A California bill would set in place a number of new regulations on the state’s hemp industry, not the least of which is a ban on hemp flower sales.
Under the proposal, Assembly Bill 45, the California Department of Public Health would oversee a newly legal market for hemp-derived goods, including food products, beverages and dietary supplements. While the U.S. FDA hasn’t provided its own guidance on the matter, California is joining other states in crafting its own approach to this cannabinoid. (The Senate version of the bill is S.B. 235.)
It’s not the first time that the state has considered a regulatory plan like this, but the timing and scope of this legislation has drawn criticism. The California Hemp Association has lodged its opposition to several specific aspects of the bill, including the flower ban and the proposed point of taxation. Wayne Richman, founder and president of the California Hemp Association, told Hemp Grower that a more holistic dialogue is needed to ensure the interests of farmers themselves are represented in this bill.
For one thing, the emerging hemp flower market is an outlet for growers otherwise saddled with tumbling CBD wholesale prices.
“We started with, ‘We will not support the smokable hemp ban if it remains in this bill,’” Richman said. “That’s our position. Period. It’s just simple straight-up: The only way many farmers have managed to survive the debacle, the collapse of the CBD market, is by selling smokable flower. They know the markets. And that’s what this is all about: finding markets for products. It’s a new industry.”
California is not alone in attempting to clamp down on the burgeoning hemp flower market. Other states, like New York and Texas, have passed flower prohibitions that eventually landed back in the legislature or, in Texas’ case, in court. It’s a hotly debated topic in the industry right now, with consumer demand and regulatory oversight locking horns at times.
According to Hemp Benchmarks, hemp flower pricing increased 32% from November to December 2020, when bulk flower was selling at around $250 per pound.
Whereas hemp flower offers a new market for growers themselves, Richman argued, the CBD industry is geared more toward the value-adding processors and, further downstream the retailers. If it’s already tough to make it as a hemp grower in California, he said, this bill has the potential to layer more regulatory weight on individual farmers.
Richman said that the California Hemp Association plans to speak more with the bill’s sponsor, Assemblywoman Cecilia Aguiar-Curry, after being invited to continue a dialogue with her staff and other legislative stakeholders.
He added that the elements of A.B. 45 that the California Hemp Association does support include the need for proper testing on hemp products used by consumers. “There’s not a farmer in our group who believes otherwise,” he said. “We all want good products.”
The germane question, then, is what that process might look like. Furthermore, what will taxation look like? These are open questions being debated in the context of A.B. 45, and Richman pointed out farmers' interests are integral to downstream product development.
“This is a multi-billion-dollar opportunity, a once-in-a-lifetime opportunity,” he said. “There isn’t another crop sitting in the corner that will produce this kind of downstream income with value-added products as will hemp.”
As for A.B. 45, the bill has remained in the state’s Health Committee since January.