Will California Get a Hemp Social Equity Program?

As states across the country develop regulated cannabis programs, more and more are incorporating social equity programs. Illinois’ new adult-use cannabis law, for example, made waves for its broad social equity program. Here in California, cannabis social equity is not a central part of the state-level regulations, but many of the larger cities throughout the state have adopted and are in the process of implementing comprehensive social equity programs: for example, Los Angeles, San Francisco, and Long Beach. Others will probably follow in the future.

But the same isn’t really true for California hemp or hemp-derived cannabidiol (“Hemp CBD”). California hasn’t really made any progress on adopting hemp social equity programs, probably because of the murky legality of hemp to start. Most Hemp CBD products are “illegal” according to the California Department of Public Health, and . AB-228—the bill that may change that, if it ever moves forward—won’t really do anything to create any kind of social equity benefits for Hemp CBD manufacturers or sellers. California’s existing hemp cultivation law—the California Industrial Hemp Farming Act (or “CIHFA”, which I’ve written about here)—is half a decade old and essentially is limited to regulating very limited aspects of cultivation.

The CIHFA is not really geared towards the easy creation of a social equity program for hemp farmers. It doesn’t necessarily require city or county permitting, but instead requires that commercial cultivators file simple registration forms with county agricultural commissioners and pay a pretty nominal fee. This is in contrast to the state’s cannabis law—the Medicinal and Adult Use Cannabis Regulation and Safety Act and its corresponding regulations (or “MAUCRSA”)—which requires local approval and thus creates the opportunity for cities to fill the gap with their own individualized social equity programs. Because there’s currently not an equivalent licensing program for hemp, and because the state laws on point don’t address social equity, we just aren’t seeing that happen.

Moreover, a possible amendment to the CIHFA (SB-153) will actually hurt the chances of the state getting a social equity program that looks anything like cannabis social equity programs. One of the current provisions of SB-153 states:

Any person convicted of a felony relating to a controlled substance under state or federal law before, on, or after January 1, 2020, shall be ineligible, during the 10-year period following the date of the conviction, to participate in the industrial hemp program.

This provision is a bit vague and we don’t yet know how it will be implemented—for example, what the state means by “participation” is not yet clear so we don’t know if that would bar someone from being an owner of a hemp farm, or even being employed by one. It is also similar to exclusionary language found in the federal 2018 Farm Bill, which bars “any person convicted of a felony relating to a controlled substance under State or Federal law.”

We wrote about the discriminatory impact of that language here. Under the similar SB-153 language, if someone had a controlled substances conviction—likely even a cannabis conviction anywhere in the U.S.—within 10 years of attempting to participate in the industrial hemp program, they would be ineligible. This is anathema to social equity programs which in many cases will give assistance to persons were convicted for possession of controlled substances (i.e., Los Angeles’ program). The upshot is that if a locality were to adopt a social equity program, it may not be able to use prior convictions as a basis for eligibility and would have to design it a lot differently.

At the end of the day,  it’s too early to tell whether the state will bring social equity to hemp. We’ll report back on any updates to this, so stay tuned to the Canna Law Blog.