While the future of federal marijuana rescheduling has been put on hold for the foreseeable future, federally legal hemp businesses continue to face a barrage of statewide restrictions.
In this article, we explore the current state of hemp, taking a deep dive into the changes that are afoot within the Golden State and potentially, federally.
Specifically, we will address the following:
- Expiration of the Federal Farm Bill in September 2025 – Federal Changes May be Afoot.
- The State of Hemp – CA Ban on Detectable THC and Age Gating is the “New Normal”.
- March 2025 Expiration of CA’s Emergency Consumable Hemp Regulations – 90 Day Extension Likely to be Granted, Regulations May Become Permanent.
- Introduction of Three California Bills to Further Regulate and Tax Hemp.
- AB 8
- SB 378
- AB 1397
- City of Los Angeles Municipal Code Changes to Definition of Cannabis to Include Hemp.
Expiration of the Federal Farm Bill in September 2025 – Federal Changes May be Afoot
Despite the lack of clarity surrounding the various cannabinoids derived from hemp, since the Farm Bill’s passage in 2018 Congress has remained on the sidelines of hemp policy, standing by and watching the states and federal courts interpret their legislation. Moreover, in the past two legislative sessions, Congress has repeatedly failed to produce a new Farm Bill, instead extending the 2018 Bill twice, for additional one year terms. The 2018 Farm Bill extension is currently set to expire Sept. 30, 2025.
During the 2025 legislative session Congress will again be asked to act on hemp by either passing a new Farm Bill or by passing an additional one year extension to the 2018 Bill. There have been ample discussions on Capitol Hill to close this intoxicating hemp loophole (most recently by Rep. Mary Miller, R-Ill.) and under a unified Republican administration, Congress may be able to move the needle on this issue.
Of course, if and when Congress is able to make legislative advancements on this issue, operators can only hope to see more clarity on the federal front.
The State of Hemp – CA Ban on Detectable THC in Consumable Hemp Products and Age Gating is the “New Normal”
Explained ad nauseam over the last six years, the current federal definition of “hemp” derives its legality from the .3% or less concentration of delta-9 THC, the primary psychoactive compound found in marijuana. This left unaddressed a loophole of other THC isomers, such as delta-8 THC and delta-10 THC. These “legal hemp” products have created a market filled with extremely potent, often chemically synthesized intoxicants, sometimes stronger than what is available to adults in legal, licensed marijuana dispensaries. However, these unregulated grey market hemp products are often widely available for sale in convenience stores and gas stations, with little to no restrictions on sales to minors.
In fact, a white paper recently released entitled “The Great Hemp Hoax” found that “95% of the 104 tested products [found in CA] from 68 brands contained synthesized cannabinoids, which are banned” in the state. Many of these products were shipped interstate via online purchases and contained several high potency cannabinoids.
Legislatures have taken heed to this and won over the last year where courts have repeatedly struck down lawsuits whereby hemp operators have sued for state overreach.
CA’s Emergency Consumable Hemp Regulations – March 2025 Expiration – 90 Day Extension Likely, and Regulations May Become Permanent.
In Sept. 2024, California (always a trendsetter in the marijuana and hemp space) made significant strides to combat what Governor Newsom deemed an intoxicating hemp “public health crisis” by prohibiting all intoxicating cannabinoids in hemp products, whether naturally derived or synthetic.
Specifically, Governor Newsom issued DPH-24-005E-Emergency Regulations for Serving Size, Age, and Intoxicating Cannabinoids for Industrial Hemp. Thereunder, Manufactured Hemp Products are banned with any detectable levels of THC. The Governor’s total prohibition on THC in any detectable quantity in consumable hemp products is confusing policy and has sent industry operators into a frenzy. These emergency regulations will remain in effect for six months and are currently set to expire on March 25, 2025. Notably, hemp flower is not included thereunder and may still be sold in and out of state with the proper permits. If you need assistance obtaining these permits do not hesitate to reach out to our Hemp Legal Experts at Manzuri Law!
Can These Emergency Regulations Become Permanent? Yes, Through the Regular Rulemaking Process.
