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On October 6, 2021, California Governor Gavin Newsom signed AB 45 into law. Passage of this legislation ushers in a new era for CBD in the state and could be a watershed event for other follow-the-leader jurisdictions.
In this post we’ll examine the meaning and impact of this new legislation.
Always a good idea to know what we’re talking about before actually talking about it, yah? Alright, let’s do this.
AB 45 is a law provides definitions, rules, and other guidelines related to industrial hemp. Also coming under this umbrella are hemp byproducts — like hemp-derived CBD. The statute discusses which products can be made and how these items can be distributed and marketed.(https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB45)
Previously, many aspects of CBD law were undefined or informal in the Golden State. Generally, in situations like this where there’s a lack of concrete CBD regulations or oversight mechanisms, states default to whatever the federal government has stipulated on the issue at hand (e.g., the legal amount of THC permitted in CBD).
AB 45 brings formality and structure to the CBD space in California. This effectively reduces the extent to which California relies on or leans into the federal hemp laws.
AB 45 effects some significant changes. Here are some of the most noteworthy parts.
Sometimes when you say pot-ay-to and lawmakers say pot-ah-to, you aren’t both referring to the same brown-skinned, white-fleshed starchy tuber.
It’s the same thing with hemp. AB 45 explicitly classifies cannabis plants and any of their parts or derivatives (like CBD oil) with no more than 0.3% on a dry weight basis as industrial hemp.(https://manzurilaw.com/ten-things-you-need-to-know-about-ab-45-legal-cbd-hemp-in-california/)
This legislation lays out new — and expanded — provisions for how CBD can be legally formulated and marketed. Producers are now permitted to call CBD a dietary supplement and include it in:
This is interesting because the 2018 Farm Bill (the national legislation that legalized hemp/CBD) bans infusing human and animal foods and drinks with CBD or marketing CBD as a dietary supplement.(https://www.jdsupra.com/legalnews/california-passes-cbd-law-that-2956818/)
AB 45 doesn’t give the green light to smokables for sale and use within the state yet. (Businesses can produce and sell smokables out-of-state, though.) But it is priming the system so that future legislation will be able to legalize smokable CBD products.(https://harrisbricken.com/cannalawblog/industrial-hemp-products-including-cbd-are-finally-legit-in-california/)
The law also establishes a path forward for creating formal processes, frameworks, taxation, etc. New requirements for testing, labeling, sourcing, and registration are included in this category of “Rules & Regulations.”
On the one hand, this is helpful for business owners because it gives them something to hang their hats on. They’ll be better positioned to make plans and investments if they have official regulations to adhere to and standards to meet. (Businesses hate uncertainty!)
On the other hand, it’s a lot of change coming fast (or, as fast as government rolls…) and furious down the pike. It’s also a lot of new regulations to for a business to have to be in compliance with. While there is a period of adjustment, dealing with the added bureaucracy and meeting new requirements may be operationally challenging (read: It’ll probably cost more and take more time/people.) for some businesses.
Here’s the cool thing. AB 45 could be absolutely fan-freakin’-tastic for you as a CBD enthusiast.
How so? Our top reasons for why this could be the start of something beautiful for you:
AB 45 is mega important for three main reasons:
So, AB 45 is likely to have an impact that’s proportional to the magnitude of California’s overall and CBD economies. Manufacturers, retailers, and industry trade groups are already oscillating between cautiously optimistic and borderline positive — they’re starting to salivate at the prospects of new biz opportunities.(https://www.foodnavigator-usa.com/Article/2021/10/07/The-era-of-CBD-prohibition-in-the-Golden-State-is-over-CA-governor-signs-hemp-bill-AB-45-into-law)
And, because California is the behemoth kingmaker it is, AB 45 and any downstream effects that come from it could have ramifications beyond the CA state lines. The California law could inform or hold sway over the statutes of other states or even the federal legal code.
Time is probably the only way we’ll really be able to tell how monumental and meaningful AB 45 turns out to be for CBD laws, culture, commercialization, and consumption. Per our usual advice — stay tuned to see what happens!
California recently enacted AB 45. Among other things, this law expands the permissions and obligations of CBD businesses. It allows them to market CBD as a dietary supplement and make and sell CBD-infused foods and drinks, pet food, and cosmetics.
AB 45 may be a win for consumers as well. It could mean good things like:
Even if you aren’t in California or sourcing your CBD from a CA-based biz — this law and the impacts it has are worth paying attention to. Because California is such a power player in both the world economy and the CBD market, it’s probably going to influence CBD regulation, industry, and usage elsewhere.
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