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Hemp industry officials express relief after DeSantis veto — for now

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Hemp industry officials express relief after DeSantis veto — for now

Jun 08, 2024 | 12:22 pm ET
By Mitch Perry
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Hemp industry officials express relief after DeSantis veto — for now
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Field of hemp. Credit: René Nijs via Flicker

The hemp community in Florida is breathing a collective sigh of relief this weekend following Gov. Ron DeSantis’s veto of a bill that they say if signed would have presented an existential threat to their livelihoods.

The measure (SB 1698) would have imposed regulations on intoxicating hemp-derived products in the state, including strict limits on THC levels and a complete ban on the sale of delta-8 THC.  In the nearly three months since the bill was passed, the governor’s office was inundated with calls for him to veto it.

In his letter explaining his veto, DeSantis appeared to respond in part to warnings it would deal a blow to tens of thousands of people working in the industry.

“Small businesses are the cornerstone of Florida’s economy,” he wrote. “While Senate Bill 1698’s goals are commendable, the bill would, in fact, impose debilitating regulatory burdens on small businesses and almost certainly fail to achieve its purposes. Senate Bill 1698 would introduce dramatic disruption and harm to many small retail and manufacturing businesses in Florida — businesses that have emerged due to recent legislation paving the way for the commercial use of hemp.”

The law would have imposed a cap on delta-9 THC levels in hemp products, restricting them to 5 milligrams per serving and 50 milligrams per container. A last-minute amendment upped those limits from the original proposal of 2 milligrams per serving and 10 milligrams per package. It would have banned all delta-8 THC products in the state.

“It would have been a massive, massive blow to the industry,” said Zack Kobrin, a Fort Lauderdale attorney with the firm of Saul Ewing who works in the cannabis and hemp industry. “The bill did not attempt to regulate the product. It just wanted to stop sales.”

Total sales from hemp businesses totaled more than $10 billion in Florida in 2022, according to a 2023 analysis from Whitney Economics. That report said that the industry employs approximately 104,000 workers earning in excess of $3.6 billion in annual wages.

“If this bill had been signed and gone into law, “a number of these companies would have picked up and moved to another state,” Kobrin said. “I know that for a fact from talking to [hemp entreprenuers]. They were looking at where are the states that are potentially not as antagonistic to the hemp industry. It would have been pretty bad for the industry, and we would have lost a lot of jobs and a lot of businesses.”

“We’re definitely happy that the governor listened to the many small businesses and voices that reached out to him directly for him to veto 1698,” said Vinnie Seudath with Kushy Pies in Tampa. “We’re feeling good today.”

Carlos Hermida owns smoke shops in Tampa and St. Petersburg. He said the bill would have been bad for his business.

“Hemp products are my second best-selling product, and since I’ve been selling hemp for so long it kind of dominates my shelves,” he wrote in a text message on Saturday morning. “I estimate that I would have had to remove about 75% of my hemp products off my shelves.”

Unsympathetic Republicans

Despite the concerns voiced by those who work in the hemp industry over the past two legislative sessions that the proposal sponsored by Lakeland Republican state Sen. Colleen Burton would have been extremely detrimental to their business survival, Republicans have been relatively unsympathetic.

Hemp industry officials express relief after DeSantis veto — for now
State Sen. Colleen Burton. Credit: Florida Senate
Hemp industry officials express relief after DeSantis veto — for now
State Rep. Tommy Gregory. Credit: Florida House

“I think it was a measured bill,” Senate President Kathleen Passidomo told reporters in February. “It was well thought out.  You can tell that Sen. Burton spent a lot of time on it and listened to the stakeholders who appeared in committee, and she ended up with a good bill. So, I am not concerned about it.”

Manatee County Republican Tommy Gregory, sponsor of the bill in the House (HB 1613), was dismissive during one committee meeting when colleagues said they had been besieged with thousands of emails from constituents warning that if the bill passed, they would have no choice but to go to drug dealers to get pain relief.

“That statement answers the question for you what these products are,” Gregory said. “They’re drugs. They’re recreational drugs. And yes, if we say if you can’t buy them, and you’re a drug user, then sure, maybe you’ll go to a drug dealer. Maybe you’ll do the right thing and stop using drugs.”

This was only the third bill that DeSantis has vetoed out of the more than 230 measures sent to his desk since the legislative session ended in early March. The governor announced the veto in a press release issued early Friday evening, a time known in journalism circles as the “Friday night news dump,” when fewer people pay attention to the news.

And although the news may be surprising for some, CBS Miami reported on May 30 that the governor was “moving toward” vetoing the measure.

Had he signed the bill, it would have gone into effect in October. But some hemp industry members remain concerned about what might take place next year. In his veto letter, DeSantis said he wants the Legislature to “reconsider” the topic when it convenes in 2025 to “create a comprehensive regulatory framework for the manufacture and sale of hemp and hemp-derived products.”

He went on to make specific recommendations regarding quality control, labelling, marketing, and packaging.

“These shops should not present themselves as medical offices, and the Legislature should consider measures to prevent the ubiquity and concentration of these retail locations in communities across the state,” he wrote.

‘Sigh of relief’

That alarms Seudath.

“It is a sigh of relief, until you read the full two-page letter that the governor put out with that veto, because if your read his recommendations for what the Legislature should do for the next session, it’s actually worse than what Burton had originally put out.”

Kobrin says he understands that sentiment but believes “there is certainly a place for real regulation ensuring that we’re not just putting any product out in the marketplace.”

Burton filed similar legislation during the 2023 session, but that bill was watered down to banning the sale of such products to individuals under age 21. It also would have prohibited marketing that targeted children and banned packaging resembling candy that could be attractive to kids.

She said last summer that she hoped Congress could address hemp-derived products in the U.S. farm bill. But that didn’t happen, which is why the bill came back before the Legislature this year.

DeSantis’ veto of the hemp bill came approximately five months before Floridians will vote on a proposed constitutional amendment to legalize recreational cannabis for adults 21 or older — a proposal that DeSantis has publicly adamantly opposed. That has led to speculation that in helping out the hemp industry by vetoing this measure, he will expect the hemp folks to now spend resources and energy to oppose the cannabis initiative.

Hermida calls it a “good strategy.”

“The hemp industry is tired of big businesses controlling cannabis in Florida and, after this attempt to take us out of business, I wouldn’t be surprised if some larger hemp companies contribute to stopping the amendment,” he said.

Seudath can’t get behind that.

“That seems to be the reasoning or the line of thinking that we have heard,” he said. “They’re going to want us to help them stop Amendment 3, which as an activist I can’t see why we would do such a thing.”