For years, the State of California dragged its heels on regulating hemp-derived CBD. Numerous legislative efforts had failed time-and-again – until last year, with the passage of AB-45, signed by Gov. Gavin Newsom, which allowed for the inclusion of hemp and CBD extracts in food, beverages, cosmetics, dietary supplements, processed pet foods and more – assuming they contained less than 0.3% THC. However, nothing has really happened since – until now. Just a few days ago, the California Department of Public Health (CDPH) has proposed emergency regulations – mostly dealing with registration for industrial hemp manufacturers.
As our Los Angeles CBD business attorneys can explain, the key points in the emergency action are as follows:
- Hemp product manufacturers will be granted different types of registrations, licenses, and/or authorizations from the CDPH, depending on the type of product they make. Those that make many different types of hemp/CBD products may need numerous registrations.
- Out-of-state hemp/CBD manufacturers that want to import products to California will need to register with the CDPH.
- “Enrollment and oversight authorization” is required at each location, lasts one year, and cannot be transferred.
- Applicants requesting oversight authorization must provide detained information about not only the type of product, but its sources, extract methods, etc. These must be signed under penalty of perjury.
- Fees are based on gross revenue accrued in the 12 months prior. New applicants will need to estimate their fees, and the formulas for calculating them are a bit complex. The fee structures for CBD product types and extract manufacturers are different.
These are just the primary points of the emergency action. It’s imperative that anyone in the CBD business or hemp business in California consult with their business attorney to make sure all registration, oversight, and licensure paperwork is properly drafted and timely submitted.
We expect that there will soon be more in-depth regulatory guidelines issued for things like advertising and marketing, as well as consumer sales. But the promising takeaway for CBD manufacturers – despite coming four years after the passage of the 2018 Farm Bill – we finally have some movement on this front in California.
In addition to establishing a registration requirement for manufacturers of hemp products, AB-45 requires independent laboratory testing of hemp extracts in its final raw form, to ensure it doesn’t exceed the maximum allowable amount of THC, as well as to make sure the product is uncontaminated. Further, hemp products that are food, beverages, or dietary supplements will require:
- Labels with a scannable barcode, website URL, or QR code linking that will provide analysis certificates showing each batch’s THC content.
- Expiration and best-by dates.
- Statements stipulating that children and pregnant/breastfeeding people should avoid using the product without talking to a doctor.
- A statement saying the product should be kept out of children’s reach.
- Statement indicating the FDA hasn’t evaluated the product for either safety or efficacy.
The emergency action by the CDPH is currently awaiting a 30-day public comment period. Any CBD or hemp product maker should be reaching out to their legal department/contracted attorney to discuss the appropriate next steps to ensure their operations are properly aligned with the law.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 714-937-2050.
DPH-22-002E Industrial Hemp Fee, April 25, 2022, California Department of Public Health