California Gov. Newsom expected to sign hemp bill

13-Sep-2021 - Last updated on 14-Sep-2021 at 20:29 GMT

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The California Legislature has passed a bipartisan bill to establish rules for the production and marketing of CBD/hemp products. Proponents expect Gov. Gavin Newsom to sign the bill into law before the Oct. 10 deadline.

Newsom, a Democrat, faces a recall election today (Sept. 14). The most recent polling data has given him a comfortable margin for victory.

Bill’s provisions

Among other things the new bill (AB45) would:

Allow CBD and hemp extracts to be used in foods (including supplement-like products), beverages and cosmetics.
Put forward new rules for hemp farmers and businesses including lab testing standards, similar to what is already in place for the recreational and medical cannabis industries.
Mandate that all products, including those imported from out of state, meet the new standards.
Ban sale of THC isomers, including delta-8 THC, outside of regulated dispensaries.

Wide support, but some reservations, too

The bill has enjoyed wide industry support. According to the publication Marijuana Business Daily, which covers the recreational and medical markets, cannabis businesses are supportive because it means CBD/hemp companies will have to incur the same regulatory compliance costs as do the marijuana firms, thus leveling the cost playing field.

Within the CBD/hemp space, the bill reportedly had the support of the US Hemp Roundtable, California Cannabis Industry Association, California Hemp Council, Cannabis Beverage Association and a few marijuana companies such as Canadian producer Canopy Growth.

David Culver, Vice President of Global Government Relations at Canopy Growth, said the new legislation will help cement the importance of California in the hemp trade.

“California plays a pivotal role in hemp cultivation, production, and distribution, which was a key consideration in why we heavily invested in the state by locating our West Coast facility in Modesto,” Culver said.

“These critical changes to California law will drive economic opportunity and boost job growth by providing certainty to farmers, manufacturers, and retailers through a clear roadmap for expansion by providing consumers with a regulated CBD marketplace,” he added.

Jonathan Miller, an attorney with the firm Frost Brown Todd and the chief legal officer of the US Hemp Roundtable said the new bill will resolve an impasse that began in 2018 when California aligned itself with the US Food and Drug Administration's position that CBD is not a legal dietary ingredient as it was first investigated as a drug.

"Retailers and product manufacturers will no longer have to fear embargoes and product seizures. Consumers will have access to products that promote their health and wellness. And most importantly, California hemp farmers will see a wide opening of opportunity for their crops, as the nation’s largest wellness market is now open for sale," Miller said.

However, MMJ Daily reported that earlier versions of the bill had divided the hemp community, with some growers maintaining that the rules were too onerous for what has been ruled to be a legal crop.

Delta-8 provision could prove influential

The delta-8 THC portion of the bill may very well provide a precedent for the marketing of this constituent in other jurisdictions. There has been much confusion about whether delta-8 THC can be—or should be—considered in the same breath as CBD/hemp products for regulatory purposes.

The confusion on the matter induced the US Hemp Roundtable earlier this year to clarify its position.

While delta-8 THC does not have the same intoxicating power as does its better known sibling delta-9 THC, it still has some. Miller said in his group’s view any intoxicating constituents of the plant, including delta-8 THC, should be restricted to medical and recreation cannabis channels and should not be included in products meant to marketed in a way similar to dietary supplements.

What about all those other cannabinoids?

Miller said the US Hemp Roundtable supports a current bill before Congress, HR 841, titled the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021.

This bill, which was sponsored by Rep. Kurt Schraeder, D-OR, would go a long way toward putting this kind of confusion to rest, Miller said. In addition, it would include language to encompass all kinds of non intoxicating cannabinoids, so that no new wheels would have to be invented for CBG, CGBN and any other hemp constituents that start to gain market prominence, Miller said.

“The bill we are supporting in Congress would open up legal and regulatory pathways for all hemp constituents that are not intoxicating. We don’t want to keep passing legislation for every single molecule."