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.
On 1 May 2026, a federal judge in Washington heard oral argument in a pivotal court case set to determine whether a US government programme to introduce hemp-derived CBD into Medicare-funded care should be halted.
The plaintiffs, long-time cannabis industry agitators Smart Approaches to Marijuana (SAM), argue that this initiative has been forced through without a proper safety review, public consultation, or Federal Drug Administration (FDA) oversight.
At the centre of the case is Charlotte’s Web, the market leader in US CBD, which has spent five years attempting to demonstrate its products’ safety to the European Food Safety Authority (EFSA), while reportedly helping design the US programme now under legal challenge.
Arguments now being levelled against CBD in the US closely mirror those that have halted the regulatory process in the EU and in the UK, which, since Brexit, has come closest of any country to officially regulating CBD products.
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. No notice of proposed rulemaking was issued, no public comment was solicited, and the programme did not appear in the Federal Register.
The CMS gave the industry just 11 days’ notice of the introduction of CBD.
The BEI allows participating providers in selected Medicare models, including ACO REACH and the Enhancing Oncology Model, to offer patients up to US$500 of hemp-derived CBD products per year under physician direction.
It was promulgated under Section 1115A of the Social Security Act, a provision designed to test payment and delivery models, not, the complaint argues, to create federally sanctioned access to specific consumer products.
SAM’s complaint raises three legal grounds for halting it. First, that CMS violated the Administrative Procedure Act by bypassing notice-and-comment rulemaking, a procedural requirement the agency cannot avoid by embedding a substantive policy change in a participation agreement.
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.
Third, that CMS exceeded its statutory authority under the Major Questions Doctrine established in West Virginia v. EPA, creating federally sanctioned access to cannabis for the first time in history without clear congressional authorisation.
Beyond the procedural details of US law, the complaint aims at the evidence base supporting CBD’s safety, and with it drags the industry into the same battle that’s been playing out across Europe for the last eight years.
Charlotte’s Web announced its intention to participate as a BEI provider in December 2025, months before any public 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.
Judge Trevor N. McFadden denied an initial temporary restraining order on 31 March, but confirmed he would consider the preliminary injunction upon completion of briefing. Oral argument was heard on 1 May, and the industry is eagerly awaiting a ruling.
Charlotte’s Web, likely the largest consumer CBD business on the planet, is now fighting this very same battle on multiple continents.
Five years ago, when the European novel food approval process was in full swing, Charlotte’s Web filed its application to sell a carbon dioxide CBD extract as a novel food with EFSA.
The novel foods process for CBD began in earnest around 2019 and 2020, as applications flooded into the European Commission. In June 2022, EFSA suspended its assessments, citing persistent data gaps around liver toxicity, reproductive effects, neurodevelopmental impacts and drug interactions. The agency concluded it could not establish that CBD was safe for general consumption, and until late last year remain silent on the issue.
In December 2025, EFSA adopted an updated safety statement that, for the first time, established a provisional safe intake of 2mg per day for a 70kg adult, applying an uncertainty factor of 400, double the standard margin, while concluding that safety could not be established for individuals under 25.
As Business of Cannabis reported in February, the limit renders most commercial CBD products effectively unviable in the EU. The only authorised CBD product on the European market remains Epidyolex, a prescription medicine for specific forms of epilepsy.
Charlotte Web’s dossier, submitted in March 2021, was finally ruled upon by EFSA on March 04, 2026, with disappointing results for the CBD giant.
‘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% of the product by weight remained uncharacterised. The stability and toxicological studies submitted had been conducted on a hemp extract produced through a different manufacturing process, isopropanol extraction, rather than the CO2 extraction used for the product Charlotte’s Web was seeking to market.
The Panel concluded the test material was not representative of the product under assessment. No human intervention studies were submitted, and the allergenicity of the product was unknown.
Charlotte’s Web is not a small operator with an incomplete dossier. 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.’ The EFSA ruling does not say its product is dangerous. It says the evidence to establish its safety was never provided.
Sixteen days after EFSA adopted that conclusion, CMS published the BEI. On the same day, Charlotte’s Web issued a press release welcoming it as ‘science-driven policymaking that prioritises consumer safety.’ The EFSA ruling was not mentioned.
Meanwhile, the UK has pursued its own path post-Brexit. After five years and 15 positive safety assessments, the FSA’s novel foods programme has produced zero final authorisations. As Business of Cannabis reported in March, just three applications, RP07 (Pureis), RP350 (Cannaray) and RP427 (EIHA Consortium), retain any realistic prospect of ministerial approval before the SPS agreement overtakes the process entirely. The majority of the 15 positively assessed applications may never proceed.
Charlotte’s Web appeared on the FSA’s public list from 2022, via its UK distributor Savage Cabbage, under dossiers RP230 and RP231. In March 2025, as reported at the time, 58 of its products were removed from that list, and the reasons were not made public.
With safety assessments for its products stalled in Europe and the UK, the company is now fighting this familiar battle with the FDA, which already rejected its New Dietary Ingredient notification in 2021.
