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Federal Judge Rules Medical Cannabis Isn’t Covered by Insurance

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Patients with behavioral health conditions cannot make insurance claims for medical cannabis, a federal judge ruled April 23 in the U.S. District Court of New Mexico.

Judge Martha Vázquez granted a motion by three health insurance providers to dismiss a complaint by a New Mexico cannabis company and four individuals who pay out of pocket for medical cannabis to treat behavioral health conditions. Three of the individuals were diagnosed with post-traumatic stress disorder (PTSD), while the fourth individual is a father whose child has nonverbal autism.

Other qualifying conditions for medical cannabis in New Mexico—such as opioid-use disorder, severe anorexia and Parkinson’s disease—are also considered behavioral health conditions in New Mexico.

New Mexico Top Organics, a vertically integrated cannabis company doing business as Ultra Health Inc., filed the lawsuit in 2022, arguing that under state law that became effective that year, insurance companies that cover behavioral health services are required to fully cover the cost of medical cannabis used for behavioral health issues.

Vázquez was not convinced.

“This court finds that New Mexico state law does not compel health insurance coverage of medical cannabis and that, even if it did, such a requirement would be preempted by federal law,” the judge wrote in Wednesday’s ruling. “For these reasons alone, the court must grant defendants’ motion to dismiss and thus need not address defendants’ remaining arguments.”

The defendants listed in the lawsuit include Blue Cross and Blue Shield of New Mexico, Presbyterian Health Plan Inc., and Western Sky Community Care Inc.

The state law that Vázquez referred to is Senate Bill 317, which Gov. Michelle Lujan Grisham signed into law in April 2021. The legislation intended to make mental and behavioral health services more affordable for New Mexicans by eliminating all cost-sharing and out-of-pocket costs for those services and accompanying medications.

Although S.B. 317 doesn’t specifically mention medical cannabis, it includes the language “all medications.” Sen. Martin Hickey, D-Albuquerque, a retired physician who sponsored the legislation, indicated in early 2022 that he intended the law to include insurance coverage for medical cannabis patients with certain conditions.

“The health plan is not on the hook for it unless it is a clinician who has prescribing authority by license and is credentialed by a health plan,” Hickey told the Santa Fe New Mexican that year, adding that the law does not apply to cannabis patients who receive Medicaid coverage due to the federal illegality of cannabis.

Vázquez ruled in this week’s decision that the bill’s language was not explicit.

Rather, the judge found that S.B. 317 requires that insurance plans that cover behavioral health services not impose any cost-sharing “on those services.”

“This language suggests that the prohibition on cost-sharing applies only to those behavioral health services that the insurance provider already covers,” Vázquez wrote. “Whether the intent of the statute was to include medical cannabis, as is suggested by the article quoting the bill’s sponsors, the language of the statute does not do so.”

Vázquez did acknowledge that New Mexico state courts have held that medical cannabis constitutes a “reasonable and necessary health care service from a health care provider” and must be covered under the New Mexico Workers’ Compensation Act. The federal judge also recognized that the Court of Appeals of New Mexico found that medical cannabis should qualify as a prescription drug for tax-dedication purposes under state law.

However, the defendants argued that state law on the issue of cannabis is preempted by federal law prohibiting its use as a Schedule I drug under the Controlled Substances Act. The judge agreed.

Although the U.S. Department of Health and Human Services found that cannabis does have a currently accepted medical use in the U.S. after conducting a scientific and medical evaluation of the plant under President Joe Biden—recommending that it be relisted to Schedule III—Vázquez indicated in this week’s ruling that the Drug Enforcement Administration has yet to take up that recommendation.

“By virtue of its classification as a Schedule I drug, Congress has decreed that cannabis has no medical use,” she wrote. “Even accepting as true for the sake of argument that cannabis does have medical value, state law still does not compel defendants to provide coverage for it. … The fact that medical cannabis is not explicitly covered in the state’s Benchmark Plan signifies that state law does not mandate coverage of it.”

