Licensed cannabis businesses may handle industrial hemp; excise tax reaches products presumed to be cannabis

On this date the temporary bar in Business and Professions Code section 26000.5 ends: licensees may possess, transport, distribute, manufacture, and sell industrial hemp, and licensed manufacturers are no longer limited to concentrates and extracts made from licensed cannabis. Hemp that enters the licensed market is subject to cannabis rules, including the track and trace program. Most of the act's changes to the state's hemp food and product law also become operative. Under new Revenue and Taxation Code section 34015.3, anyone who keeps or sells a product presumed to be cannabis owes the cannabis excise tax, 15 percent of gross receipts, as if it had been bought from a cannabis retailer, plus a penalty of 25 percent of the tax or $500, whichever is greater. The act does not set a dispensary-only sales rule. Its bans on inhalable hemp THC products, hemp flower, synthetic cannabinoids, and products made outside the licensed market have applied since January 1, 2026.

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