Warning to ABC Licensees Concerning Illegal Hemp Products

Consumer dietary supplements, food, or beverage products manufactured using industrial hemp are governed by the Sherman Food, Drug, and Cosmetic Laws (starting with Health and Safety Code section 109875; “Sherman Act”). There are a number of provisions that require manufacturers and distributors of hemp products to be registered with the Food and Drug Branch for Industrial Hemp Enrollment and Oversight at the California Department of Public Health. Other provisions regulate the composition of hemp products and impose specific labeling and marketing restrictions.

Violations of the Sherman Act are misdemeanors and may subject a violator to fines and/or imprisonment. In addition, ABC may pursue administrative disciplinary action against licenses of businesses found to be selling hemp products that violate the Sherman Act. Such discipline may result in a suspension or revocation of the ABC license.

ABC licensees are expected to comply with all laws that affect their business operations and are required to operate their licensed business in a lawful manner. This includes ensuring that any hemp products being sold are lawful. There are a few steps that licensees can take to check if hemp products they are selling are lawful, and thus help protect their business and their employees from legal action.

First, be very cautious of representations made by manufacturers or distributors as to the legality of hemp products they are promoting and selling. They do not necessarily have your interests in mind and often do not stand behind those products if you are subject to investigation and legal action.

Second, the California Department of Public Health maintains a list of industrial hemp businesses that have registered with the Food and Drug Branch for Industrial Hemp Enrollment and Oversight. While this does not mean that individual products are necessarily compliant, it is an available resource to aid in your decision as to whether or not to carry an item.

Third, scrutinize the packaging. As indicated above, there are a number of specific labeling requirements. Health and Safety Code section 111926.2 provides that packaging and labeling on hemp products must include all of the following information:

1. A label, scannable barcode, internet website, or quick response (QR) code linked to the certificate of analysis of the final form product batch by an independent testing laboratory that provides all of the following information:
   1. The product name.
   2. The name of the product’s manufacturer, packer, or distributor, and their address and telephone number.
   3. The batch number, which matches the batch number on the product.
   4. The concentration of cannabinoids present in the product batch, including, at minimum, total THC and any marketed cannabinoids.
   5. The levels within the product batch of contaminants.
2. The product expiration or best by date, if applicable.
3. A statement indicating that children or those who are pregnant or breastfeeding should avoid using the product prior to consulting with a health care professional about its safety.
4. A statement that products containing cannabinoids should be kept out of reach of children.
5. The following statement, “The FDA has not evaluated this product for safety or efficacy.”

If a hemp product package or label does not fully comply with these requirements, then it is mislabeled or misbranded and is therefore illegal. It may even be prudent to verify that the phone number, QR code, or website are actually valid; if not, this would be a strong indication that the product is not lawful. In addition, it is noted that Delta-9 THC is listed as a chemical subject to Proposition 65 warning, thus triggering appropriate notice requirements under that law.

Finally, manufacturers are specifically prohibited from advertising or marketing to children (among others), so packaging or products that might reasonably be considered as attractive to children should be treated with particular caution.