Why Are So Many California Cannabis Companies Switching To Hemp Products?

California’s cannabis companies are abandoning the weed market in favor of the less regulated hemp sector. High taxes, extensive regulations and limited market reach are the main motives. As the California cannabis market becomes increasingly complex even for farmers, companies like Green Bee Botanicals have already rebranded their cannabis products to hemp, where they find fewer obstacles. So, what’s going on?

From Strictly Regulated Cannabis To Barely Regulated Hemp

Kim Howard, the founder of Green Bee Botanicals, made the switch after struggling for six years in the cannabis market. "Rather than the thorny obstacles we've had to crawl through [in California's marijuana industry], it's like being in a regular market," she said in an article by Lester Black at SFGate.

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For many companies, moving into the hemp market offers clear advantages. Hemp businesses face lower taxes, fewer regulations, and the ability to sell products online and across state lines. Bridget May, Howard's business partner, emphasized the difference, saying the hemp industry is "like night and day" compared to cannabis. "There's pretty much nothing to deal with."

Benefits Of Unregulated Hemp

By avoiding California’s cannabis taxes, Green Bee Botanicals can reduce product prices by up to 30%. Sunstone Winery, another company that made the switch, found the hemp market not only more practical but more profitable.

As depicted by SFGate, other companies, such as Wyld, California’s leading edible brand, have transitioned to selling THC-rich edibles in the hemp market. San Francisco’s Rose, known for collaborating with top chefs on exclusive weed edibles, and the iconic Truffle Man, who quickly sold out after shifting to the hemp industry, have also seen a surge in demand.

To successfully transition from cannabis to hemp, companies need to reformulate their products. For instance, Green Bee Botanicals adjusted their skincare line to contain less than 1 milligram of THC per serving, ensuring compliance with federal hemp regulations. Sunstone Winery reworked their cannabis-infused drinks to fit hemp guidelines, maintaining the same dosage but staying under the 0.3% THC limit.

Not Just The Small Players

If you zoom out a little bit, you’ll likely notice something is changing in the cannabis industry throughout the US.

Recently, news came out that Glass House Brands GLASF is considering diversifying into the hemp industry. Similarly, Curaleaf Holdings CURLF recently joined the hemp market.

Hemp industry and cannabis companies are going to war in states like Florida, where hemp manufacturers are supporting Florida’s GOP governor and candidate Ron De Santis, who publicly opposes recreational cannabis. One of the main supporters of the legal cannabis campaign which will be voted in Novembers ballot, is cannabis giant Truelieve TCNNF.

And California politicians are taking note of this ever-developing situation.

Last week, the California Senate decided not to advance Assembly Bill 2223 after strong opposition from the hemp industry, which argued that the bill would harm the hemp market by imposing stricter THC limits. The bill aimed to integrate hemp and cannabis products and regulate synthetic cannabinoids, but its progression was halted for this year.

As more companies make this transition, the question arises: should regulators across the country focus on ensuring cannabis products are treated more fairly or should they succumb to the pressure of an ever-growing de facto disguised cannabis industry?

• Read Also: California Company Led By Ex-Police Officer-Turned- Cannabis CEO Could Pivot Into Hemp Space

Cover: IA generated image