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California is moving toward a permanent ban on hemp-derived THC products—like Delta-8 THC vapes, edibles, and beverages. This comes after an emergency rule from Governor Newsom’s administration in 2024 that blocked the sale of these products across the state.
Now, the California Department of Public Health (CDPH) has proposed turning that temporary rule into a permanent one. The move could bring big changes for hemp businesses, retailers, and the broader cannabis market. Here’s a breakdown of what’s happening, why the state is doing it, and what businesses should do next.
In September 2024, California passed emergency rules banning hemp products that contain even small amounts of THC, including popular products like hemp-based gummies and THC drinks. These products were being sold at gas stations, smoke shops, and grocery stores—often without age limits or testing requirements.
The emergency rule was extended in March 2025. Then, on June 13, 2025, the CDPH proposed making the ban permanent. The new rule would keep the “no detectable THC” limit in place and restrict hemp-derived products to people 21 and over. It would also limit packages to five servings of CBD or other non-THC cannabinoids. A public comment period is open through late July, with a public hearing expected before the final decision.
The state says the main goal is to protect public health, especially for young people. Lawmakers are concerned that hemp THC products are being sold without proper safety checks. Because they are made from hemp, these products don’t go through the same testing, labeling, and tax systems as licensed cannabis.
Officials also say it’s about fairness. Licensed cannabis businesses argue that hemp THC is an unfair competitor because it avoids many of the rules they have to follow. California hopes to create a more level playing field by banning these products. Other states like Oregon and Washington have taken similar steps to crack down on unregulated hemp THC.
If this ban becomes permanent, the impact could be huge. According to state estimates, hemp businesses could lose more than $2 billion in revenue over the first five years. Nearly 18,500 jobs could be lost, and up to 115 businesses might shut down.
Small retailers like gas stations, convenience stores, and corner shops could be hit the hardest, as many rely on hemp product sales for a big part of their income.
Licensed cannabis companies might see some benefit in new revenue and jobs. But overall, the damage to the broader hemp and retail market could outweigh those gains.
Hemp businesses that sell THC products will need to make big changes fast. If the rule becomes permanent, they’ll have to remove or reformulate any products that contain detectable THC. This could mean reformulating gummies, beverages, tinctures, and vapes to meet the state’s strict standards.
Retailers that stock these products will also need to act. If they keep selling banned items, they could face fines or other penalties. Many may need to clear out inventory, cancel orders, or find new products to fill the gap.
Licensed cannabis operators may have a chance to expand. With less competition from hemp THC, some cannabis companies could attract new customers. But they’ll also need to make sure they have enough supply, update pricing, and follow all state rules.
Lawyers and consultants should help clients prepare now. That includes reviewing product formulas, checking packaging and labeling, and preparing for possible enforcement actions.
Here’s what to expect next:
Some businesses and trade groups may challenge the rule in court. They could argue that California’s ban conflicts with federal law under the 2018 Farm Bill, which allows hemp products with less than 0.3% Delta-9 THC. Others might push for more balanced regulations—like age limits, product testing, and labeling—rather than a total ban.
If you own or operate a hemp or cannabis business in California, now is the time to take action. First, get involved in the regulatory process by submitting comments to the California Department of Public Health (CDPH) before the deadline and consider speaking at the upcoming public hearing. Written comments can be submitted in a few ways:
Next, review your current product offerings and remove or reformulate anything that contains detectable levels of THC to avoid potential penalties. It’s also a good idea to explore new business opportunities by shifting toward non-THC products, such as CBD isolate or other minor cannabinoids that remain compliant under the proposed rules. Retailers should prepare to update their product mix and clearly communicate changes to customers.
Finally, work closely with a cannabis attorney. These regulatory changes are complex, and legal guidance can help you understand your options, avoid risks, and stay compliant.
California’s move to permanently ban hemp THC marks a major shift for the industry. While it’s aimed at protecting consumers and supporting the licensed cannabis market, the proposed rule could force major changes across the supply chain.
Businesses that plan ahead and stay involved in the process will have the best chance of adapting. If you need legal support navigating these changes, now is the time to act.
Contact us today or call 858-756-7107 to learn how we can help.
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