Hemp And CBD Groups Threaten To Sue California Over Governor’s New Rules Restricting Cannabinoid Products

California Gov. Gavin Newsom’s (D) plan to crack down on hemp-derived cannabinoids in the state is rankling some in hemp industry, who now say they’re exploring lawsuits to challenge the governor’s proposed emergency rules unveiled last week.

On Friday, the advocacy group One Hemp said it’s considering a court challenge “with the intent to hold Newsom accountable to the normal democratic process.”

The organization, which has ties to the hemp CBD industry, notes the governor’s proposal was never approved by the state legislature and would severely restrict access to hemp products already legal under federal law.

“These are products that the disabled, chronically ill and veteran communities cannot live without to help support seizures, pain and mobility management, sleep and more,” One Hemp said in a press release about the possible lawsuit.

Jared Stanley, a founding member of One Hemp and a co-founder of the CBD company Charlotte’s Web, said Newsom’s plan to target hemp-derived cannabinoids is overbroad and would severely harm families who rely on CBD products.

“If you ultimately choose to formally issue these regulations on an emergency basis, we will challenge their legality, and we will win.”

“We have been supportive of Governor Newsom’s intent to rid bad players in the hemp industry,” Stanley said in a statement Friday, “but we were shocked that he chose to lump in responsible hemp companies that have been fighting for quality and safety standardization that’s backed by science, data, and research. Newsom’s overreach is shameful and will devastate the good players and have dire consequences for the families who rely on their products for quality of life.”

Shortly after the emergency regulations were formally filed on Friday with state officials, the U.S. Hemp Roundtable, an industry trade group, indicated that it plans to challenge the rules.

The group’s general counsel, Jonathan Miller, wrote of the emergency rules on social media: “We will be challenging them through the proper legal forums. And we will win.”

A few hours ago, @GavinNewsom‘s health agency formally filed its hemp-killing emergency regulations. We will be challenging them through the proper legal forums. And we will win. Stay tuned — on Monday, we will be sharing our strategy, and asking for your help.

— Jonathan Miller (@RecoveringPol) September 13, 2024

With the emergency regulations now officially with the Office of Administrative Law, stakeholders will have only days to file public comment on the proposed changes, according to the health department’s finding of emergency.

Miller at the Hemp Roundtable earlier this week sent an open letter to Newsom, saying: “We believe you are being misled.”

“You were misled to announce sweeping emergency regulations last Friday because you don’t have the legal authority to issue them,” Miller wrote. “California law is crystal clear: The measures you proposed must go through the regular 45-day notice and comment framework of the standard regulatory process.  If you ultimately choose to formally issue these regulations on an emergency basis, we will challenge their legality, and we will win. Please don’t waste scarce taxpayer resources fighting a battle that is unwinnable.”

In an open letter to @GavinNewsom, U.S. Hemp Roundtable General Counsel @RecoveringPol urges the Governor to withdraw the proposed emergency hemp regulations. pic.twitter.com/tIHAGPScPa

— US Hemp Roundtable (@HempRoundtable) September 12, 2024

“The answer is quite simple,” his letter says. “We kindly request that you withdraw your proposal.” It asks instead that health regulators instead crack down on bad actors in the hemp-derived product space and “work with industry to develop a legislative proposal that imposes meaningful safeguards against selling and marketing hemp products to children.”

Miller emphasized that hemp advocates have “reached out our hands repeatedly to your Administration to develop a new robust regulatory framework.”

“We’d much rather work with you rather than pursue you in court,” he wrote to the governor.

Notably, Newsom’s proposal—part of an effort to rein in the proliferation of products that contain intoxicating hemp-derived cannabinoids—would outlaw hemp products with any “detectable amount of total THC.” Hemp products that don’t contain any THC would further be limited to five servings per package, and sales would be restricted to adults 21 and older.

While One Hemp has not yet filed suit over the newly proposed rules, the group’s press release gives an indication of advocates’ theory behind the challenge.

“The question becomes, is Newsom acting outside of his boundaries here?” the release asks. “The Office of Administrative Law will most likely consider three key factors in their ruling: Is this an actual emergency? Does this align with federal hemp guidelines of .3% THC allowable in consumer products? Does the Governor have the authority?”

One Hemp says that it’s supportive of the plan to regulate psychoactive delta-8 THC products, but it says that advocates for hemp CBD “are ardent that they shouldn’t be collateral damage.”

Stephanie Bohn, a California mom who says hemp CBD helped her 10-year-old child, Sadie, celebrate a year without seizures, said Newsom’s rules “signify that the Governor intends to turn his back on my daughter and millions in the disabled community.”

“Governor Newsom, please acknowledge children like my daughter–the ones with intractable seizures and debilitating insomnia that conventional pharmaceuticals don’t help,” she said in a statement. “The only thing that offered rescue was full-spectrum CBD. This is more than a policy issue, this is a life-or-death issue.”

