California lawmakers are shutting the door on delta-8 and delta-10 THC entirely, while other intoxicating hemp products will no longer be sold in smoke shops, gas stations and convenience stores in the name of public health and safety.

Pending Gov. Gavin Newsom’s signature, Assembly Bill 8 will outlaw synthetic cannabis products and inhalable cannabis products containing cannabinoids derived from hemp. The Assembly voted, 73-1, to concur with Senate amendments on Sept. 13, after the upper chamber voted, 37-0, the previous day to pass the bill.

Sponsored by Assembly Majority Leader Cecilia Aguiar-Curry, D-Winters, the 82-page legislation also seeks to expand the authority for state and local enforcement agencies to inspect, seize and destroy unlawful products.

In addition, it would integrate products containing concentrated cannabinoids derived from hemp, other than CBD isolate, into the state’s licensed and regulated cannabis supply chain. Aside from a pure CBD isolate, all other products would fall under the definition of a cannabis product.

Now being prepared for the governor, these provisions in the bill include an effective date of Jan. 1, 2028.

Sen. Angelique Ashby, D-Sacramento, presented the legislation for a third reading on Sept. 12  in the upper chamber.

“A.B. 8 seeks to protect public health by eliminating access to intoxicating hemp products outside of authorized dispensaries,” she said. “[The bill] will give state agencies and local governments the tools they need to protect our kids from synthetic products.”

The bill’s passage follows executive action by Newsom in September 2024, when he issued emergency regulations to require that hemp food, beverage and dietary products intended for human consumption have no detectable THC or other intoxicating cannabinoids per serving, create a minimum age to purchase hemp products to 21, and limit the number of servings of hemp products to five per package.

“We will not sit on our hands as drug peddlers target our children with dangerous and unregulated hemp products containing THC at our retail stores,” Newsom said at the time. “We’re taking action to close loopholes and increase enforcement to prevent children from accessing these dangerous hemp and cannabis products.”

In June 2025, the California Department of Public Health (CDPH) issued a notice of proposed rulemaking to follow through, estimating that the ban would cause 115 businesses to close and more than 18,400 jobs to be lost within five years of implementation, with more than $3.1 billion in lost revenue.

When the state Assembly passed A.B. 8 that same month, before sending it over to the Senate, Aguiar-Curry said her 2025 bill aimed to remedy the unintended consequences of legislation that she authored in 2021 to create a “well-regulated and safe hemp market” for Californians.

“Bad actors have abused it to sell intoxicating hemp products outside dispensaries and without age limits. This is illegal and is absolutely unacceptable,” Aguiar-Curry said in June. “A.B. 8 is an important step forward in protecting our kids and ensuring intoxicating products are sold safely and legally. By closing dangerous loopholes, we’re reinforcing our commitment to responsible regulation and supporting struggling legal businesses competing with illegal markets.”

Intoxicating hemp products, which often aren’t subject to the excessive tax or regulatory structures of state-sanctioned cannabis markets, undercut businesses that pay a premium to operate and provide meaningful state and local funding. Under A.B. 8, all concentrated cannabinoids derived from hemp, other than CBD isolate, would be subject to the state’s 15% excise tax.

While A.B. 8 represents a victory for California’s licensed cannabis businesses, the triumph could have been greater.

In particular, a Senate amendment removed language from the bill that would have repealed the requirement for the California Department of Tax and Fee Administration (CDTFA) to increase the cannabis excise tax to make up for lost revenue from the 2022 elimination of the state’s cannabis cultivation tax.

While the state’s excise tax automatically increased from 15% to 19% on July 1 due to a budget trailer that Newsom orchestrated in 2022, California lawmakers passed legislation this session to roll back that rate to 15% and suspend the CDTFA from increasing it until at least June 30, 2028. That bill is also heading to Newsom’s desk.

RELATED: California Cannabis Excise Tax Going Back to 15% Next Month, Pending Governor’s Signature

The Senate also amended A.B. 8 to clarify that cannabinoid products derived exclusively from industrial hemp may be shipped through the state without entering the licensed market—provided they are not sold in California—or shipped out of California by a licensee. This aligns with interstate commerce protections provided in the 2018 Farm Bill, which federally legalized commercial hemp cultivation.

