As of January 3, 2021, under California’s Proposition 65, all cannabis products—including hemp-derived cannabidiol (CBD) products—that contain any amount of delta-9-tetrahydrocannabinol (THC) must warn consumers about the so-called dangers of being exposed to the THC. This warning includes CBD products made from industrial hemp.
The warning is mainly focused on chemical contaminants known to the state of California to cause cancer, birth defects, or other reproductive issues. When Prop. 65 was first implemented—under California’s Safe Drinking Water and Toxic Enforcement Act of 1986—THC was not initially a concern. That all changed on January 3rd, 2020 when THC was initially added to the Prop 65 list.
However, this didn’t affect CBD companies that manufacture, distribute, and retail within the state—including out-of-state companies that sell products in California—until this past January 3rd. Even with products containing the federal limit of 0.3 percent delta-9-THC or less, all must contain a warning label.
Companies that disobey Prop. 65’s restrictions are subject to fines of $2,500 per day per violation. Government agencies along with individuals will be enforcing the new rules.
The biggest difficulty with these changes in laws is it’s going to make it more expensive for CBD companies to operate within the state of California. The state already has a list of regulations concerning the cannabis industry, many of which come at a high cost the average entrepreneur simply can’t afford.
We saw this back when California first legalized recreational cannabis and many long-time growers opted to harvest against government regulations. While they were risking it all for the black market, their profit margins were so much higher than those going down the legal route.
The more regulations California implements, fresh entrepreneurs are going to have less of a shot at this industry. While customer safety is in the interest of lawmakers and Prop 65, the potential consequences of these actions are often ignored.