Consumer dietary supplements, food, or beverage products manufactured using industrial hemp are governed by the Sherman Food, Drug, and Cosmetic Laws (starting with Health and Safety Code section 109875; “Sherman Act”). There are a number of provisions that require manufacturers and distributors of hemp products to be registered with the Food and Drug Branch for Industrial Hemp Enrollment and Oversight at the California Department of Public Health. Other provisions regulate the composition of hemp products and impose specific labeling and marketing restrictions.

Violations of the Sherman Act are misdemeanors and may subject a violator to fines and/or imprisonment. In addition, ABC may pursue administrative disciplinary action against licenses of businesses found to be selling hemp products that violate the Sherman Act. Such discipline may result in a suspension or revocation of the ABC license.

ABC licensees are expected to comply with all laws that affect their business operations and are required to operate their licensed business in a lawful manner. This includes ensuring that any hemp products being sold are lawful. There are a few steps that licensees can take to check if hemp products they are selling are lawful, and thus help protect their business and their employees from legal action.

First, be very cautious of representations made by manufacturers or distributors as to the legality of hemp products they are promoting and selling. They do not necessarily have your interests in mind and often do not stand behind those products if you are subject to investigation and legal action.

Second, the California Department of Public Health maintains a list of industrial hemp businesses that have registered with the Food and Drug Branch for Industrial Hemp Enrollment and Oversight. While this does not mean that individual products are necessarily compliant, it is an available resource to aid in your decision as to whether or not to carry an item.

Third, scrutinize the packaging. As indicated above, there are a number of specific labeling requirements. Health and Safety Code section 111926.2 provides that packaging and labeling on hemp products must include all of the following information:

1. A label, scannable barcode, internet website, or quick response (QR) code linked to the certificate of analysis of the final form product batch by an independent testing laboratory that provides all of the following information:
   1. The product name.
   2. The name of the product’s manufacturer, packer, or distributor, and their address and telephone number.
   3. The batch number, which matches the batch number on the product.
   4. The concentration of cannabinoids present in the product batch, including, at minimum, total THC and any marketed cannabinoids.
   5. The levels within the product batch of contaminants.
2. The product expiration or best by date, if applicable.
3. A statement indicating that children or those who are pregnant or breastfeeding should avoid using the product prior to consulting with a health care professional about its safety.
4. A statement that products containing cannabinoids should be kept out of reach of children.
5. The following statement, “The FDA has not evaluated this product for safety or efficacy.”

If a hemp product package or label does not fully comply with these requirements, then it is mislabeled or misbranded and is therefore illegal. It may even be prudent to verify that the phone number, QR code, or website are actually valid; if not, this would be a strong indication that the product is not lawful. In addition, it is noted that Delta-9 THC is listed as a chemical subject to Proposition 65 warning, thus triggering appropriate notice requirements under that law.

Finally, manufacturers are specifically prohibited from advertising or marketing to children (among others), so packaging or products that might reasonably be considered as attractive to children should be treated with particular caution.

On July 1, 2024, AB 1013 (Lowenthal, Chapter 353, Statutes of 2023) will go into effect. This new law will require Type 48 license holders and applicants (including those issued an interim operating permit) to make drug testing devices available to their customers (such as test strips, stickers, straws, or other device types that are designed to detect the presence of controlled substances in a drink), which have not exceeded their expiration date or recommended period of use, that test for “controlled substances” commonly used to spike drinks. These controlled substances may include, but are not limited to, flunitrazepam, ketamine, and gamma hydroxybutyric acid, also known by other names, including GHB, gamma hydroxybutyrate, 4-hydroxybutyrate, 4-hydroxybutanoic acid, sodium oxybate, and sodium oxybutyrate. The drug testing devices must either be available for sale to customers, at a price not to exceed a reasonable amount based on the wholesale cost, or be given to customers free of charge.

In addition to offering the drug testing kits, the license holder or applicant must post the following notice verbatim in a prominent and conspicuous location on their licensed premises:

“Don’t get roofied! Drink spiking drug test kits available here. Ask a staff member for details.”

