Governor Gavin Newsom of California is working toward regulating intoxicating products derived from hemp, via the state Department of Cannabis Control. The governor is actively looking into ways to increase enforcement, close loopholes and prevent underage kids from having access to unsafe marijuana and hemp products.
In a recent statement, Gov. Newsom argued that these products needed to be subjected to safety and health regulations, just as marijuana products are. This sentiment is echoed by most observers, who agree that at some point, marijuana and hemp will be subject to the same rules. What those rules will be and when that will occur remains unknown, however.
It doesn’t help that legislators in California have failed to control the proliferation of hemp products, with the senate failing to call AB 2223 for a hearing last week. This means that the measure’s proposal to regulate hemp products and impose taxes and product-safety rules has been stalled for now.
This is a win for hemp advocates, because it helps maintain the current status quo for intoxicating cannabinoids derived from hemp in the state. Origins Council’s policy director, Ross Gordon, stated that the now-defunct measure address two related but different dilemmas. The first one is hemp products that are sold at liquor stores and gas stations, and the second issue is how and whether hemp needed to be integrated into the marijuana supply chain.
A previous version of AB 2223 was vehemently opposed by the Origins Council, partly because it would have permitted hemp-derived cannabinoids into California’s framework for cannabis. This would mean that out-of-state growers of hemp would be allowed to compete with local cannabis farmers who already grapple with strict regulations and heavy taxes.
Remarkably, the same measure was partly supported by the California Cannabis Industry Association (CCIA). In a letter penned earlier this month in support of the measure, the CCIA stated that the legislation would fulfill a commitment allowing the integration of cannabinoids derived from hemp with the regulated marijuana supply chain.
Caren Woodson, CCIA board president, added that this would create opportunities to significantly improve customer access to high-quality and safe products while decreasing costs for legal marijuana businesses. The letter also claimed that integration had been implemented in different parts of the country, mentioning 18 states where hemp and cannabis products were sold under one regulatory framework. This includes states such as New York, where products derived from hemp are sold to nearly anyone, and Minnesota, where hemp drinks with low levels of THC are permitted for sale.
The entire cannabis industry, including leading entities such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), will be watching to see which way this matter is eventually resolved and whether or not the decisions taken in California spill over into other jurisdictions.
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