California is moving to make permanent an emergency ban on hemp-derived THC products.
Hemp plants (photo credit: Heather Ainsworth for The Wall Street Journal).
On Friday, the California Department of Public Health (CDPH) announced a proposal to codify the ban, triggering a 45-day public comment period and setting the stage for a public hearing next month. If adopted, the rule would extend beyond the temporary emergency ban backed by Governor Gavin Newsom, which is set to expire in September.
Hemp-derived THC products are allowed nationwide via a loophole in the 2018 farm bill, which legalized industrial hemp. Although it’s certainly not what many lawmakers intended with the law, it has resulted in a proliferation of companies —including online retailers and local brick-and-mortar businesses like gas stations and smoke shops— selling a plethora of hemp THC products, such as THC beverages, gummies, and tinctures.
Governor Newsom has been a vocal critic of hemp-derived THC, arguing that these products pose a risk to minors and lack the strict safety standards applied to state-licensed marijuana products. His administration pushed for the original emergency ban last year, which he later extended in March.
According to CDPH’s own analysis, the move will result in a $602 million economic loss in the first year alone, climbing to over $3.1 billion by year five. The ban would eliminate nearly 18,500 jobs.
While the move may give California’s struggling licensed marijuana industry a temporary boost—with projected gains of $69.8 million in revenue and 232 new jobs—the CDPH noted that those benefits are modest compared to the widespread economic losses across other sectors.
The department also acknowledged that banning hemp THC products could drive more consumers to the underground market. “Out-of-state businesses and the illegal market will supply the California THC hemp market,” the report stated.
