Jonathan Miller: "We were shocked by the new emergency regulations."
The hemp industry in California is under rising pressure after Governor Gavin Newsom issued emergency regulations that effectively hinder further development of the industry, according to Jonathan Miller, general counsel of the U.S. Hemp Roundtable. "We were shocked by the new emergency regulations," he stated. This wasn't the first attempt by the state government to block the hemp industry. "But we were able to defeat that first attempt. We then asked the governor and other stakeholders to come to the table to find a compromise, but we were met with this unilateral decision."
According to Jonathan, the California hemp industry was open to further regulations to better delineate hemp companies' operational boundaries. After all, following the passage of the 2018 Farm Bill, which allowed hemp products to be sold, the sector became somewhat of a wild west. "The hemp market in 2018 was filled with excitement and promises," he explained. "A lot of people started farming hemp without really knowing where their crop would end up. There was a lot of natural disruption caused by people who weren't very business-savvy. However, in early 2019, the FDA declared that it was illegal to market CBD. While they never really enforced that, it cast a shadow over the market."
Despite this, the hemp industry has seen a resurgence, particularly in the beverage sector. "This has been happening especially over the last 12 months," he noted. But several states have since hindered the development of the industry, not just California. "In Missouri, the governor tried something similar, but the Attorney General backed us and focused on counterfeit products. We fully support that approach, which is very different from what California and New Jersey have been doing."
A similar effort to disrupt the industry has indeed been underway in New Jersey. " Some hemp businesses have a lawsuit ongoing over there, too."
A couple of weeks ago, a similar lawsuit was filed in California by the U.S. Hemp Roundtable and six other companies. Additionally, the Roundtable has filed for a temporary restraining order (TRO) against the governor's emergency rule. "The next step is the courtroom, and we hope the judge will grant the TRO and ultimately force the governor to come to the table and discuss the best approach to address the hemp industry's issues."
In the meantime, hemp operators are left in limbo just as the harvest season is about to start. "So far, California hasn't issued any enforcement actions, but retailers have been asking for refunds and returning products, all while we are heading into Croptober. That's why we've sued, and we hope the decision will be reversed."