The Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA) , an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) , among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities and requires the Department of Cannabis Control to administer its provisions.
Existing law governs the cultivation of industrial hemp in this state and establishes a registration program administered by county agricultural commissioners and the Department of Food and Agriculture for growers of industrial hemp, hemp breeders, and established agricultural research institutions, as defined.
The Sherman Food, Drug, and Cosmetic Law, among other things, regulates the labeling of food, beverages, and cosmetics and makes it a crime to distribute in commerce any food, drug, device, or cosmetic if its packaging or labeling does not conform to these provisions. Existing law establishes a process for the embargo, condemnation, and destruction of a food, drug, device, or cosmetic that is adulterated, misbranded, or falsely advertised, gives the authority to place items under embargo to authorized agents of the State Department of Public Health, and requires the department to take specified actions. Violation of the Sherman Food, Drug, and Cosmetic Law is a misdemeanor. Existing law also requires hemp manufacturers who produce specified products that include industrial hemp or who produce raw hemp extract, as defined, to complete a registration process, under the State Department of Public Health, and to meet various requirements for testing and labeling on products. Existing law, as part of the registration process, requires the department to assess specified fees, including an oversight and authorization enrollment fee, to cover the actual reasonable costs of implementing the regulatory program.
Existing law exempts industrial hemp, as defined, from the definition of cannabis and from MAUCRSA, but requires the Department of Cannabis Control to prepare a report, on or before July 1, 2022, to the Governor and the Legislature outlining the steps necessary to allow for the incorporation of hemp cannabinoids into the cannabis supply chain.
This bill would state that MAUCRSA does not prohibit a licensee from manufacturing, processing, distributing, or selling products that contain industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp if the product complies with all applicable state laws and regulations. The bill would authorize a licensed manufacturer or microbusiness to obtain industrial hemp from a person registered with the State Department of Public Health, as specified, and would require industrial hemp purchased by a licensee to be tracked as a separate batch through the manufacturing process. The bill would require a licensee that manufactures, distributes, or sells products that contain industrial hemp to record all transactions and specified data in the state track and trace system. The bill would prohibit a licensed manufacturer from incorporating THC or comparable cannabinoid, as defined, that has been converted from a hemp-derived cannabinoid and would also prohibit licensed retailers and distributors from selling or distributing cannabis or hemp products that contain converted THC or comparable cannabinoid. The bill would require the department to implement a process by which any licensee that is also a registered hemp manufacturer may use the same premises.
This bill would revise and recast the provisions of the Sherman Food, Drug, and Cosmetic Law regulating industrial hemp to redefine certain terms, expand the prohibition that raw hemp extract not exceed 0.3% of a tetrahydrocannabinol or comparable cannabinoid, limit the level of total THC that can be in an industrial hemp final form product, and prohibit the manufacture, distribution, or sale of an industrial hemp product that contains a synthetically derived cannabinoid, as defined, unless authorized by the department in regulation. The bill would prohibit an industrial hemp food and beverage product from being labeled, marketed, or advertised as a product intended to create an intoxicating effect. The bill would require that industrial hemp human food and beverage final form products meet specified guidelines and would specify that violations of the act are grounds for revocation of an industrial hemp enrollment and oversight authorization. The bill would require an out-of-state hemp manufacturer who produces certain products such as industrial hemp food, beverages, or cosmetics for importation or sale in this state to register with the department. The bill would establish a separate process for the embargo, condemnation, and destruction of industrial hemp products and would give authority to seize or embargo those products to a peace officer or a state official who possesses seizure authority in specified circumstances and would require the peace officer or state official who began the embargo to seek voluntary condemnation from the owner or commence proceedings for condemnation. The bill would make a violation of provisions regarding the retail sale of industrial hemp a misdemeanor and would impose a civil penalty. By creating a new crime, this bill would impose a state-mandated local program.
Existing law authorizes the California Department of Tax and Fee Administration (CDTFA) or a law enforcement agency to seize cannabis or cannabis products not contained in secure packaging to seize cannabis or cannabis products possessed, stored, owned, or sold by an unlicensed person or that were not reported in the track and trace system, as specified, and provides that seized cannabis or cannabis products are deemed forfeited, as specified.
This bill would, in certain circumstances, establish a presumption that any product containing or purporting to contain any cannabinoid is a cannabis product, unless there is reasonable cause to believe that the product is authorized to be distributed or sold as an industrial hemp product.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Statutes affected:
AB2223: 110065 HSC, 111920 HSC, 111921 HSC, 111921.7 HSC, 111922 HSC, 111923.3 HSC, 111923.9 HSC, 111926.2 HSC, 34016 RTC
02/07/24 - Introduced: 110065 HSC, 111920 HSC, 111921 HSC, 111921.7 HSC, 111922 HSC, 111923.3 HSC, 111923.9 HSC, 34016 RTC
04/10/24 - Amended Assembly: 110065 HSC, 111920 HSC, 111921 HSC, 111921.7 HSC, 111922 HSC, 111923.3 HSC, 111923.9 HSC, 111926.2 HSC, 111926.2 HSC, 34016 RTC
05/16/24 - Amended Assembly: 110065 HSC, 111920 HSC, 111921 HSC, 111921.7 HSC, 111922 HSC, 111923.3 HSC, 111923.9 HSC, 111926.2 HSC, 34016 RTC
AB 2223: 110065 HSC, 111920 HSC, 111921 HSC, 111921.7 HSC, 111922 HSC, 111923.3 HSC, 111923.9 HSC, 34016 RTC