In the EU, EFSA could not establish safety. In the UK, removed without explanation. In the US, the FDA rejected its New Dietary Ingredient notification in 2021. The BEI represents Charlotte’s Web’s most significant commercial opportunity since each of those doors closed.
The company’s full year 2025 results, filed on 31 March 2026, the same day Judge McFadden denied the temporary restraining order, Charlotte’s Web reported revenue of US$49.9 million against an operating loss of US$20.3 million and cash reserves of US$8 million, down from US$22.6 million a year earlier. Its accumulated deficit stands at US$331.3 million. 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.
Charlotte’s Web’s experience is far from unique, but an illustrative case study of the regulatory swamp that the US is likely heading into.
Hundreds of companies have attempted to navigate the same process in the EU and the UK, with similar outcomes.
EFSA’s conclusion that Charlotte’s Web’s product’s safety ‘cannot be established’ is not a finding that the product is dangerous. It is a finding that the data to determine one way or the other was, according to the regulator, not provided.
Short-term clinical studies, including the MedCan trials we covered in February, have found that moderate to high doses of pharmaceutical-grade CBD do not trigger acute hepatotoxicity in supervised settings.
The safety concerns cited by EFSA, the FSA and by the plaintiffs in the US court challenge relate primarily to long-term exposure in the general population, drug interactions in people on concurrent medication, and effects on vulnerable groups, including younger adults and the elderly, questions that regulators across the globe have so far decided there is insufficient evidence to answer.
The sole authorised CBD product in the EU, Epidyolex, demonstrates that CBD can meet regulatory safety standards, but only under the pharmaceutical pathway, with full characterisation of the drug substance, standardised dosing, and human safety data. Charlotte’s Web’s own subsidiary DeFloria is pursuing exactly that pathway for AJA001, a cannabinoid treatment for autism spectrum disorder, which has cleared Phase 1 and is expected to enter Phase 2 trials in mid-2026.
The regulatory problem is not that CBD is unsafe. It is that the consumer supplement market has been built on a product whose population-level safety profile at commercial doses has not been established by the methods regulators require. That is the evidentiary gap EFSA identified in 2022, which has not been able to close, and that is now, in a different legal form, before a federal judge in Washington.
The post America’s CBD Industry Now Faces Same Evidential Battle Europe Has Been Fighting for 8 Years appeared first on Business of Cannabis.
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On 1 May 2026, a federal judge in Washington heard oral argument in a pivotal court case set to determine whether a US government programme to introduce hemp-derived CBD into Medicare-funded care should be halted.
The plaintiffs, long-time cannabis industry agitators Smart Approaches to Marijuana (SAM), argue that this initiative has been forced through without a proper safety review, public consultation, or Federal Drug Administration (FDA) oversight.
At the centre of the case is Charlotte’s Web, the market leader in US CBD, which has spent five years attempting to demonstrate its products’ safety to the European Food Safety Authority (EFSA), while reportedly helping design the US programme now under legal challenge.
Arguments now being levelled against CBD in the US closely mirror those that have halted the regulatory process in the EU and in the UK, which, since Brexit, has come closest of any country to officially regulating CBD products.
A programme without a 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. No notice of proposed rulemaking was issued, no public comment was solicited, and the programme did not appear in the Federal Register.
The CMS gave the industry just 11 days’ notice of the introduction of CBD.
The BEI allows participating providers in selected Medicare models, including ACO REACH and the Enhancing Oncology Model, to offer patients up to US$500 of hemp-derived CBD products per year under physician direction.
It was promulgated under Section 1115A of the Social Security Act, a provision designed to test payment and delivery models, not, the complaint argues, to create federally sanctioned access to specific consumer products.
SAM’s complaint raises three legal grounds for halting it. First, that CMS violated the Administrative Procedure Act by bypassing notice-and-comment rulemaking, a procedural requirement the agency cannot avoid by embedding a substantive policy change in a participation agreement.
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.
Third, that CMS exceeded its statutory authority under the Major Questions Doctrine established in West Virginia v. EPA, creating federally sanctioned access to cannabis for the first time in history without clear congressional authorisation.
Beyond the procedural details of US law, the complaint aims at the evidence base supporting CBD’s safety, and with it drags the industry into the same battle that’s been playing out across Europe for the last eight years.
Charlotte’s Web announced its intention to participate as a BEI provider in December 2025, months before any public 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.
Judge Trevor N. McFadden denied an initial temporary restraining order on 31 March, but confirmed he would consider the preliminary injunction upon completion of briefing. Oral argument was heard on 1 May, and the industry is eagerly awaiting a ruling.
READ MORE…
America’s CBD Industry Now Faces Same Evidential Battle Europe Has Been Fighting for 8 Years
The War on Europe’s Legal Hemp Industry
Clinical Evidence vs. Food Law: Europe’s CBD Dilemma
‘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.
Five years ago, when the European novel food approval process was in full swing, Charlotte’s Web filed its application to sell a carbon dioxide CBD extract as a novel food with EFSA.