What everyone wants to know is if these emergency regulations could become permanent – the short answer is yes. However, in the interim, the California Office of Administrative Law (“OAL”) has the ability to approve a one time 90-day extension. The law indicates that “no more than two readoptions are permitted.” In order to move towards permanence, the Dept. of Public Health (“DPH”) must adopt the emergency regulations, while still in effect, through the regular rulemaking process.
Introduction of Three New California Bills to Further Regulate and Tax Hemp Products.
There are several bills working their way through both the CA House and the Senate that could change this environment. Even further, the City of Los Angeles’s recent alteration to the Municipal Code brings hemp into the citywide definition of cannabis, removing a distinction between the two.
AB 8 Would Allow Cannabis Licensees to Produce and Sell Hemp Products
On December 2, 2024, California state Assembly Member Aguiar-Curry introduced AB 8, which would essentially allow licensed marijuana operators to manufacture, distribute and/or sell products that contain industrial hemp with a THC concentration of more than .00%, alongside their legal marijuana products. (Mostly CBD).
AB 8 would seek to alleviate the industry tensions between marijuana and hemp operators, regarding what some argue is unfair competition. Specifically, AB 8 states that MAUCRSA (the law that legalized cannabis in California) would not prohibit a cannabis “licensee from manufacturing, distributing, or selling products that contain industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp, if the product complies with all applicable state laws and regulations.”
Furthermore, this law would require out-of-state producers who intend to market and sell their products in California, to register with the CDPH. This way, the CDPH would, ostensibly, have a better understanding as to the products that are legally being sold in the state, even those not manufactured here.
Altogether, this bill is currently lacking in substantive detail, so be sure to follow along with this!
CA SB 378, a Bill to Target Online Sales of Hemp Products
Another attempt to regulate out of state hemp product producers was introduced into the Senate just this month. On February 14, 2025, Senator Scott Weiner introduced SB 378 as a way to further “tackle online sales of sketchy hemp products.” This bill seeks to take aim at online sales from out of state by defining “online hemp marketplaces” and requiring those marketplaces, in their Terms of Service, to implement a reporting mechanism that allows individuals to file a report to that marketplace of the existence of an advertisement for an intoxicating (illegal) hemp product.
If the marketplace continues to maintain the “illegal” advertisement they will face noncompliance civil penalties of not more than $10,000 for each violation, other damages for harms caused, and potentially legal fees. Each day an online hemp marketplace is in violation would constitute a separate violation.
The bill also carries a component for an “online cannabis marketplace” which would also facilitate reporting from individuals who encounter the advertisement of unlicensed and unregulated cannabis products. The same monetary civil penalties that apply to the online hemp marketplaces, apply here. If passed, this bill would effectively end online sales of hemp derived THC products within the Golden State, and could also make transactions slightly more difficult for licensed adult-use marijuana businesses.
CA AB 1397, a Bill to Tax Low-Dose Hemp Drinks
Another bill AB 1397, was also introduced in February 2025 by Republican Health Flora. This bill would impose an excise tax on low-dose hemp beverage products that are sold in California at 10% of the gross receipts. The unfair competition claims emanating from the cannabis industry about the hemp industry may see some support for this bill, however it’s unlikely that this bill will make it far in the legislature given its proponent. Despite AB1397’s potential failure, it shows there is appetite for regulating and potentially taxing the hemp industry to align with the overregulated, overtaxed marijuana industry.
City of Los Angeles Municipal Code Changes to Definition of Cannabis
Finally, in an attempt to further bring the hemp and marijuana industries together, the City of Los Angeles changed the municipal definition of cannabis to include “hemp.” Specifically, for the past decade, “cannabis” did not have a standalone definition in the LA Municipal Code, rather the Code referred to the definition of cannabis in the California Business and Professions Code. Now the definition of “cannabis” in the LA Municipal code will mirror the language approved by voters in Measure M. This will ensure consistency across all City codes – nearly 9 years after legalization.
Looking to Other States – New Jersey + Florida + Tennessee
In 2024, at least nine states enacted legislation further regulating intoxicating hemp products, including Connecticut (HB 5150) Wyoming (SF 32), Minnesota (HB 4757), South Dakota (HB 1125), West Virginia (SB 679), Louisiana (HB 952), and New Jersey (S 3235).
