Today's Law As Amended


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AB-420 Cannabis: industrial hemp. (2023-2024)



As Amends the Law Today


SECTION 1.
 (a) The Legislature finds and declares that the legal cannabis industry faces challenges from a thriving illicit cannabis marketplace.
(b) It is the intent of the Legislature to enhance the viability of cannabis licensees in the marketplace by pursuing measures to relieve tax and regulatory requirements, and to authorize licensees to manufacture, distribute, and sell hemp and cannabidiol (CBD) products in compliance with current law.

SEC. 2.

 Section 26003 is added to the Business and Professions Code, to read:

26003.
 This division does not prohibit a licensee from manufacturing, distributing, or selling products that contain industrial hemp, as defined in Section 11018.5 of the Health and Safety Code, or cannabinoids, extracts, or derivatives from industrial hemp, if the product complies with all applicable state laws and regulations, including Division 24 (commencing with Section 81000) of the Food and Agricultural Code or Chapter 9 (commencing with Section 111920) of Part 5 of Division 104 of the Health and Safety Code, as applicable.

SEC. 3.

 Section 111920 of the Health and Safety Code is amended to read:

111920.
 For purposes of this chapter, the following definitions apply:
(a) “Department” means the State Department of Public Health.
(b) “Established and approved industrial hemp program” means a program that meets any applicable requirements set forth in federal law regarding the lawful and safe cultivation of industrial hemp.
(c) “Final form product” is a product intended for consumer use to be sold at a retail premise.
(d) “Hemp manufacturer” means either of the following:
(1) A processor extracting cannabinoids from hemp biomass.
(2) A processor purchasing industrial hemp raw extract for the purpose of manufacturing a final form product.
(e) “Independent testing laboratory” means a laboratory that meets all of the following requirements:
(1) Does not have a direct or indirect interest in the entity for which testing is being done.
(2) Does not have a direct or indirect interest in a facility that cultivates, processes, distributes, dispenses, or sells raw hemp products in this state or in another jurisdiction.
(3) Does not have a license issued pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code, other than as a licensed testing laboratory.
(4) Is either of the following:
(A) A testing laboratory licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code, if the licensed testing lab has notified the Department of Cannabis Control.
(B) Accredited by a third-party accrediting body as a competent testing laboratory pursuant to ISO/IEC 17025 of the International Organization for Standardization.
(f) (1)  “Industrial hemp” has the same meaning as in Section 11018.5. “Industrial hemp” does not include cannabinoids produced through chemical synthesis.
(2) “Cannabinoids produced through chemical synthesis” or “chemically synthesized cannabinoid” means a substance that is created by a chemical reaction that changes the molecular structure of any substance derived from the plant Cannabis sativa L. A chemically synthesized cannabinoid does not include any of the following:
(A) A naturally occurring chemical substance that is separated from the plant by a chemical or mechanical extraction process.
(B) Cannabinoids that are produced by decarboxylation from a naturally occurring cannabinoid acid.
(C) Any other chemical substance approved by the department in regulation.
(g) (1) “Industrial hemp product” or “hemp product” means a finished product containing industrial hemp that meets all of the following conditions:
(A) Is a cosmetic, food, food additive, dietary supplement, or herb.
(B) (i) Is for human or animal consumption.
(ii) “Animal” does not include livestock or a food animal as defined in Section 4825.1 of the Business and Professions Code.
(iii) Does not include THC isolate as an ingredient.
(C) Contains any part of the plant Cannabis sativa L., including naturally occurring cannabinoids or extracts.
(2) “Industrial hemp product” does not include industrial hemp or a hemp product that has been approved by the United States Food and Drug Administration or a hemp product that includes industrial hemp or hemp that has received Generally Recognized As Safe (GRAS) designation. For purposes of nonfood applications, “industrial hemp product” does not include a hemp product that contains derivatives, substances, or compounds derived from the seed of industrial hemp.
(h) (1) “Manufacture” or “manufacturing” means to compound, blend, extract, infuse, or otherwise make or prepare an industrial hemp product.
(2) “Manufacturing” includes all aspects of the extraction process, infusion process, and packaging and labeling processes, including processing, preparing, holding, and storing of industrial hemp products.
(3) “Manufacturing” also includes processing, preparing, holding, or storing hemp components and ingredients.
(4) “Manufacturing” does not include planting, growing, harvesting, drying, curing, grading, or trimming a plant or part of a plant.
(i) “Raw extract” or “industrial hemp raw extract” means extract not intended for consumer use and that contains a THC concentration of not more than an amount determined by the department in regulation.
(j) “Raw hemp product” means a product that is derived from industrial hemp that is intended to be included in a food, beverage, dietary supplement, or cosmetic.
(k) “Retail” has the same meaning as in Section 113895.
(l) “THC” or “THC or comparable cannabinoid” means any of the following:
(1) Tetrahydrocannabinolic acid.
(2) Any tetrahydrocannabinol, including, but not limited to, Delta-8-tetrahydrocannabinol, Delta-9-tetrahydrocannabinol, and Delta-10-tetrahydrocannabinol, however derived, except that the department may exclude one or more isomers of tetrahydrocannabinol from this definition under subdivision (a) of Section 111921.7.
(3) Any other cannabinoid, except cannabidiol, that the department determines, under subdivision (b) of Section 111921.7, to cause intoxication.
(m) “THCA” means tetrahydrocannabinolic acid, CAS number 23978-85-0.
(n) “Total THC” means the sum of THC and THCA.  all THC or comparable cannabinoids, as defined.  Total THC shall be calculated using the following equation: total THC concentration (mg/g) +/- the measurement of uncertainty, as defined by the United States Department of Agriculture.

