Contentious bill sets different rules for several hemp products
CBD advocates and sellers are celebrating a big win this month after California Governor Gavin Newsom signed into law AB-45, a bill legalizing the sale of dietary supplements, foods, beverages and cosmetics containing the popular hemp-derived cannabinoid.
After nearly three years of debate and negotiations with a slew of opponents, manufacturers and sellers of these products, including many direct selling companies and their suppliers, will finally be able to access the largest state market in the country, representing 20 percent of U.S. wellness consumers.
The battle over legalizing this non-intoxicating cannabinoid as an ingredient in a state with some of the most progressive cannabis laws is a testament to the paradoxical, and often confusing, nature of the state and federal laws regulating hemp and cannabis-derived products.
2018 Was Year Zero for US Hemp Policy
The 2018 Farm Bill, which created a legal distinction between hemp and marijuana, defines hemp as a cannabis plant containing 0.3 percent or less of Delta-9 THC, the main psychoactive compound in marijuana. At the time of the Farm Bill passage, California took the side of the Food and Drug Administration (FDA), which declared that CBD was not a legal dietary supplement because it was first studied and classified as a drug. Ironically, pure CBD in oil form has been legal and widely available in California since 2018 when the state modified laws to comply with the Farm Bill.
Blake Schroeder, CEO of California-based CBD direct seller, Kannaway, is embracing the new law.
“California has been an industry leader in cannabis and hemp for many years but not without its challenges. As pioneers of California’s legal hemp industry, we have witnessed the state’s many debates with respect to hemp and CBD, even after its federal legality was outlined in the 2018 Farm Bill.
“AB-45 is focused on safety and consistency of products. We welcome those measures with open arms. Our company created many of the testing standards that most major players in the industry still use today, and we hope that this bill helps weed out the companies that are selling inaccurately labeled products,” Schroeder says.
Since CBD is not the only marketable cannabinoid found in hemp and cannabis, the details of AB-45 have important ramifications for sellers eager to offer the full spectrum of these plant-derived products to a growing market.
Details of Bill Reveal Specific Regulations
- AB-45 provides that:
- Non-psychoactive, hemp-derived extracts including (but not limited to) CBD are explicitly permitted to be sold as dietary supplements and food and beverage ingredients.
- Psychoactive cannabis extracts are not considered hemp and must be sold through adult-use dispensaries.
- Hemp products must contain less than 0.3 percent THC.
- THC is defined as THC-A and any tetrahydrocannabinol, including Delta-8, -9, and -10. California’s Department of Public Health (CDPH) can exclude any THC variants from this classification if they are determined to be non-psychoactive.
- Hemp extract must be tested by an independent lab before being incorporated into products.
- CDPH can determine serving sizes, cannabinoid concentration per serving size, the number of servings per container, and other details for food and beverage products.
- Products must be pre-packaged, shelf-stable, and are required to have a barcode, website, or QR code linked to the certificate of analysis of the final batch by an independent testing lab and must show the cannabinoid concentration present in that batch.
AB-45 Proves to be Setback for Delta-8, Hemp Flower Advocates
Delta-8 THC, the less psychoactive first cousin to Delta-9 THC that has exploded in consumer popularity over the past few years, has existed in a legal gray area since 2018, as the Farm Bill only imposed strict federal regulations on Delta-9.
Since then, 18 states have enacted their own laws to restrict Delta-8. With AB-45’s new classification of all of the THC isomers as “real” THC, California used its CBD legalization bill to become the 19th state to restrict Delta-8.
This legislation also leaves intact a ban on smokable hemp—specifically, hemp flower and CBD vapes—until the state can decide how to tax it, which could take years.
A major cause of the long and contentious road to AB-45 passage was pushback from California hemp growers and their lobbyists, as smokable hemp represents one of the most profitable uses for this crop. And while hemp farmers are still allowed to sell smokable flower out of state, the ban on local sales may put many of them out of business. A coalition of hemp farmers is currently planning a lawsuit.
Coordination, Clarity of National Hemp Laws Still Long Way Off
As with many of the new statutes issued by state legislatures across the country, California’s new law is a mixed bag for growers, manufacturers, advocates and sellers of hemp products. Not to mention the fact that California state law will now be at odds with FDA regulation, in regards to CBD as an additive.
Supporters of full CBD legalization are celebrating AB-45, while Delta-8 and hemp flower devotees are frustrated with the new state ban.
As for the prospect of a more simple and coordinated national hemp/cannabis policy, the ball appears to be in the federal government’s court. Future moves to either fully legalize marijuana or explicitly ban the family of secondary hemp extracts may go a long way in normalizing these standards around the country.
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