Statement by Jonathan Miller, General Counsel, U.S. Hemp Roundtable, on AB2223

With great disappointment in the administrative state – but with hope that Governor Newsom and the Legislature see through a bureaucratic power grab that poses an existential threat to the California hemp industry – the US Hemp Roundtable strongly urges state legislators to vote “NO” on AB 2223.

Three years ago, the US Hemp Roundtable worked closely with the Governor’s team and legislators led by Assembly member Aguiar-Curry, to create a balanced, rational and responsible framework to legalize hemp CBD products in California, Assembly Bill 45. Relying on that bill, farmers and businesspeople developed an industry that has grown to nearly $4 billion, with nearly a quarter billion dollars in sales tax and other revenues and more than 40,000 employees across the state.

Unfortunately, the state Department of Public Health purposely failed to execute its responsibilities under AB 45. It refused to implement a robust licensing scheme envisioned in AB 45 to generate the revenue necessary to fulfill its obligations.  It ignored its enforcement role at the state and local level to protect the public health against bad actors that sought to infiltrate the marketplace with products that were poorly manufactured and illegally targeted children.  It sat on its hands when AB 45 provided the department with ample authority to recognize and respond to inappropriate actions on the ground through regulatory reforms.

Last year, AB 420 was offered by Asm. Aguiar-Curry as a well-intentioned legislative effort to address the lack of enforcement.  The hemp industry eagerly shared its thoughts on the best ways to approach regulation that would safeguard the economic gains while cracking down on the bad actors.  The hemp industry has long called for state and federal regulation, which protects not only consumers and children, but also the integrity of the industry.  That bill was not fully cooked and was appropriately held in committee.

Unfortunately, her new bill, AB 2223, introduced this year, took a big step backward.  The bill included outrageous requirements that would result in the ban of 90-95% of hemp products for retail sale – including most non-intoxicating CBD products that were the explicit focus of passage of AB 45. Hemp advocates were met with continual promises – both privately and during public hearings – that our concerns would be addressed, that the language in AB 2223 was just a starting point of the discussion.  The hemp industry provided legislators and the Administration with scientific and economic studies to bolster our arguments.

Yet just within the past few weeks, the California Department of Cannabis Control dropped a bomb on the discussions.  In 41 pages of new “technical” amendments, the agency proposed that all hemp products with any THC in them – again, meaning nearly every hemp product – come under their purview and therefore be banned from retail sale.   Worse yet, the agency is trying to sway legislators to adopt this Trojan horse in the wee hours of the legislative session.  With barely two weeks left before the Legislature adjourns for the year, they have not even publicly released their massive rewrite and reconfiguration of hemp and CBD laws.

The lack of transparency is no coincidence. These efforts have represented an unholy alliance between regulators and the companies they regulate – the largest marijuana companies who seek to destroy the new hemp industry as a way to capture market share by forcing all hemp products to be sold exclusively in their own dispensaries. It’s a cynical effort to build monopolistic empires – both governmental and financial – on the backs of hemp farmers and small businesses, as well as at the expense of small, independent and minority owned cannabis companies.

These regulators and marijuana companies are not concerned about the likely loss of tens of millions of sales tax dollars at the time that the state is facing huge budget deficits.  They don’t care about the thousands of employees who will lose their jobs.  And in the most inhumane consequence of their game plan, they are turning their backs on millions of Californians who rely on hemp CBD for its therapeutic benefits, Californians who don’t choose to shop in marijuana dispensaries for health and wellness products or popular hemp beverages, Californians who live in the 60% of the state that doesn’t even have dispensaries, Californians who have no faith that dispensaries will even sell lower THC products because they’re in the business of getting people high.

If this plan is allowed to become law, it will be a stunning reversal of a pathway adopted with strong bipartisan support in the Legislature and the intimate involvement of the Administration.  It will effectively convey to small businesses across the state that the state does not care to support businesses that play by the rules.  If we don’t like the product you sell, we will do whatever it takes to put you out of business.

We implore the Legislature to see through this fiction and protect the good actors in California while taking smart actions to curtail the practice of some bad actors.  We implore Governor Newsom to delve deeply into the details and not allow his deputies to push through an action that goes against all of his core principles of fairness, prosperity and economic growth.

We urge all Californians to let the Governor and the Legislature know that AB 2223 should be quashed and a true collaborative effort should begin next year to protect farmers, small businesses, consumers and children.  Please use this link to send an email to Governor Newsom and your legislators to urge a “NO” vote on AB 2223.

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The U.S. Hemp Roundtable is a coalition of dozens of leading companies and organizations committed to safe hemp and CBD products. We proudly represent the industry’s major national grassroots organizations, and are leading the way forward for hemp and CBD products through education and action. The mission of the U.S. Hemp Roundtable is to advocate for science-driven, equitable, and inclusive law and regulation for hemp industries – including agriculture, oilseed, fiber and extracts, such as CBD – to produce a reliable, sustainable supply chain of responsible commerce.