The novel foods process for CBD began in earnest around 2019 and 2020, as applications flooded into the European Commission. In June 2022, EFSA suspended its assessments, citing persistent data gaps around liver toxicity, reproductive effects, neurodevelopmental impacts and drug interactions. The agency concluded it could not establish that CBD was safe for general consumption, and until late last year remain silent on the issue.
In December 2025, EFSA adopted an updated safety statement that, for the first time, established a provisional safe intake of 2mg per day for a 70kg adult, applying an uncertainty factor of 400, double the standard margin, while concluding that safety could not be established for individuals under 25.
As Business of Cannabis reported in February, the limit renders most commercial CBD products effectively unviable in the EU. The only authorised CBD product on the European market remains Epidyolex, a prescription medicine for specific forms of epilepsy.
Charlotte Web’s dossier, submitted in March 2021, was finally ruled upon by EFSA on March 04, 2026, with disappointing results for the CBD giant.
‘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% of the product by weight remained uncharacterised. The stability and toxicological studies submitted had been conducted on a hemp extract produced through a different manufacturing process, isopropanol extraction, rather than the CO2 extraction used for the product Charlotte’s Web was seeking to market.
The Panel concluded the test material was not representative of the product under assessment. No human intervention studies were submitted, and the allergenicity of the product was unknown.
Charlotte’s Web is not a small operator with an incomplete dossier. 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.’ The EFSA ruling does not say its product is dangerous. It says the evidence to establish its safety was never provided.
Sixteen days after EFSA adopted that conclusion, CMS published the BEI. On the same day, Charlotte’s Web issued a press release welcoming it as ‘science-driven policymaking that prioritises consumer safety.’ The EFSA ruling was not mentioned.
Meanwhile, the UK has pursued its own path post-Brexit. After five years and 15 positive safety assessments, the FSA’s novel foods programme has produced zero final authorisations. As Business of Cannabis reported in March, just three applications, RP07 (Pureis), RP350 (Cannaray) and RP427 (EIHA Consortium), retain any realistic prospect of ministerial approval before the SPS agreement overtakes the process entirely. The majority of the 15 positively assessed applications may never proceed.
Charlotte’s Web appeared on the FSA’s public list from 2022, via its UK distributor Savage Cabbage, under dossiers RP230 and RP231. In March 2025, as reported at the time, 58 of its products were removed from that list, and the reasons were not made public.
With safety assessments for its products stalled in Europe and the UK, the company is now fighting this familiar battle with the FDA, which already rejected its New Dietary Ingredient notification in 2021.
In the EU, EFSA could not establish safety. In the UK, removed without explanation. In the US, the FDA rejected its New Dietary Ingredient notification in 2021. The BEI represents Charlotte’s Web’s most significant commercial opportunity since each of those doors closed.
The company’s full year 2025 results, filed on 31 March 2026, the same day Judge McFadden denied the temporary restraining order, Charlotte’s Web reported revenue of US$49.9 million against an operating loss of US$20.3 million and cash reserves of US$8 million, down from US$22.6 million a year earlier. Its accumulated deficit stands at US$331.3 million. 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.
Same arguments, different setting
Charlotte’s Web’s experience is far from unique, but an illustrative case study of the regulatory swamp that the US is likely heading into.
Hundreds of companies have attempted to navigate the same process in the EU and the UK, with similar outcomes.
EFSA’s conclusion that Charlotte’s Web’s product’s safety ‘cannot be established’ is not a finding that the product is dangerous. It is a finding that the data to determine one way or the other was, according to the regulator, not provided.
Short-term clinical studies, including the MedCan trials we covered in February, have found that moderate to high doses of pharmaceutical-grade CBD do not trigger acute hepatotoxicity in supervised settings.
The safety concerns cited by EFSA, the FSA and by the plaintiffs in the US court challenge relate primarily to long-term exposure in the general population, drug interactions in people on concurrent medication, and effects on vulnerable groups, including younger adults and the elderly, questions that regulators across the globe have so far decided there is insufficient evidence to answer.
The sole authorised CBD product in the EU, Epidyolex, demonstrates that CBD can meet regulatory safety standards, but only under the pharmaceutical pathway, with full characterisation of the drug substance, standardised dosing, and human safety data. Charlotte’s Web’s own subsidiary DeFloria is pursuing exactly that pathway for AJA001, a cannabinoid treatment for autism spectrum disorder, which has cleared Phase 1 and is expected to enter Phase 2 trials in mid-2026.
The regulatory problem is not that CBD is unsafe. It is that the consumer supplement market has been built on a product whose population-level safety profile at commercial doses has not been established by the methods regulators require. That is the evidentiary gap EFSA identified in 2022, which has not been able to close, and that is now, in a different legal form, before a federal judge in Washington.
The post America’s CBD Industry Now Faces Same Evidential Battle Europe Has Been Fighting for 8 Years appeared first on Business of Cannabis.
Continue reading...
