be right to do so. option– than mandate—The use of medical cannabis in their facilities fundamentally undermines the intention of the reform.

Gov. Jared Polis (D) also said last month his state did not have to join a lawsuit supporting a federal ban on the possession of guns by people who use marijuana that recently went before the US Supreme Court, and he personally opposes the state attorney general’s “legal position on this.”

user photo Brian Shamblen.