Members of the hemp industry—including Cheech and Chong’s cannabis company—filed a lawsuit on Tuesday seeking to overturn new California regulations that outlaw most consumable hemp products in the state, including those containing any intoxicating cannabinoids derived from the plant.
The suit says the rules, backed by Gov. Gavin Newsom (D), are based on a faulty declaration of “emergency” and come after officials failed to effectively implement hemp regulation legislation that was enacted in 2021.
First unveiled earlier this month, Newsom’s new emergency ban won official approval from California’s Office of Administrative Law on Monday and took effect immediately. The rules prohibit hemp products with any “detectable amount of total THC,” while hemp products that don’t contain THC are limited to five servings per package and may only be sold to adults 21 and older.
The action came less than a month after the state legislature effectively killed a governor-backed bill that would have imposed somewhat similar restrictions on intoxicating hemp-derived cannabinoids.
Filed in state court on behalf of industry trade group U.S. Hemp Roundtable and a handful of individual businesses, the new lawsuit alleges that regulators’ “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.”
“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 suit says, referring to previously enacted hemp legislation.
The complaint says that a “draconian” regulation to ban any hemp product with detectable THC “goes far beyond the limits” of state law and “will essentially devastate an emerging industry that consists largely of small business owners. It’s akin to requiring candy to stop containing sugar…starting tomorrow.”
Plaintiffs in the new suit against the California Department of Public Health include Cheech and Chong’s Global Holdings, Juicetiva, Blaze Life, Boldt Runners, Lucky to be Beverage and Sunflora.
“Whatever the merits of the general issues addressed by these emergency regulations, the Department has acted entirely outside the boundaries of California’s applicable law to adopt and issue them,” the suit says. “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.”
If allowed to remain in effect, the emergency regulations will eliminate nearly every ingestible hemp product currently for sale in California, including the vast majority of non-intoxicating products, and even though some products subject to the emergency regulations are not sold in California. Many small businesses will have to close operations immediately with millions in losses.”
The plaintiffs plan to file a separate petition for a temporary restraining order on Wednesday seeking to prevent enforcement of the ban while the overall litigation proceeds.
Jonathan Miller, general counsel for the Hemp Roundtable, said that Newsom’s “misguided efforts to destroy a thriving hemp industry—one that he helped create in signing AB 45 three years ago—clearly violate state and federal law.”
“We are confident that the courts will agree that the governor does not come close to demonstrating an ’emergency’ exists, and the devastation that he would unleash on hemp farmers, small businesses and product consumers must be forestalled,” he said. “We are hopeful that once relief is granted, the governor will finally meet with the hemp industry to appropriately address his stated mission: to develop a robust regulatory regime that promotes health and safety and keeps hemp products out of the hands of minors.”
Newsom, for his part, took an aggressive tone when announcing the new emergency restrictions.
Standing next to a table piled with largely unregulated products containing hemp-derived cannabinoids, including beverages and gummies, he expressed disgust that they’re now widely sold at grocery stores, gas stations and convenience stores. Hemp-derived THC-infused sparkling water, he lamented, can be found—including by minors—alongside more benign products like La Croix.
“It’s a disgrace and it’s a shame,” the governor said, flanked my members of law enforcement, “and the industry bears full responsibility for not policing itself, for the proliferation of these intoxicating products that are hurting our children.”
The rules have the support of the California Department of Public Health (CDPH) and marijuana regulators at the Department of Cannabis Control (DCC). They’re also backed by the California Cannabis Industry Association, which represents mostly marijuana businesses, and by an alcohol trade group.
But the Hemp Roundtable isn’t the only organization pushing back on the new rules. Earlier this month, the advocacy group One Hemp said it’s also considering a court challenge “with the intent to hold Newsom accountable to the normal democratic process.”
On Tuesday, Jared Stanley, a founding member of One Hemp, said the group’s membership “supported efforts to address bad actors in the hemp industry, but we were shocked that responsible hemp companies were included in this overreach.”
“These companies have long advocated for quality and safety standards backed by science and research,” Stanley said in a statement. “The governor’s decision will harm the good actors in the industry and have dire consequences for families and veterans who depend on these products for their quality of life.”
