Relief for Hemp Industry as Governor Vetoes Restrictive Bill

In a move that has brought significant relief to Florida’s hemp community, Governor Ron DeSantis recently vetoed Senate Bill 1698. The bill, which proposed strict regulations on intoxicating hemp-derived products, including imposing THC limits and banning the sale of delta-8 THC, was seen as a major threat to the hemp industry. DeSantis’ veto has been celebrated by industry officials who warned that the bill could have spelled disaster for small businesses and the livelihoods of thousands of workers.

Florida Hemp Industry

Bill History

Senate Bill 1698 aimed to impose stringent regulations on hemp-derived products in Florida, including limits on delta-9 THC to 5 milligrams per serving and 50 milligrams per container. Initially, these limits were even more restrictive before a last-minute amendment relaxed them slightly. The bill also sought to ban all delta-8 THC products, a popular cannabinoid due to its milder psychoactive effects and legal status under the Farm Bill 2018.

These proposed regulations alarmed the hemp industry. The strict THC limits would have drastically reduced the potency of available products, potentially driving consumers to less regulated sources. The ban on delta-8 THC, a significant market segment, would have forced businesses to discontinue popular products, leading to financial losses.

The economic impact on small businesses was a major concern. Florida’s hemp industry, with sales exceeding $10 billion in 2022 and supporting approximately 104,000 jobs, faced significant disruption. Many small businesses would struggle to absorb the financial blow from the product bans and stringent THC limits, leading to closures and widespread job losses.

Industry representatives, like Zack Kobrin, emphasized that the bill sought to curtail operations rather than regulate them. Business owners such as Carlos Hermida highlighted that the bill would wipe out a significant portion of their product offerings, estimating a 75% reduction in his hemp products, severely impacting revenue.

The passage of Senate Bill 1698 through the Legislature sparked significant concern. In the months following its approval, Governor DeSantis’ office was inundated with calls and messages urging a veto. The industry’s concerted effort to communicate the bill’s potential negative impacts played a crucial role in the governor’s decision to protect small businesses and economic stability.

Governor’s Decision

Governor Ron DeSantis’ decision to veto Senate Bill 1698 was largely influenced by the potential economic harm the bill could inflict on small businesses. In his veto letter, DeSantis acknowledged the bill’s commendable goals but argued that its implementation would impose debilitating regulatory burdens on small businesses and likely fail to achieve its intended purposes.

“Small businesses are the cornerstone of Florida’s economy,” DeSantis wrote. “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.”

DeSantis’ veto letter elaborated on several key points:

  • Economic Disruption: DeSantis highlighted that Senate Bill 1698 would impose stringent regulations that could lead to significant economic disruption for small businesses. He stressed that these businesses are vital to Florida’s economy, providing jobs and supporting local communities. The governor pointed out that many of these enterprises have flourished due to previous legislation that encouraged the commercial use of hemp. Imposing new, harsh restrictions would undermine the progress made and threaten their survival.
  • Regulatory Burdens: The governor noted that the bill would create regulatory burdens that small businesses might find impossible. These burdens include the costs associated with reformulating products to comply with new THC limits, altering packaging, and discontinuing popular products like delta-8 THC. The financial strain of these changes could be overwhelming for small operators, many of whom already operate on thin margins.
  • Ineffectiveness of Proposed Regulations: DeSantis expressed skepticism about the effectiveness of the proposed regulations in achieving their intended goals. He argued that while the bill aimed to ensure product safety and consumer protection, it would likely fail to meet these objectives. Instead, the regulations would push consumers toward the black market, where products are not subject to any safety standards. This could ultimately pose greater risks to public health and safety.
  • Call for Comprehensive Regulation: While vetoing the bill, DeSantis acknowledged the need for regulation in the hemp industry. He called on the Legislature to revisit the issue in 2025 and work towards creating a comprehensive regulatory framework that balances safety with economic viability. The governor recommended focusing on quality control, labeling, marketing, and packaging standards to ensure consumer protection without stifling the industry.