- New Jersey – Passed SB 3225
In line with California, in September 2024, NJ Governor Murphy signed into law Senate Bill No. 3235, which was set to regulate the production and sale of certain intoxicating hemp products. The law immediately made it unlawful to sell or distribute a product intended for human consumption that contains THC in any detectable amount to a person under 21 years of age.As written, the law mandates that only cannabis-licensed retailers may sell the intoxicating hemp products, which means that some liquor license holders are able to sell hemp products so long as they receive licenses from the cannabis commission.
New Jersey will count “total THC” in products, which will hold derived hemp to a higher standard than the federal law that legalized hemp. Products with more than 0.5 milligrams of THC per serving or 2.5 milligrams per package would be under the purview of the cannabis agency. Additional provisions were scheduled to take effect on October 12, 2024, however, due to a court order issued on October 10, the State has been unable to enforce those provisions. The court’s decision is currently being reviewed; however, the provisions prohibiting sale to those under 21 remain in effect.
Individuals found selling intoxicating hemp products without a license could face a fine of at least $100 for the first offense, $1,000 for the second offense, and minimum $10,000 for each subsequent violation.
- Florida – Proposed Bills – SB 1030 & HB 601
Through the past two legislative sessions Florida lawmakers have attempted, and failed, to pass regulations to restrict hemp products, restrictions that hemp industry officials said would have been absolutely “devastating to their bottom line.”
Now, a 2025 version of restrictive hemp legislation has been filed by Democratic Sen. Tracie Davis (SB 1030). SB 1030 calls for a number of provisions that would regulate and restrict the FL hemp industry, including:
- “Putting limitations on delta-9 THC levels in hemp products, restricting them to 2 milligrams per serving and 20 milligrams per container.
- A ban on delta-8 THC products.
- A ban on hemp extract products from being sold in a form for smoking—with a third violation resulting in the revocation of the violator’s license, permit, authorization, certificate or registration.
- A ban on the sale of hemp products in gas stations.
- A ban on locating hemp stores within 500 feet of a school or daycare facility.
- A ban on advertising the availability of hemp products that is visible to members of the public from any street, sidewalk, park or other public place.
- Event organizers could not promote, advertise or facilitate an event where hemp products are not from an approved source.
- Hemp locations would be subject to random, unannounced inspections by law enforcement.
- Would prohibit businesses from possessing hemp products that are attractive to children.”
In addition, another bill has been introduced in the House, HB 601 – Hemp Extract Products, which would institute its own restrictions on the industry, including:
- Requires opaque exit packaging for all purchases, and
- Places a limitation of Milligrams per package:
- Zero point 3 percent total delta-9-tetrahydrocannabinol concentration on a wet-weight basis;
- Twenty-five milligrams per serving or 500 milligrams per container on a dry-weight basis for edible products; or
- Three milliliters for a product that uses an electronic, chemical, or mechanical means to produce vapor.
- Tennessee – Proposed Bills – HB 1376 & HB 1148.
TN lawmakers have also been anxious to pass new policies to curtail “cannabis” sales, including HB 1376, put forth by Rep. William Lamberth (R-Portland) which would allow the Alcoholic Beverage Commission to regulate cannabis distributors.
Rep. Ed Butler (R-Rickman) has proposed HB 1148, which would remove THCa and THCp from the list of allowable hemp derived cannabinoids. In essence, if passed this bill would effectively prohibit any smokeable products, any concentrates and vapes in the state.
Looking Ahead
A decade into marijuana legalization, the state of the marijuana and hemp industries remains wildly in flux across the country. Congress’s passage of the 2018 Farm Bill, against the backdrop of federal prohibition of marijuana, inadvertently and unexpectedly legalized “hot hemp”. Since then, states have taken it upon themselves to legislate, regulate, and in some places, prohibit alternative these hemp derived cannabinoids.
Many in the marijuana industry are lobbying for hemp regulation and/or integration into the cannabis market as his current distinction between marijuana and hemp has created unfair competition. Others see the intoxicating hemp industry as an opportunity to engage in interstate commercial hemp activities as the market is already flourishing.