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A long-debated bill to establish new hemp rules in California – but which drew the ire of business owners in both the hemp and marijuana sectors – has gained final approval from state lawmakers.

The measure easily passed both the state Senate and Assembly this week and is now on its way to the governor for his signature.

Among other things, the bill would:

  • Allow hemp extracts – including CBD – to be added to foods, beverages, cosmetics and pet products.
  • Establish new rules for hemp farmers and businesses, akin to the regulatory framework for marijuana companies, such as lab testing standards.
  • Hold out-of-state hemp products imported into California to the new state standards.
  • Ban the sale of intoxicating THC isomers such as delta-8 THC outside regulated cannabis sales channels.
  • Permit the sale of smokable hemp, but only once lawmakers agree on a new tax for “inhalable products.” The timing for such a tax is uncertain.

The passage of the bill was the result of years of effort to update industry rules for California’s hemp companies.

Up until its passage, the measure remained a divisive issue among marijuana and hemp industry stakeholders.

The marijuana industry stands to benefit because low-THC hemp products now will be subject to the same regulations, testing and taxing that MJ businesses are subject to. Thus, companies selling low-THC products will have a harder time undercutting marijuana businesses.

According to a state legislative analysis issued Wednesday, supporters of the measure included the U.S. Hemp Roundtable, California Cannabis Industry Association, California Hemp Council, Cannabis Beverage Association and a few marijuana companies such as Canadian producer Canopy Growth.

“These critical changes to California law will drive economic opportunity and boost job growth by providing certainty to farmers, manufacturers, and retailers through a clear roadmap for expansion by providing consumers with a regulated CBD marketplace,” David Culver, Canopy’s vice president of global government relations, said in a news release.

There were vocal opponents, though, including the California Hemp Association, Cannabis Distribution Association and a number of regional MJ cultivation trade groups such as the Origins Council.

Some changed their formal stance to neutral after several last-minute amendments, according to the Los Angeles-based United Cannabis Business Association.

The final version of the bill “finally moves toward establishing a legitimate foundation upon which we can build responsible policies for all cannabinoid products of all origins,” the UCBA said in a release.

California had 479 hemp growers on 17,184 acres in 2020.

– John Schroyer

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