Cannabidiol, commonly known as CBD, is a non-impairing substance that can be derived from hemp plants. CBD can be infused with many consumer products such as foods, dietary supplements, and cosmetics, and demand for those products has exploded — according to Forbes, the U.S. market for CBD is projected to grow to over $15 billion by 2024.
The federal government removed hemp from its list of controlled substances in 2018, but CBD products have been in a regulatory gray area in many states until recently. California’s Assembly Bill No. 45, signed into law in October 2021, brings clarity and structure to regulating hemp and CBD products in the state.
What Is AB45?
AB45 took immediate effect when Governor Gavin Newsom signed it into law last year. The bill supersedes previous regulation in California, where the state Department of Public Health had outlawed the sale of CBD products. AB45 created a legal framework for the CDPH to regulate the manufacture and sale of CBD products within the state.
What Does the Passing of AB45 Mean for Hemp and CBD Products?
The signing of AB-45 brought significant shifts to legal definitions surrounding the cannabis industry, California’s business and profession code, and its health and safety code. One major update expanded the definition of “industrial hemp” to include cannabis plants or plant parts containing less than 0.3% THC, a change from previous legislation, which only included plants.
AB45 Key Provisions
The most important and immediate effects of AB45’s signing are:
- Lifting the prohibition of the sale of dietary supplements, food, beverages, cosmetics, and pet foods containing hemp-derived extracts
- Affirming that dietary supplements, food, beverages, cosmetics, and pet foods are no longer considered ‘adulterated’ by the inclusion of industrial hemp-derived cannabinoids or extracts
In other words, the bill makes most CBD products legal to buy and sell in California. As a result, the bill mandates that all manufacturers of industrial hemp in the state must register with CDPH and comply with ingredient sourcing laws, quality testing requirements, and more.
What Products Are Excluded from AB45?
Not all products containing industrial hemp were legalized under AB45. Most notably, California still prohibits industrial hemp from being used or incorporated into medical devices, prescription drugs, tobacco or nicotine products, and alcoholic beverages.
Another caveat in the law concerns inhalable and smokable hemp products. AB45 states that inhalable hemp products can be manufactured for sale in other states but cannot be sold within California until the CDPH establishes a tax format for this type of product. The ban on “inhalables” appears to be temporary, but AB45 doesn’t provide a timeline for when the appropriate taxes might be enacted.
What about Federal Hemp Laws?
The FDA currently prohibits the selling of CBD-infused products from interstate commerce. AB45 states that the laws and regulations outlined will remain in effect until the federal government changes its stance on hemp products. But with no indication if or when federal legislation might be passed, it’s critical for California marijuana business owners to comply with the latest guidance at all levels.
Have Questions about Hemp-Derived CBD Regulation? Call McElfresh Law
After one year in effect, AB45 has paved the way for many marijuana businesses to profit from hemp-deprived products. However, you may have further questions about the production and selling of CBD and other hemp-derived products in California under AB45. McElfresh Law has helped countless individuals navigate the legal marijuana business in California and can provide the support you need to prosper.
Attorney Jessica McElfresh is dedicated to providing experienced council, helping you realize your business goals and comply with regulations. Call McElfresh Law today to retain a lawyer who is up to date on the latest developments in California cannabis law, including AB45 and hemp-derived CBD products. Contact us at (858) 756-7107 or reach out online to schedule a consultation.