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The day after California Governor Gavin Newsom‘s emergency ban on all hemp-derived THC products went into effect, a group of hemp businesses, including Cheech and Chong‘s cannabis company and the U.S. Hemp Roundtable filed a lawsuit in Los Angeles County Superior Court on Tuesday seeking to reverse the new rules.
Newsom’s ban essentially halts the sale of hemp products, including popular items like hemp-THC beverages and medicinal CBD products, throughout California.
“Significantly, at the core of the Department’s Emergency Regulations is a provision that goes far beyond the limits contemplated in AB 45 to ban all hemp products unless they contain no ‘detectable levels of THC,’” the lawsuit reads.
Previously, AB 45 created a regulatory framework for the manufacture and sale of hemp products in 2021. That said, Newsom contends that those regulations allowed minors to gain access to intoxicating hemp-derived THC products.
Ted Whitney, chief beverage officer of Cheech and Chong’s Global Holding Company, known for its stringent testing procedures, said earlier that the proposed ban overlooks the preferences and rights of adult consumers.
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“While we align with the Governor’s office on the importance of public safety, we firmly believe that an outright ban misses the mark. Collaborative regulation, involving both the industry and state authorities, would more effectively protect public safety and uphold consumer choice,” Whitney stated. “It’s disheartening that the proposed amendments and their potential to generate $210 million in tax revenue were overlooked. This oversight not only deprives Californians of a legitimate and safe market but also inadvertently benefits illicit operations.”
The Lawsuit
The plaintiffs called the new regulations “draconian” adding they will result in devastating small businesses within the emerging industry.
“It’s akin to requiring candy to stop containing sugar … starting tomorrow,” they said in the lawsuit. “Plaintiffs and their members will suffer losses in the millions of dollars over existing products, pending manufacturing, and future sales of hemp and hemp products that legally contained THC, as per existing California and federal law, but have now been banned overnight by the emergency regulations.”
California’s Department of Public Health’s “inaction over the last three years hardly serves as a sufficient basis for declaring a sudden emergency and circumventing the meticulous procedures of regular rulemaking,” the plaintiffs said.
Newsom’s “emergency” rules are in contradiction of California and federal law, according to the lawsuit. “The Department has acted entirely outside the boundaries of California’s applicable law to adopt and issue them,” the lawsuit stipulates.
What’s Next
The plaintiffs plan to file a separate petition for a temporary restraining order on Wednesday. The move is expected to stop the enforcement of the ban during the litigation process.
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