Extra info on the California CBD ruling
The U.S. Hemp Roundtable, the leading national advocacy group for the hemp industry, is deeply disappointed that the California Senate leadership has refused to allow a vote on AB 2028 (Aguiar-Curry, Wicks and Wilk), which prohibits the use of hemp CBD Overall would have legalized products to move forward before the end of the 2019-20 legislature.
As a result, California will not benefit from the tens of millions of new tax dollars or thousands of new jobs that AB would have delivered in 2028. California continues to lag behind 21 other states, including Florida, Texas, Virginia, and Ohio, which have already passed hemp CBD laws and are taking business away from California.
AB 2028 was the result of intense negotiations between the Round Table, its allies in California's hemp growing and commercial industry, and Governor Gavin Newsom, whose efforts legislators had urged proponents to do. The move received widespread support from both parties, as evidenced by the passage of an earlier bill with unanimous votes by the Assembly and the Senate Health, Economic and Professional Committees.
"We have been informed by Senate President Pro Tem Toni Atkins that there has simply not been enough time in the final days of the session to review the amendments to the bill," said Jonathan Miller, General Counsel of the Round Table. "Assuming that this is the case, we are optimistic that a reintroduction of AB 2028 at the earliest opportunity with all the necessary technical corrections will ultimately be endorsed by both houses of law and signed by Governor Newsom."
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California's economy has been in dire straits as a result of the COVID-19 pandemic. Tax revenues have been hit hard, jobs have disappeared, and the state's ability to rebuild in time is uncertain. The hemp industry, particularly the hemp CBD market, is an important source of new state and local revenues that can be realized quickly.
National market analyzes (including the Brightfield Group and Fortune Business Insights) assume that the hemp-CBD food and beverage industry alone will generate more than 2 billion US dollars annually by 2023. Had it gone into effect, AB 2028 would have set California's market share at approximately $ 300 million in its first full year of operation.
AB 2028 would have reached several critical milestones:
Enable the use of hemp CBD in foods, beverages and supplements, as well as cosmetics and other topics. Ensure consumer safety, including label standards that provide essential information to consumers. Require CBD consumer product testing that reflects comprehensive testing requirements for cannabis. Apply the existing requirements of the Sherman Food, Drug and Cosmetics Act to all hemp CBD consumer products.
Miller added, “We thank the authors of the bill for their unwavering leadership on this important issue and the Governor for working with us to find an effective avenue for an industry that has been nothing short of meteoric in other parts of the country. We are confident that California policymakers will adopt this policy before the hemp cultivation and CBD industry become nothing more than an afterthought into the California economy. "
Full interview with Jonathan Miller, member of the hemp round table
When will the legislature reopen to continue this?
The legislature meets for an organizational meeting in December. A bill could be introduced that day, but it will be suspended again until January 4th. No action could be taken until after this date. There is speculation that the governor will convene a special session in the fall. The governor said he was open to it. However, it is very uncertain that he will do so. If he calls a special session, an invoice could be introduced if this is compatible with the purpose of the special session.
Will there be any additional changes to the invoice that you want to add during this time?
We may need to do some fine-tuning and tech cleanup. We are open to discussing other changes, although we are realistic about the administration's interest in other significant changes.
There is already a large market for these products. If California doesn't pass laws, will it put CBD products on the black market too? Are you causing the same problems you have had with marijuana all these years?
There is no bigger potential market than California, especially for CBD foods and beverages. The promise of the CBD market on a national level will only be fulfilled if California is part of that market. We don't expect a black market like the one that continues to exist in marijuana for two main reasons: 1) There was a robust black and gray market in marijuana for years before it became fully legal. There has never been a product made for hemp CBD, and 2) unlike marijuana, which was largely smokable on the black market, hemp CBD is mostly a manufactured product like food and beverages that is harder to make on a black market. Even if a bill is not waived, there are still up-to-date hemp CBD products that can be legally made and sold in California.
If the language doesn't change on the bill, what exactly does that mean for CBD business owners?
Entrepreneurs currently resident and operating in California continue to be at risk from state and county enforcement actions. They will face an existential question about their continued viability in California and may relocate their business, tax generation and jobs to another state. California-based companies with a presence in California or looking to expand into California can withdraw from California, reduce their California presence, or focus their energy on any of the 21 states that have legalized hemp CBD.
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