Despite being a prominent leader in the cannabis industry, California took a surprising turn on September 6 when Governor Gavin Newsom (D) issued proposed emergency regulations that effectively cripple the state’s hemp industry. This move highlights the increasing challenges facing the hemp sector and deepens the divide between hemp and cannabis operators nationwide. In response, members of the hemp industry swiftly filed lawsuits against the state as the emergency rules became effective on September 23. With more states adopting stricter regulations on hemp, will this trend further hinder operators’ ability to sell products under the 2018 Farm Bill?
CDPH Emergency Rules
Due to an uptake in health incidents related to intoxicating hemp products, including those affecting minors, the California Department of Public Health (“CDPH”) approved of emergency rules that require all industrial hemp food, food additives, beverages, and dietary supplements intended for human consumption to have no detectable THC or other intoxicating cannabinoids. The regulations expand upon the definition of “intoxicating cannabinoids” as the language adds an additional thirty (30) cannabinoids and isomers, including Delta-5, Delta-6, Delta-7, Delta-10, and Delta-11. The additional cannabinoids and isomers is on top of further banning Delta-8, Delta-9, and THCA. All products intended for human consumption will be further restricted to no more than five (5) servings per package. Moreover, to address products on the market that are attractive to children, the new rules establish a minimum age of twenty-one (21) to purchase hemp food products.
Immediate Legal Action Taken
To no surprise, six (6) hemp companies led by the U.S. Hemp Roundtable sued CDPH in Los Angeles County on September 24 asserting that the emergency regulations violate state and federal law, and by effect, eliminates the vast majority of California’s multi-billion-dollar hemp industry. The plaintiffs include Cheech and Chong’s, JuiceTiva, Blaze Life, Boldt Runners Corp., Lucky To Be Beverage Co., and Sunflora – all hemp operators specializing in industrial hemp food products from seltzers to oral pouches. According to the complaint, the plaintiffs are alleging that CDPH’s rules violate the 2018 Farm Bill and state law, as well as the commerce clause of the U.S. Constitution and the plaintiff’s due-process rights under the 5th and 14th Amendments.
To note, the lawsuit highlights the state’s failure to implement regulations for the hemp industry since Assembly Bill 45 was signed into law in 2021. As a result of such failure, the plaintiffs’ assert that these emergency regulations are no emergency at all as nearly three (3) years prior, A.B. 45 was intended to create a pathway to regulate industrial hemp products, including food and beverages. Due to the state’s inaction, the lawsuit claims that this is a clear violation of the Administrative Procedure Act as it is an attempt to circumvent the rule-making process. According to The Wrap, representatives of Cheech and Chong state that they will file a separate petition to acquire a Temporary Restraining Order (“TRO”) to prevent the ban from being effective while the lawsuit is currently underway to determine its legality.
Conclusion
The CDPH’s emergency rules effectively banning industrial hemp products represent a significant and unprecedented blow to the state’s hemp industry, sending shockwaves throughout the nation. It not only threatens the livelihoods of countless hemp operators but also deepens the divide between hemp and cannabis sectors at a time when regulatory clarity is urgently needed. This move sets a concerning precedent for other states considering similar restrictions, potentially unraveling progress made under the 2018 Farm Bill. The swift legal action taken by the hemp industry underscores the high stakes of this decision, and its outcome could reshape the future of hemp regulation across the U.S.