This article is authored by Patrick Goggin.

As I sit down to write an update on California hemp law and policy developments, I cannot do so without mentioning, and placing it in the context of, our common global pandemic experience. The fluid, fast-paced and chaotic nature of daily events we are presently experiencing, with a quite unknown and wide ranging set of potential outcomes, are not dissimilar to the evolution of policy.

Anecdotally and apropos of current events, as the City and County of San Francisco scrambled last week to issue and implement its shelter in place order, agencies rushed to act within their jurisdictional domain. The Department of Public Health (DPH), currently the lead agency for medical cannabis dispensaries in the City, hastily sent out emails prior to the order going into effect at midnight on Monday March 16th to dispensaries informing them that they are not an essential business and would, therefore, need to shutter indefinitely. Simultaneously however, an FAQ on the City’s website indicated that medical cannabis was an essential service. Tuesday brought further confusion when the Office of Cannabis reinforced DPH’s direction to dispensaries to close down. Advocates pushed back, and by Tuesday afternoon, the Mayor reiterated via Twitter that cannabis was essential to many and dispensaries could remain open. DPH immediately followed suit, and by Friday, when the Governor issued a statewide shelter in place order, California maintained the policy that dispensaries are an essential service and will remain open.

Hemp in an Ever Evolving Landscape

Turning back to hemp, states find themselves in an ever evolving and changing landscape. As states work to transition their regulation of hemp production from under the 2014 Farm Bill to the 2018 Farm Bill, they are operating with a moving target. When the U.S. Department of Agriculture (“USDA”) issued its Interim Final Rule (“IFR”) for hemp production on November 1, 2109, states reasonably believed they had a year to implement a state plan under the 2018 Farm Bill because the 2014 Farm Bill hemp amendment sunsets one year after the USDA “establishes a plan” under the 2018 Farm Bill. The IFR was thought to be the plan contemplated by the Farm Bill. Since then though, it has become clear that the IFR is a work in progress. For example, USDA announced last month that is would delay the controversial DEA registered lab provision until at least fall 2021 and broaden the options for the disposal, versus destruction, of “hot” hemp crops. Earlier this month, while testifying before the Senate Agriculture Committee, USDA Secretary Perdue characterized the IFR as “a draft plan” after all. Fluid indeed!

California Has Major Questions for the USDA

While further clarity will certainly come at some point, many states simply cannot wait for that to act. Under California law, the state must submit its state plan to USDA by May 1. But several major questions now exist: when will the state plan become effective and will it too be malleable? Given that the IFR is a “draft plan”, it does not make sense to finalize a state plan until after USDA establishes a final plan. With this in mind, and as general counsel to the California Hemp Council, I have worked with our team in Sacramento and Senator Scott Wilk’s office to introduce a spot bill, SB 864, to serve as the legislative vehicle for California to legislatively adapt to USDA’s evolving plan. One important change will address “hot” hemp by changing the term “destroy” to “dispose” to be consistent with 2018 Farm Bill language. This will provide California farmers with much needed flexibility and a tool for financial efficiency. The need for additional amendments will inevitably arise during the session and we will be ready and armed with SB 864 to execute needed changes.

For now, like most states, California’s hemp production will remain under the 2014 Farm Bill for the 2020 farming season. With a finger on the pulse of evolving hemp law and policy, Hoban Law Group’s California based attorneys are here to advise and guide you through that process as it stands now and in the future.

 

Keep an eye out for my next California update when I will take a look at legislative developments regarding CBD and Proposition 65’s THC listing and its attendant impact on hemp. Until then, stay safe, stay sane, and wave to your neighbor.