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VA Senate Bill 918 Blog Post
Great Intentions With Tremendous Collateral Damage
Virginia Governor Northam just signed Senate bill number 918 into law which creates the Virginia Industrial Hemp fund and establishes rules and regulations for the use of industrial hemp extract in products sold in Virginia. While overall this is a promising step forward for the hemp industry in Virginia, the lack of clarity on batch testing requirements leaves small CBD manufacturers in Virginia vulnerable. The bill itself establishes that the state has a right to adopt regulations establishing batch testing requirements and labeling requirements and that a manufacturer of industrial hemp extract or food containing Industrial Hemp extract must be an approved source. Though District Hemp fully supports safety and quality regulations in the hemp industry and already provides lab testing on all our products to advocate transparency for our consumers, we want to make sure our small local suppliers are not forced out of business by unnecessarily strict regulations that seem to disregard the viability of small manufacturers. We have larger entities actively lobbying for less competition in CBD space every year and we fear this may be an attempt to stifle some of our favorites brands out of the industry.
The Letter of the Law
The source requirements are relatively straightforward. Virginia defines an approved source as "a manufacturer operating under inspection by the responsible food regulatory agency... [and] in compliance with the laws regulations or criteria that pertain to the manufacturer of industrial hemp extracts or food containing an industrial hemp extract in the location in which such manufacturing occurs". Manufacturers located outside of Virginia, as long as they are complying with their local regulations, should continue to be sold in Virginia with little issue. Any Virginia manufacturers who are in compliance with Virginia hemp manufacturing laws should also continue to be sold in Virginia.
So What's The Issue?
The sticking point comes with the batch testing requirements. Senate Bill 918 does not establish the specific regulations and standards that Virginia will adopt for batch testing requirements. If manufacturers are required to test every batch of product, small manufacturers will most likely see an increase in overhead costs associated with lab testing, potentially amounting to hundreds of thousands in testing fees. For certain all organic or edible makers that produce small product batches several times a week, this could add $80-$1500 a week depending on how the state decides to regulate the requirements. Many local and small manufacturers will not be able to compensate for the increase in overhead and will be forced to shut their businesses. One of District Hemp's most popular brands, CBD Livity, a two-person operation, estimated a $28,000 increase in overhead if they were required to test every single batch in a year. Additionally, the District Hemp brand coffee is made in collaboration with a local Manassas coffee shop, Ground Central Station, and a requirement for lab testing each batch would mean we could no longer continue to produce this product. These are just two of many businesses that may be at risk if the Commonwealth implements these regulations without some of the most important manufacturers in mind.
Exactly How Common Is Batch Testing...?
It's not. A regulation requiring each batch of industrial hemp-based CBD products to be tested would be outside the norm for other business ventures (for example: the cosmetics industry, food supplements, and farmers markets) that are not required to test each batch of products before sale. First in terms of food supplements, the FDA requires that a finished product be tested either by statistical sampling or every finished batch and there are exemption procedures if there is no scientifically valid method for testing or other processes make it so that a final batch cannot be tested normally. Other forms of documentation are required to verify the food supplement complies with regulations. Second, the cosmetic industry is regulated by the FDA, however only color additives need to be approved before a product is sold. There are no testing requirements for products or ingredients though the manufacturer or distributor is legally responsible for ensuring products are safe for consumers. In addition, the FDA may conduct research on cosmetic products or ingredients to address any safety concerns that arise. The state of Virginia also establishes the right of state officials to inspect any establishment in which cosmetics are manufactured processed and packaged to be sold to consumers. The only other regulations on cosmetic products in Virginia involve the modification of cosmetics products and misbranded cosmetics. Finally, Farmer's market regulations are typically much more diverse given the establishment of said regulations are often left to states and localities. In Virginia, though all sellers have to comply with federal food safety regulations, state inspection requirements are often waived for small manufacturers and producers so that they are only required to be inspected periodically, rather than at each slaughter or harvest.
The above examples highlight how appropriate regulations can be put in place while still accounting for and supporting local small manufacturers in their respective industries. Officials in Virginia need to keep small manufacturers in mind when implementing regulations on the hemp industry. They are hugely important to our customer's selection and are often some of our most effective products.
The good news is that you, the consumer, can voice your support for small hemp-based CBD manufacturers in Virginia! You've given us amazing feedback over the years on what products are working or not working for you and what new products you would most like to see in store! Most regulations in Virginia are subject to public hearings and comments prior to approval and as soon as the comment window or hearing is announced we will let you know. So please consider supporting our great suppliers and making sure small manufacturers don't get left behind by the Virginia Hemp Industry!