Despite this ruling, legislation that’s currently advancing in the New Mexico Legislature, House Bill 527, would amend state law and New Mexico’s insurance code to require medical cannabis to be covered by public and private insurers, including individual and group health plans, Medicaid, and state coverage offered to state and local government employees, educators and retirees.

RELATED: New Mexico Bill to Provide Health Insurance for Medical Cannabis Advances

Since Medicaid is a joint state-federal program, there would be no federal Medicaid match for medical cannabis under the bill, which advanced through New Mexico’s House Health and Human Services Committee last month.

However, Vázquez ruled this week that even if New Mexico law did compel insurance providers to cover the cost of medical cannabis, such a law would be preempted by federal prohibition under the Supremacy Clause of the U.S. Constitution.

“By providing coverage for medical cannabis, defendants would be aiding and abetting illegal drug procurement,” the judge wrote. “The likelihood of whether defendants would be prosecuted for that crime is irrelevant. The criminalization of cannabis at the federal level remains intact and therefore would conflict with a state law mandating coverage of medical cannabis.”



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Feds provide anti-cannabis group a platform to bash legalization (Newsletter: September 15, 2025)

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DC marijuana expungement repeal advances in Congress; CA cannabis tax relief bill to gov; MA psychedelics vote; Study: Bongs don’t filter effectively

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/ TOP THINGS TO KNOW

The Substance Abuse and Mental Health Services Administration provided a federally hosted platform for the prohibitionist organization Smart Approaches to Marijuana to claim that legalization does not diminish the illicit market and harms youth, despite data to the contrary.

The House Oversight and Government Reform Committee approved a bill to overturn a Washington, D.C. marijuana expungements law that was enacted by local officials in the nation’s capital.

The House Homeland Security Subcommittee on Oversight, Investigations & Accountability has scheduled a hearing about “how China is using marijuana to build a criminal network across America” for Thursday—though witnesses are currently unknown.

California lawmakers sent Gov. Gavin Newsom (D) a bill to pause a recently enacted tax hike on marijuana products, with the Assembly unanimously agreeing to the Senate’s amendments to the legislation.

The Massachusetts legislature’s Joint Committee on Mental Health, Substance Use and Recovery approved a bill to create a psychedelic therapy pilot program.

A new study comparing marijuana consumption methods found that “bong water does not seem to significantly filter out any compound from the smoke”—though the paper has now been withdrawn “because there may be a conflicting bureaucracy issue due to the location this research was performed.”

  • Gas chromatography-mass spectrometry “results from both the bong and joint smoke show similar smoke composition. No compounds between 5 to 350 g/mol were completely filtered by the bong water.”

The Rhode Island Cannabis Control Commission is now accepting applications for 24 new marijuana dispensary business licenses—with six reserved for social equity applicants and six reserved for worker-owned cooperatives.

The Arkansas Department of Finance and Administration reported that dispensaries have sold $193.1 million worth of medical cannabis products so far this year, putting the state on pace to set a new annual record.

/ FEDERAL

Sen. Susan Collins (R-ME) commended law enforcement officials for taking action against illegal marijuana grow operations.

The House bill to designate psychedelic therapy centers of excellence got one new cosponsor for a total of 13.

/ STATES

Nebraska Gov. Jim Pillen (R) signed revised medical cannabis regulations.

Illinois Gov. J.B. Pritzker (D) is considering an executive order to address intoxicating hemp products.

Texas’s lieutenant governor criticized Gov. Greg Abbott’s (R) hemp executive order.

New Jersey’s Senate president said he supports legalizing limited home cultivation of marijuana and the creation of a state bank to serve cannabis businesses.

California regulators announced a recall of marijuana products due to noncompliant packaging and labeling, and inability to verify they were manufactured using good manufacturing practices.

Nevada regulators sent a bulletin about marijuana products that failed microbials testing.

