Ever since the Farm Bill of 2018 legalized the cultivation of industrial hemp, the industry has quite literally exploded. Demand for CBD products has been tremendous, and a plethora of sellers have flooded the market to cater to it. Sadly, legislators have been slow to come up with regulations to rein in and regulate the industry. This has turned the CBD industry into a sort of Wild West, where sellers can make wild, unsubstantiated claims about their products, and the quality and prices aren’t standardized. However, some states have started taking action to regulate the industry.
California Governor Gavin Newsom signed a bill that would bring the state’s hemp laws in line with the 2018 Farm bill that made hemp cultivation legal. The bill, signed on Saturday, takes effect on January 1 next year, and it would update the state’s definition of industrial hemp and all the related terminology to match the federal language. It would regulate the cultivation and testing of industrial hemp, and monitor the activities of seed breeders to develop seed cultivars (varieties of industrial hemp) through seed development plans.
The bill defines industrial hemp as “an agricultural product, growing or not, that is limited to the types of the plant Cannabis Sativa L. and any part of that plant including the seeds of the plant and all derivatives, extracts, the resin extracted from any part of the plant, cannabinoids, isomers, acidic salts and salts of isomers with a delta-9 tetra hydro cannabis oil (THC) concentration of no more than 0.3% on a dry weight basis.”
California residents who wish to grow industrial hemp will have to register with the agricultural commissioner of the county they intend to grow the hemp. The application shall be accompanied by a registration fee valid for one year, after which the grower will have to renew the license, subject to a renewal fee. The registration and renewal fee will be paid to the Department of Food and Agriculture fund, and it will be used to fund the administration and enforcement of the registration program.
The bill also specifies consequences for a violation of its provisions according to the frequency of prior offenses and whether the violation was negligent, grossly negligent, reckless, or intentional. It further states that the clandestine cultivation of industrial hemp is prohibited.
The California Department of Food and Agriculture is also to develop and submit a hemp regulation plan to the US Department of Agriculture (USDA) by May 1, 2020. The USDA has 69 days to either approve or deny the proposal. If it’s approved, California will adopt the expanded registration and regulatory requirements for hemp growers and implement consequences for rule violators.
Analysts think industry actors like SinglePoint Inc. (OTCQB: SING) and Organigram Holdings Inc. (TSX: OGI) (NASDAQ: OGI) are glad that California is now set to comply with the 2018 Farm Bill.
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