By Geoffrey Taylor, MA, Hemp Contributor, Valley Ag Voice
For producers of CBD-rich hemp and THC-rich cannabis products in the state of California, sweeping regulatory changes are shaking up these industries yet again as business owners, producers, and processors prepare to shift yet again with the changing tides of these industries. As the state of California continues to make drastic changes to the regulatory framework surrounding these industries, it is critical for businesses to adapt and realign or risk facing consequences from the agencies overseeing these efforts.
“Many producers and growers across the state, both in the hemp and cannabis spaces, are facing an uphill battle in complying with existing state regulations, let alone moving forward with compliance efforts for the upcoming changes in state law,” said Travis Copeland of Unico Ag. “It’s a shame that farmers, manufacturers and businesses within these spaces have to make such immense changes to their operations knowing that further regulatory changes are likely to come in the future.”
Assembly Bill 45, which recently passed and is awaiting the signature of the Governor, provides hemp producers with a regulatory framework similar to cannabis producers, making life even more difficult for producers who are already burdened by the state’s excessive regulations on agriculture.
This bill outlaws psychoactive isomers of Cannabidiol, or CBD, such as Tetrahydrocannabinol Delta-8, or THC-D8, THC-D10, THCo, THCp and other compounds found to be of great medicinal value and produced from isolated hemp extracted cannabinoid CBD, and limits these cannabinoids to production under the state’s Cannabis regulatory framework. For many hemp producers in the state, this will serve as a major blow to their business models as the price of CBD has reached record lows and these isomerized extracts are keeping the doors open at many hemp operations across California and many other states.
“It’s hard to understand why the state has taken this route to limit hemp-derived cannabinoids and their production by producers and processors here in California,” said Copeland. “What we do know is that many hemp operations may find themselves out of business if they cannot adapt or change with the new regulations in place.”
To accent yet another blunder from our Sacramento lawmakers, the state of California recently issued a 197-page draft outlining intended changes to the state’s Cannabis industry which may make life even more difficult for struggling growers across the state.
Evan, a licensed Humboldt County cannabis grower who prefers not to use his last name, fears that his own farm, like many others, will not make it to the 2022 full season harvest and they may have to return to the unregulated market or cease operations altogether due to the regulatory burden placed on sungrown cannabis producers.
“They’ve hit us front every side – environmental compliance, watershed protections, fish and game – we’re just trying to farm a commodity like anyone else but between the high rate of taxation for cultivators and the increasing burdens to remain legal and compliant, it’s going to be incredibly difficult to navigate these new regulations without losing everything I’ve worked over a decade to build.”
Though the state has loosened industry restrictions on providing product samples to potential distributors and retailers for free rather than the pay-for-samples model previously adopted under the current regulatory guidelines, this is small concession in the most backwards cannabis marketplace in the nation. California has the opportunity to act as a leader in this segment and provide a model for the nation to follow but instead has enacted regulations that favor major corporations over small farms, manufacturers and others in the industry without the venture capital needed to fund their operations.
As California continues to further define itself as an unfriendly place to do business in virtually any market, hemp and cannabis producers face the uphill battle of fighting against the regulatory behemoth of the Department of Cannabis Control as this agency shifts away from the “education and outreach” model of compliance and edges toward a model that will charge immense fines to these businesses for even the smallest non-compliance issues.
With many hemp and cannabis growers and producers leaving the state and setting up shop in more regulatory-friendly states such as Oregon, Oklahoma, Colorado and others in anticipation for federal legalization of cannabis, California will quickly lose its place as the mecca for global cannabis production and further paralyze small producers in the hemp and cannabis spaces. It’s up to producers to stand up and protect our legacy as a state who forever changed the socio-political atmosphere surrounding the cannabis plant.