New York regulators reached an agreement with marijuana dispensaries facing potential closure under a zoning law dispute that will allow the businesses to continue operating for at least five months.

Delaware regulators launched a social equity financial assistance grant program for cannabis businesses.

Oregon regulators will hold an advisory meeting about changes to cannabis rules on Tuesday.


Marijuana Moment is tracking hundreds of cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.


Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.

/ LOCAL

New York City’s mayor was filmed in a marijuana dispensary saying, “It smells good in here.”

The Boston, Massachusetts Cannabis Board will meet on Wednesday.

/ INTERNATIONAL

Colombian President Gustavo Petro said that if cocaine were legalized worldwide, “there would be no destruction of the Amazon rainforest.”

A Netherlands court ordered a cannabis cultivation company to address odor issues.

/ SCIENCE & HEALTH

A study of UK doctors found that 87 percent would be open to prescribing medical cannabis to manage chronic pain.

A study’s results “support the therapeutic potential of liposome-based co-delivery of CBD and [celecoxib] in [glioblastoma multiforme] therapy.”

/ ADVOCACY, OPINION & ANALYSIS

The chair of the Florida Democratic Party tweeted about an upcoming congressional hearing on Chinese involvement in illegal marijuana operations, saying, “Simple solution…legalize and regulate.”

/ BUSINESS

RISE Dispensary workers in York, Pennsylvania are on strike.

/ CULTURE

Bryan Cranston spoke about microdosing psilocybin for the first time.

Make sure to subscribe to get Marijuana Moment’s daily dispatch in your inbox.

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The Toking Traveler: Why Amsterdam Weed Is Mostly Boof

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You know those tequila shops in Mexico? The tourist traps in every major resort town that try to pass off random blends of grain spirits as the real-deal Holyfield blue agave tequila?

Yes, this may come as a shock to our audience, but if you have even the slightest sense of what defines a quality cannabis product, you may leave Amsterdam feeling a bit… hoodwinked. Bamboozled. Punk’d.

Firmly the mecca of cannabis since back in 1976, Amsterdam holds a special place in our stoner hearts because of their laissez-faire approach to recreational consumption. For many, a trip to their famed coffee shops was the first chance we had to legally get high. White Widow, AK-47, OG Kush…they seem to have all the classics, along with a laundry list of different Hazes (e.g, Amnesia Haze, a signature smoke of the Dutch).

On my most recent trip back in July, I stepped off the plane after a particularly hellish 20+ hour journey from LA to Istanbul before finally reaching Schiphol and beelined for The Bulldog, arguably the most famous coffee shop in existence. While I appreciated the conversations I had with other patrons and staff alike, including a gregarious German home grow enthusiast living on an isolated island in the Caribbean, only in town while on his way to Eastern Europe for “the REAL Dracula history tour, not the one you see in guides,” the caliber of social interaction doesn’t really make up for how subpar their cannabis is.

Imagine an OG Kush that doesn’t look like OG, doesn’t smell like OG, or even hit you like OG. Yeah, it’s even more of a gutpunch after you realize you dropped $18 on a single gram of it.

Do the Dutch simply not care about quality? Or perhaps they mix so much damn tobacco into their spliffs that it doesn’t matter?

In my travels, I met many locals who also bemoaned their city’s lack of quality. This all stems from the fact that the Dutch have adopted a “tolerance policy,” as while cannabis (and other substances) do remain federally illegal in the Netherlands, they’ve realized that attempting to regulate often does more harm than good. Who’d have thought?!?

While there is essentially zero enforcement around the use of “soft drugs”, such as cannabis and psilocybin truffles, the rest of the supply chain is a fragmented nightmare of backroom deals and questionable practices. Simply stated, it’s all illicit market product.

Their system is entirely built around rewarding the lowest cost of production, regardless of safety or standards. Any cannabis you’ll find in Amsterdam hasn’t been lab tested, meaning that harmful bacteria, pesticides, and who knows what else are likely present in your bag. They’re able to get away with it, as most of the tourists crawling the Red Light District will never return to that same shop. It’s designed to run efficiently and without accountability.

