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Will California Kill The Hemp Industry?

by in Industry News June 15, 2021

A California hemp bill (AB-45 Industrial hemp products.(2021-2022)) that would provide a long-awaited green light for hemp-derived CBD products have cleared the lower chamber โ€“ but the progress has set up a cannabis clash in the worldโ€™s largest state market.

Some states have made CBD illegal, and others are pursuing Delta 8 THC legally.

The bill easily passed through the California Assembly and awaits action in the state Senate. It would legalize the distribution and sale of hemp-derived CBD in the state as an ingredient in foods, beverages, and dietary supplements.

But it would ban smokable hemp and limit hemp-derived THC isomers such as delta-8 THC to marijuana dispensaries.

Hemp Farm In California During The Hemp Boom – Credit to NorthBayBusinessJournal.com

Some hemp operators are hoping the measure passes after years of delay. They point out that Californiaโ€™s health department says CBD canโ€™t go in food and drinks, limiting opportunities for hemp operators.

But smokable hemp producers say the bill would wipe out the only truly profitable segment of the industry, while marijuana groups are concerned that the legislation doesnโ€™t hold hemp-derived CBD to the same standards as state-regulated medicinal marijuana, and would increase competition for their products.

The pending bill would โ€œmake clear that a product is not adulterated or misbranded due to the inclusions of hemp,โ€ according to the U.S. Hemp Roundtable, an advocacy group and proponent of the legislation.

If signed into law, the legislation โ€œwill open an important retail market for CBD consumers,โ€ the group states.

โ€œThis is something that weโ€™ve been working on for three years now,โ€ Jonathan Miller, an attorney with the U.S. Hemp Roundtable told Hemp Industry Daily.

Miller thinks COVID-19 concerns derailed the measure last year but said his group is โ€œvery, very hopeful that it will pass by this fall.โ€

Smokeable Flower Ban In California Feels The Heat

“But the legislation drives a wedge through the heart of the hemp industry”, said Josh Schneider, CEO of Cultivaris Hemp in San Diego.

Although permitting CBD as a legal ingredient would be a welcome advancement, it comes at the expense of California hemp farmers who produce flower for the smokable hemp market.

According to Schneider, smokable hemp is currently the only profitable sector of the hemp industry for small and medium-sized farmers.

โ€œThis bill will devastate the already badly regulated California hemp industry by closing down the single most profitable outlet for hemp farmers,โ€ said Schneider, who leads a newly formed farmer advocacy organization, the Hemp Farmers Guild.

โ€œAdditionally it bans the inclusion of hemp and hemp extracts in alcoholic beverages โ€˜unless explicitly approved by the FDA,โ€™ an impossible standard to meet for brewers and beverage makers. They are trying to kill the hemp industry and will succeed if people donโ€™t take action.โ€

Medical Marijuana Growers Oppose California Hemp Regulations

Some California marijuana groups are lobbying against the stateโ€™s hemp legislation.

Californiaโ€™s United Cannabis Business Association, a coalition of cannabis trade associations, calls the legislation โ€œan assault on the cannabis industry.โ€

The coalition rallied its members to fight the CBD proposal earlier this month, saying it โ€œcreated a double standardโ€ between hemp and marijuana cannabinoids.

Miller said these groups feel competition from hemp producers, and feel that hemp should be treated just like marijuana, subject to all the same regulations and only sold through dispensaries.

โ€œThe fact of the matter is, hemp is not marijuana.

โ€œItโ€™s not the way itโ€™s treated on the federal level, itโ€™s not the way itโ€™s treated in any other state, because hemp is non-intoxicating,โ€ Miller said.

โ€œWe have strongly supported โ€ฆ two different pathways โ€“ one for intoxicating products like marijuana and the other for not intoxicating products, like hemp. Thatโ€™s what this legislation would do.โ€

That includes delta-8 THC and delta-10 THC, intoxicating products that are lab-created from CBD isolate.

โ€œThis would not ban these products, but it would require that they could only be sold through the dispensaries,โ€ Miller said.

Washington state marijuana producers have also voiced concern that their businesses could be hamstrung by federally legal hemp being converted into delta-8 THC โ€“ and even delta-9 THC โ€“ and then sold as licensed marijuana products.

Marijuana growers say itโ€™s far cheaper to convert CBD extract into THC than to grow marijuana to make THC.

Schneider and Miller agree that Californiaโ€™s governor has insisted on the ban of smokable hemp flower.

Schneider says Gov. Gavin Newsomโ€™s insistence on a smokable hemp ban seems to come largely from the California Department of Public Health warnings against โ€œanything smokable.โ€

โ€œGov. Newsom is pushing this hemp bill that will destroy the farms and businesses of hundreds of minority farmers across the state,โ€ Schneider said.

Miller, too, said the original bill didnโ€™t include a ban on smokable hemp, but that the executive branch has insisted on the smokable hemp ban in exchange for supporting the CBD legislation.

The U.S. Hemp Roundtable does not support such a ban, Miller said.

โ€œWe are still working and are hopeful that weโ€™ll be able to remove it by the time of final passage,โ€ he said.

โ€œOne area of compromise that we have suggested is that smokable hemp be permitted in (marijuana) dispensaries so that those who are concerned about smokable hemp getting in the hands of minors wouldnโ€™t have that problem,โ€ Miller said.

โ€œBut there is just such a strong anti-smoking-of-any-kind strain through California politics. Thatโ€™s what we keep running into,โ€ Miller said.

Hemp Industry Daily reached out to the Health Department for comment, but a spokesman responded in an e-mail that the department doesnโ€™t comment on pending legislation.

Original Author: Laura Drotleff of Hemp Industry Daily News – They Are Trying To Kill The Hemp Industry