California: Market and legal data analysis of the cannabis sector

14th October 2024: US - California: Governor Gavin Newsom has announced that a Los Angeles Superior Court judge rejected an attempt by industry stakeholders to block new California regulations banning ingestible hemp products with any detectable amount of THC. The decision upholds California’s restrictions, which prohibit selling any industrial hemp food, beverage, or dietary product intended for human consumption if there is any detectable THC or other intoxicating cannabinoids per serving. In the ruling, judge Stephen Goorvitch found that the plaintiffs had failed to show that the new rules “will cause widespread and catastrophic destruction of the hemp industry”, noting that manufacturers can still sell “THC through the legal cannabis system in California, i.e., with a license”.
1st October 2024: US - California: Governor Gavin Newsom has signed into law Assembly Bill (AB) 1775, which will allow localities to permit cannabis dispensaries to serve food and non-alcoholic drinks and hold live music events while allowing on-site consumption. The “cannabis café” bill was vetoed by Newsom last year over lack of protections from smoke for dispensary employees, but he found that this year’s revised bill provided enough safeguards for staff.
25th September 2024: US - California: A ban on ingestible hemp products with any detectable amount of THC was approved by the Office of Administrative Law on Monday (23rd September). The emergency regulation, issued by governor Gavin Newsom, specifically applies to food additives, beverages and dietary supplements with any detectable amount of total THC, which includes THC and any “comparable cannabinoid” that causes intoxication. It also prohibits the sale of hemp products intended for human consumption to anyone under the age of 21 and is effective immediately. Industry stakeholders have already filed a lawsuit challenging the emergency regulation.
9th September 2024: US - California: Governor Gavin Newsom announced he has issued proposed emergency regulations that would outlaw hemp products with any “detectable amount of total THC”. The new regulations require that industrial hemp food, beverage and dietary products intended for human consumption have no detectable THC or other intoxicating cannabinoids per serving; set a minimum age of 21 for purchasing hemp products; and limit the number of servings of hemp products to five per package. According to the state, the emergency regulations “will take effect immediately upon approval by the Office of Administrative Law. Sellers must begin to implement purchase restrictions and remove consumable hemp products containing any levels of detectable THC from shelves”.
5th September 2024: US - California: The Office of Administrative Law has approved the amendment to Section 4890 in Title 3 of the California Code of Regulations pertaining to the definition of “harvest”. According to the amendment, “harvest” means the collection of any portion of industrial hemp plant at the termination of the cultivation process for the purpose of processing, distribution, storage or sale. The definition of “harvest” does not include material removed from the plant for sampling that is notified to the commissioner for nutrition, diseases or pests; maintenance of stock; male culling; thinning; or disposal.
2nd September 2024: US - California: Assembly Bill (AB) 1775 has been passed by the Assembly and now heads to the governor’s desk. AB 1775 would allow cities to authorise dispensaries to serve food and non-alcoholic drinks, and even host live entertainment, alongside the consumption of cannabis products. Governor Newsom vetoed the prior version of a similar proposal, saying that he felt “concerned this bill could undermine California’s long-standing smoke-free workplace protections”. The current version of the bill includes new provisions aimed at addressing these concerns, such as allowing cities to impose ventilation standards and ensuring cannabis café employees can use protective masks – with employers covering the costs. The measure would also allow local governments to decide whether to allow cannabis cafés to operate instead of automatically legalising them statewide.
16th August 2024: US - California: Governor Gavin Newsom has announced that an operation led by his Unified Cannabis Enforcement Taskforce (UCETF) seized more than 2.2m illegal cannabis packages marked with the universal symbol of legal California cannabis, “undermining the safety and integrity of the state’s regulated cannabis industry”. The operation focused on 11 storefronts where multiple businesses were manufacturing and selling packaging used in the illicit cannabis market. The governor also said “much of the packaging resembled popular food and candy brands that could appeal to children, including items resembling Twinkies and Sweet Tarts”. Since January, the task force has seized more than $120m in illegal cannabis.
22nd May 2024: US - California: Assembly Bill (AB) 2223 has been unanimously passed by the Assembly and now heads to the Senate. AB 2223 would allow cannabis licensees to manufacture, process, distribute, or sell hemp or hemp-derived products if they comply with state law. However, it would be illegal for licensees to manufacture or sell hemp products that contain converted THC or other intoxicating cannabinoids.
21st May 2024: US - California: Assembly Bill (AB) 1775 was passed by the Assembly and now heads to the Senate. AB 1775 would allow local jurisdictions to permit the smoking, vapourising, and ingesting of cannabis products on the premises of a licensed cannabis retailer and allow for the sale of non-cannabis foods and beverages on such premises. A very similar bill by the same sponsor was passed by the legislature last year but vetoed by the governor due to concerns over smoke-free workplace protections. The sponsor has said he is working with the governor’s office to address those concerns.
26th January 2024: US - California: The Senate has failed to override a veto of Senate Bill (SB) 58, thus causing the bill to fail. SB 58 was vetoed by governor Gavin Newsom in October and would have decriminalised the possession of certain psychedelic substances by adults (21+).
11th December 2023: US - California: The City of San Diego's Cannabis Business Division has sent warning letters to vendors that it believes are selling illegal hemp products, such as delta-8 THC products, synthetically derived products, and hemp products intended for inhalation. The letter warns that if such products are not removed from shelves by the end of December, the city will take enforcement action.
16th October 2023: US - California: A group of California cannabis dispensaries is suing other dispensaries and manufacturers of intoxicating hemp-derived cannabinoid (IHDC) products to prevent them from selling IHDC products in the state, press reports. The plaintiffs claim that the sale of many IHDC products is illegal under California law because hemp products may not have more than 0.3% of all THC isomers, and inhalable products are also prohibited. The plaintiffs also claim that calling such products “legal cannabis” on their packaging is false advertisement.

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