Florida Industry Icon

Industry Reaction

The hemp industry’s response to the veto has been overwhelmingly positive. Zack Kobrin, a Fort Lauderdale attorney specializing in cannabis and hemp, described the bill as a potential “massive, massive blow” to the industry. He emphasized that the bill aimed to halt sales entirely, which would have devastating consequences for legally operating businesses.

Vinnie Seudath of Kushy Pies in Tampa expressed immense relief, noting that the collective efforts of small businesses and persistent advocacy had paid off. “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 Seudath. This sentiment echoed throughout the hemp community, highlighting the importance of grassroots advocacy.

Carlos Hermida, who owns smoke shops in Tampa and St. Petersburg, estimated that he would have had to remove about 75% of his hemp products if the bill had passed. “Hemp products are my second best-selling product, and since I’ve been selling hemp for so long, it kind of dominates my shelves,” Hermida explained. Removing such a significant portion of his inventory would have resulted in substantial revenue losses and jeopardized his business.

The economic implications of Senate Bill 1698 were profound. According to a 2023 analysis from Whitney Economics, the hemp industry in Florida generated over $10 billion in sales in 2022 and supported approximately 104,000 jobs, with workers earning more than $3.6 billion in annual wages. The bill’s implementation threatened to disrupt this thriving sector, potentially leading to widespread job losses and economic instability in communities heavily reliant on it.

Industry representatives were particularly concerned about the bill’s impact on innovation and market diversity. By imposing strict THC limits and banning delta-8 THC products, the bill would have stifled product development and limited consumer choice.

Many businesses had invested heavily in developing new products that complied with existing regulations, and the sudden imposition of new restrictions would have rendered these investments worthless, discouraging further innovation and growth within the industry.

In summary, the veto of Senate Bill 1698 was seen as a critical move to protect Florida’s hemp industry from potentially crippling regulations. The collective relief among industry officials underscored the significance of the governor’s decision to preserve the economic health and future prospects of the hemp sector in the state.

Political Landscape

The political dynamics surrounding Senate Bill 1698 showed a clear division between hemp industry advocates and certain Republican legislators. State Sen. Colleen Burton and State Rep. Tommy Gregory were vocal proponents of the bill. Despite significant concerns raised by the hemp industry, these legislators remained largely unsympathetic.
Senate President Kathleen Passidomo supported the bill, stating, “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 the committee, and she ended up with a good bill.” This highlights the belief among some legislators that the bill was necessary to address issues within the hemp industry.

State Rep. Tommy Gregory, who sponsored the bill in the House, dismissed concerns raised by colleagues and constituents. When some colleagues mentioned being inundated with emails warning of the bill’s consequences, Gregory responded, “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 starkly contrasting view reflects the broader debate within the political community regarding hemp regulation. Proponents of the bill, like Burton and Gregory, saw the restrictions as necessary to curb misuse and potential public health risks. In contrast, industry advocates and other legislators viewed the bill as an overreach that would harm small businesses and stifle an emerging industry.

These conflicting views characterized the legislative process, with substantial lobbying and advocacy efforts from both sides. The hemp industry’s concerted campaign to communicate the bill’s potential negative impacts to the governor played a crucial role in the eventual veto. This political battle underscores the complexities and challenges of creating balanced regulations that protect consumers without unduly burdening businesses.

The future of hemp industry regulations in Florida remains to be determined. Governor DeSantis has called for the Legislature to revisit the issue in 2025 to create a comprehensive regulatory framework. This acknowledges the need for regulation while recognizing that there were better approaches than the proposed bill.

Future Implications for the Florida Hemp Industry

Future Implications

DeSantis outlined areas for future legislative focus in his veto letter, including quality control, labeling, marketing, and packaging standards. He emphasized the need for regulations that ensure product safety and consumer protection without imposing excessive burdens on small businesses. “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.

