/>iWith the passing of Brian Wilson, it seems like an appropriate time to debut The Beach Boys to Budding Trends, and the governor of California’s proposed ban of hemp products reminds me of one of Brian’s great lyrics:
If you should ever leave me
Though life would still go on believe me
The world could show nothing to me
What’s Going On?
As expected by many, Gov. Gavin Newsom’s administration proposed a permanent ban on many of the hemp products available in the state, as reported in SFGate (emphasis added):
The California Department of Public Health proposed the ban Friday, which would make a controversial earlier emergency ban permanent, according to a CDPH document shared with SFGATE. It’s now in a 45-day comment period, with a public hearing planned next month.
Gov. Gavin Newsom has spearheaded a ban on these hemp THC products, saying they are accessible to minors and pose a public health risk because they do not face the same safety standards as state-regulated marijuana products do. Newsom pushed for last year’s emergency THC ban and extended it in March. It is now set to expire in September.
Making the ban permanent will have a major adverse economic impact on the state, according to the analysis released Friday. The CDPH estimates that it will cause a $602 million decreasein revenue for California businesses for the first 12 months and a $3.14 billion decrease over five years. The ban will also cost 18,478 jobs over five years, force 115 businesses to close, and reduce state sales tax revenue by $192 million, according to CDPH’s estimate.
The analysis found that small, independent retailers like corner stores and grocery stores would be especially impacted over the first five years of the ban, with $1.9 billion in lost revenue and 5,567 lost jobs.
Friday’s proposal to permanently ban hemp THC comes after years of complaints from California’s licensed marijuana industry, which has claimed that it faces unfair competition from unregulated hemp companies. Marijuana companies face sky-high regulatory costs, especially in California, and can only sell their products through state-licensed retailers. Hemp companies, on the other hand, face almost no regulations and have historically been able to sell their intoxicating drugs almost anywhere, including liquor stores, grocery stores and online.
This disparity between the two industries has created pressure on governors like Newsom to protect their state-regulated cannabis companies. In California, these businesses are already increasingly failing under the weight of the high taxes and expensive regulations overseen by Newsom. Other states with robust state-licensed marijuana markets have also restricted hemp THC, including Oregon and Washington.
Licensed cannabis companies would gain $69.8 million and 232 jobs over the first five years of the proposed ban, according to the CDPH analysis. The department said “these numbers are comparatively low to retail sales lost in other sectors” because demand for hemp THC drinks is minimal at state-licensed stores.
The department also said illicit sales will probably fill the void if hemp THC products are permanently banned. “Out-of-state businesses and the illegal market will supply the California THC hemp market,” the report said.
Why Is This a Problem?
I have just been in the middle of knife fights in the legislative halls of Alabama and Mississippi where hemp products were under attack. I’m currently working on the next federal Farm Bill and what the hemp language ultimately looks like. And just today I read of similar efforts in Delaware. So, I’ll admit this is an issue that has been on my mind for a long time.
I completely understand why state-regulated marijuana operators are opposed to often unregulated hemp operators being able to conduct business without the onerous burden of regulations and taxation. I also believe that there are ways to even the playing field without prohibiting consumable hemp products entirely.
Are you worried about minors obtaining product? Put laws in place that prohibit access to minors and spend the time and money enforcing those laws. The money can come from fees paid by hemp manufacturers and retailers in the form of licensing/permitting fees and taxes on hemp.
Worried about the safety and potency of products? Put extensive rules in place that govern testing requirements and potency caps, with the latter possibly tailored to where the products are sold. Perhaps grocery stores and gas stations/convenience stores would be limited to lower THC products, whereas specialty hemp stores would be able to sell different products with higher THC levels.
Worried about labeling and packaging? Put extensive rules in place that ensure packages are child resistant and labels clearly explain (with QR codes to COAs) what is in the product and how it was tested to ensure that the package contains what it says it does.
Or – and I suspect this is the motivation for many – are you worried that regulated marijuana operators are at a disadvantage as compared to hemp operators facing far less regulation? Then put them on a more level playing field. Impose similar taxes and regulations so that responsible marijuana operators are not punished for following the rules while hemp companies operate without government oversight. Marijuana operators shouldn’t be able to bully hemp operators out of business simply because of greed, but hemp operators shouldn’t get a free pass either.
Conclusion
Maybe God only knows why the government of California is making the decision to ban its robust hemp industry rather than seeking ways to reform it so that it addresses the stated (albeit likely not entirely complete) concerns of the hemp program’s critics. But this isn’t a Beach Boys album; this is real life and real governing with real implications to operators and consumers. The government has a chance to dig into this issue and make hard choices that can make California a better market for the cannabis plant generally and all of those people who have come to rely on it through the years. I won’t pretend that this process will be easy, and certainly not as easy as simply banning an entire class of products. That’s the easy way out. Maybe I’m just California Dreamin’, but Wouldn’t It Be Nice if the people of California were treated better by their government?
