It has become clear in recent years that obtaining a cannabis license is both expensive and complicated. As a result, many people have found it easier to sell intoxicating products, such as hemp THC beverages. However, this trend may be shifting, especially in California.
Hemp THC beverages are drinks that contain hemp-derived delta-9 THC. You might be wondering how this is possible given the federal law that restricts THC content to 0.3%. Interestingly, these beverages can still be intoxicating without exceeding this limit. For instance, a drink containing 5 to 10 milligrams of hemp-derived THC can be intoxicating while still maintaining a THC concentration below 0.3%, depending on its weight.
California Governor Gavin Newsom issued an order in April for the Alcoholic Beverage Control (ABC) and the Public Health Department (CDPH) to ensure hemp products sold in the state adhere to the law. The initiative, titled California Takes Action to Protect Youth from Illegal Hemp Products, emphasizes the need to prevent mislabeled and misleading products from reaching the market, particularly to safeguard children’s health.
The directive highlighted concerns about highly intoxicating hemp beverages appearing in retail stores, which could easily end up in the hands of minors. Hemp products, distinct from those in the legal market, must adhere to stringent consumer safety regulations, including precise labeling requirements. Failure to comply with these regulations is illegal and can lead to license revocation.
Following the directive, both ABC and CDPH issued general warnings to entities about potentially illegal hemp products.
Last week, CDPH specifically warned consumers against drinking hemp-infused sodas under the Mary Jones branding, alleging that the drinks contained isolate of delta-9 THC. As per the CDPH, state law prohibits the inclusion of THC isolate as a component in hemp products.
This warning, which indicates that CDPH views goods containing THC isolates could be dangerous, might have a big impact on the California hemp THC beverage market. The future actions of CDPH remain uncertain, especially regarding companies that produce hemp THC drinks without using THC isolates. State law grants CDPH and other regulators substantial authority to target companies selling “misbranded” or “adulterated” products. These terms can be interpreted broadly, potentially encompassing any product with intoxicating cannabinoids.
Under California law, “THC” broadly consists of:
- tetrahydrocannabinolic acid
- tetrahydrocannabinol of any kind regardless of how they are derives (the CDPH may exclude certain isomers from this definition)
- any other cannabis compound, except CBD, that CDPH determines to be intoxicating.
This definition indicates that CDPH may examine any psychoactive cannabinoid, not just isolate of delta-9 THC. Additionally, there are federal considerations to keep in mind. Recent proposed amendments to Farm Bill 2024 aim to limit intoxicating cannabis compounds. While the amendments do not specify a restrictive milligram cap for hemp THC beverages, they do exclude products with “quantifiable levels” of THC or other intoxicating cannabis compounds from the definition of hemp. The exact meaning of “quantifiable levels” will be determined by federal regulators, which could result in regulations that effectively ban intoxicating hemp THC drinks.
The actions taken by California regulators to crackdown on hemp intoxicants could help to clarify the boundaries between the THC products from licensed companies in various jurisdictions, such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF), and products synthesized from hemp.
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