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California Bans Most Hemp Products and Illuminates Battle Between Hemp and Marijuana Businesses
Wednesday, September 18, 2024

What if I told you that California of all places – where virtually any adult can purchase marijuana on demand – was trying to harsh the mellow of citizens trying to access certain hemp-derived products? On the next 30 for 30, “California Schemin’.”

Welcome to the next front of the battle between marijuana and hemp.

California Gov. Gavin Newsom recently announced “emergency” regulations that would ban products derived from industrial hemp that contain any intoxicating cannabinoids and set an minimum age of 21 years old to purchase hemp products.

First off, let’s give a big shout out to Sam Reisman, who hasn’t let his participation in a labor dispute with Law360 stop him from writing about the cannabis industry. He sets out the facts nicely:

“We will not sit on our hands as drug peddlers target our children with dangerous and unregulated hemp products containing THC at our retail stores,” Newsom, a Democrat, said in a statement Friday. “We’re taking action to close loopholes and increase enforcement to prevent children from accessing these dangerous hemp and cannabis products.

“In California and nationwide, there have been significant reports of hospitalizations among teenagers and young adults, highlighting the health risks for these age groups,” the findings of emergency said. “The proposed age requirement protects vulnerable populations from adverse effects on still-maturing brains and reduces associated public health threats.”

Not to spoil the surprise but the hemp industry is not supporting Gov. Newsom’s actions. As in many other states, hemp stakeholders view outright bans such as the one announced by Gov. Newsom as overbroad and an overreach of state power.

One argument by hemp advocates that has had success in other states is that the law is preempted by the 2018 federal Farm Bill, which advocates say expressly contradicts any state rule that bans hemp.

Another argument, raised by the U.S. Hemp Roundtable, resembled the same argument that many are making in the Congressional debate on the next Farm Bill: Regulate, don’t confiscate.

Reisman quoting the Roundtable’s general counsel:

“Instead of addressing legitimate regulatory concerns shared by all good actors in the cannabis space — such as establishing reasonable policies to keep intoxicating products out of the hands of children — Governor Newsom instead has proposed a complete retail prohibition on 90-95% of popular hemp products for adults, including most non-intoxicating CBD products that he purports to support in his public communications,” he said Friday.

“And in the middle of massive California budget deficits, he is unnecessarily throwing away nearly a quarter billion dollars in tax revenue from legitimate small businesses,” Miller’s statement continued. “We will be exploring all legal options in the coming days with California hemp farmers and businesses that comprise the multi-billion-dollar industry that this action would destroy.”

We live in interesting times. The pioneers of cannabis are now on the front line of prohibiting cannabis – as long as it’s the other types of cannabis. But I get it. It’s just business. And this is the business we’ve chosen. If I was a marijuana operator, I wouldn’t want to have to compete with operators offering similar products who weren’t subject to the same types of regulations and taxes. But I also hope that we can find a way to get along. A rising tide can lift all boats. Or it can sink them.

The battle between marijuana and hemp shows no sign of subsiding. We see it on the federal level and in state legislatures throughout the country. I don’t know what the right answer is, but I worry that any victory by any side will be a pyrrhic one.

Budding Trends just dropped some ancient Greek on you.

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