Just found this in the readme:
https://github.com/davidgiven/cpm65/blo ... /README.md
So you must use a SD card for the moment.Commander X16 notes
To use, place the contents of the x16.zip file on the X16's SD card. Load and run the CPM program to start.
The CP/M filesystem is stored in a big file called CPMFS. It needs support for the Position command in order to seek within the file. x16emu currently doesn't support this in its host filesystem, so you'll need to use an actual SD card image. (I have a pull request outstanding to add support. An SD2IEC should work too, as these support the same commands. However a real Commodore disk drive will not work.
vy73