Georgia Legislature Passes New Hemp Regulations–What’s Changing?

Last week, on “Sine Die,” the final day of the legislative term in Georgia, the state legislature passed Senate Bill 494, a bill establishing a regulatory framework and other rules and requirements for businesses that sell or manufacture hemp and hemp products.

If the bill is signed into law by the Governor, it will go into effect on July 1, 2024. 

At that point, there will be new age limits on certain hemp products, businesses that want to manufacture or sell hemp products will have to apply for licenses from the state, and labs that test hemp products will have to test for a variety of additional hemp extracts besides Delta-9-THC, the cannabinoid that gets users “high.” Critically, the bill sets up the Department of Agriculture to be the main regulatory agency for the hemp industry, giving it power to police businesses and farmers to ensure they are complying with the law.

Below are some of the highlights from the new hemp bill:

First, it’s important to note what the new hemp laws do not change. In 2019, the Georgia legislature legalized a broad variety of cannabis and cannabis extracts as “hemp” as long as they have less than 0.3% delta-9-tetrahydrocannabinol (“Delta-9-THC”). Previously illegal cannabis extracts (“cannabinoids”) like CBD, CBG, Delta-8, Delta-10, HHC, THCV, and others became legal for the first time in Georgia. (Of course, that didn’t stop some law enforcement officials from misinterpreting the law and conducting unlawful raids of small businesses).

Since 2019, there have been anti-cannabis special interest groups lobbying to ban or severely limit access to cannabinoids like Delta-8-THC and other hemp-derived extracts. In passing SB 494, the legislature rejected most of the proposals pushed by these groups, leaving the vast majority of hemp-derived cannabinoids legal under Georgia law, regardless of dosage, as long as the final product has less than 0.3% Delta-9-THC. In fact, the legislature specifically rejected a last-minute amendment that would have eliminated most THC products by grouping Delta-8, Delta-10, HHC, and other extracts under the same 0.3% threshold as Delta-9-THC.

Now, the law more explicitly protects businesses and consumers who sell or purchase “consumable hemp products,” which are defined as “a hemp product intended to be ingested, absorbed, 83 or inhaled by humans or animals.”

Consistent with recognizing a wide variety of “consumable hemp products,” SB 494 makes significant changes to the language that previously defined “hemp products.” Before, the definition of “hemp product” excluded “food products infused with THC.” Some law enforcement officials erroneously relied on that language to raid stores that sold THC gummies.

In SB 494, the legislature literally crossed out the language regarding “food products” and effectively codified the Court of Appeals ruling from last year which held that Delta-8 and Delta-10 are not controlled substances regardless of whether they are found in edible products.

Another significant change, and one that the hemp industry almost certainly won’t like, is that SB 494 will effectively eliminate the market for THCA products, especially flower and vape products that have high percentages of THCA. That’s because SB 494 introduces new language that requires hemp and consumable hemp products to be tested for a “total delta-9-THC concentration” that accounts for both the amount of delta-9-THC and THCA in a product. Under these new standards, products will have to have under 0.3% of both Delta-9-THC and Delta-9-THCA to be legal. 

To be more technically precise, SB 494 will require that the “total delta-9-THC concentration” in a product be established either 1) by testing a sample that has “undergone decarboxylation such that all delta-9-THCA in the sample has been converted to delta-9-THC” or 2) by identifying the amount of delta-9-THCA “multiplied by 0.877 plus the percentage by weight…of delta-9-THC.”

Long story short–Under these standards, most THCA products will likely be illegal under state law. The silver lining is that businesses that have been raided or had its owners and employees arrested based on the sale of THCA flowers can point to this bill as evidence that the products were legal at the time they were sold.

Another important aspect of the bill, and one that will merit close attention to ensure fair enforcement, are the licensing requirements established by SB 494. Since 2019, only hemp farmers in Georgia have had to apply for and obtain a license to handle hemp.

Now, manufacturers of hemp products must have a “manufacturer license” issued by the Department of Agriculture. Retailers and wholesalers must have a “retail consumable hemp establishment license” or a “wholesale consumable hemp license,” both granted by the Department of Agriculture. The same goes for labs that test hemp products, as they must also be registered with the State and have a documented “measure of uncertainty” in their tests.

Under the new law, manufacturing or selling hemp and hemp products without a license can lead to misdemeanor criminal charges, with a second or subsequent offense qualifying as a “misdemeanor of a high and aggravated nature.” There are also substantial financial penalties for violating these licensing requirements.

Notably, licenses will not be issued to any individuals who have been convicted of a felony drug crime within ten years of applying for the license.

SB 494 also imposes new testing standards and requires that testing results be readily available to consumers and members of the public. Specifically, the bill states that no consumable hemp product may be sold unless the manufacturer has a “full panel certificate of analysis” performed within the past year and which measures the total amount of THC, CBD, CBDA, CBG, CBGA, CBN, HHC, and other compounds identified by the Department of Agriculture. 

Hemp products containing THC must also bear a sticker, approved by the department, “warning potential consumers that such product contains THC,” as well as the results of the full panel certificate of analysis or a QR code leading to those results.

The bill authorizes the Department of Agriculture to monitor and investigate businesses to ensure they are complying with these requirements. If a business violates these labeling regulations or has hemp products that exceed the legal limit of total delta-9-THC, their products will be seized and destroyed, and the business owners may be charged with a misdemeanor.

Finally, and least controversially, SB 494 imposes age requirements for hemp products and prohibits certain advertising practices. The vast majority of businesses selling hemp products already had age limits for their stores, so these changes were largely welcomed by the industry.

Now, it will be unlawful to sell consumable hemp products” to anyone under 21 years of age, or for anyone under 21 years to purchase or possess any such hemp products. There is an exception for people under 21 who work at hemp businesses. The punishment for violating these rules is a misdemeanor and up to $500 in fines. Hemp businesses must post a sign on their stores prohibiting anyone under 21 from buying hemp products, and hemp businesses generally will not be allowed to operate within 500 feet of any schools.

Regarding advertising, consumable hemp products may not be packaged or advertised in ways that are “attractive to children” or that bear any “reasonable resemblance” to any candy, snack or other food products that are well known to the public. That law may be subject to legal challenges based on its vagueness, however, so a lot depends on how the Department of Agriculture interprets these regulations.

The law also prohibits hemp products from being advertised as “low THC oil” or as “medical marijuana or medical cannabis.” In general, hemp retailers and manufacturers should not claim that their products are medical products or medicine, as doing so will welcome attention from agencies like the FDA.

There is also a provision to the advertising regulations regarding “food products” that, if interpreted incorrectly, could lead to law enforcement officials targeting edible products, though the definition of “food products” in this subsection is limited to edible products that are intended “to be consumed by humans for physical subsistence.” Most edible hemp products, of course, are not consumed for subsistence but rather for the unique properties that hemp extracts have, such as CBD’s ability to ease pain and insomnia.

Ultimately, SB 494 could have been a lot worse. There will likely still be litigation regarding some of the vague restrictions or regulations created by the bill, as well as its attempt to eliminate the THCA market, but the bill is much better than other bills that were being considered. Time will tell whether these new protections and regulations will be enough to stop rogue law enforcement agencies from pursuing business owners.

If you are involved in the hemp industry and are seeking consultation, or if you or a loved one has been raided or threatened by law enforcement based on your sale or possession of hemp products, contact our firm today.