Another Senate amendment provides that, until Jan. 1, 2028, licensed cannabis manufacturers can only use cannabinoid concentrates and extracts that are manufactured or processed exclusively from cannabis obtained from a licensed cultivator.

In a bill analysis, lawmakers referenced a February 2025 white paper titled The Great Hemp Hoax, which was co-authored by Tiffany Devitt, a board member for the California Cannabis Operators Association (CaCOA) and the director of regulatory affairs for licensed retailer March and Ash. The white paper included an analysis of 104 products marketed as hemp from 68 brands, finding that 95% contained chemically synthesized cannabinoids.

Two California retailers, March and Ash and Embarc, and the United Food and Commercial Workers (UFCW) Local 135 sponsored the report, with testing provided by Infinite Chemical Analysis Labs.

“Additionally, over 88% of tested products exceed the maximum amount of THC allowed to be classified as hemp products in California,” according to the A.B. 8 analysis. “The white paper found that, on average, vape products supposedly derived from hemp had THC equivalency levels 268% above the state’s threshold for adult-use cannabis.”

In opposing A.B. 8, the Hermosa Coalition for Drug-Free Kids argued that Californians never voted to legalize intoxicating hemp products when they passed Proposition 64 to legalize adult-use cannabis in the November 2016 election.

“We are also opposed to integration because the data on the harms of these products are only continuing,” the coalition wrote. “Additionally, California’s legal cannabis industry is very poorly regulated. How on earth can it handle hemp? THC is THC. Whether it’s from marijuana or hemp, it is wreaking all kinds of public health harm.”

The California Department of Cannabis Control (DCC) reported that the legislation would cost roughly $2.5 million to implement next fiscal year and approximately $5.8 million in ongoing annual costs, according to the California Senate Appropriations Committee, which approved the bill in a unanimous vote last month.

Amy O’Gorman Jenkins, the executive director of the CaCOA, which sponsored A.B. 8, called the Legislature’s passage “a big win.”

“By bringing hemp-derived THC products under proper oversight while preserving access to safe non-intoxicating products, we are one step closer to finally creating a level playing field our licensed cannabis businesses deserve,” she said. “A.B. 8 draws a clear line: In California, intoxicating hemp products should no longer undercut public health, youth safety or the integrity of our legal cannabis market.”

“The outcome of the debates around these provisions will determine the future of hemp-derived products in the United States, and the economic viability of the industry.”

By Lauren Estevez and Joanne Caceres, Dentons US Cannabis Group

As Congress returns from recess this month, the hemp industry is closely monitoring provisions that could fundamentally reshape the entire sector.

The 2018 Farm Bill removed hemp and its derivatives containing less than 0.3 percent delta-9-THC from the Controlled Substances Act. A so-called “unintended consequence” was that it became possible to produce hemp products that complied with the limit but had sufficient amounts of THC to produce an intoxicating effect.

Sales of such products, including hemp beverages and edibles, have increased significantly, encouraged by consumer demand for alternatives to alcohol. Hemp beverage sales alone are expected to more than double over the next four years, to reach $4.4 billion by 2029. All of this could change under provisions contained in pending appropriations legislation.

Sens. Mitch McConnell (R-KY) and Rand Paul (R-KY) have been dueling over various provisions that could dramatically change the hemp market, with McConnell vowing to “close the Farm Bill loophole” responsible for the intoxicating hemp market. In contrast, Paul is looking to “reach a compromise” on key provisions that would further regulate the hemp industry rather than upend it.

As current appropriations legislation makes its way through the legislative process in the House and the Senate, these are the key provisions that state regulators, consumers and the hemp industry should be watching. There is also pending federal legislation that would regulate hemp products apart from the Farm Bill.

“Total” THC Concentration Calculation Effectively Prohibits Certain Intoxicating Products

One of the provisions that appeared in House and Senate versions of agriculture appropriations legislation—before being removed from the Senate version—would add other THC molecules to the calculation for the 0.3 percent delta-9-THC limit.

