Steps and Considerations for Incorporating Hemp Into the Commercial Cannabis Supply Chain

Business and Professions Code section 26013.2 requires the Department of Cannabis Control (Department) to prepare a report outlining the steps necessary to incorporate hemp into the commercial cannabis supply chain. As detailed in this report, the inclusion of hemp into the commercial cannabis supply chain is a complex undertaking that requires careful consideration of significant policy questions. The approach utilized to accomplish this end would have direct impacts on the cannabis industry, hemp industry, the standard consumer market, medicinal and adult-use consumers, Department staff and the public.

To support the Legislature’s policy deliberations and stakeholder engagement, this report identifies factors that should be considered when determining when or if to incorporate hemp into the commercial cannabis supply chain. Once policy determinations are made and a specific approach is identified, the Department can then further define the statutory, regulatory and administrative changes that would be necessary to implement that policy. These changes could include regulation development and adoption, programmatic development, new and amended contractual arrangements, development and implementation of reconfigurations of database systems, additional staffing to address increased workload, and education for staff, licensees and the public. Irrespective of which approach California adopts, this report makes clear that if that approach includes the incorporation of hemp into the cannabis supply chain at any point, an appropriate amount of time and financial resources would be necessary for comprehensive implementation by the Department.