Hemp-CBD is on the Brink of Legalization in California

The 2018 Farm Bill legalized Hemp in the U.S. While we are still waiting for the FDA’s regulations around hemp-CBD, California is about to pass AB 228 which would circumvent the issue on a state level. As of right now, the California Department of Public Health (CDPH) prohibits CBD from being added to products in accordance with their FAQ. The California Sherman Food, Drug, & Cosmetic Law allows the CDPH to remove products from shelves that they considered to be “adulterated.” With AB 228, products cannot be considered “adulterated” solely because of the addition of CBD. Therefore, California’s CBD industry is excited for the Senate Appropriations Committee hearing on August 12, 2019.

Cannabis Banking Expands in 2019

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) tracks financial services for the cannabis industry through Suspicious Activities Reports (SARs). As of March 2019, there are 493 banks and 140 credit unions actively servicing cannabis businesses. It is an increase of 55 banks and 27 credit unions since the prior quarter. Once the Secure and Fair Enforcement (SAFE) Banking Act passes, the numbers will only increase.

Hemp-Derived CBD

While hemp has been legalized with the passage of the 2018 Farm Bill, the legal manufacture and sale of CBD products derived from hemp suffers from a lack of regulation.  Although hemp was legalized, the Food and Drug Administration (FDA) still has jurisdiction over CBD, and while the FDA has taken public comment, the FDA is still in the process of developing regulations around CBD. 

Unfortunately, without regulations, CBD products may not be properly tested before reaching the consumer. For example, a product may have more THC than advertised causing the consumer to unknowingly fail a drug test. The product may also have a different amount of CBD than advertised. To protect consumers, regulations for hemp-derived CBD products cannot come soon enough.

Government Raids Unlicensed Cannabis Farms

On June 5, 2019, the National Guard, US Drug Enforcement, FBI, and many other agencies raided farms in Anza Valley in Riverside County. Roughly 140,000 plants and 3,000 pounds of processed marijuana were seized. Warrants were served on 118 locations and eight individuals were arrested. It is a reminder that cannabis businesses need to be licensed and operate lawfully or face arrest.