Two events will stabilize the hemp industry and offer for the first time a "workable" business model. At the moment, the hemp industry is governed by conflicting state laws and lack of clarity to defining the perimeters for sustained growth. (1) California's update of the state’s definition of industrial hemp and terminology to match the federal language, and (2) FTC has identified four CBD manufacturers it flagged for unfair and deceptive advertising establishes the scope of enforcement.
1. California Gov. Gavin Newsom signed a bill to bring the state’s hemp laws into compliance with the 2018 Farm Bill. The measure, which was signed Saturday and will take effect Jan. 1, updates the state’s definition of industrial hemp and terminology to match the federal language.It also requires the California Department of Food and Agriculture to develop and submit a hemp regulation plan to the U.S. Department of Agriculture (USDA) before May 1, 2020. The USDA has 60 days to approve or deny the plan, which can be resubmitted if changes are required. Once the state plan is approved, California will adopt expanded registration and regulatory requirements for cultivators and implement consequences for rule violations.
2. FTC- federal consumer protection agency has identified four CBD manufacturers it flagged for unfair and deceptive advertising. The U.S. Federal Trade Commission (FTC) announced warning letters were sent last month to four companies selling hemp-derived CBD products. At the time, the agency did not name the companies. A public records request posted this week made those warnings public.
The companies were warned to remove health claims from their websites and marketing materials, including customer testimonials. The companies’ responses were not made public. Like the U.S. Food and Drug Administration (FDA), the FTC can fine companies that make unproven medical claims, though enforcement actions beyond warning letters are rare. Included in the newly released CBD warnings was a notice that a CBD manufacturer that includes a nutrition fact panel on a tincture “suggests that it is a food” and not a dietary supplement, violating an FDA rule that “prohibits the introduction into interstate commerce of any food to which CBD has been added.”