By Geoffrey Taylor, MA, Hemp Contributor, Valley Ag Voice
California and Hemp have a complicated relationship. According to the California Department of Food and Agriculture, or CDFA, there were 17,184 acres of hemp in production with 479 permitted growers statewide while that number dropped drastically in 2021 to a mere 5,243 acres of hemp in production and only 257 permitted growers across the state. Growers have faced an uphill battle in many regions statewide due to drought conditions, costly local regulations and the high cost of compliance.
While recent legislative and regulatory actions in Assembly Bill 45, written by Assemblymember Cecilia Aguir-Curry (D-Winters), have paved the way for hemp-derived cannabinoids to go big in California, growers statewide have struggled to compete with California’s ongoing drought and market conditions driving down the cost of hemp flower and hemp biomass nationwide. In addition to this, the United States Department of Agriculture recently released a report noting a 24 percent decline in overall hemp acreage nationwide, revealing a market correction for many who embarked into uncharted waters with a new and exciting crop.
Assembly Bill 45, which recently passed and was signed into law by Governor Gavin Newsom on October 6, provides hemp producers with a regulatory framework similar to that of licensed cannabis producers, manufacturers and retailers. By providing companies a mechanism to ensure their products were safe from potential seizure by state authorities, AB 45 will allow for a robust roll out of CBD on an even greater scale than it is currently available.
While it’s no secret that CBD and other hemp-derived products are readily available at numerous retail establishments, this bill will tighten the belt on the hemp industry and allow for greater regulation of the quality of hemp products available to the consumer. While providing businesses with a framework to operate legally and distribute products throughout the state, the emphasis on consumer safety through laboratory testing and greater product monitoring is an added benefit to reduce producers’ liability.
Both the United States Hemp Roundtable, or USHR, and the California Cannabis Industry Association, or CCIA, were in support of this legislation. Jonathan Miller, general counsel of the USHR stated that “After more than three years of stops and starts and difficult negotiations, the era of CBD prohibition in California will soon be over. Retailers and product manufacturers will no longer have to fear embargoes and product seizures. Consumers will have access to products that promote their health and wellness. And most importantly, California hemp farmers will see a wide opening of opportunity for their crops, as the nation’s largest wellness market is now open for sale.”
CCIA Executive Director Lindsay Robinson stated: “AB 45 establishes a long-overdue, comprehensive framework for the manufacture and sale of hemp products in California, but our work is not over, we look forward to working with the author on future legislation to establish a pathway for the incorporation of hemp into the cannabis supply chain.” This shows promise for cannabis producers who have been limited to producing CBD infused products only from cannabis-derived sources per Department of Cannabis Control regulatory guidelines.
One shortcoming to AB 45 is a de facto ban on smokable hemp products until the state can devise a new taxation on smokable hemp products and the production of smokable hemp products–a process which can take a great deal of time. Though there is a pathway to ensuring smokable hemp products hit the shelves across the state, this is entirety reliant on the swiftness of developing a level of taxation for producers and consumers, which the state is often quite proficient at.
Overall, 2022 stands to show a recovery for the Hemp Industry following a series of blows from March 2020 to now. California Hemp producers that can withstand the hardships have the opportunity to expand supply chain opportunities into the state’s regulated cannabis industry along with expanding products into new retailers statewide without fear of reprisal from state officials. These are exciting times for hemp producers who have weathered market conditions, droughts, local over-regulation and other conditions that have impacted hemp farming and processing across the state and beyond.
