California is advancing a proposal to permanently ban hemp-derived THC products, including drinks, vapes, and edibles. Spearheaded by Governor Gavin Newsom and the California Department of Public Health, this measure seeks to replace the current emergency ban, which expires in September, with a long-term regulatory framework aimed at protecting youth and public health.
Why It Matters
Hemp-derived THC products currently evade the strict regulations imposed on licensed marijuana dispensaries. Critics argue that this loophole allows intoxicating products to be sold freely in stores and online, raising serious concerns about youth access. This tightening of hemp-derived THC rules in California stands in sharp contrast to Germany’s expansion of regulated cannabis social clubs, which aim to control access through membership-based, non-commercial models.
Estimated Economic Impact
A CDPH analysis projects the first-year revenue loss for businesses at $602 million, growing to $3.14 billion over five years. Additionally, the proposal may jeopardize 18,478 jobs and shutter over 115 small retailers. Licensed cannabis companies could see a potential gain of $69.8 million in revenue and create 232 new jobs through regulated sales.
Balancing the Market
Licensed cannabis businesses argue that the market faces unfair competition from the unregulated hemp-THC sector, particularly as federal cannabis policy shifts following the Trump administration’s move to reschedule marijuana under federal law. The proposed ban aligns California more closely with states like Oregon and Washington, which have already implemented similar restrictions to bolster their regulated cannabis markets.
Risk of Illicit Sales
Experts warn a full ban could drive demand into underground markets or fuel cross-border purchases, potentially undermining public safety efforts while igniting new regulatory challenges.
What’s Next
The ban is currently in a 45-day public comment period, with hearings scheduled soon. It must pass further review and likely legislative oversight before implementation, as state regulators balance public health priorities against economic and employment concerns.
Published On: June 15, 2025
Original Article: SF Gate – Newsom administration moves to permanently ban hemp THC in California