On November 25, 2025, CMS released its Contract Year 2027 Medicare Advantage (MA) and Part D proposed rule, a 465-page regulation that overhauls quality measures, enrollment rules and benefit design for 2027. Buried in that rule is a key change to how Medicare Advantage plans handle cannabis-related products.

Right now, CMS regulations broadly say that “cannabis products” cannot be covered as supplemental benefits under MA plans. An earlier rule for 2026 explicitly excluded both marijuana and hemp-derived CBD from coverage, even when hemp was federally legal. MORE ABOUT HERE: Marijuana Moment

The new proposal narrows that blanket exclusion. CMS says it wants to:

“state more precisely that cannabis products that are illegal under applicable State or Federal law, including the Federal Food, Drug, and Cosmetic Act, are not allowable” as special supplemental benefits for the chronically ill (SSBCI). MORE ABOUT HERE: Centers for Medicare & Medicaid Services

In plain English:

• Instead of banning all cannabis products,
• CMS would ban only products that are illegal under state or federal law (including FDA rules).
• That potentially opens the door for some hemp-derived products – and possibly certain CBD formulations – where they are clearly legal.

CMS also explicitly notes that hulled hemp seed, hemp seed protein powder and hemp seed oil can be covered because FDA already treats them as “generally recognized as safe” (GRAS) ingredients. MORE ABOUT: MJBizDaily

A pilot CBD program for seniors

Separate reporting from The Marijuana Herald shows that the same rule includes a pilot program to evaluate CBD treatments for seniors, described in the Federal Register proposal scheduled for official publication on November 28. MORE ABOUT: The Marijuana Herald

According to that summary:

• The CBD pilot would be part of the 2027 MA and Part D changes.
• Medicare would test CBD in real-world clinical settings, tracking safety, dosing consistency, product quality and patient outcomes.
• CMS flags concerns about variable potency and poor labeling in commercial CBD products, signaling that the pilot would likely focus on FDA-regulated or pharmaceutically manufactured formulations rather than the entire over-the-counter CBD market.
• If finalized, the pilot would launch with the 2027 plan year, and CMS is accepting comments on the rule through January 26, 2026.

So in addition to the rule tweak about what’s “allowable,” CMS is clearly positioning CBD as something it wants to study and structure, not just casually cover.

How this fits with the politics around CBD and Medicare

Marijuana Moment reports that this shift comes shortly after HHS Secretary Robert F. Kennedy Jr. met with Howard Kessler of the Commonwealth Project, which produced a pro-CBD video that former President Donald Trump shared on Truth Social. That video specifically called for Medicare to cover CBD for seniors and framed it as a major health initiative.

The CMS notice is therefore both a policy move and a political signal:

• It softens the federal stance that lumped legal hemp-derived CBD together with illegal marijuana.
• It acknowledges the growing demand among seniors for non-opioid pain and wellness options, which CMS itself notes as part of its rationale for evaluating CBD.

At the same time, the rule is still firmly anchored to federal legality and FDA rules, which limits how far it can go without broader federal cannabis reform.

Will Medicare really pay for CBD oil?

Here’s where expectations need to be carefully managed.

1. The rule is only proposed, not final.
   CMS has opened a 60-day public comment period after Federal Register publication; only after reviewing comments will it decide what to finalize for 2027.
2. Coverage is optional and plan-specific.
   The change mainly affects Medicare Advantage and Part D plans, not traditional fee-for-service Medicare. Plans may choose to offer certain hemp-derived benefits as SSBCI or under drug coverage, but they are not required to do so.
3. CBD itself remains in a regulatory gray zone.
   • FDA has repeatedly said that existing food and dietary supplement frameworks are “not appropriate” for CBD, and CBD isn’t an approved food additive.
   • Outside of Epidiolex, a prescription CBD drug for specific seizure disorders, most ingestible CBD products lack a clear, FDA-blessed pathway.

An analysis by MJBizDaily argues that, in practice, the Medicare change may initially cover only hemp seed foods, not mainstream CBD oils or gummies, because those remain outside FDA’s comfort zone.

4. A looming hemp THC crackdown could shrink the CBD market.
   Recent changes to federal hemp law, set to take effect in November 2026, will outlaw many hemp-derived THC products and even CBD products that contain more than 0.4 mg of THC per container, threatening the viability of most full-spectrum CBD formulations. (MJBizDaily) CMS itself acknowledges in the draft that hemp products must meet both the existing 2018 Farm Bill definition of hemp through November 11, 2026, and the amended definition after November 12, 2026, to remain legal.

Taken together, that means Medicare coverage for CBD could be technically possible, but practically narrow—especially if most current products become unlawful under the new hemp rules.

What patients and the industry should expect

For patients and caregivers

• No immediate change. Until the rule is finalized and 2027 plans are designed, Medicare beneficiaries should assume CBD remains an out-of-pocket expense, except for the already-approved drug Epidiolex, which some Part D plans cover today.
• Watch 2027 plan materials. If the proposal is finalized, some Medicare Advantage plans may experiment with:
  • Hemp seed-based nutrition products (seed oil, protein powder), and
  • Possibly limited, tightly-controlled CBD formulations under the pilot.
• Talk to clinicians. CMS has framed CBD primarily as a potential alternative for chronic pain and quality-of-life conditions in seniors, especially where opioids are a concern, but treatment decisions will still run through prescribing clinicians and plan coverage rules.

For hemp and cannabis businesses

• Regulatory compliance becomes existential. Any product that hopes to be covered will need to:
  • Stay within the newly tightened federal THC thresholds,
  • Comply with FDA requirements (either as a drug, GRAS ingredient, or under a future CBD framework), and
  • Be legal under state law.
• Pharma-style CBD has the inside track. The pilot’s emphasis on pharmaceutically manufactured or FDA-regulated formulations suggests opportunities skew toward medical-grade CBD rather than general wellness products.
• Comment period is crucial. Stakeholders—patient advocates, hemp producers, medical groups—have a limited window to push CMS for clarity on:
  • Which CBD products should qualify,
  • How quality and dosing standards will be set, and
  • How coverage will intersect with the coming hemp THC restrictions.

The bottom line

CMS’s proposed rule marks the first serious federal move toward integrating CBD into Medicare’s benefit structure, mainly via Medicare Advantage and a targeted pilot program. It’s symbolically huge: cannabis-derived compounds are no longer treated as an automatic non-starter for federal health programs.

But the practical impact will depend on three moving targets:

1. How CMS finalizes the 2027 rule and designs the CBD pilot;
2. How FDA chooses to regulate (or not regulate) CBD products beyond Epidiolex; and
3. How the new federal hemp THC limits reshape the entire CBD market by late 2026.

For now, the safest way to describe it is this: Medicare is preparing to cautiously crack the door open for CBD, not fling it wide.