The bill (AB-228 - which was introduced last year but has been on hold for several months) is supported by the US Hemp Roundtable, a group of hemp farmers, processors and manufacturers of finished goods.
Rand Martin, a lobbyist with the firm MVM Strategy that has been engaged by the group to help advance the statute, said that while some states have forged forward with their own plans on the marketing of hemp/CBD products, California has followed the federal lead in taking a dim view of the legality of this class of ingredients.
California follows federal lead on CBD
Martin said in California officials have generally taken the view that the US Food and Drug Administration should be the final arbiter of food safety law. At the moment FDA’s position is that CBD is an unlawful dietary ingredient based on its prior investigation as a drug under the brand name Epidiolex, which has been approved to treat seizures in some forms of intractable childhood epilepsy.
An advisory put out by the California Department of Public Health follows that thinking, and has prohibited the use of CBD and/or hemp extracts in foods, beverages and dietary supplements in the state, restricting the market primarily to topical products.
“We have been working since last year with Gov. Gavin Newsom’s office to get that advisory overturned,” Martin said. The bill had progressed rapidly through the State Assembly and then landed in the State Senate appropriations committee. Then events overtook the effort, Martin said.
“The pandemic got in the way of everything and slowed things down. But we had no choice but to try to move forward. We are within 28 days of the end of the session and if we don’t get a law passed by the end of August, it won’t happen until next year,” Martin said.
Bill specifies supply chain security, testing procedures
The bill’s language would allow the sale of foods, beverages and supplements containing hemp and/or CBD assuming that it is derived from crops that meet the federal definition of industrial hemp, which is less than 0.3% THC content by dry weight.
The bill also included language that would require firms that handle both cannabis (or Cannabis sativa raw material that has higher levels of THC) and industrial hemp to be able to demonstrate that no cross contamination of the raw material streams could occur. This would include submitting architectural drawings to demonstrate how the material flows would be segregated within a facility.
In addition, all hemp products sold in California would need to be verified by accredited third party testing laboratories.
Economic benefits support passage
Martin said the bill’s advocates are pushing hard on the economic benefits of the plan, which he believes could be a winning strategy during the sharp economic downturn that the pandemic has wrought.
“California is facing its worst economy since the Great Depression,” Martin said. “The state just announced it is forecasting another $8.7 billion budget deficit. That is on top of the $54 billion deficit that was built into the budget they passed in June.”
“We remain guardedly optimistic that we can get this done, because I don’t how the governor and the state legislature will be able to turn a blind eye to all of the potential new tax revenue. This is a brand new industry that will bring new jobs,” Martin added.
Opening up the state to CBD products could be a huge boon to the industry. California, with its $3.2 trillion GDP in 2019, would rank as the world’s fifth largest economy if it were considered as a separate country.
Hemp group seeking federal solution
Jonathan Miller, general counsel of the US Hemp Roundtable, said while the organization is intimately involved in the California bill, it is also keeping the pressure dialed up on seeking an eventual federal regulatory solution. The organization started out as a group of hemp farmers in Kentucky, and has since morphed into one that has national scope and a variety of member companies. Miller said the group’s ultimate goal is to harmonize regulations nationwide.
“What’s happening on the state levels has created a patchwork and has made it difficult for farmers and producers trying to sell across state lines,” Miller said. “Having a federal regulatory program would solve that.”
Miller said there are some signs that FDA is moving forward on a CBD regulatory framework, but the organization is seeking some protection for producers in the meantime.
“We’d like to see some formal enforcement discretion while they undertake the multiyear path to regulate CBD,” he said.