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California hemp bill could bring ‘clarity,’ squash intoxicating derivatives

As state governments nationwide grapple with how to regulate hemp-derived cannabinoids, California could integrate marijuana and hemp producers under new legislation.

But Assembly Bill 2223 also would restrict the hemp industry, particularly when it comes to intoxicating hemp products.

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AB 2223, which Assembly Majority Leader Cecilia Aguiar-Curry introduced in February, passed the Assembly Floor with bipartisan support in May.

The bill builds on AB 45, legislation from 2021 that permitted hemp-derived CBD to be used in food, drinks and other products, temporarily banning smokable and inhalable products and increasing testing requirements for hemp products.

But some hemp product makers “exploit” a loophole in the 2018 U.S. Farm Bill that measures THC content by weight instead of how intoxicating it is, Aguiar-Curry’s office said.

And Gov. Gavin Newsom in April directed the California Departments of Public Health (CDPH) and Alcoholic Beverage Control to issue recalls and warnings about intoxicating hemp products.

Enforcement in action

The CDPH issued a warning last week about Mary Jones hemp-infused sodas – which contain hemp-derived THC isolate – deeming them “unsafe.”

“I’ve introduced AB 2223 to protect public health by greatly enhancing the tools available to state and local health and law-enforcement officials to stop the sale of (intoxicating hemp) products,” Aguiar-Curry said in a statement.

“We must act this year to enhance the restrictions under AB 45 so we can adapt to this constantly evolving illegal market.

“The bottom line is that if it gets you high, it should not be sold outside a dispensary. Period.”

Aguiar-Curry’s bill states that:

  • Licensed cannabis operators could manufacture, process, distribute and sell regulated products that contain industrial hemp or hemp-derived cannabinoids, extracts or derivatives, which would be tracked through the state’s compliance system in the same way marijuana products are.

  • Synthetic cannabinoids where the molecular structure of the cannabinoid has been changed would not be permitted to be sold, even by licensed cannabis companies.

  • Hemp can’t contain more than 0.3% THC or a “comparable cannabinoid,” such as delta-8 or delta-10 THC.

  • Final products containing hemp can’t contain more than 1 milligram of THC, and each serving per package can’t exceed 0.25 milligrams.

The bill has the support of the United Food and Commercial Workers labor union, which represents cannabis workers in the state, and the California Cannabis Industry Association (CCIA).

“Cannabis products are excessively regulated and overtaxed, while intoxicating hemp products remain under-regulated and subject to no special taxes,” CCIA President Caren Woodson said in a statement.

“AB 2223 presents an opportunity to reimagine a legal and regulatory framework for cannabinoids in California and beyond.”

California hemp industry needs ‘clarity’

Despite its heavy restrictions on hempe, California produces more hemp than any other state, according to the recently published U.S. Department of Agriculture’s Census of Agriculture.

Shareef El-Sissi, founder of Terpene Belt Farms in Alameda County, first began working in the cannabis industry in 2007.

As the regulatory environment of working in marijuana became too challenging and industrial hemp was legalized in 2018, he pivoted, founding the hemp-derived terpenes producer in 2019.

Although El-Sissi would like to sell hemp-derived cannabinoids, Terpene Belt doesn’t deal with cannabinoids at all; instead, the company harvests and processes buds for terpenes on-site to preserve the most sensory qualities.

The terpenes are then largely bought by regulated vape companies throughout the United States and the rest of the plant is destroyed, El-Sissi told MJBizDaily.

“We would very much love to participate in producing and selling cannabinoids, but because of all of the uncertainty, the lack of clarity, the poorly defined regulations and the patchwork of state regulations, we actually compost all of our cannabinoid material,” he said.

Federal and state changes expected

El-Sissi and his team, including Terpene Belt Chief Legal and Regulatory Officer Pamela Epstein, are closely watching progress of both the 2024 Farm Bill and state-sponsored hemp measures such as AB 2223.

“As a hemp operator looking for that clarity to expand into cannabinoids, we would want to see a dual-use allowance and a clear integration that allows us to put products into the regulated space,” Epstein told MJBizDaily.

But AB 2223 is controversial, Epstein said.

For one, when Californians voted in favor of Proposition 64, the ballot initiative that legalized recreational marijuana, they didn’t distinguish between hemp-derived THC and marijuana-derived THC, Epstein said.

“So, would selling the same compounds from a different source be in conflict with that?” Epstein asked.

Some critics also have expressed disappointment that AB 2223’s low THC limit on hemp and final products could effectively ban “full-spectrum” hemp-derived CBD products, which would impact medical consumers who rely on them.

“Over time, we have big plans to pair our essential oil with cannabinoids in a federally legal interstate commerce situation,” El-Sissi said.

“But until then, it’s not worth the trouble.”



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