AB-45: California Finally Welcomes Hemp Products To The Marketplace

Sheppard Mullin Richter & Hampton LLP

Sheppard Mullin Richter & Hampton LLP

In a win for much of the booming hemp products industry, on October 6, 2021, California Governor Gavin Newsom signed AB-45 into law.  AB-45 is comprehensive legislation that regulates and legitimizes many industrial hemp products. The law excludes from the list of permissible products inhalable hemp products. The law takes effect immediately and supersedes the California Department of Public Health’s (CDPH) 2018 “FAQ” guidance on hemp-derived CBD in food, beverages, dietary supplements, and pet food. The new law allows for the inclusion of hemp and cannabinoids (e.g., CBD), extracts, or derivatives of hemp in food and beverages, dietary supplements, cosmetics, and pet food.

Among other things, AB-45 establishes a registration requirement for manufacturers of hemp products.  It also requires testing by an independent laboratory of hemp extract in its final raw form (prior to being incorporated into a product) to ensure that the THC concentration does not exceed the 0.3% threshold and that no unsafe contaminants are present. Like many other states’ hemp product regulations, AB-45 requires that hemp products which are foods, beverages, or dietary supplements include:

  • A label, scannable barcode, internet website, or QR code linking to certificates of analysis, providing, among other things, the THC content of the tested batches.
  • The product expiration or best by date, if applicable.
  • A statement indicating that children or those who are pregnant or breastfeeding should avoid using the product prior to consulting health professionals.
  • A statement that cannabinoids should be kept out of reach of children.

The law prohibits the labeling, advertising, or marketing of any untrue “health-related statement,” which is defined as a “statement related to health . . . [that] suggests a relationship between the consumption of industrial hemp or industrial hemp products and health benefits or effects on health.”

Absent from the law, however, is guidance on maximum serving sizes, good manufacturing practice standards for manufacturers, active cannabinoid concentration per serving size, the number of servings per container, record-keeping standards, advertising, age restrictions, licensing fees, and possible “prohibited products” (in addition to what is already in AB-45).  The CDPH is given the authority to issue regulations on these issues and we anticipate seeing such guidelines in the near future.

Finally, recognizing a the current and potential future conflict with federal law, AB-45 provides that when federal law authorizes hemp products, CDPH “shall adopt new regulations either as necessary pursuant to the federal law or deemed necessary to protect consumers.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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