Newsom’s proposal comes less than a month after the state legislature effectively killed a governor-backed bill that would have imposed somewhat similar restrictions on intoxicating hemp-derived cannabinoids.

The governor said in a press conference late last week that he expects the new rules to take effect after a “very short” administrative process.

“We will not sit on our hands as drug peddlers target our children with dangerous and unregulated hemp products containing THC at our retail stores,” Newsom added in a press release. “We’re taking action to close loopholes and increase enforcement to prevent children from accessing these dangerous hemp and cannabis products.”

The move has the support of the California Department of Public Health (CDPH) and marijuana regulators at the Department of Cannabis Control (DCC). It’s also backed by the California Cannabis Industry Association (CCIA), which represents mostly regulated marijuana businesses.

“We commend Governor Newsom’s decisive action to address intoxicating hemp products in California, protecting public health and ensuring that harmful, unregulated products no longer undermine our state’s rigorous cannabis laws,” Laura Fogelman, a volunteer board member for CCIA, told Marijuana Moment in an email last week. “These emergency regulations will create a safer, more transparent marketplace while safeguarding our youth and preserving the integrity of—and critical tax revenues from—California’s cannabis legalization framework.”

Other reformers, such as Dale Gieringer, the director of California NORML, have raised concerns that the proposed rules are impracticable. He’s argued that the strict limit on THC would effectively outlaw even hemp products not intended to be intoxicating.

“This is an overly broad regulation that would harm many medical users who rely on high-CBD extracts to treat childhood epilepsy, cancer and other serious conditions,” Gieringer told Marijuana Moment. He added that California NORML has heard worries from doctors who recommend high-CBD hemp extracts to patients.

California NORML has pointed out that it’s “virtually impossible to eliminate trace amounts of THC from natural hemp products,” noting that “Even the FDA-approved CBD pharmaceutical Epidiolex contains detectable traces of THC.”

“The governor is quite right to be concerned about the sale of hemp products with intoxicating doses of THC,” Gieringer said. “However, the regulation needs to be relaxed to exempt low-THC, high-CBD medicinal preparations, as other states like Colorado have done.”

Newsom expressed hope at last week’s press conference about working with Assemblymember Cecilia Aguiar-Curry (D), who sponsored the legislative plan to restrict intoxicating hemp products, in the coming legislative session.

“We believe hemp—even hemp with intoxicating components—can be sold,” the governor said, “but they must be sold in a regulated environment, not in grocery stores, not in corner stores all throughout the state of California.”

Aguiar-Curry’s bill, AB 2223, would have done more than just outlaw intoxicating hemp products. As written, it would have folded hemp-derived cannabinoid products into the state’s regulated marijuana system and opened the door to out-of-state hemp producers to sell products into California’s cannabis market.

Products with any detectable amount of THC or other intoxicating cannabinoids would need to be sold through state-licensed cannabis dispensaries under AB 2223. So called “pure CBD” products would not be subject to that rule, but those products could not contain any detectible amount of THC or any other intoxicating cannabinoid.

Newsom said he hoped to partner with Aguiar-Curry next year “to address some of the integration issues” that come with moving intoxicating hemp products under the state’s regulatory system for marijuana.

The advocacy group Origins Council, which says it represents about 800 small and independent cannabis businesses in rural counties throughout the state, was one of the lead advocacy groups pushing back on AB 2223 this session. In comments to Marijuana Moment last week, however, the group applauded Newsom’s emergency proposal to outlaw hemp-derived cannabinoids.

“Legalizing hemp under the 2018 Farm Bill, while maintaining federal prohibition on cannabis, was always going to lead to absurd outcomes,” said Ross Gordon, Origins Council’s policy chair. “Ultimately, the only path forward is to federally legalize cannabis, and to regulate hemp and cannabis at parity from farm to retail.”

“In the meantime,” Gordon added, “addressing these intoxicating hemp loopholes is absolutely necessary, and we applaud Governor Newsom for taking this important step forward.”

Somewhat similar discussions about how to regulate hemp derivatives are playing out at the federal level, as congressional lawmakers consider legislative provisions to impose a general ban on hemp-derived cannabinoids such as delta-8 THC.

Rep. Mary Miller’s (R-IL) amendment to the 2024 Farm Bill, for example, was approved by a House committee in May and would remove cannabinoids that are “synthesized or manufactured outside of the plant” from the federal definition of legal hemp. The change is backed by prohibitionists as well as some marijuana companies, who’ve described the restriction as a fix to a “loophole” that was created under the 2018 Farm Bill that federally legalized hemp and its derivatives.

Anti-drug groups, law enforcement and some health organizations have called on Congress to embrace the ban, arguing that “trying to regulate semi-synthetic cannabinoids will not work.”