Another outspoken opponent to the new hemp regulations is Paige Figi, the executive director of the advocacy group Coalition for Access Now. Figi is the mother of Charlotte Figi, who became a crucial figure in the CBD movement after the family successfully treated Charlotte’s Dravet syndrome, a rare form of epilepsy, with CBD oil. Her story is broadly credited as launching the mainstream movement to allow access to CBD.
“Families brought a solution to the legislature and while they were heard, the Governor overrode both the legislature and mothers across California,” Figi said in a statement to Marijuana Moment, referring to failed attempts earlier this year to find consensus on how to regulate hemp-derived cannabinoids.
“In doing so, he may have addressed the issue of intoxicating THC but he has turned the lives of families who depend on non-intoxicating CBD completely upside down,” she continued. “He is not listening and it is causing real harm. Now, these families are left with impossible choices: moving, breaking the law, fighting to change it, or enduring severe suffering, even death.”
Bill Morachnick, CEO of the hemp CBD company Charlotte’s Web—named after the younger Figi, who passed away in 2020—similarly called the regulations an overreach.
“While we fully support efforts to regulate synthetic and intoxicating products, we strongly oppose the inclusion of non-intoxicating, natural CBD products within this regulatory framework,” Morachnick said. “We believe these regulations are overreaching and unnecessarily restrict access to safe, non-intoxicating hemp products by lumping them in with an entirely different class of products.”
“Other states like Colorado and Virginia have set shining examples of how to clean up the market while safeguarding products that consumers depend upon for their health and wellness,” he added.
In Missouri, for example, health regulators recently announced they’re narrowing the scope of that state’s ban on intoxicating hemp products to focus on “misbranded” products that are more likely to be confused with mainstream snacks and beverages.
Ben Kennedy, CEO of the hemp-derived THC beverage brand Fable Libations, told Marijuana Moment in a statement that if California officials “believe that the adult-use regulated cannabis market is a solution, as cited, they’ll need to work overtime as the state’s regulated market has yet to work commercially and likely never will under current framework.”
Kennedy added that while some bad actors do sell intoxicating hemp products unscrupulously, Fable’s beverages are sold “in a 21+ environment,” for example at alcohol retailers.
The state’s new regulations, he said, are “representative of the ‘obliteration approach,’ when this matter is quite delicate and nuanced.”
Other stakeholders in California, meanwhile—especially those in the state’s regulated marijuana sector—have welcomed Newsom’s emergency regulations, saying they’re a necessary step to rein in an epidemic of unregulated hemp products, many of which produce a chemical high.
The California Cannabis Industry Association (CCIA), for one, has applauded the governor’s proposal. The group, which represents licensed marijuana businesses in the state, earlier this month commended what it described as “Newsom’s decisive action to address intoxicating hemp products in California, protecting public health and ensuring that harmful, unregulated products no longer undermine our state’s rigorous cannabis laws.”
“These emergency regulations will create a safer, more transparent marketplace,” CCIA said, “while safeguarding our youth and preserving the integrity of—and critical tax revenues from—California’s cannabis legalization framework.”
Reached after the emergency regulations were approved this week, the group added:
“The California Cannabis Industry Association (CCIA) appreciates the state’s ongoing efforts to safeguard public health and better address the rapidly evolving cannabinoid market. We believe these emergency regulations will help support youth prevention efforts and address other safety risks posed by unregulated, intoxicating products. Simultaneously, we see a clear need for refinement to ensure continued access to beneficial CBD products and provide a pathway for a more balanced approach to regulation of all cannabinoids — regardless of whether they’re sourced from hemp or cannabis. CCIA looks forward to continued collaboration with the legislature, the Administration and stakeholders to help shape future policies that benefit all Californians.”
Dustin Moore, co-founder and chief strategy officer of the marijuana retail and delivery service Embarc, said in a statement to Marijuana Moment, meanwhile, that approval of the emergency regulations “makes a necessary statement on the importance of protecting consumers.”
“The way we see it, any form of the cannabis plant—hemp derived or not—should be tested and regulated to ensure we provide California consumers with safe, reliable products,” Moore said.
Vince Ning, CEO and co-founder of the cannabis wholesaler Nabis, similarly said that the Office of Administrative Law ruling “sends a message to operators that safety is crucial for longevity and growth in this industry.”
