Changes to the California CBD Industry


This month, the California hemp CBD industry was dealt two major blows affecting the legal status of hemp derived CBD. First, the California Department of Public Health (the “CDPH”) issued a memorandum that provides legal support for its position that the infusion of hemp derived CBD into food products renders the food adulterated and thereby illegal. Second, the Bureau of Cannabis Control (the “BCC”) made its final proposed regulations public and made it clear that hemp derived CBD products cannot be sold in cannabis dispensaries. Each issue will be described more fully below.

Hemp Derived CBD in Foods

First, the issue tackled by the CDPH memorandum is quite narrow and does not appear have as far reaching implications as many in the hemp and cannabis industries may fear. The CDPH memorandum concludes that food products infused with hemp derived CBD are “adulterated” since CBD is not recognized by the FDA – and, by extension, under the Sherman Food Drug and Cosmetics Act, by the CDPH – as an allowable food additive. Therefore, by the CDPH’s reasoning, the infusion of hemp derived CBD into food products renders the food adulterated since CBD has not been shown to be safe for its inclusion into foods intended for human and animal consumption. Further, while it is true that if CBD is sold with the intent it be consumed with or in connection with any “food, drink, confection, condiment, or chewing gum by man or other animal,” then it is prohibited, some grey areas still exist for hemp derived CBD products – such as topicals – that are not intended to be consumed in the manner prohibited by the CDPH.

Many in the CBD industry have reached out to us to determine what this means for their businesses. Although every situation is unique, the narrow scope of the memorandum and the CDPH’s authority to regulate food and food additives should not slow the momentum that CBD has gained over the past several years. For more guidance on the impact of this memorandum on your hemp derived CBD operations, please contact Navid Brewster with McAllister Garfield, P.C. for a consultation.

Hemp CBD Products Are Proposed to Be Banned From Sale in California Cannabis Dispensaries

Prior to the most recent version of the proposed final regulations, California dispensaries were apparently authorized to sell certain hemp derived CBD products in conjunction with their cannabis product offerings. (See 16 CCR § 5407.) However, on July 13, 2018, when the BCC issued its proposed final regulations, the BCC proposed to significantly modify section 5407 of the current emergency regulations by changing the regulations to now state that, “a licensed retailer may only sell cannabis accessories and any licensee’s branded merchandise or promotional materials.” This extreme limitation imposed on cannabis retailers would effectively make the sale of hemp derived CBD products, whether in concentrated form or topicals, a violation of the regulations. While this limitation would effectively limit the ability to sell hemp derived CBD products to a target consumer who is quite likely to be interested in CBD products, the chance to fight back is now. The current draft of the final proposed regulations are currently in the public comment period which will last until 5:00 p.m. on August 27, 2018. The public comment period allows Californian’s and interested parties to provide feedback on the regulations and suggest workable alternatives to the regulations as they are currently proposed.

If this recently proposed change has a significant impact on your business and you would like a comment prepared on your behalf, please contact Navid Brewster in the McAllister Garfield L.A. office for guidance.