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What’s the Deal With California’s New CBD Bill?

What's the Deal With California's New CBD Bill?1

The new legislation is bringing an end to “CBD prohibition” in California. But will the bill cause more problems for the hemp industry than it solves? And what will it mean for consumers?

The road to CBD’s full legalization has been a fitful one, and weirdly, California is no exception to the rule. That may sound counterintuitive since the state has clearly embraced THC, having fully legalized cannabis in 2016. But in fact, California has not been particularly friendly to the “other” cannabinoids.

If you’re wondering how it’s possible that California could limit the sale of CBD products after the 2018 Hemp Act federally legalized the substance, the answer lies with the FDA. That agency, to make a long (and not very interesting) story short, has maintained that, since CBD isolate has been used medicinally in the drug Epidiolex, CBD should not be added to food or drink. 

When California aligned its CBD policy with that of the federal government, it took on the same stance towards CBD in food and beverage. 

So, yes, it’s been legal in California to buy THC edibles – and even marijuana-derived CBD edibles – but not hemp-derived CBD edibles. We’re not the first ones to point out that this is really a bit of a silly situation. And the state’s position has also meant that its CBD manufacturers, retailers, and hemp farmers have been in a very limited position as to what they could produce and sell.

This is the situation that is being termed as “CBD prohibition” in California, even though it has certainly been possible to buy CBD oil in the state since 2018. But retailers that have chosen to sell CBD edibles or drinks have been living under the shadow of possible product seizures since 2018.

This legislation has been in the making (and re-making) for three years, but it would seem that third time's the charm. Of course, some stakeholders are happier than others with the results.

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This latest legislation was the third attempt to pass a bill fully legalizing those products, and this one will go into effect after Newsom signs it in early October. Hemp associations like the Hemp Roundtable, which have been pushing for the legislation to include food and beverage, have lost no time in popping open the champagne:

“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,” said Jonathan Miller, General Counsel of the U.S. Hemp Roundtable.

So what will this new legislation mean for consumers? Well, probably the most immediate change will be the availability of CBD-infused edibles and beverages. Companies have been waiting in the wings for California’s enormous market to open up to these products and will lose no time stocking shelves. 

Restaurants will also be able to take advantage of CBD as an ingredient in their offerings. The one exception to this will be CBD-infused alcoholic beverages, which will continue to be banned in the state. The legislation prohibits the use of CBD in combination with alcohol, nicotine, or tobacco.

Of course, not everyone’s equally happy with the bill as it stands. For one thing, the legislation effectively outlaws hemp-derived Delta-8 products, which will make business difficult for some retailers. The bill states clearly that the level of THC in a CBD product cannot exceed 0.3%, and that includes all forms of THC. So Delta 8, Delta 9, and Delta 10 THC will all be treated the same under this legislation.

The legislation also leaves small hemp growers, who grow their hemp for the premium raw/smokable market, in a kind of limbo. That’s because, while the original legislation included a ban on smokable hemp, the current bill includes a phased-in approach to craft hemp flower. The catch? Regulatory authorities still need to agree on a tax regime for the product. And there’s no real end in sight to those conversations.

So until regulators figure out how to tax the stuff, Californians will still have to go elsewhere for their smokable hemp. 

 

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