In the latest major state government move against legal intoxicating hemp products, California Governor Gavin Newsom last week filed an emergency rule that would completely ban the sale of hemp products that contain THC, stating that the products pose a grave danger to the state’s children.
“We will not sit on our hands as drug peddlers target our children with dangerous and unregulated hemp products containing THC at our retail stores,” Newsom said. “We’re taking action to close loopholes and increase enforcement to prevent children from accessing these dangerous hemp and cannabis products.”
Under the emergency regulations, hemp food, beverage, and dietary products sold in California must have “no detectable amount of THC” and no more than five servings per package and can only be sold to adults aged 21 and over. The regulation states that an independent testing laboratory shall determine the limit for detection of THC.
The regulation states that any manufacturer of an “industrial hemp final form food product” must provide a certificate of analysis from an independent testing laboratory to verify that the amount of total THC in the final product does not exceed the limits of the regulation.
If approved by the Office of Administrative Law, the rules would take effect immediately. The result would almost certainly wipe out the state’s hemp industry as almost all products would be in violation of the new guidelines.
Back in May, Newsom directed California state officials to warn hemp retailers that they could lose their licenses if they mislabeled products.
“Mislabeled and misleading products do not belong in the marketplace — especially when they put our kids’ health and safety at risk. Today, the state is taking action to protect Californians, especially our kids, as we work to further close loopholes and increase enforcement to prevent children from accessing hemp and cannabis products,” Newsom said in a statement.
The hemp business advocacy organization The Hemp Roundtable said that “today’s ’emergency action’ by Governor Newsom is a betrayal of California hemp farmers, small businesses, and adult consumers.”
"Closing an Unintended loophole"
Marijuana Moment reported that Newsom’s emergency regulation was met with approval by the Beer Association, a prominent trade association for the alcohol industry.
“The Beer Institute thanks Governor Newsom for his leadership in closing an unintended loophole that has enabled the proliferation of unregulated intoxicating hemp products,” Beer Association President and CEO Brian Crawford said in a statement.
“Intoxicating hemp products are being sold as food and beverages, despite not being deemed safe for the U.S. food supply by federal regulators, and in some cases without age restrictions,” he added.
The hemp business advocacy organization The Hemp Roundtable said that “today’s ’emergency action’ by Governor Newsom is a betrayal of California hemp farmers, small businesses, and adult consumers.”
California is not the first state to propose banning intoxicating hemp products.
In August, Missouri Governor Mike Parson issued an executive order that would have restricted sales of intoxicating hemp-derived products beginning September 1st. The order also directed the state’s Department of Health and Senior Services to classify unregulated psychoactive cannabis products as unapproved.
Missouri Secretary of State Jay Ashcroft rejected the ordinance, saying Parson's office did not provide the required legal justification for the emergency rule.
"3.5 billion per year by 2028"
Unburdened by the regulations faced by the legal cannabis industry, the intoxicating hemp-derived products market should expand to $3.5 billion per year by 2028, with a compound annual growth rate (CAGR) of 5%, according to a study by the market research firm the Brightfield Group.
“This exponential rise is a testament to promising consumer demand and the rapid diversification of product offerings in the sector. In the absence of comprehensive regulations imposing substantial restrictions on the sale of these products, the market is anticipated to expand to $3.5 billion by 2028, exhibiting a compound annual growth rate (CAGR) of 5%,” the report states.
Last month, SFGate published an article that highlighted how many California cannabis entrepreneurs have pivoted to the hemp industry, to take advantage of lower taxes, easier regulations, and the ability to sell in states across the country.
“The exodus is sending shock waves through the industry, bleeding an already troubled marijuana market of needed businesses — and the customers who would shop there. It’s also befuddling regulators, who are unsure of what to do as intoxicating hemp products are sold outside the protection of state regulations,” the article stated.
In March, Attorneys General from 20 states and Washington, D.C. called on congressional leaders to clear up the loopholes surrounding intoxicating hemp products.
In a letter, they wrote “as Congress prepares to embark on a new five-year reauthorization of the Farm Bill, we strongly urge your committees to address the glaring vagueness created in the 2018 Farm Bill that has led to the proliferation of intoxicating hemp products across the nation and challenges to the ability for states and localities to respond to the resulting health and safety crisis.”
To learn more about the legal issues facing the hemp market in the United States and how cGMP and current good agricultural practices relate to hemp product manufacturing, check out the Rootwurks Understanding USDA Hemp Regulations Course. Built with the expertise of CSQ - Cannabis Safety and Quality, the course is available here on the Wurkshop.
