California’s Hemp Ban Is Official

I have thoughts.

Tuesday, September 24, 2024
Time to read: About 5 minutes. Contains 994 words. 

Good afternoon!

Well, California just banned hemp-derived THC, and I believe this has far-reaching impacts on the national cannabis scene. Today’s newsletter is everything that I, and a couple of brands in the space, have to say about it. 

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One Hitter: California Bans Hemp THC

Governor Gavin Newsom officially banned hemp-derived THC and other cannabinoids in California. Citing “child safety,” Newsom reasons that the underregulated hemp products are easier for underage youth to access. The regulations require that “industrial hemp food, food additives, beverages, and dietary supplements intended for human consumption have no detectable THC per serving.” You now must be over 21 to purchase any hemp-derived CBD products, and no package can contain more than 5 servings.

This isn’t the first ban on hemp-derived cannabinoids, but California being taken off the hemp map is a big deal. It’s not explicitly stated whether or not Californians will be able to continue ordering hemp-derived products online, but I’m 99% sure this ban eliminates that. Massive gummy brand Wyld already updated the shipping policy on their Delta 9 website to exclude CA. That means the 28.95 million adults living in the state are no longer eligible customers.

In theory, that’s a good thing for licensed cannabis biz, right? All those people buying hemp will now head back to the dispensary and spend money on adult-use weed? That’s what Newsom and many adult-use advocates are saying. But in reality, things just aren’t that simple. Legal dispensaries aren’t well distributed across the vast state of California, and if people can’t buy cannabis at grocery stores or online, they’re going to go to the black market rather than drive an hour or three out of their way to buy more expensive legal cannabis. 

The other issue is the difference in product offerings. The average dispensary caters to high-tolerance daily consumers. You’re lucky if they carry one low-THC flower or an edible containing less than 5 mg THC. In the hemp sphere, low-dose products abound. (This is an issue I’ll be breaking down in much more detail in an upcoming dispatch for paid subscribers). There are many people who can’t find the products that work best for them at their neighborhood shop and instead order hemp joints or 1-2 mg edibles online. 

Is hemp underregulated? Absolutely. It’s vital for consumers to be selective with who they buy from to ensure that the brand tests its product and sources ingredients responsibly. The same goes for adult-use cannabis. Plenty of safety issues have arisen in the licensed space, and hundreds of unlicensed dispensaries are still selling cannabis statewide, all of which may or may not be sticklers when checking IDs. 

Earlier today, I reached out to Nathan Cozzolino, co-founder of Rose Los Angeles, to get his temp on this ban.

“I totally get the need for emergency regulations,” says Cozzolino. “My son can walk into a boutique grocery and buy a 200 mg psilocybin gummy with cannabinoids, and that’s not good. But what Newsom did was such an extreme ban across the board. It feels like influence by adult-use cannabis lobbyists more than it does a logical solution to the problem,” says Cozzolino.

He went on to explain all the ways they could manage an age gate for their DTC operations, not just at checkout but at delivery as well. Like many other brands, I imagine, Cozzolino is in talks with Rose’s legal team today to assess next steps. He’s aware of the U.S. Hemp Roundtable’s vow to pursue legal action against the state and even accepted an invitation to be a plaintiff in the suit, but its legal standing is no sure thing. 

The emergency regulations, as they stand, will be effective until March 25, 2025. Time will tell whether it’s extended in some form or another, but it’s long enough for brands with California-based manufacturing to face worst-case scenarios of shutting down operations or relocating to another state. For Rose, that would mean essentially throwing away 20 years' worth of relationship-building with local farms and abandoning the sustainable farm that the Rose team themselves have invested in the past few years, cultivating hemp and produce that goes into their Delights.

If the scope of this ban dampens or decommissions thoughtful, small farmer-first operations like Rose, I don’t see how this will be good for the broader cannabis industry in the long run. 

Even in the event that this ban results in an uptick in adult-use sales, it would not come close to compensating for the broken system that put so many hundreds of well-meaning farms, shops, and brands out of business. As Kush Queen founder Olivia Sawyer put it in a passionate Instagram Story last night, “If the state wants to help licensed cannabis businesses, they should cut taxes, not ban hemp.”

The fates of cannabis and hemp are inextricable—it’s the same plant. THC is THC. The entire us vs. them animus is such a fallacy. I understand why some state-licensed cannabis companies feel salty about hemp companies’ lower overhead and freer marketing and sales channels, but hemp prohibition is not going to help this plant’s perception at large. Cannabis in all forms should be regulated with care and accessible to all adults.

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Next week, we’ll get caught up on the rest of industry news. It felt necessary to get granular here, as it touches so many issues in the cannabis space right now. I opened up comments below to all for any commentary, in agreement or not, on this situation.

One last thing: In light of reaching the final mile before the election, my Broccoli Talk bud, Mennlay Aggrey, and I have been mulling over a reunion chat to talk about the state of cannabis and politics. Is that something you folks would be interested in? 👀 Stay tuned for more details.

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In service to this plant and her alone,
Lauren Yoshiko