New Mexico operator loses suit over insurance coverage of medical marijuana

A federal court in New Mexico has dismissed a lawsuit filed by the state’s largest medical marijuana operator seeking to get health insurers in the market to cover MMJ expenses.

According to Cannabis Business Times, U.S. District Court Judge Martha Vazquez on April 23 sided with health insurance companies in dismissing Ultra Health’s 2022 lawsuit that attempted to force insurance companies to reimburse roughly 74,000 New Mexico patients their medical marijuana.

Ultra Health’s suit was based on a New Mexico law passed in 2021 that requires health insurers to reimburse 100% of patient costs for any care related to mental or behavioral health.

The lawsuit – a class action on behalf of plaintiffs that included former Democratic state Sen. Jacob Candelaria – sought “millions” in punitive damages.

However, Vazquez wrote in her ruling “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.

“For these reasons alone, the court must grant defendants’ motion to dismiss and thus need not address defendants’ remaining arguments.”

The judge’s reference to federal law specified the Medicaid Act, which covers only drugs approved by the U.S. Food and Drug Administration.

The FDA does not regulate cannabis products, including those containing CBD, because they remain illegal at the federal level.