Today California Governor Gavin Newsom signed Assembly Bill 45, establishing comprehensive regulatory framework for the manufacture and sale of hemp-derived products in the state, including smokable hemp as well as hemp-infused food and drink sales. As an emergency statute, the bill goes into effect immediately.

While CBD products are freely found in stores, they are considered “adulterated” under existing California law, which is defined under the Sherman Food, Drug, and Cosmetic Law. What AB-45 will do is provide clarity for the hemp industry—more importantly, reassuring hemp consumers that products are independently tested and labeled properly.

EcoGen BioSciences, recently acquired by Kadenwood Brands, is the “largest supplier of raw hemp ingredients in the business,” and is heavily impacted by the new regulations. “AB-45 provides a model for hemp framework across the United States that we believe is necessary to move the industry forward,” Garrett Bain, President of EcoGen BioSciences told High Times. “As California takes the lead on clarifying the requirements for hemp to be included in food products and dietary supplements, we anticipate seeing other states adopt this model as well. These requirements that span labeling, serving size, testing regulations, and sourcing will allow hemp products to gain mainstream legitimacy and increased safety. Only through regulatory consistency will we see this industry grow to eliminate unlicensed and potentially harmful products from non-compliant manufacturers.”

Other leaders in hemp celebrated the bill as well. “California has been an industry leader in both cannabis and hemp throughout the years but not without its shortcomings and challenges,” Blake Schroeder, CEO of Medical Marijuana, Inc. told High Times. “As pioneers of California’s legal hemp industry, we have witnessed the many back and forth debates with respect to hemp and CBD, even after its Federal legality was outlined by the 2018 Farm Bill. We welcome the new focus on safety and consistency set by AB-45. Our company created many of the testing standards that most major players in the industry still use today. We hope that this bill helps weed out the companies that are selling fake or inaccurately labeled products.” Medical Marijuana, Inc. is a holding company with subsidiaries making a wide range of hemp-based products.

The California Cannabis Industry Association (CCIA) issued a breaking update, early this morning—alerting hemp business owners who will inevitably be impacted by the news. Assembly Bill 45 explicitly allows the sale of hemp-derived extracts that comply with testing and labeling standards—notably CBD.

“We cannot thank the author enough for her tireless and unparalleled work to get comprehensive hemp regulations passed,” said CCIA Executive Director Assemblymember Lindsay Robinson. “Aguiar-Curry has been steadfast in her approach to create a level playing field between cannabis and hemp while protecting the health and safety of all Californians.”

Robinson continued, “AB 45 establishes a long overdue, comprehensive framework for the manufacture and sale of hemp products in California, but our work is not over. We look forward to working with the author on future legislation to establish a pathway for the incorporation of hemp into the cannabis supply chain.”

Politico described the momentum of the bill as the end of the “Wild West era” of CBD. Here’s why it matters: California’s CBD market hit $730 million in sales in 2019—two and a half times more than any other state. 

The bill was authored by Assemblymember Cecilia Aguiar-Curry, representing the 4th California Assembly District. “The product is everywhere. You can walk into a World Market, a health food store, a pet store, and you’ll see CBD there,” said Aguiar-Curry. “There’s no labeling, it doesn’t tell you if it’s safe. So, I want to make sure that people know what they’re purchasing.”

A series of mishaps of mislabeled CBD products in various states—some with alarming findings—highlighted the urgent need for better regulations. A sampling from the Minnesota Hemp Farmers and Manufacturers Association (MHFMA), for instance, found over two-thirds of CBD products deviated from what the labels claimed. If a product has more than 20 percent deviation of CBD content from what the label stated, the U.S. Department of Agriculture (USDA) can deem it “misbranded.”

JD Supra reports that hemp manufacturers must register with the California Department of Public Health (CDPH) and adhere with good manufacturing practices (GMP); test extracts to ensure total THC does not exceed 0.3 percent and maximum contaminant levels; link product labels to lab testing results for THC, avoiding unproven health-related claims; demonstrate their hemp is grown in a state or country that has an established industrial hemp program.

Last but not least—hemp manufacturers must avoid marketing to children or pregnant women.

Hemp-infused food and dietary supplements must demonstrate proper sourcing, and can’t be included alongside alcohol, tobacco or nicotine.

In charge of regulations, CDPH could do anything from regulating maximum serving doses to mandating tracking standards. The bill also directs CDPH to study the introduction of hemp-derived cannabinoids into the cannabis supply chain.

The regulations apply to hemp-derived food, beverages, dietary supplements, cosmetics, pet food, inhalable products. Interestingly, inhalable hemp products can be manufactured and sold outside of California, but may not be sold within California until a tax is implemented.

Once federal law regarding hemp-derived products is clarified, new regulations will likely be adopted as it would be necessary to comply with federal law. 

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