In addition to Miller’s amendment in the 2025 Farm Bill, the House Appropriations Committee last month approved a separate spending bill that contains a similar provision to prohibit cannabinoid products such as delta-8 THC and CBD containing any “quantifiable” amount of THC.

Hemp-derived cannabinoids also came up in a recent federal appeals court decision in which judges ruled that cannabinoids derived from hemp, such as THC-O-acetate, indeed qualify as hemp and are legal under the 2018 Farm Bill. In making that ruling, the court rejected the Drug Enforcement Administration’s more restrictive interpretation of the law.

How to address hemp-derived cannabinoids has caused some fractures within the cannabis community, and in some cases marijuana businesses have found themselves on the same side as prohibitionists in pushing a derivatives ban.

In a letter to congressional leaders ahead of Miller’s amendment, the U.S. Cannabis Council (USCC) proposed specific language they wanted to see included that would place hemp-derived cannabinoids containing any amount of THC under the definition of federally illegal marijuana.

While they’ve focused on the need to address public safety concerns related to unregulated “intoxicating” cannabinoid products such as delta-8 THC, some hemp industry advocates say the effect of the proposed language could be a ban on virtually all non-intoxicating CBD products as well, as most on the market contain at least trace levels of THC, consistent with the Farm Bill definition of hemp that allows for up to 0.3 percent THC by dry weight.

Meanwhile, the legislation that advanced through the House Agriculture Committee in May also contains provisions that would reduce regulatory barriers for certain hemp farmers and scale-back a ban on industry participation by people with prior drug felony convictions.

Specifically, it would make it so the U.S. Department of Agriculture (USDA), states and tribal entities could choose to eliminate a policy that prevents people with felony drug convictions in the past 10 years from being licensed to produce industrial hemp.

However, advocates had hoped to see more expansive language, such as what was described in Senate Democrats’ recent summary of their forthcoming Farm Bill draft. Under that plan, there would be a mandate to eliminate the ban, rather than simply authorizing it, and it would cover all hemp producers, not just those growing it for non-extraction purposes.

The Senate Agriculture Committee has not yet released the draft text of their bill, so it remains to be seen if the summary description matches what will ultimately be released. Bipartisan House lawmakers filed standalone legislation last year that would broadly lift the felony ban for would-be hemp producers.

Lawmakers and stakeholders have also been eyeing a number of other proposals that could be incorporated into the Farm Bill—and which could come up as proposed amendments as the proposal moves through the legislative process—including measures to free up hemp businesses to legally market products like CBD as dietary supplements or in the food supply.

The hemp market started to rebound in 2023 after suffering significant losses the prior year, according to an annual industry report from the U.S. Department of Agriculture (USDA) that was released in April.

The data is the result of a survey that USDA mailed to thousands of hemp farmers across the U.S. in January. The first version of the department’s hemp report was released in early 2022, setting a “benchmark” to compare to as the industry matures.

Bipartisan lawmakers and industry stakeholders have sharply criticized FDA for declining to enact regulations for hemp-derived CBD, which they say is largely responsible for the economic stagnation.

To that end, FDA Commissioner Robert Califf testified before the House Oversight and Accountability Committee earlier this year, where he faced questions about the agency’s position that it needed additional congressional authorization to regulate the non-intoxicating cannabinoid.

USDA is also reportedly revoking hemp licenses for farmers who are simultaneously growing marijuana under state-approved programs, underscoring yet another policy conflict stemming from the ongoing federal prohibition of some forms of the cannabis plant.

For the time being, the hemp industry continues to face unique regulatory hurdles that stakeholders blame for the crop’s value plummeting in the short years since its legalization. Despite the economic conditions, however, a recent report found that the hemp market in 2022 was larger than all state marijuana markets, and it roughly equaled sales for craft beer nationally.

Meanwhile, internally at USDA, food safety workers are being encouraged to exercise caution and avoid cannabis products, including federally legal CBD, as the agency observes an “uptick” in positive THC tests amid “confusion” as more states enact legalization.

Separately in California, lawmakers recently gave final approval to a bill to prevent what advocates call the “double taxation” of marijuana by restricting the ability of local governments to calculate their cannabis levies after state taxes are already applied. The legislation’s sponsor says if the proposal is signed into law it will end what he calls the “collection of a tax on a tax.”

California lawmakers also gave final passage to bills last month that would allow small marijuana growers to sell their products directly to consumers at state-organized farmers markets and legalize cannabis cafes in the state.

Also, a state-funded effort is underway to analyze the genetic information of various marijuana strains in order to preserve the state’s rich history of cannabis cultivation. It’s part of a project meant not only to acknowledge the past but also protect the future of legacy growing regions such as the Emerald Triangle.

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