Georgia hemp community responds to hurricane, new regulations

The Georgia hemp industry was tasked over the past week with the dual challenge of navigating a hurricane and new regulations governing allowable products.

The rules that went into effect Tuesday stand to change the fortunes of Georgia-based hemp operators, and some industry stakeholders believe they could drive businesses out of the state for good.

Joe Salome and Ryan Dills, managing partners at The Georgia Hemp Co., founded the business in 2017.

Until last week, THCA flower was “a top seller” at the Atlanta-based company’s six retail stores around the state, Salome said.

But under Georgia’s new hemp regulations, sales of hemp flower and hemp pre-rolls are not allowed.

“What’s sad is, not everybody knows about this; the general public isn’t fully aware,” Salome told MJBizDaily, adding that flower consumers who did not stock up in advance of the Oct. 1 effective date are likely to buy through e-commerce or return to the illicit market.

According to the Austell-based Georgia Medical Cannabis Society, 70% of state hemp operators’ profits came from smokable hemp.

“This is actually going to cripple quite a few folks,” Kristina Flores, the group’s action team coordinator, told MJBizDaily.

 “You have a ton of CBD stores who have been following the federal hemp regulations and selling THCA – and people are wanting to purchase THCA for obvious reasons, because we can’t access it in other places – and the ruling has basically shut down that entire legal industry as of today,” Flores said in a Tuesday phone interview.

Paula Savchenko, a Florida-based attorney and founding partner of Cannacore Group and PS Law Group, said the new regulations will likely force some hemp operators out of Georgia.

Calling the rules among “the most strict” she’s seen, Savchenko told MJBizDaily that they affect about 80% of products currently on the shelves at hemp retailers.

She said “the biggest issue is: What do you do with the products already in the state once Oct. 1 comes around and you’re not able to sell those products anymore?”

The Georgia Department of Agriculture said ahead of Oct. 1 that it would give operators a 90-day grace period, during which “the Department intends to prioritize educating consumers and market participants on the law.”

But in a news release published Sept. 30, Georgia Gov. Brian Kemp said that “consumable hemp products are dangerous to minors.”

And, “All law enforcement officers in the state will be enforcing them starting October 1st.”

Savchenko advised hemp operators to “err on the side of caution” and consider out-of-state distribution channels.

As of Oct. 1, hemp operators are required to have one of the following license types from the Georgia Department of Agriculture:

Licenses cost between $250 and $5,000, depending on type.

Under the new rules, employees who manufacture consumable hemp products must be at least 21 years old, and consumers must be at least 21 to make hemp purchases.

Unlike California, which recently cracked down on 30 synthetic and hemp-based cannabinoids, Georgia regulators did not ban delta-8 THC.

Instead, THC limits of 10 milligrams per serving and 150 milligrams per package apply only to edibles containing hemp-based delta-9 THC.

And going forward, gummies are the only hemp-based edibles that will be allowed at stores in the state.

Salome said The Georgia Hemp Co. is retiring many of its infused edibles lines – even CBD dog biscuits – to comply with the new regulations.

The state aimed to cap hemp-infused beverages at 5 milligrams of THC per 12-ounce can, but regulators are reconsidering the cap after industry pushback.

The new regulations require hemp operators to have their products tested by a state-licensed laboratory and make Certificates of Authenticity (COAs) available to consumers via QR codes.

The Georgia Hemp Co.’s Dills believes such a practice aims to target products sold through gas stations and convenience stores.

“It’s going to make it a lot harder for people to operate undercover that aren’t aboveboard, which is important,” Dills told MJBizDaily.

“If you have to operate aboveboard or to a certain standard, that’s going to get rid of a lot of people.”

Dills and Salome said they have always had their products tested by a third party, although using a testing lab in Georgia required a small pivot.

While The Georgia Hemp Co. has been mindful of trying to do business with local companies, operators in the state have lagged even neighboring markets such as North Carolina and Tennessee.

Georgia is home to a restrictive medical marijuana program where low-THC oil is the only cannabis product available to patients who have secured a recommendation from a licensed physician.

“The state of Georgia is kind of late to the game,” said Salome , who helped develop the Haleigh’s Hope Act in 2014 and Georgia’s Hope Act in 2019.

“The bottom had fallen out on CBD by the time farmers started farming here, so a lot of them aren’t in existence anymore,” he added.

Instead, The Georgia Hemp Co. relied on relationships with operators from the West.

“We have a big network out west … business relationships and personal relationships with people in the industry at all levels,” Dills said.

“That’s how we were able to navigate some of that earlier on, a little easier than others, because locally the vertical side is a little bit harder – even from farming to manufacturing to processing.”

Leading up to the Oct. 1 start date for the new hemp regulations, some Georgia operators were digging out from Hurricane Helene, which tore a path from North Florida, through Georgia and into the Carolinas.

South Georgia was hardest hit by Hurricane Helene relative to other parts of the state, with winds topping 100 mph in Valdosta, according to the University of Georgia Cooperative Extension.

Hemp farmer John Downs reported losing two-thirds of his crop near Thomaston, Georgia.

“I have about 10 plants that made it out of about 500 that were still outside,” Downs said in a statement to MJBizDaily, adding that he hoped to salvage some of his outdoor hemp plants by getting them “re-caged and re-staked.”

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Georgia’s hemp industry leans more heavily toward retailers than cultivators or product manufacturers.

“It’s a small community of folks,” the Georgia Medical Cannabis Society’s Flores said.

“There aren’t a ton of processing facilities,” she added.

According to the National Hemp Report released by the U.S. Department of Agriculture, Georgia famers planted about half as many acres of outdoor hemp in 2023 as they did in 2021, with acreage falling from 130 in 2021 to 60 acres in 2023.

Kate Lavin can be reached at kate.lavin@mjbizdaily.com.