Potential changes might include more stringent quality control measures, mandatory third-party lab testing, clear labeling of THC content, and child-resistant packaging. Marketing restrictions could prevent targeting children or making unfounded health claims. These measures aim to protect consumers while allowing the industry to grow and innovate.

Ongoing uncertainty means the hemp industry must remain adaptable and prepared for potential regulatory changes. Businesses may need to invest in compliance infrastructure and stay informed about legislative developments to meet new standards. The industry’s readiness to adapt will be crucial in navigating these changes and sustaining growth.

While the veto of Senate Bill 1698 provides temporary relief, the discussion around hemp regulation is far from over. The industry will need to engage proactively with lawmakers to help shape future regulations that balance consumer safety and economic viability. This engagement will be vital to ensuring that the hemp industry in Florida can continue to thrive and contribute to the state’s economy.

Controversies and Speculations

Governor DeSantis’ veto of Senate Bill 1698 has sparked controversy and speculation, particularly with the upcoming vote on a proposed constitutional amendment to legalize recreational cannabis for adults 21 or older. Some believe DeSantis’ veto was a strategic move to gain the hemp industry’s support against this cannabis initiative.

Carlos Hermida, a smoke shop owner, described the veto as a “good strategy,” noting the hemp industry’s frustration with large businesses dominating Florida’s cannabis market. “I wouldn’t be surprised if some larger hemp companies contribute to stopping the amendment,” Hermida said, suggesting the veto was to align the hemp industry with DeSantis’ stance against recreational cannabis legalization.

However, not all industry figures agree with this strategy. Vinnie Seudath expressed reservations about aligning with the governor’s apparent agenda, stating, “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.” This division highlights the differing priorities within the hemp and cannabis industries.

There are also concerns about DeSantis’ recommendations for future legislation, which some fear could be even more restrictive than Senate Bill 1698. DeSantis called for the Legislature to reconsider the issue in 2025, suggesting stricter quality control, labeling, marketing, and packaging standards. While these aim to ensure product safety and consumer protection, they could also impose further burdens on the industry.

Zack Kobrin, a legal expert in the cannabis and hemp field, acknowledged these concerns but emphasized the need for balanced regulation. “There is certainly a place for real regulation ensuring that we’re not just putting any product out in the marketplace,” Kobrin noted. The challenge for the industry will be to engage with lawmakers to shape future regulations in a way that protects consumers without stifling economic growth.

Conclusion

Following Governor DeSantis’ veto of Senate Bill 1698, the current state of the hemp industry in Florida is one of cautious optimism. The veto has provided a much-needed reprieve from potentially crippling regulations, allowing businesses to continue operating without the immediate threat of stringent THC limits and product bans. Industry officials have expressed relief and gratitude for the governor’s decision, saving many small businesses from financial ruin.

The importance of balanced regulation that supports economic growth while ensuring safety cannot be overstated. The hemp industry significantly contributes to Florida’s economy, with over $10 billion in sales and employing approximately 104,000 workers. Maintaining this economic contribution requires a regulatory framework that allows for innovation and market diversity while also protecting consumers.

The hemp industry must be prepared to adapt to future regulatory changes. Governor DeSantis has indicated that the issue will be revisited in 2025, focusing on creating a comprehensive regulatory framework. Businesses must stay informed and proactive, engaging with lawmakers to advocate for regulations that balance safety and economic viability.

Reflecting on the period of uncertainty and political maneuvering, it is clear that the hemp industry must remain vigilant and united in its efforts to shape future legislation. The potential impact on the market will depend on the industry’s ability to navigate these challenges and work towards a sustainable and prosperous future for all stakeholders involved.

For buyers and smoke shop owners looking to stay ahead of the curve, we invite you to register as a buyer for our upcoming shows. Connect with top manufacturers and explore the latest trends in the hemp industry. Register now to secure your spot.

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