September 24, 2021


AB 45, which would legalize CBD in food, beverages, cosmetics, dietary supplements, and pet food, has faced serious opposition from operators in the legal cannabis market. Despite the onslaught of opposition, the bill gained enough support to be passed onto the desk of Governor Newsom and is soon to be signed into California state law. Here are the ten things you need to know about the bill and CBD in the state. 

1. Amends Definition of Industrial Hemp to Include Cannabis Plants and ANY Part of that Plant with THC Concentration of No More Than 0.3%.

This bill amends the Adult Use of Marijuana Act (“AMUA”) by changing the definition of “industrial hemp” to include cannabis plants and any part of that plant, including the seeds of the plant and all derivatives, extracts, the resin extracted from any part of the plant, cannabinoids, isomers, acids, salts, and salts of isomers, with a delta-9 tetrahydrocannabinol concentration of no more than 0.3% on a dry weight basis. 

Health & Safety Code § 11018.5(a).

2. Food, Beverages, Cosmetics, Dietary Supplements, and Pet Food are No Longer Adulterated with the Inclusion of Industrial Hemp. 

This bill stipulates that dietary supplements, food, beverages, cosmetics, and pet food are no longer adulterated by the inclusion of industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp if those substances meet specified requirements. Additionally, there are no longer prohibitions on the sale of dietary supplements, food, beverages, cosmetics, or pet food that include industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp-based solely on the inclusion of those substances.

Health & Safety Code § 113091.

Unless explicitly approved by the federal Food and Drug Administration (“FDA”), industrial hemp can not be included in products in any of the following categories:

  1. Medical devices.
  2. Prescription drugs.
  3. A product containing nicotine or tobacco.
  4. An alcoholic beverage. 

Health & Safety Code § 111921.5(a)

Food and beverages shall be prepackaged and shelf-stable.

Health & Safety Code § 111922(b). 

3. Prohibition on Making Any Untrue Health-Related Claims. 

Manufacturers, distributors, and sellers of an industrial hemp product are prohibited from including on the label, or publishing or disseminating in advertising or marketing, a health-related statement, as defined, that is untrue in any particular manner as to the effects on the health of consuming products containing industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp. 

Health & Safety Code § 110407.

4. DCC to Compose a Report for Incorporation of Hemp Products into Cannabis Supply Chain. 

On or before July 1, 2022, the Department of Cannabis Control (“DCC”) will prepare a report and present it to the Governor and the Legislature outlining the steps necessary for the incorporation of hemp products into the cannabis supply chain, specifically the incorporation of hemp cannabinoids into manufactured cannabis products and the sale of hemp products at cannabis retailers. 

Business & Professions Code § 26013.2. (a)

The incorporation of hemp into the cannabis supply chain shall be determined and/or implemented no later than the 2023–24 legislative session. 

Business & Professions Code § 26013.2(c) 

5. CDFA, CDPH & DCC Must Develop Processes to Facilitate Compliance & Enforcement.

This bill requires the Department of Food and Agriculture (“CDFA”) and the State Department of Public Health (“CDPH”), in consultation with the DCC, if necessary, to develop a process to share license, registration, cultivar, and enforcement information to facilitate compliance and enforcement against unlicensed manufacturers or the sale of hemp that does not meet specified requirements. Additionally, communications shared between these agencies and local law enforcement for this purpose are exempt from the California Public Records Act. 

Health & Safety Code § 111928(a).

6. Creation of a CDPH Registration Process for Hemp Manufacturers.

Hemp manufacturers who produce specified products that include industrial hemp or who produce raw hemp extract must register with the State Department of Public Health. 

The bill would authorize the department to include or exclude comparable compounds from the definition of THC for purposes of regulation as industrial hemp-based on the compound’s intoxicating effect, or lack thereof. 

Additionally, the bill would authorize the department to collect specified fees which will be utilized to implement the registration program. 

Health & Safety Code §§ 111923; 111923.3.

7. Manufacturers Must Utilize Components Sourced from an Established and Approved Industrial Hemp Program. 

The bill requires a manufacturer of dietary supplements and food that includes industrial hemp to be able to demonstrate that all parts of the plant used to come from a state or country that has an established and approved industrial hemp program that inspects or regulates hemp under a food safety program (or equivalent criteria) to ensure safety for human or animal consumption. Additionally, the industrial hemp cultivator or grower must be in good standing and in compliance with the governing laws of the state or country of origin. 

Health & Safety Code § 111923.3(a)(1).

8. Rigorous Laboratory Testing is Required. 

A raw hemp product cannot be distributed or sold without a certificate of analysis (“COA”) from an independent testing laboratory that confirms all of the following:

  1. The raw hemp product is the product of a batch of industrial hemp that was tested by the independent testing laboratory.
  2. A tested representative sample of the batch of industrial hemp contained a total THC concentration that did not exceed 0.3 percent on a dry-weight basis.
  3. The tested sample of the batch did not contain contaminants that are unsafe for human or animal consumption. 

Health & Safety Code § 111925.2.

Testing requirements for contaminant levels shall be the same as those for cannabis. 

Health & Safety Code §111925.4(a). 

9. Postponement of Inhalable Products, Until a Tax Structure can be Implemented.

Upon the enactment of a tax on inhalable products, the CDPH will regulate those products or enter into a memorandum of understanding or other interagency agreement with another state agency to do so. Until then, the manufacture and sale of inhalable products, except for the sole purpose of sale out of state, is postponed.

Health & Safety Code § 111929.4.

10. This is the Law Until Federal Legalization of Cannabis. 

All laws and regulations pertaining to industrial hemp products will remain in effect until the adoption of regulations pursuant to the federal law that authorizes industrial hemp products. At that time, the department shall adopt new regulations either as necessary pursuant to the federal law or deemed necessary to protect consumers. 

Health & Safety Code § 110036.

This legislation paves the way forward for California cannabis businesses, and it is critical that each company in the cannabis, hemp, and cannabinoids space understands how each aspect of the law applies to their operations. If you have questions about the law and how it applies to your cannabis or hemp business, please contact one of our cannabis law firm specialists today by phone at 310-912-2960 or online.

Disclaimer: This article has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.