After easily passing both the California State Assembly and State Senate, Assembly Bill 45 is now headed to Gov. Gavin Newsom for his signature. The long-debated bill establishes new hemp rules in California but has drawn the ire of both hemp and marijuana business owners.

Low-THC hemp products now will be subject to the same regulations, testing, and taxing as marijuana businesses. It will thus be more difficult for companies selling low-THC products to undercut marijuana businesses.

Opponents of the measure included the California Hemp Association, Cannabis Distribution Association, and some regional marijuana cultivation trade groups like Origins Council. Supporters of the measure included the U.S. Hemp Roundtable, California Cannabis Industry Association, California Hemp Council, and Cannabis Beverage Association.

“These critical changes to California law will drive economic opportunity and boost job growth by providing certainty to farmers, manufacturers, and retailers through a clear roadmap for expansion by providing consumers with a regulated CBD marketplace,” said David Culver, Canopy Growth vice president of global government relations. Canopy Growth was another vocal supporter of the bill.

The Los Angeles-based United Cannabis Business Association said in a release that the bill “finally moves toward establishing a legitimate foundation upon which we can build responsible policies for all cannabinoid products of all origins.”

Among other things, the bill would:

• Allow hemp extracts to be added to food, beverage, and cosmetic products.
• Establish new rules for hemp farmers and businesses, akin to the regulatory framework for marijuana companies, such as lab testing standards.
• Hold out-of-state hemp products imported into California to the new state standards.
• Ban the sale of intoxicating THC isomers such as delta-8 THC outside regulated cannabis sales channels.
• Permit the sale of smokable hemp, but only once lawmakers agree on a new tax for “inhalable products.”

This bill’s passage was the cumulative result of years of effort to update California’s industry rules for hemp companies.