The 2018 Farm Bill defined legal hemp as “the plant Cannabis sativa L. and any part of that plant…with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” In contrast, the current bills account for “total tetrahydrocannabinol concentration (including tetrahydrocannabinolic acid) of 0.3 percent in the plant on a dry weight basis.”

This provision would bar certain products from the market which have low delta-9-THC but have high concentrations of other intoxicating THCs (such as THC-A, Delta-8 THC, THC-O, etc.). This would outlaw many hemp products currently on the market, especially hemp flower products and vape products with high THC-A, and cause disruption to many business owners, especially smoke shops and gas stations, where such products thrive.

If enacted, it would require manufacturers to reformulate certain products and invest in new testing procedures to ensure compliance with the narrower definition for legal products.

Excluding Synthetic Cannabinoids And Conversion Will Lower Supply and Increase Input Costs

The agriculture spending legislation also excludes synthetic cannabinoids from the definition of legal hemp products. These provisions exclude cannabinoids that are not naturally produced in the cannabis plant, and those which are naturally occurring but which are produced “outside of the plant.”

While synthetic THCs are currently illegal under the Controlled Substances Act, there is legal uncertainty around naturally occurring THCs which are created through chemical processes from the naturally extracted hemp cannabinoids (frequently, naturally occurring CBD is converted to delta-9-THC and other intoxicating cannabinoids).

A prohibition against converting CBD to THC would significantly impact the cost to make these ingredients for intoxicating hemp products. Manufacturers that currently rely on these converted cannabinoids would need to discontinue certain product lines altogether or produce them with naturally occurring cannabinoids at tighter margins.

Ban On “Quantifiable” THC Or Intoxicating Cannabinoids Would Push Intoxicating Hemp Products Back To Illicit Market And Inadvertently Harm The Non-Intoxicating Cannabinoid Wellness Market

The most controversial provision would limits the “legal limit” of THC concentration in hemp products from 0.3 percent to “no quantifiable” amount of THC, with quantifiable amount to be defined by the Department of Health and Human Services (HHS) in consultation with the U.S. Department of Agriculture (USDA).

The provision would create tremendous disruption for the hemp industry, state regulators and customers. As currently drafted, the definition of “no quantifiable amount” is ambiguous as to whether it means 0 percent or some other threshold. Certificates of analysis usually denote no “detectable amount” when testing is below a certain limit.

The definition of “quantifiable” is unknown. This rule could ensnare full spectrum and CBD products, which are neither intended nor designed to be intoxicating. The change would also conflict with the many state laws that allow for 0.3 percent and or have quantifiable limits like 2.5mg, 5 mg, or 10mg of THC per serving or package for legal hemp products.

Standalone Hemp Regulation Bills Like Griffith’s Proposed Approach

While additional regulation of hemp products is sorely needed, a regulatory approach focused on health and safety will ultimately be more effective than a prohibition bill.

Draft legislation from Rep. Morgan Griffith (R-VA) circulated in late August would allow for hemp product sales to adults aged 21 and over, and would require HHS to determine THC thresholds within 60 days of passage of the bill.

The legislation would require labels to contain a QR code linking to a certificate of analysis showing which cannabinoids the product contains and in what quantities, prevent hemp producers from adding alcohol and nicotine to their products and require tamper-proof packaging that does not appeal to youth.

In the event that HHS fails to establish THC thresholds within the required timeframe, the bill would automatically implement the following limits:

• Oral hemp products with non-intoxicating cannabinoids: Up to 10mg/serving and 50mg/package.
• Inhalable products: Up to 100mg/serving and 500mg/package.
• Topical products: Up to 100mg/serving and 500mg/package.
• Intoxicating cannabinoid products (e.g. items containing THC): Up to 0.2mg/serving and 1mg/package.

The restrictions in Griffith’s bill mirror many state regulations that are already in place, and the automatic THC thresholds that would be implemented allow for a larger variety of products than the restrictions in the appropriations bills. However, the proposed limits to intoxicating cannabinoid products suggested would effectively eliminate the legal hemp intoxicating product market.

