California was an early state to legalize marijuana for recreational use, but the state has been slower to regulate hemp-derived products such as cannabidiol (“CBD”).

A new bill, AB-45, would legalize hemp in foods, food additives, dietary supplements, herbs, and cosmetics intended for human or animal consumption if the products meet threshold requirements.

AB-45 attempts to win over those who opposed two previous attempts to legalize CBD in California, AB-228 and AB-2028, through a variety of restrictions addressing concerns about CBD safety that have stymied regulation at the federal level, as well. The California bill promulgates certification and labeling requirements that would promote transparency as to sourcing and purity. It also imposes restrictions on advertising language that reflect concerns over misleading or unsubstantiated health benefit claims. This focus echoes the federal Food and Drug Administration’s (“FDA”) stated concerns about CBD, which have resulted in delays in federal CBD regulation as the agency seeks more data on these issues.

Indeed, the vacuum created by the FDA’s inaction is apparent from the bill’s specification that state laws pertaining to hemp regulation would remain in effect “until the adoption of regulations pursuant to the federal law that authorizes industrial hemp products.”

The bill models how federal regulations might address these concerns about safety, most notably via its requirements on advertising and labeling. The bill would flatly prohibit manufacturers, distributors, and sellers of industrial hemp products from including on labeling, advertising, or marketing false or misleading statements about the “health effects of consuming products containing” industrial hemp, CBD, or other derivatives. CBD products also cannot be advertised to individuals under the age of 18. (However, the bill does not include an age restriction on who may purchase these products.) These prohibitions parallel FDA concerns about misleading health benefit claims made about CBD products, and about the purity of those products.

Again responding to questions about CBD products’ safety, AB-45’s labeling requirements mandate bar codes or QR codes that would provide links to certification results from an independent laboratory about that product’s CBD concentration. (Other states have similar labeling requirements.) Products would also need to bear a certificate of analysis demonstrating that they do not contain more than 0.3% tetrahydrocannabinol (“THC”) – the limit to be classified as legal hemp, as opposed to marijuana – and contain only derivatives of legally-grown hemp.

The bill similarly seeks to assuage concerns as to oversight and safety by imposing an array of registration requirements on various participants in the CBD market. Manufacturers of hemp-derived products who are located within California, all manufacturers of raw hemp extract that will be infused into products by manufacturers within California, and any retailer of raw or finished hemp extract products must register with the California Department of Public Health.

Notably, AB-45 draws a bright line between CBD as a food additive, and as a drug. Although the bill would allow CBD food and beverage products, it bars adding CBD or any other hemp derivative to smokable products, cigarettes, or prescription drugs and other medical implements. While recreational marijuana is legal in California, the distinction reflects ongoing concern among some groups, such as the FDA, about the safety of CBD and other hemp derivatives given the limited data the FDA has seen about substances’ safety.

Given the similarities between AB-45’s restrictions and the FDA’s public comments about hemp derivatives, the California bill is likely instructive as an example of the general contours federal regulation regarding CBD may take when it finally arrives. Moreover, AB-45’s success or failure in the California legislature may indicate whether its level of stringency is enough to win over opponents, or even stricter regulation should be anticipated in California and elsewhere.