BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 448
                                                                  Page  1

          Date of Hearing:   May 21, 2001

                          ASSEMBLY COMMITTEE ON AGRICULTURE
                             Barbara S. Matthews, Chair
                  AB 448 (Strom-Martin) - As Amended:  May 15, 2001
           
          SUBJECT  :   Industrial hemp: license for commercial purposes.

           SUMMARY  :   Directs the Secretary (Secretary) of the California  
          Department of Food and Agriculture (CDFA), in consultation with  
          the Attorney General to establish rules and regulations for the  
          licensure and growing of industrial hemp.  Provides definitions  
          and makes it a crime to violate any provision of this division.   
           Specifically,  this bill  :  

          1)Provides findings and declarations regarding industrial hemp's  
            history, its benefits as a raw material for multiple products  
            and that it has no hallucinatory properties.  

          2)Provides definition for "industrial hemp" as parts and  
            varieties of cannabis sativa that is cultivated or possessed  
            by a licensed grower containing tetrahydrocannabinol (THC)  
            levels of 3/10 of 1 percent (.003) or less by weight.  States  
            that "industrial hemp" does not include marijuana.

          3)Defines that THC is the natural or synthetic equivalents from  
            the plant in the resinous extracts of cannabis and their  
            related elements with similar chemical structure and  
            pharmacological activities.

          4)Authorizes any person meeting specified requirements to be  
            properly licensed to plant, grow, harvest, possess, process,  
            sell, or buy industrial hemp for commercial purposes.

          5)Requires any person wanting to plant, grow, harvest, possess,  
            process, sell, or buy industrial hemp for commercial purposes,  
            apply to CDFA for a license.  Requires CDFA, in consultation  
            with the Attorney General, to develop related forms for this  
            purpose.

          6)Requires applicants for licensure to provide their full name,  
            address, and legal description of production sites, a set of  
            fingerprints taken by law enforcement, and other background  
            information necessary for criminal history checks.  Requires  
            the review of the criminal histories to be done with the  








                                                                  AB 448
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            Department of Justice  (DOJ) and the Federal Bureau of  
            Investigation (FBI).  Such investigative information is  
            required to be confidential and permits CDFA, in consultation  
            with and at the discretion of the Attorney General, to deny  
            licensure of an individual with a criminal record. 

          7)Requires applicants to be responsible for all costs associated  
            with background checks.  Licenses will be valid for one year  
            and provides the legal presumption that licensed growers are  
            growing industrial hemp.

          8)Requires all licensees to provide CDFA with certification that  
            the seeds have no more than 3/10 of 1 percent of THC and is to  
            be provided by the seed suppliers.  Licensees are required to  
            provide a copy of any contract to grow industrial hemp to  
            CDFA.

          9)Requires that licensees promptly notify CDFA of sale or  
            distribution of crop and to provide names of purchasers of  
            industrial hemp or to whom it was distributed.

          10)Creates a misdemeanor to violate any provision of this  
            statute.

          11)Permits the Secretary to adopt rules, regulations, and fees  
            to further this statute and to provide for testing of THC  
            levels, supervision of growth and harvest of industrial hemp  
            by the Attorney General.

           EXISTING LAW  prohibits the growing or possessing of any  
          "cannabis" varieties, except as permitted by the United States  
          Drug Enforcement Administration (DEA).  Federal statutes preempt  
          state authority to deal with industrial hemp by defining  
          "cannabis" as a Class 1 drug prohibiting its cultivation, sale  
          or procession.

           FISCAL EFFECT  :   Unknown
           
           COMMENTS  :   There has been a concerted effort over the last  
          decade to reauthorize the growing of industrial hemp.  Last year  
          the California Assembly adopted HR 32 (Strom-Martin) that stated  
          the Legislature should consider directing universities and other  
          agencies to prepare studies on the cultivation, processing, and  
          marketing of industrial hemp.









                                                                  AB 448
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          The National Conference of State Legislatures, in December of  
          2000, adopted a policy paper and forwarded it to President  
          Clinton supporting "flexible policies to allow states to  
          determine the viability of industrial hemp."  In their letter  
          they "strongly urge the U.S. Department of Agriculture, the DEA,  
          and the Office of National Drug Control Policy to  
          collaboratively develop and adopt an official definition of  
          industrial hemp, as per those nations currently producing hemp."  
           Further, they urge an amendment to the U.S. Codes to  
          differentiate between industrial hemp and marijuana.

          According to information provided by the author, there are  
          currently 24 countries that permit some type of production of  
          industrial hemp.  Most notably, Canada had over 30,000 acres  
          licensed and planted in 1999.  Some other countries include  
          Chile, China, France, Great Britain, India, Japan, Spain, Korea  
          and Egypt.  Within the US, 20 states have introduced or passed  
          legislation dealing with this product.  Hawaii was granted a  
          quarter acre experimental plot in 1999 by its Legislature and  
          permitted by DEA.

          The committee may wish to consider technical amendments to  
          clarify the proposed program. Add to page 4, line 16, after the  
          word "production," the words "processing, distribution, or  
          storage."  While processors and distributors are required to  
          apply for a license, the location of their operations and where  
          the product will be held is not required to be included.   On  
          page 5, line 11, the address of the purchaser and the intended  
          use should be provided.  Further, defining a person or entity  
          would be helpful.  If a partnership or corporation applies for a  
          license, who is required to be fingerprinted and have the  
          criminal history search taken?  What criteria is used if a  
          member of the management of such a partnership or corporation  
          does have a criminal history?

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Representative Cynthia Thielen, State of Hawaii
          Representative David Monson, State of North Dakota
          Alternative Undies
          Appal Energy
          Arizona Industrial Hemp Council
          Artisan Gear








                                                                  AB 448
                                                                  Page  4

          Bee Bright
          Business Alliance for Commerce in Hemp
          Campaign for Agricultural and Industrial Renewal
          Capital Resources
          Coalition for Agricultural and Industrial Renewal
          Community Alliance with Family Farmers
          Co-op America Business Network
          County of Mendocino Sheriff-Corner
          Dr. Bronner's Magic Soaps
          Fitness Foods dba Govinda's
          GCM Farms
          Hemp Traders
          Humboldt State University Association of Students
          North American Hemp Company
          Nutiva
          Spectrum Organic Products, Inc.
          The Body Shop
          47 individuals

           Opposition 
           
          Committee on Moral Concerns
          1 individual
           
          Analysis Prepared by  :    Jim Collin / AGRI. / (916) 319-2084