“Prior to this ruling,” Ning said, “hemp-derived cannabis products were available to consumers statewide, but were not required to follow the same regulations and testing as traditional, licensed cannabis products”
Other reformers, such as Dale Gieringer, the director of California NORML, have raised concerns that the rules are impracticable. He’s argued that the strict limit on THC would effectively outlaw even hemp products not intended to be intoxicating.
“This is an overly broad regulation that would harm many medical users who rely on high-CBD extracts to treat childhood epilepsy, cancer and other serious conditions,” Gieringer told Marijuana Moment. He added that California NORML has heard worries from doctors who recommend high-CBD hemp extracts to patients.
California NORML has pointed out that it’s “virtually impossible to eliminate trace amounts of THC from natural hemp products,” noting that “Even the FDA-approved CBD pharmaceutical Epidiolex contains detectable traces of THC.”
“The governor is quite right to be concerned about the sale of hemp products with intoxicating doses of THC,” Gieringer said. “However, the regulation needs to be relaxed to exempt low-THC, high-CBD medicinal preparations, as other states like Colorado have done.”
Newsom expressed hope at this month’s press conference about working with Assemblymember Cecilia Aguiar-Curry (D), who sponsored the legislative plan to restrict intoxicating hemp products, in the coming legislative session.
“We believe hemp—even hemp with intoxicating components—can be sold,” the governor said, “but they must be sold in a regulated environment, not in grocery stores, not in corner stores all throughout the state of California.”
Aguiar-Curry’s bill, AB 2223, would have done more than just outlaw intoxicating hemp products. As written, it would have folded hemp-derived cannabinoid products into the state’s regulated marijuana system and opened the door to out-of-state hemp producers to sell products into California’s cannabis market.
Products with any detectable amount of THC or other intoxicating cannabinoids would need to be sold through state-licensed cannabis dispensaries under AB 2223. So called “pure CBD” products would not be subject to that rule, but those products could not contain any detectible amount of THC or any other intoxicating cannabinoid.
Newsom said he hoped to partner with Aguiar-Curry next year “to address some of the integration issues” that come with moving intoxicating hemp products under the state’s regulatory system for marijuana.
The advocacy group Origins Council, which says it represents about 800 small and independent cannabis businesses in rural counties throughout the state, was one of the lead advocacy groups pushing back on AB 2223 this session. In comments to Marijuana Moment earlier this month, however, the group applauded Newsom’s emergency proposal to outlaw hemp-derived cannabinoids.
“Legalizing hemp under the 2018 Farm Bill, while maintaining federal prohibition on cannabis, was always going to lead to absurd outcomes,” said Ross Gordon, Origins Council’s policy chair. “Ultimately, the only path forward is to federally legalize cannabis, and to regulate hemp and cannabis at parity from farm to retail.”
“In the meantime,” Gordon added, “addressing these intoxicating hemp loopholes is absolutely necessary, and we applaud Governor Newsom for taking this important step forward.”
Somewhat similar discussions about how to regulate hemp derivatives are playing out at the federal level, as congressional lawmakers consider legislative provisions to impose a general ban on hemp-derived cannabinoids such as delta-8 THC.
Rep. Mary Miller’s (R-IL) amendment to the 2024 Farm Bill, for example, was approved by a House committee in May and would remove cannabinoids that are “synthesized or manufactured outside of the plant” from the federal definition of legal hemp. The change is backed by prohibitionists as well as some marijuana companies, who’ve described the restriction as a fix to a “loophole” that was created under the 2018 Farm Bill that federally legalized hemp and its derivatives.
Anti-drug groups, law enforcement and some health organizations have called on Congress to embrace the ban, arguing that “trying to regulate semi-synthetic cannabinoids will not work.”
In addition to Miller’s amendment in the 2025 Farm Bill, the House Appropriations Committee in July approved a separate spending bill that contains a similar provision to prohibit cannabinoid products such as delta-8 THC and CBD containing any “quantifiable” amount of THC.
Hemp-derived cannabinoids also came up in a recent federal appeals court decision in which judges ruled that cannabinoids derived from hemp, such as THC-O-acetate, indeed qualify as hemp and are legal under the 2018 Farm Bill. In making that ruling, the court rejected the Drug Enforcement Administration’s more restrictive interpretation of the law.
How to address hemp-derived cannabinoids has caused some fractures within the cannabis community, and in some cases marijuana businesses have found themselves on the same side as prohibitionists in pushing a derivatives ban.