Note: You may access a printable version of this sign as a PDF download.

Violations of this law are not criminal offenses but may result in administrative citation against the license. While it is the obligation of a type 48 licensee or applicant to ensure the testing devices offered to customers have not exceeded their expiration date or recommended period of use according to the product manufacturer or label/packaging, the license holder is not liable for defective tests or inaccurate test results, such as a false positive or false negative result.

These laws are scheduled to repeal on January 1, 2027 unless otherwise extended by the Legislature.

Frequently Asked Questions

Beginning January 1, 2024, all licensed beer manufacturers (meaning Type 1 and Type 23 Licenses) will be authorized to produce cider or perry under their beer manufacturer licenses. While this privilege already exists for Type 1 license holders, SB 788 (Ashby) repeals the statutory requirement that a beer manufacturer must annually produce more than 60,000 barrels of beer in order to manufacture cider or perry under their beer manufacturing license. As a result of this new law, Type 23 license holders will have the ability to produce cider or perry without possessing a winegrower’s license.

Under current federal and state law, both cider, which is made from apples, and perry, which is made from pears, are classified as wine since they are fermented from fruit. SB 788 does not change the classification of cider or perry, rather it establishes parity for small beer manufacturers to produce cider or perry under the same exception that exists for Type 1 license holders. As part of the exception, beer manufacturers are able to sell cider or perry to other licensees authorized to sell wine (such as wholesalers or retailers), but are not authorized to sell or offer tastings to consumers at their brewery unless they possess a winegrower’s license. If a beer manufacturer wishes to offer tastings, consumption, or sales to consumers of cider or perry on a Type 1 or Type 23 licensed premises, they will need to acquire a winegrower’s license to do so and be afforded the full privileges associated with the sale of alcoholic beverages fermented from fruit.

Frequently Asked Questions

Pursuant to AB 1734 (Bennett, Chapter 175, Statutes of 2022), ABC licensees who hold a beer manufacturer’s license and a winegrower’s license that are under identical ownership were authorized beginning January 1, 2023 to hold both licenses for a single premises where alcoholic beverages allowed under those license types may, without separation, be sold or consumed. The licensee must still have a designated area on the premises where retail sales or consumption occurs but is not required to separate beer and wine sales or beer and wine consumption. In order to exercise the privileges established by the bill, both licenses must be maintained under identical ownership. Identical ownership means the entity listed on the licenses must be identical in all respects, and not just the same individuals in control of both licenses. Further, the manufacturer licenses for the single premises must be either both master licenses or both branch offices and may not be a combination of a master license and a branch office. If the premises involves overlapping branch offices, alcoholic beverage sales are limited only to those produced by the licensee.

There are distinct privileges that vary between beer and wine manufacturers. This new law does not enable a licensee to bypass statutory or regulatory requirements or restrictions applicable to their beer manufacturer or winegrower license simply by overlapping the premises with the other type of manufacturer’s license. For example, limits applicable to the number of bona fide eating places a winery may operate remain applicable. As expressly provided in the bill, it is not intended to allow a licensee to exercise any license privileges, or to hold licenses alone or in combination, not otherwise authorized by the ABC Act.

Update: SB 269(Laird, Chapter 176, Statutes of 2023) was recently enacted and will take effect January 1, 2024. This bill adds the brandy manufacturer and craft distilled spirits manufacturer license types to the single-premises authorizations established by AB 1734. In practice, this means a beer manufacturer’s license, a winegrower’s license, a craft distiller’s license, or a brandy manufacturer’s license, that are held in any combination and under identical ownership, may overlap at the same premises without necessitating separate sales and consumption areas. If one of the manufacturer’s licenses for the single premises is a craft distilled spirits manufacturer, then the manufacturer’s licenses for the single premises must all be master licenses and not a combination of a master license and a branch office. This limitation was incorporated to reconcile the differing privileges that exist among manufacturer license types. Work with your local ABC district office to license a single premises with multiple manufacturer license types and exercise this authorization.

Frequently Asked Questions