California Just Got Closer to Allowing CBD in Foods and Licensed Cannabis Facilities

Our California hemp lawyers have been getting pummeled with questions about the legality of industrial hemp derived cannabidiol (“Hemp CBD”) ever since the 2018 Farm Bill was signed in January (and especially since our recent hemp and Hemp CBD webinar). One of the most frequent questions we receive is whether CBD is a lawful additive in foods.

The answer is often no depending on the state in which Hemp CBD food products will be sold. At a baseline, there has been guidance from the federal Food and Drug Administration (“FDA”) which says that Hemp CBD cannot be added to foods. Some states have taken an aggressive approach to enforcement, while others haven’t. One of the states with a clearer position is California. The California Department of Public Health (“CDPH”), in its now infamous Hemp CBD FAQs, took the position that Hemp CBD could NOT be added to foods—and this position was notably based on federal law (which now has been changed via the 2018 Farm Bill) and the FDA’s position.

Back in January, I wrote about a piece of California legislation that had just been introduced, AB-228, which was aimed at paving the way for adding Hemp CBD to foods, beverages, and cosmetics. I wrote that AB-228 didn’t go quite far enough under California law to allow CBD, and would have no effect on the FDA’s position—so ultimately it doesn’t look like that version of AB-228 would really change very much in California.

On March 13, 2019, AB-228 got some well-needed amendments which put the law much closer to actually allowing Hemp CBD to be included in food products. Of equal importance, the amendments may open up the manufacture and sale of products which contain Hemp CBD in the licensed cannabis chain, which is a first for licensed cannabis companies in the Golden State.

CBD in Foods, Beverages, and Cosmetics

AB-228’s initial text would have conclusively established that food, beverages, and cosmetics are not “adulterated” merely by including Hemp CBD. As I noted back in January, the biggest major legal roadblock to selling Hemp CBD foods in California was the FAQs, which don’t in fact claim that Hemp CBD makes foods or beverages “adulterated” (and say nothing about cosmetics). The reference to being “adulterated” came from state law which was not even the basis for the FAQs.

The revised text of AB-228 goes much further. Not only would the bill conclude that Hemp CBD foods and beverages are not adulterated, but it would also find that foods and beverages containing industrial hemp or Hemp CBD are safe for human and animal consumption. The bill would notably also state:

The sale of food or beverages that include hemp or cannabinoids, extracts, or derivatives from industrial hemp shall not be restricted or prohibited based solely on the inclusion of industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp.

Similar provisions would also be included for cosmetics.

The modifications to AB-228 would therefore come much closer to legalizing Hemp CBD in foods and beverages under California law. But again, the FDA has still taken the position that Hemp CBD in foods is unlawful, and the CDPH’s FAQs are based on the FDA’s position. It’s not clear just yet whether the CDPH would reverse its position if this law were passed, or whether it would stick to its guns. Regardless, this is a major step forward for Hemp CBD manufacturers and sellers in California.

CBD in Licensed Cannabis Facilities

As important as adding CBD to foods, AB-228 might allow them in the licensed cannabis market. Section 1 of the law would essentially add a section to the Medicinal and Adult-Use Cannabis Recreation and Safety Act (“MAUCRSA”) as follows:

(a) This division does not prohibit an entity licensed pursuant to its provisions from cultivating, manufacturing, distributing, or selling products that contain industrial hemp, as defined in Section 11018.5 of the Health and Safety Code, or cannabinoids, extracts, or derivatives from industrial hemp.

(b) A product containing industrial hemp-derived tetrahydrocannabinol (THC) in concentrations above 0.3 percent by product weight is subject to this division.

What this amendment would do is open up the doors for licensed cannabis companies to use industrial hemp plants and derivatives to manufacture and sell a host of CBD products that would otherwise be unlawful. This is a huge change and may lead to the sale or addition of Hemp CBD in the licensed cannabis market, which to date has been prohibited.

AB-228 hasn’t passed yet and isn’t guaranteed to pass. But if it does, that could spell major changes for Hemp CBD. Stay tuned to the Canna Law Blog for more AB-228 developments.