California Hemp Industry Sues to Block New Rules

Snack hemp seeds for sale at the Capitol Hemp store in Washington on May 20, 2010. Tim Sloan/AFP/Getty Images

A coalition of hemp growers and retailers is suing California’s Department of Public Health for implementing new emergency rules Sept. 23 that restrict hemp sales in the state.

The U.S. Hemp Roundtable, a Kentucky-based business-advocacy coalition, filed a lawsuit Tuesday against the state at Los Angeles County Superior Court.

The emergency regulations, which require that hemp-derived food and beverage products have no THC, would ban 90 percent to 95 percent of hemp products on the marketplace, including manufacturing or selling them in California, according to plaintiffs.

“This draconian regulation alone will essentially devastate an emerging industry that consists largely of small business owners,” the lawsuit claimed.

The lawsuit claims the companies that sell CBD and other hemp-derived products will suffer immediate and irreparable harm because of the emergency regulations, which they say violate the California Health and Safety Code and federal law.

Federal law defines “hemp” as a product with 0.3 percent or less THC.

The new rules will destroy a thriving hemp industry that Newsom helped create three years ago—and clearly violate state and federal law, according to Jonathan Miller, U.S. Hemp Roundtable’s general counsel.

“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 in a statement.

The group hoped the governor would instead meet with the hemp industry to appropriately address his stated mission, Miller added.

The plaintiffs are asking the judge to declare the emergency regulations invalid and issue a temporary restraining order to prevent the regulations’ enforcement until the lawsuit is resolved.

Gov. Gavin Newsom submitted the emergency regulations for the health department. The rules were approved by the state’s Office of Administrative Law on Monday and went into effect immediately.

The new rules ban the sale of hemp products meant for human consumption to anyone under 21 and limit servings to five per package.

The rules also ban all hemp-derived food, beverages, and dietary products from containing any detectable amounts of tetrahydrocannabinol (THC), the substance in marijuana that creates a “high.”

Marijuana was being sold in this Los Angeles dispensary in January 2019. New emergency hemp regulations would require CBD oil with THC to be sold at dispensaries, and require customers to be over 21. Robyn Beck/AFP via Getty Images

State health officials say the emergency regulations would protect children from intoxicating cannabinoids found in unregulated hemp products sold at retail stores, which they say have led to a rise in hospitalizations and poisonings, injury, and death.

In a press release earlier this month proposing the regulations, Newsom said, “We will not sit on our hands as drug peddlers target our children with dangerous and unregulated hemp products containing THC at our retail stores.”

Health department director Tomás Aragón said in the same press release: “Intoxicating industrial hemp products can cause illness and injury to California consumers. We are working to ensure products in the marketplace comply with state laws that protect consumers against these public health risks.”

Retailers in the state can continue to sell CBD products outside of state-licensed cannabis dispensaries if the products have no detectable THC or other intoxicating cannabinoids.

State legislators tried to pass Assembly Bill 223 this session to create the hemp industry regulations, but the bill failed to pass the Senate Appropriations Committee in August.

A state law—Assembly Bill 45—passed in 2021 defined hemp products, but it did not distinguish between products that were intoxicating and ones that weren’t, according to the lawsuit.

California resident Chela Coennen, a caregiver and cannabis coach, went to Sacramento along with other hemp advocates to argue against the regulations. Her husband and father use CBD and other products that combine hemp and THC to help with medical issues, she said.

“My dad lives with Alzheimer’s and wouldn’t be able to do that if not for the full-spectrum CBD oil,” Coennen told The Epoch Times.

CBD oil has up to 0.3 percent THC but can be purchased outside of a state-licensed cannabis dispensary, which charges 15 percent cannabis excise tax on top of local and state sales taxes.

After using the CBD products for a year, her father started recognizing people again, she said.

With the new regulations, the cost of her family’s medications will skyrocket, she said. The same products they use every month would have to be purchased at a dispensary and would cost about $3,000 or more plus state tax. A monthly supply for her husband usually costs only about $77.

Once she heard about the emergency regulations, she stockpiled about six months’ worth of products, she said.

Coennen said she has heard from some smaller suppliers that they don’t plan to pay attention to the new regulations and will continue to sell hemp products. Coennen might also consider getting a post office box in a neighboring state and buying her products there as a way to bypass California’s restrictions.

Other retailers joining the lawsuit were Boldt Runners Corporation, Cheech and Chong’s, Good Stuff Manufacturing, Juicetiva Inc., and Sunflora, Inc.