In a letter to congressional leaders ahead of Miller’s amendment, the U.S. Cannabis Council (USCC) proposed specific language they wanted to see included that would place hemp-derived cannabinoids containing any amount of THC under the definition of federally illegal marijuana.
While they’ve focused on the need to address public safety concerns related to unregulated “intoxicating” cannabinoid products such as delta-8 THC, some hemp industry advocates say the effect of the proposed language could be a ban on virtually all non-intoxicating CBD products as well, as most on the market contain at least trace levels of THC, consistent with the Farm Bill definition of hemp that allows for up to 0.3 percent THC by dry weight.
Meanwhile, the legislation that advanced through the House Agriculture Committee in May also contains provisions that would reduce regulatory barriers for certain hemp farmers and scale-back a ban on industry participation by people with prior drug felony convictions.
Specifically, it would make it so the U.S. Department of Agriculture (USDA), states and tribal entities could choose to eliminate a policy that prevents people with felony drug convictions in the past 10 years from being licensed to produce industrial hemp.
However, advocates had hoped to see more expansive language, such as what was described in Senate Democrats’ recent summary of their forthcoming Farm Bill draft. Under that plan, there would be a mandate to eliminate the ban, rather than simply authorizing it, and it would cover all hemp producers, not just those growing it for non-extraction purposes.
The Senate Agriculture Committee has not yet released the draft text of their bill, so it remains to be seen if the summary description matches what will ultimately be released. Bipartisan House lawmakers filed standalone legislation last year that would broadly lift the felony ban for would-be hemp producers.
Lawmakers and stakeholders have also been eyeing a number of other proposals that could be incorporated into the Farm Bill—and which could come up as proposed amendments as the proposal moves through the legislative process—including measures to free up hemp businesses to legally market products like CBD as dietary supplements or in the food supply.
The hemp market started to rebound in 2023 after suffering significant losses the prior year, according to an annual industry report from the U.S. Department of Agriculture (USDA) that was released in April.
The data is the result of a survey that USDA mailed to thousands of hemp farmers across the U.S. in January. The first version of the department’s hemp report was released in early 2022, setting a “benchmark” to compare to as the industry matures.
Bipartisan lawmakers and industry stakeholders have sharply criticized FDA for declining to enact regulations for hemp-derived CBD, which they say is largely responsible for the economic stagnation.
To that end, FDA Commissioner Robert Califf testified before the House Oversight and Accountability Committee earlier this year, where he faced questions about the agency’s position that it needed additional congressional authorization to regulate the non-intoxicating cannabinoid.
USDA is also reportedly revoking hemp licenses for farmers who are simultaneously growing marijuana under state-approved programs, underscoring yet another policy conflict stemming from the ongoing federal prohibition of some forms of the cannabis plant.
For the time being, the hemp industry continues to face unique regulatory hurdles that stakeholders blame for the crop’s value plummeting in the short years since its legalization. Despite the economic conditions, however, a recent report found that the hemp market in 2022 was larger than all state marijuana markets, and it roughly equaled sales for craft beer nationally.
Meanwhile, internally at USDA, food safety workers are being encouraged to exercise caution and avoid cannabis products, including federally legal CBD, as the agency observes an “uptick” in positive THC tests amid “confusion” as more states enact legalization.
Separately in California, lawmakers recently gave final approval to a bill to prevent what advocates call the “double taxation” of marijuana by restricting the ability of local governments to calculate their cannabis levies after state taxes are already applied. The legislation’s sponsor says if the proposal is signed into law it will end what he calls the “collection of a tax on a tax.”
California lawmakers also gave final passage to bills last month that would allow small marijuana growers to sell their products directly to consumers at state-organized farmers markets and legalize cannabis cafes in the state.
Also, a state-funded effort is underway to analyze the genetic information of various marijuana strains in order to preserve the state’s rich history of cannabis cultivation. It’s part of a project meant not only to acknowledge the past but also protect the future of legacy growing regions such as the Emerald Triangle.
Photo elements courtesy of rawpixel and Philip Steffan.
Members of the hemp industry—including Cheech and Chong’s cannabis company—filed a lawsuit on Tuesday seeking to overturn new California regulations that outlaw most consumable hemp products in the state, including those containing any intoxicating cannabinoids derived from the plant. The suit says the rules, backed by Gov. Gavin Newsom (D), are based on a faulty Read More