State lawmakers in California have imposed a ban on the sale of hemp products containing detectable levels of THC. This emergency legislation, proposed by Democratic Governor Gavin Newsom, came into effect recently and prohibits the sale of hemp-derived THC products across the state, impacting the hemp food, beverage, and dietary product markets.
In a bid to safeguard children’s health and prevent access to harmful consumable hemp products, Newsom enacted this regulation on September 6. “We will not sit on our hands as drug peddlers target our children with dangerous and unregulated hemp products,” he emphasized. The new rules aim to close existing loopholes and enhance enforcement efforts to restrict access to such products.
In addition to the prohibition, the new regulations set the minimum age at 21 for purchasing hemp products in California. Retailers are now required to remove any hemp food, beverage, and dietary products containing THC from their shelves, with these emergency measures scheduled to expire in March 2025.
The regulation has drawn criticism from Jonathan Miller, General Counsel for the US Hemp Roundtable, who warned that it could signal a “death knell” for California’s hemp farmers and businesses. In his open letter to Newsom, Miller asserted, “Prohibition never works, and it’s especially not effective in protecting children. You know quite personally that intoxicating products can be limited to adults – with enforcement of retail ID checks and new online software that provides meaningful age-gating.”
Miller pointed out the inconsistency in banning hemp products while alcoholic beverages remain readily available for purchase. Notably, he highlighted that: “Most of the products you featured at your press conference are available at Total Wine, which doesn’t even allow kids in their stores.”
On the federal level, President Joe Biden has proposed plans to reevaluate marijuana’s classification, potentially easing penalties for possession and sale. Currently, marijuana maintains a schedule one status under the DEA’s Controlled Substances Act, equating it with heroin and methamphetamine. The National Cannabis Industry Association welcomed this proposal, regarding it as a “first step” toward establishing a rational marijuana policy.
While numerous CBD and THC beverage companies operate in legalized states, many major brands remain hesitant to fully invest in the sector. In November 2022, for instance, Molson Coors decided to withdraw from both the ready-to-drink and CBD markets due to a perceived lack of progress toward federal legalization. Additionally, Constellation Brands reduced its investment in Canadian marijuana venture Canopy Growth, shifting its focus to minimize exposure to the cannabis market.
In conclusion, these developments delineate a critical junction in the food and beverage industry, emphasizing the need for businesses in the sector to adapt to shifting regulatory landscapes while navigating consumer trends. For those invested in the food and drink business, understanding these changes will be essential for maintaining a competitive edge in the evolving marketplace.
