An act to add Article 11 (commencing with Section 111929.6) to Chapter 9 of Part 5 of Division 104 of the Health and Safety Code, and to add Part 14.6 (commencing with Section 34100) to Division 2 of the Revenue and Taxation Code, relating to hemp, and making an appropriation therefor.
AB 1397 would create a new legal category for “low-dose hemp drinks” and allow hemp manufacturers to produce and sell them in California if they meet specified safety and composition standards. The drinks could contain no more than 0.5 milligrams of total THC per container, could not contain cannabis as defined in existing law, must be tested by an independent laboratory, and must have THC concentration clearly visible on the container. The bill also bars sale to, or consumption by, anyone under 21.
The measure would also impose a 10% excise tax on retail sales of low-dose hemp drinks beginning January 1, 2026. Retailers would collect the tax from purchasers, separately state it on receipts, and remit it to the California Department of Tax and Fee Administration. Revenue would go into a new Low-Dose Hemp Drink Excise Tax Fund and be continuously appropriated to the Department of Tax and Fee Administration and the State Department of Public Health to cover regulatory and enforcement costs.
In state law terms, AB 1397 would add a new article to the Health and Safety Code and a new part to the Revenue and Taxation Code. It would extend the Sherman Food, Drug, and Cosmetic Law and the Fee Collection Procedures Law to this product category, which means violations could carry criminal consequences under existing enforcement frameworks. The bill also states that no local reimbursement is required and that it would create a higher tax requiring a two-thirds vote for passage.
Because no committee transcript or vote record is provided, the available context suggests the bill was still in committee and had not advanced beyond filing with the Chief Clerk. The overall sentiment in the text is regulatory rather than oppositional: the bill appears designed to legalize and control a hemp beverage market while funding oversight through a dedicated tax. The inclusion of age limits, testing, labeling, and tax collection provisions indicates a consumer-safety and enforcement focus.
The main points of potential contention are likely to be the new excise tax, the use of criminal enforcement provisions for compliance, and the broader policy question of whether hemp-derived intoxicating beverages should be allowed in retail commerce at all. Stakeholders most likely to care include hemp manufacturers, beverage retailers, tax administrators, public health regulators, and opponents or supporters of hemp-derived THC products.
AB 1397 would amend California’s Health and Safety Code and Revenue and Taxation Code to authorize and regulate low-dose hemp drinks, creating new product standards, age restrictions, testing requirements, and a dedicated excise tax. It would establish a new tax fund and continuously appropriate revenues for administration and public health oversight, while also expanding the reach of existing food and drug enforcement and tax collection laws to this product category. The bill would affect hemp manufacturers, retailers, consumers under 21, the California Department of Tax and Fee Administration, and the State Department of Public Health.
Based on the bill text and the limited procedural context, the measure appears generally supportive of a regulated hemp beverage market rather than prohibitive of it. The bill’s structure suggests an effort to permit sales while imposing safety, labeling, and tax controls. No votes or committee testimony are available, so there is no recorded public split in the provided materials, but the policy design implies a pragmatic, regulatory approach with emphasis on oversight and youth access restrictions.
The likely areas of contention are the 10% excise tax, the decision to treat violations under criminal enforcement frameworks, and the policy choice to permit hemp drinks that contain trace THC. Critics may argue the bill normalizes intoxicating hemp products or adds compliance burdens and costs, while supporters may view the tax and testing rules as necessary safeguards. The age-21 restriction, THC cap, and prohibition on cannabis content are likely intended to address public health concerns and distinguish the drinks from cannabis products.