California’s recent emergency regulations aimed at hemp-derived products have sent shockwaves through the cannabis industry. Governor Gavin Newsom’s emergency order has sparked widespread concern, with businesses questioning the far-reaching restrictions and their potential impact on both state and national markets.
Brandon Harshbarger, president of Cheech & Chong Global Holdings, has voiced his worries about the implications of these changes. Speaking ahead of his appearance at the upcoming Benzinga Cannabis Capital Conference, Harshbarger highlighted the already noticeable fallout across California’s cannabis and hemp markets.
Harshbarger, whose company operates in both the recreational cannabis and hemp sectors in California, emphasized the disconnect between the state’s portrayal of hemp products and the reality. “We’ve been more vocal than some, but the reality is there are some very large recreational cannabis operators that are also producing excellent hemp-derived products in California along with many other states,” he explained.
The emergency order not only affects producers but also disrupts the entire supply chain, harming retailers and wholesalers who previously operated under the framework of AB45, a law allowing hemp-derived THC products under specific guidelines. “What the state isn’t recognizing is that AB45 was crafted with very specific requirements for hemp producers to follow,” Harshbarger pointed out, noting that many of the products targeted by the ban complied with these regulations.
One of the most concerning aspects, according to Harshbarger, is the potential financial hit. Using Minnesota as a comparison, he highlighted that hemp-derived THC beverages alone had generated nearly $200 million in sales in just over a year. “If you extrapolate population and store counts, it becomes easy to see that just the hemp-derived THC drink category is worth more than a billion dollars in sales a year to the State of California,” he added.
This, combined with the broader restrictions on hemp-derived products, suggests a far-reaching economic impact. The consequences could extend beyond businesses, affecting employment and state tax revenues.
Despite the challenging situation, Harshbarger remains optimistic, suggesting that these restrictions could ultimately drive recreational cannabis and hemp operators to collaborate on policy reform. “My hope is that this event is going to galvanize both the recreational cannabis and hemp operators in California so we can craft policy that makes sense for greater access and healthier companies to combat the illicit market,” he said.
As the debate over hemp and cannabis regulations continues, it’s clear that California’s decisions will have far-reaching national implications. The current market, as Harshbarger stated, “is untenable,” and these emergency measures may push the industry to reevaluate its approach to cannabis and hemp alike.
