Lawmakers passed industry-killing hemp legislation, but Gov. DeSantis has the opportunity to block it and save billions

Image by Niksy from Pixabay.

In the waning days of the 2024 Session, lawmakers have passed a bill that will likely cause significant financial losses to the state and its citizens, by actively ignoring input from the exact industry they are attempting to regulate out of existence.

The hemp industry contributes $10 billion to Florida’s economy, and is regulated by both the state through the Florida Department of Agriculture and Consumer Services (FDACS) and the federal government through the United States Department of Agriculture (USDA).

Although hemp is distinct from cannabis and cultivated for medicinal purposes, large medicinal marijuana corporations are the only ones who will benefit from a reduction in the number of small businesses in the hemp industry.

At issue is a bill (SB 1698) from Sen. Colleen Burton regulating how much THC can be in hemp extracts and exacting major changes to the hemp industry’s regulatory framework.

The Senate accepted House terms after a back and forth that means the permissible amount of delta-9 THC in help extract will be 5mg per serving, or up to 50mg per container. While that’s a more liberal limit than the 2mg/10mg limits originally proposed, there are still plenty of causes for concern, and a lot of reasons Gov. Ron DeSantis should veto the legislation when it hits his desk.

Currently, products produced by the hemp industry are used for things like CBD oils, lotions and food products. Often, these hemp products do not have the psychotropic effects that medicinal marijuana has — people using CBD products don’t experience a “high” like they do in cannabis products containing higher levels of THC — but instead rely on the health benefits associated with CBD.

Hemp farmers are required to track and report on their crops’ THC content at several stages through the growth cycle to ensure THC levels stay below the federally set limit. Cannabis, on the other hand, is still illegal at the federal level.

While new and growing industries need to have some regulatory certainty, it is surprising that proposed regulations for the legal hemp industry were driven during this Legislative Session by the medicinal marijuana industry.

Florida has been a beacon of economic dynamism, showing the nation that it is possible to grow the economy even in challenging times. If Florida were its own country, it would be the 14th largest economy in the world. Thousands of people are moving here every day because of the economy, the job opportunities and the consistent regulatory environment.

These significant wins do not happen overnight, but they can be erased overnight.

Consider California’s regulatory environment.

There, medicinal marijuana companies worked hand-in-hand with elected officials to regulate the hemp industry out of existence.

Now, California is dealing with the repercussions of their regulatory actions through increased illegal dispensaries and Chinese imports. A thriving black market exports billions of dollars in illegal marijuana across the United States, according to recent reporting by The Wall Street Journal. That means American small businesses are forced to compete with the growing influence of Chinese imports in the marijuana industry.

Like many other small businesses in Florida, the hemp industry has grown remarkably in the past few years. Following the passage of the 2018 Farm Bill, which set a federal framework for hemp production, the hemp industry in Florida has created more than 104,000 jobs in our state — mostly through small businesses.

However, this new, punitive regulatory scheme making its way through the Legislature would eliminate many, if not most of those jobs. Should this regulatory regime be signed into law, the only remaining options for hemp consumers would be online importers, large marijuana corporations or the black market.

All of the associated economic activity would simply transfer to out of state entities, and, because of China’s increased involvement in this industry, eventually to a new type of cartel.

Without a reasonable regulatory framework in place here, Florida is losing the positive economic impacts of a significant agricultural industry, and the consumer is forced to look elsewhere to find these products.

There are ways to prevent this loss to Florida’s economy, though. Florida’s lawmakers had a chance to work with the hemp industry to find solutions that would work for all sides, but were unwilling to come to the table.

The bill passed out of the House with a slim majority of just 64 votes to 48 opposed. Many Representatives voiced concern for the constituents and small business owners in their districts who would be affected by this legislation.

Now, DeSantis has the opportunity to correct what they couldn’t. With his veto pen, DeSantis can halt this bad legislation and prevent Florida’s hemp industry from going the way of California.