What You Need to Know About CA’s New Hemp Bill

This entry was posted on Thursday, November 11th, 2021 and is filed under Cannabis Law.

On October 6, 2021, California Governor Gavin Newsom approved Assembly Bill 45 (“AB-45”), establishing a framework for the regulation of industrial hemp products in the state.  Please find below a summary of the substantive updates to existing law enacted by the bill:

Definitions

AB-45 codifies the requirement that “industrial hemp” have a delta-9 THC concentration of no more than 0.3% on a dry-weight basis.  Moreover, it excludes from the definition of “industrial hemp product” any U.S. Food and Drug Administration (FDA)-approved industrial hemp or hemp product, including industrial hemp or hemp that has received Generally Recognized As Safe (“GRAS”) designation. 

For purposes of nonfood application, “industrial hemp product” does not include hemp product containing:

  • derivatives
  • substances
  • or compound derived from industrial hemp seed 

“Raw extract” means extract not intended for consumer use and containing a THC concentration of not more than an amount determined by the California Department of Cannabis Control (“DCC”) in regulation. 

Finally, “THC or comparable cannabinoid” means THCA; any kind of THC (e.g., delta-8, delta-9, or delta-10) however derived, except DCC may exclude THC isomers if they do not cause intoxication; or any other cannabinoid, except CBD, that DCC determines causes intoxication.

Manufacturing

Hemp manufacturers must obtain an industrial hemp enrollment and oversight authorization from the California Department of Public Health (“CDPH”).  Certain products (foods, beverages, dietary supplements, cosmetics, and pet food) are not adulterated simply because they include industrial hemp. 

Restricting sale of these products based solely on the inclusion of industrial hemp is prohibited.  Including:

  • industrial hemp in medical devices
  • prescription drugs
  • any product containing nicotine or tobacco, or alcoholic beverages

is prohibited, unless explicitly approved by the federal FDA. 

Finally, distributing or selling an industrial hemp dietary supplement, food, beverage, or cosmetic in California requires packaging and labeling that includes:

  • a link to the certificate of analysis (“COA”) from an independent testing lab
  • the product’s expiration date
  • a statement that the Food and Drug Administration (“FDA”) has not evaluated the product for safety or efficacy

Testing

Hemp manufacturers must test industrial hemp in raw extract final form before incorporating it into a product. 

The testing must be completed by an independent testing lab, and it is prohibited to have hemp extract in final form exceeding a THC concentration of 0.3%. 

Additionally, raw hemp product may not be distributed or sold in California without a COA from an independent testing lab confirming the product is from a batch that was tested by an independent testing lab, the tested representative sample contained no more than 0.3% THC concentration on a dry-weight basis, and the testing sample did not contain unsafe contaminants. 

Finally, the initial testing requirements for contaminant levels for industrial hemp must be the same as for cannabis.  CDPH may adjust these levels for industrial hemp by regulation.

Inhalable Products

The manufacture and sale of inhalable products containing industrial hemp is prohibited, except to sell in other states, until the effective date of future state legislation that establishes a tax on inhalable products. 

Upon the effective date of such legislation, one may not:

  • sell inhalable products to consumers less than twenty-one (21) years of age
  • may not have inhalable products containing any flavorings, vitamin E acetate, and certain other substances

CDPH may enter interagency agreements with another state agency to administer the inhalable product provisions here.

Advertising

Hemp manufacturers may not directly target-advertise or market to children or persons pregnant or breastfeeding. 

The bill also limits advertising and marketing to only be displayed where at least seventy percent (70%) of the audience is reasonably expected to be eighteen (18) years of age or older. 

Manufacturers, distributors, or sellers of industrial hemp product may not publish any untrue statements as to health effects or consuming industrial hemp or its derivatives. 

Finally, industrial hemp product distributed or sold in California must have documentation it was produced from industrial hemp regulated by the California Department of Food and Agriculture (“CDFA”) if sourced in-state, or licensed according to U.S. Department of Agriculture (“USDA”) requirements if sourced out-of-state.

CDPH’s New Regulatory Powers

CDPH may impose age requirements for the sale of certain industrial hemp products if it finds a threat to public health.  It may determine:

  • maximum serving sizes
  • active cannabinoid concentration per serving size
  • number of servings per container
  • along with any other requirements for food and beverages

CDPH may prohibit including industrial hemp in products altogether if doing so poses a risk to human or animal health. 

Finally, it may regulate the cap on extract, and to cap the amount of THC concentration at product level based on:

  • product form
  • volume
  • number of servings
  • cannabinoid-to-THC ratio in the product
  • or other factors

Miscellaneous

On or before July 1, 2022, DCC must prepare a report to the Governor and Legislature outlining the steps necessary to incorporate hemp cannabinoids into the cannabis supply chain. 

The report must include:

  • incorporation of hemp cannabinoids into manufactured cannabis products
  • the sale of hemp products at cannabis retailers

By Patrick Babajanian, November 11, 2021