Before dismissing the case on standing, Judge McFadden warned the government from the bench that the outcome “is not going to go well for the government on remand” if he got the threshold question wrong. That appeal is now scheduled.

WASHINGTON, D.C. / ACCESS Newswire / August 27, 2026 / The U.S. Court of Appeals for the District of Columbia Circuit has entered a briefing schedule in Smart Approaches to Marijuana, et al. v. Kennedy, No. 26-5205, the appeal challenging the Centers for Medicare & Medicaid Services’ Substance Access Beneficiary Engagement Incentive. MMJ International Holdings, Inc. and its subsidiaries are among the appellants.

Entered on the court’s own motion August 26, 2026:

  • Appellants’ Brief – October 5, 2026

  • Appellees’ Brief – November 4, 2026

  • Reply Brief – November 25, 2026

  • Deferred Appendix – December 2, 2026

  • Final Briefs – December 16, 2026

The order directs that all issues be raised in the opening brief, and the court has advised that oral argument will be scheduled separately.

What the district court decided – and what it did not

On May 22, 2026, U.S. District Judge Trevor N. McFadden dismissed the case for lack of subject-matter jurisdiction. He did not hold that CMS acted lawfully.

“But the Court need not address those question[s] to resolve this dispute. Plaintiffs, though numerous, have not established standing to bring this case. Each claims an injury too abstract or too remote to open the courtroom doors.”

The opinion expressly reserved the substantive questions. In footnote 8, the court stated it “does not decide whether … CMS may implement the BEI without notice-and-comment,” calling that “a merits question,” and likewise did not address “whether Plaintiffs fall within a statute’s zone of interests and thus have a cause of action.”

In footnote 7, the court noted that having found MMJ was not a current competitor, it “need not address other questions competitor standing raises, such as whether there is sufficient market overlap” or whether the competition “adversely affect[s]” MMJ’s “bottom line.”

Whether CMS lawfully created a federal pathway for hemp-derived cannabinoid products without notice-and-comment rulemaking has never been decided by any court.

What the judge told the government from the bench

The May 1 hearing transcript adds context. Judge McFadden asked government counsel Matthew Zorn whether MMJ was the plaintiffs’ strongest candidate for standing. Zorn answered:

“In the abstract, yes. But based on the facts they’ve presented to the Court, no.”

The government thus did not dispute that competitor standing can fit a company in MMJ’s position. Its objection was to the record MMJ had assembled.

Later in the argument, the judge put a direct question to the government about resting on standing rather than its other threshold defenses:

“I mean, recognizing, if I rule for you, Plaintiffs appeal me and they say, you know, McFadden screwed up. From the threshold here, there was standing. I mean, this is not going to go well for the government on remand if you’ve kind of led me up the garden path on the very first hit. I mean, is that the – do you see that as your best argument here? Or is it really more that this is just not even – it’s not statutorily reviewable?”

The judge was describing what appellants would argue on appeal, not predicting how the D.C. Circuit would rule. But the scenario he raised from the bench is now the posture of the case.

MMJ’s position: compliance became the reason it was kept out

The district court concluded MMJ was not a “direct and current competitor” because it “has no product on the Medicare-beneficiary market and no sense of when it may.”

MMJ has pursued cannabinoid medicine through the FDA botanical drug development pathway – two Investigational New Drug files, Orphan Drug Designation for Huntington’s disease, a DEA-inspected Schedule I analytical laboratory, chemistry and manufacturing controls, stability testing, and a standardized final dosage form of 5 milligrams CBD and 2.5 milligrams THC per soft-gel capsule.

MMJ is not on the market because federal law does not permit it to be. Its INDs remain under Full Clinical Hold, and its December 2018 DEA manufacturing application remains unresolved after more than seven years.

“No court has ruled that CMS followed the law. A court ruled that we were not allowed to ask,” said Duane Boise, Chief Executive Officer of MMJ International Holdings. “We were told we are not a competitor because we have no product on the market. We have no product on the market because we followed the federal process. That is the question we are putting to the D.C. Circuit.”

What is and is not at stake

Reversal would not establish that CMS violated the law. It would return the case for the merits questions the district court never reached – CMS’s statutory authority, the process used to adopt the BEI, and the substantive Administrative Procedure Act claims.

If a company that completed the federal drug-development requirements lacks standing to challenge a federal program extending Medicare infrastructure to products that completed none of them, it is not obvious who would have standing to seek review.

Briefing concludes December 16, 2026. MMJ makes no prediction concerning the outcome.

About MMJ International Holdings, Inc.

MMJ International Holdings, Inc. is a privately held pharmaceutical company developing standardized cannabinoid-based investigational medicines through federal pathways administered by FDA and DEA. MMJ holds two Investigational New Drug files with FDA and Orphan Drug Designation for its Huntington’s disease program. MMJ BioPharma Labs holds a DEA Schedule I analytical-laboratory registration. MMJ BioPharma Cultivation has a pending DEA bulk-manufacturing application. MMJ’s investigational programs concern potential treatments for Huntington’s disease and multiple sclerosis.

CONTACT:
Madison Hisey
MHisey@mmjih.com
203-231-8583

CAUTIONARY STATEMENT. Quotations from the district court are taken from the Memorandum Opinion issued May 22, 2026 and from the certified transcript of the May 1, 2026 hearing in Smart Approaches to Marijuana v. Kennedy, No. 1:26-cv-01081-TNM (D.D.C.). The briefing schedule is taken from the order entered August 26, 2026 in No. 26-5205 (D.C. Cir.). Readers are encouraged to consult those documents. Statements by the district judge quoted here were made in the course of oral argument and reflect questions posed to counsel; they are not findings, and nothing in this release should be read as indicating how the district court or the court of appeals will resolve any issue. The district court dismissed for lack of subject-matter jurisdiction and did not reach the merits of any claim; nothing here should be interpreted as a judicial determination that CMS acted unlawfully. MMJ’s descriptions of the litigation reflect its position as an appellant, and no outcome is predicted or implied. MMJ’s product candidates are investigational, have not been approved by FDA and remain subject to a Full Clinical Hold; no clinical trials have been completed and no conclusions concerning safety or efficacy may be drawn. There can be no assurance that FDA will lift any clinical hold, that DEA will act upon MMJ’s pending registration application, or that any court will grant the relief sought. MMJ is also a petitioner in federal litigation concerning the April 2026 marijuana rescheduling order. Nothing herein constitutes an offer to sell or a solicitation of an offer to purchase any security.

SOURCE: MMJ International Holdings

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