Perhaps recognizing an enforcement gap in the evolving struggle to protect consumers from what Governor Newsom has characterized as a grave threat to public health and safety, the California legislature is taking steps to stem the tide of intoxicating consumable hemp products flowing into the State. Senator Scott Weiner (D-San Francisco) recently introduced SB 378, which would prevent online sales of illicit, unlicensed, non-safety-tested intoxicating hemp and cannabis products in California. In a press release accompanying the bill’s introduction, Senator Weiner invoked many of the same concerns – such as protecting children and adults alike from the risk associated with untested consumable hemp products, many of which contain dangerous synthetic substances – that sparked California’s recent emergency regulations governing intoxicating hemp products.
Last year California promulgated emergency regulations, which directly banned all forms of intoxicating hemp food products from being manufactured, distributed or sold within the State. The emergency regulations, which apply to “industrial hemp final form food products intended for human consumption,” state that no person shall “manufacture, warehouse, distribute, offer, advertise, market, or sell industrial hemp final form food products intended for human consumption including food, food additives, beverages, and dietary supplements that are above the limit of detection for total THC per serving.” The regulations further clarify that industrial hemp final form food products intended for human consumption in the State are prohibited from containing any “detectable amounts” of total THC.
However, those emergency regulations did not explicitly address online, direct-to-consumer sales of consumable hemp products, which have increased exponentially in the years following enactment of the 2018 Farm Bill. Senator Weiner did not pull any punches in identifying behemoth e-commerce platforms Amazon and Instagram (Meta) as part of the problem, saying “[o]nline platforms like Amazon and Instagram do not have effective systems in place to remove these products from online marketplaces, and they face no penalties for blindly selling products that present serious public health risks.” Indeed, rather than targeting the elusive roster of consumable hemp manufacturers that create these dangerous products and introduce them into interstate commerce, SB 378 takes aim at the intermediaries – i.e., the online platforms – that are allowing these products to be sold freely online without so much as an age verification requirement.
SB 378 would specifically define and separately govern “online cannabis marketplaces” and “online hemp marketplaces.” Among other things, it would:
- Require an online cannabis marketplace to address in its terms of service whether it permits Californians to view the advertisements and business information of unlicensed sellers of cannabis or cannabis products on its marketplace and whether the marketplace verifies the licenses of sellers of cannabis or cannabis products whose advertisements and business information are viewable on its marketplace.
- Require an online cannabis marketplace to establish a prominent mechanism within its internet-based service that allows an individual to report to the online cannabis marketplace the display, storing, or hosting on the marketplace of advertisements from, or business information about, an unlicensed seller of cannabis or cannabis products.
- Require an online hemp marketplace to establish a prominent mechanism within its internet-based service that allows an individual to report to the online hemp marketplace an advertisement for an intoxicating hemp product on the marketplace.
- Impose strict liability on an online marketplace that facilitated the connection between a consumer and an unlicensed seller of cannabis or a cannabis product for damages caused to the consumer by the cannabis or cannabis product.
- Impose strict liability on an online marketplace that facilitated the connection between a consumer and a seller of an intoxicating hemp product for damages caused to the consumer by the intoxicating hemp product.
Notably, the bill would also provide a private right of action for individuals to enforce compliance with the law against any online cannabis marketplace that displays, stores, or hosts an advertisement from, or business information about, an unlicensed seller of cannabis or cannabis products in violation of the law. Any person who prevails in such an action would be entitled to reasonable attorneys’ fees and costs and $250,000.
SB 378 is currently sitting in the Senate Judiciary Committee. We will continue to monitor the bill’s progress and report on any material developments.
