California Moves to Make CBD, Like THC, an Investor-Class Industry

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Earlier this month the California Department of Public Health Food & Drug Branch (CDPH-FDB) set a dangerous new precedent by strongly stating that absolutely no hemp-derived CBD is allowed to be added to any sort of food or beverage to be sold in the state.

From their newly revised FAQ:


“[A]lthough California currently allows the manufacturing and sales of cannabis products (including edibles), the use of industrial hemp as the source of CBD to be added to food products is prohibited. Until the FDA rules that industrial hemp-derived CBD oil and CBD products can be used as a food or California makes a determination that they are safe to use for human and animal consumption, CBD products are not an approved food, food ingredient, food additive, or dietary supplement.”

Everyone from hemp farmers to patients dependent on the vast array of healing capabilities of the CBD compound looked on in disbelief as the state that allegedly legalized recreational cannabis use in 2016 bowed down to the federal government just two years later over hemp-derived CBD.

The way that the state is leaning on federal approval from the FDA over hemp is odd considering that they admit in the very same statement that cannabis is being legally grown, sold, and regulated in California despite the fact that it is still federally illegal and flies in the face of the Controlled Substances Act.

The latest set of regulations handed down by the CDPH strike a difficult blow to the hemp-based CBD market which has exploded in California with products popping up in gas stations, dispensaries, grocery stores, on the menu at restaurants, and more. The real fear is that California may set a precedent that other states begin to follow.

According to Hemp Industry Daily, the Cali regs now clearly state:

  • CBD cannot be added to “food, drink, confection, condiment or chewing gum by man or other animal.”
  • The source of the CBD, whether from marijuana or industrial hemp, does not matter.
  • CBD would have to come from people with “commercial cannabis licenses,” something many hemp-derived CBD processors and manufacturers in California do not have.
  • Marijuana retailers must use marijuana-derived CBD in their products. Hemp-derived CBD is specifically banned in manufactured cannabis products  

So let’s break that down.
Anything you are going to put in your mouth – OR – an animal’s mouth to eat or drink or otherwise ingest cannot contain CBD unless it is derived from cannabis plants grown under a commercial cannabis license.

The amount of high-CBD/no-THC cannabis flower being grown under the otherwise lucrative commercial cannabis licenses in California is somewhere between slim and none and even if some large farms made the switch to CBD weed, the imbalance between supply and demand would keep the prices for “legal” cannabis-derived CBD products artificially high and out of most patients’ price range.

As a further consequence, all licensed/legal dispensaries in California are now allegedly prohibited from selling any and all edible or drinkable hemp-based CBD products.

From Alex Traverso, spokesperson for the Bureau of Cannabis Control: “The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) applies to cannabis and explicitly excludes industrial hemp from the definition of cannabis. Retailers licensed by the Bureau are licensed to sell cannabis goods and may not sell industrial hemp products on the same licensed premises where cannabis goods are sold.”

Even with the strict clarification of the regulations, many shops are still confused and wondering about hemp-based lotions, bath bombs, and other CBD infused products.

What about hemp pre-rolls? We sure aren't smoking 'em, but they are on shelves now - are they legal?

So some shops are clearing out all hemp-derived products, some are just taking out all edibles, and surely some are always going to buck these ridiculous laws and keep their shelves stocked.

So far the Department of Public Health has not revealed how it plans to enforce these regulations and industry lawyers are chomping at the bit waiting to litigate any attempts by the state to step on the hemp plant which they say is absolutely legal in California, including “in every preparation of the plant”.

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For now, hemp-derived CBD products are being sold in every corner of America.
So for now, California-based hemp producers could export their extracted CBD isolates to states where the hammer hasn’t dropped on CBD yet… but that hammer is starting to drop, and not just in California.

On Monday of this week, the highly popular Green Gorilla Smoke & Vape Shop in Amarillo, TX was raided by federal DEA agents who seized all CBD oil, some of the same brands still available on Amazon.com.

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Lawyers for the store are ready to fight, telling the Amarillo Pioneer, "The DEA took CBD oils during the raid and $170,000 has also been confiscated from one of the owner's homes for something that is not drugs regardless of how [U.S. Attorney General] Jeff Sessions squints at it."

On Tuesday of this week, local Drug Task Force Agents in Missouri raided the Park Hills location of Peace of Mind Smoke Shop, stripping the shelves of all CBD products after they sent an undercover agent in and bought CBD products – some bang-up police work there boys, we’re sure the streets are much safer now, right?

No news so far of DEA raids at Amazon warehouses…

This is the problem though – the dangerous precedent.
If left-wing California is going to make CBD a pay-to-play industry reserved exclusively for the investor-class, what will stop smaller and less weed-friendly states from following their lead?

The will of the people?