California’s sweeping overhaul of hemp regulations, enacted last week, continues to draw sharp criticism from hemp producers, manufacturers, and other stakeholders who say it will shrink the legal market, deepen regulatory confusion, and disadvantage both hemp and cannabis businesses.
Opponents argue the law, Assembly Bill 8 (AB 8), cements an unworkable “zero THC” standard for foods and beverages, folds hemp too tightly into the marijuana regulatory system, and could worsen oversupply problems for licensed cannabis cultivators. Others warn that accompanying tax changes may reduce funds intended for community and youth programs.
It’s only Phase 1
AB 8 integrates hemp products into California’s marijuana regulatory framework and sharply restricts the use of hemp-derived cannabinoids in foods and beverages. Signed by Gov. Gavin Newsom late last month, the law bans the incorporation of raw hemp extracts into foods, beverages, and dietary supplements starting in 2026, with further integration of hemp products into the cannabis system to follow in 2028.
The measure builds on California’s emergency regulations, which already require hemp consumables to contain no detectable THC—a standard many products cannot meet. It also expands oversight through the California Industrial Hemp Enrollment & Oversight (IHEO) system, which mandates registration, testing, labeling compliance, and food manufacturing permits.
Uncertainty
For companies built around minimally processed hemp products, AB 8 creates serious uncertainty. The law effectively bars the use of raw hemp extracts in foods and beverages and imposes strict THC and serving-size limits that few products in this category can meet.
Chris Boucher, CEO of Vista-based Farmtiva, said the changes will hit sales channels hard. “AB 8 has a severe negative impact on selling any CBD to online stores, health food stores, grocery stores, juice bars—everywhere,” he said.
Farmtiva’s Juicetiva raw hemp leaf juice contains nondetectable THC, which gives it a narrow compliance advantage. “We’re in a unique category since it’s whole-plant food and not a cannabinoid extract,” Boucher said. But even with those advantages, Farmtiva must navigate new serving caps, labeling requirements, and an uncertain regulatory definition of what qualifies as “traceable” THC.
Murky bureaucracy
Boucher said California’s zero-tolerance THC standard is essentially unworkable for most producers, since only pharmaceutical-grade CBD isolate can reliably meet the requirement. He noted that such isolates are far less efficient than full-spectrum extracts, requiring roughly twice as much to achieve the same effect.
He also criticized the state’s lack of clarity on testing methods. While regulators rely on gas chromatography to determine trace THC levels, the law itself doesn’t clearly define what counts as “traceable,” leaving producers to navigate shifting interpretations without clear guidance.
IHEO authorization is mandatory for hemp manufacturers in California, but the system is often described as disorganized and difficult to navigate—particularly for small and mid-sized businesses.
“The CDPH is so disorganized and ill-informed they clearly don’t know the laws,” Boucher said. “I could go on about the chaos they have caused.”
Hempseed on separate path
Unlike CBD and hemp extracts, hempseed and its derivatives—hulled hempseed, hempseed oil, and hempseed protein—have been generally recognized as safe (GRAS) under U.S. federal law since 2018. AB 8 does not address hempseed, and California has not imposed additional barriers to their sale.
These products are widely available through conventional food channels and are stocked by major retailers in the state. Hempseed is primarily sourced from Canadian and U.S. grain production and is used in plant-based foods, protein powders, cooking oils, and snacks. Several California-based companies incorporate hempseed ingredients into branded foods, but the state does not have a significant hemp grain production sector of its own.
Opponents also argue that AB 8 may worsen economic problems on both sides of the hemp–cannabis divide. By requiring many hemp products to be reformulated with ultra-pure isolates or enter the marijuana system, the law narrows the legal space for non-intoxicating hemp foods, beverages, and supplements.
Threat to pot shops
At the same time, critics warn that allowing some hemp-derived THC products into the cannabis supply chain could deepen the glut facing licensed cannabis cultivators and undermine state revenues. Boucher estimates that there are currently only about 900 marijuana dispensaries in California, compared to well over 50,000 stores that could sell hemp CBD products.
“AB 8 is one of the most dangerous cannabis laws in America,” Boucher said. “California is a massive economic powerhouse of the world, and this law destroys all the economic opportunities for hemp CBD companies. The marijuana industry lobbyists have bribed Gov. Newsom into signing this insane law.”