Case in point:

  • It is illegal to possess or use cannabis.
  • It is illegal to commercially grow cannabis.
  • It is legal for coffeeshops to sell you cannabis, but not for them to acquire that cannabis, so it “magically appears” for sale at each location.

Curious, eh? This is also why there is a very high probability that your coffee shop cannabis was grown on the top floor of a local high-rise apartment building by an organized criminal syndicate (and yes, they own/operate the rest of the space to provide cover). Your OG isn’t true OG because there are no repercussions if it’s not.

Now, the one exception where you can find true-to-strain cuts seems to be most of the Haze cultivars, as these are massively popular in Europe (and thus with locals) and known for being premium quality, so the bar is often a bit higher.

Fortunately, the times they are a-changin’ and even a craft rosin scene has started to develop in the city. I was personally blown away by the service I received at Boerejongens, a coffee shop that the headiest of locals kept endorsing. Outside of their shop, I was greeted by an employee in a sharp bowler hat and three-piece suit. These guys serve as de facto guardians of the neighborhood community, helping to ensure that anyone visiting doesn’t get too unruly. They’ll even help little old ladies cross the street or provide expert-level guidance to anyone lost, customer or otherwise. Inside the store, the “hipster barista” meme has been taken to wholly new levels, as there was a row of budtenders decked out in white butchers’ aprons, wielding giant butchers’ knives to chop up flower into your desired quantities. The Strawberry Haze at Boerejongens ran circles around everything else I procured, outside of a decent Blueberry Haze I found near Vondelpark.

Next time you’re ready to enjoy a toke as you navigate Amsterdam’s canals, do yourself a favor and avoid the touristy areas like the plague. The further you’re away from the Red Light District (and I’m sad to say, shops like The Bulldog), the closer you are to finding buds that won’t just scratch your itch but will truly impress you.

Photo by Jinsoo Choi on Unsplash



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Arkansas Medical Marijuana Sales Are On Track To Set A New Annual Record

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“A total of $1.5 billion has been spent on medical marijuana since the state’s first dispensary opened in May 2019.”

By Sonny Albarado, Arkansas Advocate

Arkansans spent $10 million more on medical marijuana so far this year than during the first eight months of 2024, putting the state on track to exceed a record set two years ago, according to the state finance department.

From January through August, Arkansans bought $193.1 million in medical marijuana products from the state’s dispensaries, compared with $182.5 million in the same period last year, according to a press release from the state Department of Finance and Administration.

“With daily sales averaging about $800,000 in 2025, we are on track to surpass the 2023 sales record of $283 million,” department spokesperson Scott Hardin said.

There has also been a significant year-to-year increase in the number of pounds of cannabis sold, Hardin said, with the 2025 total at 52,292 pounds.

The state collected $5.38 million in tax revenue from medical marijuana in July and August, bringing the total tax haul so far this year to $21.57 million.

Patients spent $24,262,201 in July, purchasing 6,721 pounds, and $24,647,170 in August, buying 6,778 pounds, according to the finance department.

Suite 443 in Hot Springs and Natural Relief Dispensary in Sherwood sold the most medical marijuana in both July and August, according to the press release. Suite 443 sold 1,419.6 pounds total for both months. Natural Relief sold 1,317.7 pounds over July and August.

“A total of $1.5 billion has been spent on medical marijuana since the state’s first dispensary opened in May 2019,” Hardin said.

The Arkansas Department of Health reports 109,060 active patient cards. The Medical Marijuana Commission has licensed 38 dispensaries but only 36 are operating, Hardin said. The license of one of the closed dispensaries was revoked by the state Alcoholic Beverage Control Board last year, and its owner’s appeal of the revocation remains before the courts.

This story was first published by Arkansas Advocate.

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