Marijuana may have a history as a much-maligned plant, but now it’s undoubtedly big business here at home and in more than half the states in the country where some form of it is legal. But beyond THC, the psychoactive component of cannabis that has proved so polarizing, the crop has value that is in demand and has investors eyeing the long game.

Hemp, for instance. Cannabis species are not all alike; hemp is a spindly strain of marijuana that contains less than 0.3 percent of THC, and has been used in products like essential oils and clothing. Still, because marijuana remains illegal at the federal level, hemp harvests haven’t been all that prevalent in the U.S. (as opposed to Europe, for example, where hemp flourished on over 80,000 acres in 2016, record numbers so far).

In 2014, federal legislation in the U.S. was passed that allowed “individuals, institutions and states to legally participate in industrial hemp research,” but only in states that already permitted some form of legal marijuana.

The hemp industry gets a boost in The Golden State

According to a recent public post by the state’s Office of Public Affairs, the California Department of Food and Agriculture (CDFA), the agency is evaluating regulations for the cultivation of hemp on a commercial scale. The public comment stage has commenced and will continue until December 24th, at which time the CDFA will finalize the regulations, paving the way for hemp farmers to work toward getting licensed in the new year.

Kevin Wright is the Calaveras County Agriculture Commissioner. In an interview with the Calaveras Enterprise, Wright said it’s too soon for him to predict whether hemp will robustly take root in the county and bring in swaths of green in the form of cash. He pointed out that county supervisors might opt to implement the same cultivation regulations already in place across the state, or they might decide to prohibit the industrial growing of hemp entirely.

“They’re (CDFA) addressing it in pieces,” Wright said. “First they’re talking about how to register it, but the rest hasn’t even been written. We want to have something firmly in place so we don’t get ambushed like we did with cannabis.”

Medicinal hemp is likely to be the biggest earner

Wright noted in the interview that hemp growers’ biggest profits will likely be reaped in the field of medical products that include hemp. Therefore, he expressed dismay over the fact that the proposed regulations do not specifically outline protocols for that subset of hemp cultivation.

“There are still a lot of details that need to be worked out through regulation, especially concerning hemp grown for medicinal purposes, before we will be registering hemp growers in the county,” Wright said. “There’s currently no avenue for CBD oil through hemp.”

Cannabidiol, more commonly known as CBD, is often extracted from hemp and is also non-psychoactive. CBD oil’s popularity has exploded, retailers selling it (or shipping it) even in states where marijuana use remains illegal. However, as a Sacramento bar manager discovered recently, CBD oil’s relatively innocuous reputation doesn’t mean it will be welcomed in every situation.

CBD oil in cocktails: now you see it, now you don’t

Once the Sacramento Police Department learned that the R15 bar was selling cocktails containing CBD oil, an officer serving as a California Department of Alcoholic Beverage Control (ABC) liaison showed up at the establishment and put a stop to the “Kronic Aid” drink. According to The Sacramento Bee, no citations were issued.

R15 general manager Joel York told The Bee that he purchased the CBD oil from a health food store in Sacramento, right off the shelf, without needing to prove his age or show a prescription. Still, the ABC does not allow the oil to be added alcoholic beverages.

“Until the FDA rules that industrial hemp-derived CBD oil and CBD products can be used as a food or California makes a determination that they are safe to use for human and animal consumption, CBD products are not an approved food, food ingredient, food additive, or dietary supplement,” the ABC regulation reads.

And in case that’s not clear enough, there’s more:

“ABC licensees may not manufacture, produce, or sell CBD or CBD products, or any products that contain CBD. It does not matter if the CBD comes from industrial hemp or from cannabis. This also includes nonalcoholic beverage products and edibles.”

So when it comes to pairings, CBD oil and alcohol aren’t a good match in the state, but, because things are apt to change in the cannabis-related field, we should add: at least for now.

This article is provided for educational purposes only and is not offered as, and should not be relied on as, legal advice. Any individual or entity reading this information should consult an attorney for their particular situation. For more information/questions regarding any legal matters, please email info@nelsonhardiman.com or call 310.203.2800.