Conclusion

The pending appropriations bills and other hemp legislation could dramatically reshape the hemp industry, with proposed provisions that could significantly tighten the regulatory landscape.

If Congress redefines THC limits to include all cannabinoids, excluding converted and synthetic cannabinoids, or potentially imposes a “no quantifiable” THC threshold, lawmakers are signaling a shift toward significant product restrictions for hemp producers.

These changes would not only disrupt current business models and product lines but also create substantial compliance challenges for manufacturers and state regulators.

The ambiguity surrounding key terms like “quantifiable” further complicates the path forward, raising questions about enforcement and conflicts with existing state laws.

All hemp products, whether intoxicating or not, would be impacted by these provisions if passed as drafted. Such stark changes to the law would likely push such products to the illicit market, making them less safe.

Instead, an approach similar to states like Minnesota, which allows low intoxicating dosages of up to 10mg, or less THC for beverages, as determined at the state level, would be a more suitable alternative for Congress to consider.

Now that Congress is returning from recess, the outcome of the debates around these provisions will determine the future of hemp-derived products in the United States, and the economic viability of the industry. Ultimately, any of this federal legislation would be a critical turning point for the industry, either fostering continued growth and regulatory clarity, or introducing new hurdles that could reshape the market for years to come.

Lauren Estevez is a Senior Managing Associate in the Dentons US Cannabis Group. Joanne Caceres is a Partner in the Dentons US Cannabis Group.

[PRESS RELEASE] – CHICAGO, Sept. 15, 2025 – Verano Holdings Corp., a leading multistate cannabis company, announced that the company’s board of directors approved, and the company will be seeking shareholder approval of, a proposed plan to redomicile Verano Holdings Corp. from British Columbia, Canada, to the state of Nevada.

Verano believes that redomiciling in the United States better aligns with its U.S.-based business and operations and streamlines its organizational and regulatory structure within the United States, among other reasons discussed in the preliminary proxy statement filed by the company on Sept. 12, 2025, with the U.S. Securities and Exchange Commission and in Canada on SEDAR+ (the “preliminary proxy statement”).

“Since inception and our 2021 go-public transaction, we’ve focused on ways to unlock shareholder value and create potential catalysts for the business, including enhancements to our corporate structure and executing a capital markets strategy that positions Verano to capitalize on near and long-term growth opportunities,” Verano Chairman and CEO George Archos said. “From our 2023 strategic decision to list company shares on Cboe Canada, a senior U.S.-based exchange with global operations, to our redomiciling in the U.S. as a newly-registered Nevada enterprise, we are prepared to leverage opportunities that benefit the company and our shareholders.”

The company’s plan to redomicile Verano Holdings Corp. in the United States is not expected to materially impact its existing manufacturing and retail business, which spans 13 U.S. states, including the location of its corporate headquarters in Chicago.

Pursuant to the company’s proposed plan of arrangement, Verano will continue from the jurisdiction of British Columbia, Canada, to the jurisdiction of the state of Nevada (the “continuance”). Upon completion of the continuance, the issued and outstanding subordinate voting shares of the British Columbia-formed Verano Holdings Corp. will automatically be exchanged on a one-for-one basis for shares of common stock of the continued Verano Holdings Corp. domiciled in Nevada (“Nevada common stock”). Each of the company’s outstanding stock options and restricted stock units will be deemed to be adjusted pursuant to the terms of the company’s stock and equity incentive plan to become a stock option and a restricted stock unit to receive an equal number of shares of Nevada common stock, respectively.

The preliminary proxy statement was filed in connection with a proposed special meeting of the company’s shareholders to consider and, if thought advisable, approve a plan of arrangement implementing the continuance. The company’s board of directors may, at any time, including after receiving shareholder approval, in its discretion, decide not to proceed with the arrangement and not complete the continuance.

Upon completion of the continuance, the Nevada common stock will trade on the Cboe Canada exchange under the company’s existing ticker symbol, “VRNO,” and be quoted on the OTCQX under the symbol “VRNOF.”

For more information on Verano Holdings Corp., visit the company’s investor website: https://investors.verano.com/.