SEC. 4.

 Section 111921 of the Health and Safety Code is amended to read:

111921.
 (a)  An industrial hemp product shall not be distributed  manufactured, distributed,  or sold in the state except in conformity with all applicable state laws and regulations, including this chapter and any regulations promulgated thereunder, and with documentation that includes both of the following: 
(a)  A   includes a  certificate of analysis from an independent testing laboratory that confirms both all  of the following:
(1) The industrial hemp raw extract, in its final form, does not exceed THC concentration of an  or comparable cannabinoid concentration of 0.3 percent, or a lower  amount determined allowable by the department in regulation, or the mass of the industrial hemp extract used in the final form product does not exceed a THC concentration of 0.3 percent. and is in conformity with other limits for final form products. 
(2) The industrial hemp product was tested for any hemp derivatives identified on the product label or in associated advertising in accordance with Section 111926.2.
(b) (3)  The industrial hemp product was produced from industrial hemp grown in compliance with Division 24 (commencing with Section 81000) of the Food and Agricultural Code if sourced from within California, or licensed in accordance with United States Department of Agriculture (USDA) requirements if sourced from outside the state.
(b) A person shall not manufacture, distribute, or sell an industrial hemp product that contains a cannabinoid that is not present in nature in commercially meaningful quantities in the plant of Cannabis sativa L., unless explicitly approved by the department in regulation.

SEC. 5.

 Section 111923.3 of the Health and Safety Code is amended to read:

111923.3.
 (a) (1) A hemp manufacturer located in this state  who produces an industrial hemp product that is a food or beverage or an out-of-state hemp manufacturer who produces an industrial hemp product that is a food or beverage for sale in this state  shall register with the department pursuant to Article 2 (commencing with Section 110460) of Chapter 5.
(2) Sections 110473 and 110474 shall not apply to dietary supplements and food products that include industrial hemp.
(b) Notwithstanding the voluntary nature of registration provided in Section 111795, a hemp manufacturer who produces an industrial hemp product that is a cosmetic shall register pursuant to Article 4 (commencing with Section 111795) of Chapter 7.
(c) A hemp manufacturer who produces an industrial hemp product that is a processed pet food shall obtain a license pursuant to Article 2 (commencing with Section 113060) of Chapter 10 of Part 6.
(d) (1) An in-state hemp manufacturer who produces raw hemp extract and who does not produce an industrial hemp product, or an out-of-state hemp manufacturer who produces raw hemp extract with the intent to import that raw hemp extract into this state, shall register with the department pursuant to Article 2 (commencing with Section 110460) of Chapter 5.
(2) Sections 110473 and 110474 shall not apply to hemp manufacturers who register pursuant to this subdivision.
(e) All hemp manufacturers shall notify the department immediately of any change of information in their application for a license of registration.

SEC. 6.

 Section 111923.9 of the Health and Safety Code is repealed.

111923.9.
 A hemp manufacturer or retailer who is operating in conformance with this part and in good faith compliance with their responsibilities under this chapter may manufacture or sell industrial hemp products or raw hemp extract without authorization for three months after the effective date of the act that added this chapter.
SEC. 7.
 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.