Gov. Gavin Newsom has signed a bill legalizing hemp CBD products in California, upsetting a coalition of farmers fiercely opposing the measure for temporarily banning smokable products in California but earning praise from other growers who have long sought a foot-hold in what the nation's largest intrastate market for CBD.
Assembly Bill 45 enacts a regulatory and consumer protection framework for the manufacture and sale of nonintoxicating hemp-derived products in food, beverages, dietary supplements, pet products and cosmetics. The legislative debate grew heated as the bill’s author pushed back on her opponents, arguing their personal attacks and mischaracterizations had delayed progress on the measure.
“There are hemp CBD products that are on store shelves that are unregulated and untested,” said Senator Ben Allen of Santa Monica, in advocating for the measure last month. “There are no consumer protection laws in current law providing assurances that these products are safe.”
The Food and Drug Administration has yet to enact regulations that would allow the use of cannabidiol in dietary supplements or foods marketed in interstate commerce. The agency has approved only one CBD product, a prescription drug product to treat certain types of seizures.
Allen praised Assemblymember Cecilia Aguiar-Curry of Winters, the bill’s author, for leading the charge on the proposal for three years. He described the bill as the product of a hard-won compromise, “representing a vast improvement over California's regulatory status quo.”
The California Hemp Coalition, on the other hand, called the bill a huge threat to the California industrial hemp industry and alleged Aguiar-Curry did not take farmers’ concerns into account.
“AB 45 is a bill that needs to, in our opinion, go down in flames,” said Wayne Richmond, president of the California Hemp Association, a group within the coalition. “For those of you who have been surviving on smokable hemp products, for example, this bans all of that. It ends your business.”
Richmond was speaking to the CDFA Industrial Hemp Advisory Board during its August meeting. He and the coalition argued that the bill was the creation of out-of-state CBD corporations that wanted small farmers restricted from smokable hemp as an alternative to CBD and that it would put hundreds of businesses and thousands of Californians out of work.
Board members agreed and drafted a resolution against the measure, citing Richmond’s concerns. Yet the bill actually stood outside of the board’s purview, which advises the CDFA secretary. AB 45 did not intersect with CDFA regulations since it offered no changes to the food and agriculture code.
The bill was also opposed by the California Farm Bureau. Policy advocate Taylor Roschen raised concerns about provisions that apply the same limit on THC as for cannabis, despite hemp being a federally recognized agricultural commodity. Subsequent amendments did allow for regulatory flexibility in contaminant testing but did not include a farm bureau recommendation for a regulatory pathway for the sale of raw hemp flower in the state.
Aguiar-Curry removed a ban on the smokable flower but replaced it with a provision allowing for inhalable products to be manufactured for sale in other states while prohibiting sales in California.
According to the coalition, this creates a pathway for the Legislature to legalize the sales only if lawmakers pass a tax on inhalable products. The trade groups feared a new tax would set up an untenable political battle that no lawmaker would be eager to take on anytime soon. Allen called that argument inaccurate, but recognized that with this issue, “more deliberation, more hard work, more action by the Legislature is yet to come.” Aguiar-Curry has suggested she is working on bills to address this next year.
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In opposing AB 45, the United Cannabis Business Association argued a ban on smokable hemp would shift $1 billion in annual profits to the marijuana industry in the form of high-CBD cannabis sales. The California Cannabis Industry Association, on the other hand, praised the bill for leveling the playing field between cannabis and hemp.
National hemp proponents lauded the bill as well. Eric Steenstra, president of Vote Hemp, told Agri-Pulse the passage of AB 45 was "a pretty big deal" since California has the biggest hemp market in the U.S. and perhaps the world.
"I know not everybody was 100% happy but nobody ever gets everything they want, right?" said Steenstra.
The hemp growers angry about the exclusion of smokable hemp from the bill "acted like their entire business was only dependent on smokable hemp," he said. Instead, "there's a much bigger market out here in the long term” for body care, skin care and therapeutic products, as well as foods and beverages—though the bill prohibits the use of CBD in alcohol.
Although Vote Hemp had no problem specifically with smokable hemp, Steenstra said, "We weren't going to let the entire bill not go through because the governor was refusing to budge" on smokable hemp.
The California Department of Public Health and the Department of Cannabis Control will now draft regulations for implementing the law. FDA has yet to enact regulations that would allow the use of cannabidiol in dietary supplements or foods, making the practice illegal.
Newsom has also signed Senate Bill 292, a companion measure to AB 45, which mirrors some of the language in federal law to make changes to the food and agriculture code for hemp. Richmond praised the measure for delineating “destruction” from “disposal” for crops that test over the THC limit.
“Just because it goes over 0.3%, it doesn't mean somebody is growing marijuana,” he said. “We've seen too much knee-jerk reactionary law enforcement, which has really put the kibosh on this industry.”
He argued that was the reason for significant declines in registrations and acreage for hemp in California recently.
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