California Voters May Legalize CBD If the Legislature Fails to Act

California’s Attorney General published for public comment two ballot initiatives that will legalize hemp products. The Cannabis Hemp Heritage Act of 2020 and The California Cannabis Hemp Initiative 2020 will provide voters with the ability to legalize the cultivation, processing, distribution, use, and consumption of cannabis hemp products in California. The ballot initiatives are similar to the efforts to legalize cannabis in that they require cannabis hemp euphoric products to be treated like alcohol and provide a 10% excise tax on retail sales.

Last week, the Senate Appropriations Committee held a hearing on AB-228, which will legalize the sale of CBD products in California. The California Department of Health issued a frequently asked question in 2018 that prohibited the sale of consumable CBD outside of the licensed dispensary system until the US FDA determined that CBD products can be used as a food or California made the determination that CBD was safe. The bill has been moving slowly through the legislative body since it was introduced in January 2019.

Currently, cannabis licensees may only use CBD derived from cannabis in products, and they may not sell industrial hemp products. The bill will allow cannabis licensees and others to manufacture, distribute and sell industrial hemp products. The industrial hemp products must be tested and labeled in a truthful manner. Hemp with THC levels greater than .3% can be provided to cannabis manufacturers.

The legislature is proposing to use the Cannabis Control Fund to pay for the bill’s implementation, which is estimated to be around $6.7 million. The Department of Public Health expects that there will be 750 to 800 new firms that will create and distribute hemp-derived CBD products.