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AB 1397

Hemp: low-dose hemp drinks.

2025-2026 Regular Session Introduced by Heath Flora

AB 1397 would regulate low-dose hemp drinks in California, set testing/labeling rules, ban sales to under 21, and impose a 10% excise tax starting Jan 1, 2026 to fund enforcement.

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
#hemp #low-dosehempdrinks
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Bill Summary · AB 1397

AB 1397 — Hemp: Low‑Dose Hemp Drinks (Flora) — Summary

Status: Introduced Feb 21, 2025. In committee (first hearing set; hearing later canceled at author's request). Requires 2/3 legislative vote (includes a tax/appropriation).

Purpose / Intent

AB 1397 would create a regulatory and tax framework to allow the production, sale, testing, labeling, and taxation of “low‑dose hemp drinks” in California while restricting sales to adults 21+. The bill aims to bring these hemp‑infused beverages under state food and public health oversight and generate a dedicated funding stream for administration and enforcement.

Key provisions

  • New Health & Safety Code Article (Art. 11, commencing §111929.6):

    • Authorizes hemp manufacturers to produce and sell “low‑dose hemp drinks” if requirements are met.
    • Product limits (text contains an apparent typographical inconsistency): the bill requires (1) a container to contain no greater than “0.5 5 milligrams of total THC per container” and (2) a total THC concentration not to exceed 0.3% (the article also defines “low‑dose hemp drink” as a beverage containing hemp with ≤0.3% total THC).
    • THC concentration must be clearly visible on the outside of the container.
    • Product must be tested by an independent testing laboratory.
    • Must not contain “cannabis” as defined in Business & Professions Code Division 10.
    • Sales and consumption prohibited for persons under 21.

  • New Revenue & Taxation Code Part 14.6 (Low‑Dose Hemp Drink Tax; commencing §34100):

    • Implements a 10% excise tax on purchasers of low‑dose hemp drinks (10% of gross receipts) effective Jan 1, 2026.
    • Retailers must collect the tax at sale, separately state it on receipts, and remit to the California Department of Tax and Fee Administration (CDTFA).
    • Tax is in addition to existing sales and use tax.
    • CDTFA administers/collects the tax under the Fee Collection Procedures Law.

  • Creates the Low‑Dose Hemp Drink Excise Tax Fund:

    • All tax receipts, interest, penalties (less refunds) deposited into the Fund.
    • Continuous appropriation of monies to CDTFA (administrative costs) and the State Department of Public Health (regulatory costs related to low‑dose hemp drinks).

Who is affected

  • Hemp manufacturers and producers of hemp beverages (new production/labeling/testing requirements).
  • Retailers (collection/remittance obligations and point‑of‑sale restrictions).
  • Consumers aged 21+ (access limited to adults; likely price increase due to excise tax).
  • Independent testing labs (testing demand).
  • CDTFA and State Department of Public Health (implementation, enforcement funded by the excise tax).
  • Local agencies (expands certain state laws that impose criminal penalties—creates a state‑mandated local program; bill asserts no state reimbursement required).

Procedural & Fiscal notes

  • Tax change triggers a 2/3 supermajority requirement in each legislative house.
  • Effective date for the excise tax: Jan 1, 2026.
  • Violations of underlying Food, Drug, and Cosmetic provisions and Fee Collection Procedures Law remain criminal offenses under state law.
  • The bill establishes a dedicated fund to cover administrative and regulatory costs rather than relying on general funds.

Legislative activity (selected)

  • 2025‑02‑21: Introduced.
  • 2025‑03‑28: Amended and re‑referred to Business & Professions; also referred to Revenue & Tax.
  • 2025‑04‑01 & 04‑10: Referred/Set for committee hearing; hearing later canceled at the author's request.

Note: The bill text contains a likely typographical inconsistency regarding the per‑container milligram limit (“0.5 5 milligrams”); readers should consult subsequent amendments or legislative analyses for the corrected numeric specification.

Compiled from official sources — confirm details with the bill’s official record.

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