California Governor signs new legislation that regulates sale of industrial hemp products

New California law to regulate industrial hemp products including CBD.

California Governor Gavin Newsom has signed into law Assembly Bill AB-45, which will regulate industrial hemp products, removing restrictions on the sale of dietary supplements, food, beverages, cosmetics, and pet foods that include industrial hemp or cannabinoids, extracts, or derivatives of industrial hemp. According to AB-45, “This bill would create a registration process, under the State Department of Public Health, for hemp manufacturers who produce specified products that include industrial hemp or who produce raw hemp extract, as defined, including requirements for testing and labeling on products.”

“AB 45 is a watershed moment for the advancement of the CBD industry. Ingestible CBD products – including dietary supplements and food – and topical CBD products made in compliance with AB 45 will be legal for retail sale without restriction in California,” said Duffy MacKay, senior vice president of scientific and regulatory affairs for CV Sciences to Nutritional Outlook.

“CHPA [Consumer Healthcare Products Association] thanks Governor Newsom for signing AB 45 into law. There is strong consumer and commercial interest in CBD and hemp-derived products, and we applaud California for its leadership in creating a regulatory pathway to meet consumer demand, all while protecting the public from potentially unsafe products," said Carlos Gutiérrez, CHPA's vice president of government affairs in a statement. "CHPA continues to advocate for legislation allowing CBD to become a legally marketed dietary supplement ingredient and will work with federal and state government leaders to develop a regulatory pathway.”

The bill also allows for the sale of inhalable hemp products, however the sale of these inhalable products is prohibited until the passage of legislation that would establish a tax on inhalable hemp products. However, inhalable hemp products may be sold outside the state. “Hemp farmers are advocates of smokable hemp because it brings in the highest revenue per acre,” explains MacKay.

While the bill’s passage is good news for the sale of hemp-derived CBD in California, and the labeling and packaging regulations in the law defer heavily to federal and existing state guidelines for foods and dietary supplements, it does add to the patchwork of state CBD regulations. “The new law sets some manufacturing, testing, and labeling requirements that are unique to California and will further complicate the patchwork of state regulations that CBD companies must attempt to comply with,” says MacKay. “Responsible companies are wasting extensive resources to stay compliant with different requirements by state, underscoring the importance of and need for federal regulation of hemp-derived CBD products.”

Despite California’s acceptance of medical and recreational cannabis, the passage of hemp-derived CBD legislation still has its detractors. “Ironically, states with recreational cannabis laws are the toughest to navigate for hemp-derived CBD companies,” explains MacKay. “In these states, there are CBD products in dispensaries and CBD products in retail stores that are regulated and labeled differently. For these reasons, these two CBD industries end up in a turf war when legislation is being drafted and, often, there are unreasonable regulations. For example, in Oregon you must be 21 to buy a CBD product if the entire package of CBD product exceeds 0.5 mg THC, which is far below the federal limit of 0.3%.

“AB 45 is not being embraced by several stakeholders, including the recreational marijuana community that sees hemp-derived CBD as a competitive industry with the unfair advantage of having different regulations and access to markets beyond California state lines,” he continues. “The legislation is also a burden for the smokable hemp industry that is essentially put on hold until further regulations can be drafted.”

Updated Friday, October 8, 2021 at 10:10 AM.