California & Industrial Hemp Challenge: Agricultural Commodity or Cannabis

The California Department of Food and Agriculture established an industrial hemp program for the registration of industrial hemp cultivators. Under the program, applicants must contact a local county agricultural commissioner to register for the program and abide by any local restrictions.

Businesses interested in starting a hemp company may have trouble finding a county to register in ahead of the 2020 growing season. According to our data, seventeen (17) counties currently allow hemp cultivation, twenty-six (26) counties implemented a temporary moratorium that would give them time to figure out what to do, fifteen (15) counties are silent on whether hemp is permitted, and two (2) counties are moving quickly towards implementation. California counties are struggling with whether to treat hemp as an agricultural commodity or to regulate the industry with restrictions like cannabis.

The California Legislature introduced a bill that has been ordered to its final reading will include hemp and cannabis as agricultural use under the Williams Act. This would remove some disagreement around the treatment of cultivation under local ordinances and provide firm guidance that hemp is an agricultural commodity.

California counties agree that the current high price for hemp that will be used for CBD is great for local farmers. However, counties are struggling to educate local citizens on the differences between cannabis and hemp, address concerns regarding public health and safety, and ward off litigation from surrounding cities and counties. Local police officers are concerned that diversion will occur as they are not trained to identify hemp from cannabis.

Monterey County is currently addressing these issues as it moves forward with implementing a hemp ordinance. Monterey County Planning Commission held a meeting on July 10th during which the group debated whether hemp is an agricultural commodity or as cannabis.

The ordinance that was before the planning commission treated hemp as a similar use as cannabis, and required that the cultivation and processing of industrial hemp occur within a hemp overlay district. The ordinance also required hemp cultivators to comply with cannabis requirements until the adoption of hemp specific regulations. The proposed ordinance provided only 30 registrations for hemp cultivation and limited the cultivation site to 100 acres. The deadline for registering for the 2020 growing season was August 31, 2019.

The Monterey Board of Supervisors will continue this discussion during its meeting on July 26, 2019. The Board of Supervisors will consider an amended ordinance package that includes an alternative approach of treating hemp as an agricultural commodity, which wills allow hemp cultivation in agriculturally zoned areas without additional land-use restrictions. Hemp cultivators will be subject to state law and must register with the county’s agricultural commissioner.

California is at the beginning of its journey in establishing an industrial hemp program. The unknown is preventing over forty-four percent of California’s counties from participating immediately, and the lack of testing facilities and local educational programs are also stumbling blocks to faster growth. Other counties such as Monterey are moving forward with hemp in an effort to bolster the local agricultural industry. Monterey will lead the pack in building out this industry and meeting the challenges head-on.