Assembly Bill 45: The Good, the Bad and the Ugly

Hey gang, its another sweet, sweet Friday and we are PSYCHED!! Autumn has kicked in. It’s time to get out there and enjoy that crisp autumn air. Spend a little CBD chillax time by the fire or maybe treat yourself to a CBD bath bomb. Autumn also brings the old familiar aches and pains for many of us. Our customers swear by our Sunset Salve for treating aches and pains. Check it out and see how it works for you.

Last week we were talking about the legal and regulatory chaos surrounding the CBD industry. At the end of the blog we mentioned the recently passed Assembly Bill 45 in California. Assembly Bill 45 or AB45 is a particularly baffling piece of legislation. It is confusing and infuriating. So let’s take a closer look.

The Good

AB45. At first glance its awesome because it essentially legalizes CBD in California. Not that it wasn’t legal before, although it wasn’t really legal before so… its a great thing. The bill allows CBD to be put in dietary supplements, food, beverages, cosmetics and pet food. It also finally gives us some much needed clarity on the regulation of CBD in general. After that it becomes, well, weird.

The general goal of the bill is to make the CBD market safer for the end-users. This is something that we can all support as it is good for business and good for our customers. It is especially good for companies like Cali Craft because our commitment to purity and quality. Regulation like AB45 means that all of the pop-up CBD labs that people are running out of their garage or basement will disappear. All of the hucksters who are in it for the money and fat margins but care nothing about the quality, safety or efficacy will disappear. All of these things are good things.

We need to harmonize and normalize the CBD market. We are trying to ‘protect a rapidly growing industry relating to derivatives from industrial hemp’ which is super cool. This is the moment that all of the people dedicated to the CBD cause have been waiting for. We are already following the regulations anyway so its all good.

The Bad

The overall goal is to integrate CBD into the regulatory framework and supply chain for cannabis. The idea sounds great but the actual execution is still a little hazy. There is a deadline of July 22 2022 to come up with a plan to make this happen. Sure, it seems like a long way off, but in real world terms its actually right around the corner. If there is anything that I have learned about regulatory legislation from the pharmaceutical industry is that timelines drift and deadlines get postponed, forever. This is the nature of legislation, which is  OK I guess, but in this case we are looking for clarity. If the deadline for the suggested regulation gets delayed it will leave CBD, once again, in a kind of regulatory limbo.

If you are coming into California with a product that is not made in California, you will have to pay for the regulators to come out to your facility to conduct an inspection. The cost is not small. The exact scope of the regulatory requirements remains unclear. The bill was created for the immediate preservation of public peace, health and safety. According to Article 4 of the California constitution the act shall go into immediate effect.

For the companies that are already following the regulations (California Craft) will have a 3 month grace period before they are required to get officially certified by the state inspectors. The rest of the companies will be not be able to operate until they have been inspected and certified.

The Ugly

By far the weirdest and worst part of the bill though is the part where they make smoking CBD flower illegal. Remember the bill is designed to address concerns for public peace, health and safety and it will go into effect immediately. That means that all of the farmers who have spent their last few cycles growing smokable flower are now totally screwed.

See, they want to tax the smokable flower but they don’t know how to do it exactly. The result is that until they figure out how to tax CBD smokable flower it will be illegal to sell CBD smokable flower. It’s the old “until we figure out how we are going to make money out of this nobody is going to make money out of this’ hustle. It’s short sighted to say the least and will needlessly hurt the farmers who were growing their crop in good faith.

The reality is that the farmers will challenge it in court. They did the same thing in Texas and the prohibition has been put on hold until the case is resolved. We expect to see the same thing happen in California and the sooner the better. All of this grade A premium CBD flower isn’t going to smoke its self.

In Closing

So in a nutshell, that is AB45. There are other elements to the bill that should be considered as well. In another blog in the not too distant future, we will get a bit more granular on the aspects of the AB45. But for right now we have a weekend to get started!! So have a good one and see you next Friday!!