Posted 5 months ago - by

What You Should Know About AB 45 & How California Regulates Hemp

California passed AB 45 in October of 2021, which allows for hemp, cannabinoids, extracts, or derivates of hemp, in food and beverages. It also allows for the inclusion of these listed above in other products such as dietary supplements, processed pet foods, and cosmetics. Amongst other guidelines and restrictions, the main stipulation is that these products contain no more than 0.3% THC.


AB 45

Additionally, AB 45 includes:

  • A registration requirement for manufacturers of hemp products
  • Hemp extract in its final form now must go through testing by an independent laboratory. They will check the percentage of THC does not exceed the limit of 0.3%. Similarly, they are checking for any unsafe contaminants.

Moreover, hemp products in beverages, foods, or dietary products must include the following:

  • Product expiration date
  • An identifiable label (i.e., scannable barcode, QE code, website link) that leads to certificates of analysis, providing the THC content of tested batches.
  • Statements that say, “Cannabinoids should be kept out of reach of children” & “The FDA has not evaluated this product for safety or efficacy”.

AB 45 prohibits advertisements, labels, and marketing to state any untrue “health-related statement”. Subsequently, it does not provide any guidance on maximum serving sizes or guidance on active cannabinoid concentration per serving size. It does however provide the California Department of Health with the authority to issue regulations on sizes and servings down the road.

The law also states that when federal law authorizes hemp products the California Department of Health will adopt new regulations in accordance with federal law.

Emergency Regulations

In April of 2022, The California Department of Health proposed additional Emergency Regulations to regulate CBD.

The proposed regulations mostly deal with registration for industrial hemp manufacturers. This includes:

  • Fees are based on gross revenue in the trailing 12 months. There will be one fee structure for extract manufacturers and another for all other CBD product type manufacturers.
  • Different kinds of hemp product manufacturers get different kinds of registrations/licenses from the agency.
  • Manufacturers with different types of products may need multiple types of licenses.
  • Some out of state manufacturers will need to register with the state to import products.
  • Applications for oversight authorizations will require details on sources, extract methods, their products, and more. They will also require owners to sign the applications under penalty of perjury.

The California Department of Health will accept comments on these regulations through the end of May 2022 pending their decision.

Need expert help?

Keeping up with rapidly changing compliance and regulations that come with the cannabis landscape can feel overwhelming. For this reason, Payroll Systems has partnered with financial institutions to offer payroll/HR services to the cannabis industry. This includes direct deposit, electronic tax payments, tax filings, and more.

Contact Payroll Systems to see how you can leverage our easily scalable solutions—from paperless new employee onboarding, paperless benefit enrollment, timekeeping systems with companion mobile app, physical clocks, and customized job costing and labor distribution reporting.

We pair human skills and empathy with the latest technology to take on our clients’ HR and payroll processes.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.