BILL ANALYSIS                                                                                                                                                                                                    







                      SENATE COMMITTEE ON PUBLIC SAFETY
                           Senator Carole Migden, Chair              A
                             2005-2006 Regular Session               B

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          AB 1147 (Leno)                                             7
          As Amended June 1, 2006 
          Hearing date:  June 20, 2006
          Health and Safety Code        VOTE ONLY  
          JM:br
                                    INDUSTRIAL HEMP  

                                       HISTORY

          Source:  Hemp Industries Association; Vote Hemp

          Prior Legislation: HR 32 (Strom-Martin) - 1999, adopted
                       AB 388 (Strom-Martin) -2002, vetoed

          Support:  Alice's Mountain Market; Alta Vista Growers; Alterna  
                    Professional Haircare; Marysville Appeal-Democrat  
                    (editorial); Atlas Corporation; Burcaw Chiropractic;  
                    California Certified Organic Farmers; California State  
                    Grange; CDM Corp; Center for Healing; Chico  
                    Enterprise-Record (editorial); Community Alliance with  
                    Family Farmers; Creative Research Management; Dr.  
                    Bronner's Magic Soaps; Eagle Trust Union; Eco Goods;  
                    EnvironGentle; Environmental Wholesale Products; Elk  
                    Creek Ranch; Fiddler's Green Farm, Inc.; French Meadow  
                    Bakery; Global Exchange; Green Party of California;  
                    Guaranteed Organic Certification Agency; Heartsong  
                    Herbal Brewing Company; Heavenly Low Carb; Hemp  
                    Industries Association; Hemp Sisters; Hemp Traders;  
                    Hempy's; Hirai Farms, Inc.; Human Exchange Musical  
                    Programs; Institute for Cultural Ecology; J. Ginsberg  
                    & Associates; Knoll Farms; Living Foods.Com; Luvland  
                    Farms Lavender; Malu Healthcare; New Hope Natural  
                    Media; North American Hemp Company; North American  




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                    Industrial Hemp Council, Inc.; Nutiva; Organic Ag  
                    Advisors; Organic Consumers Association; Orange County  
                    Register (editorial); PAD; Peace of Mind Consulting;  
                    Planning and Conservation League; Rainforest Action  
                    Network; Raw 4 Real; Robinson's Health Products; Salon  
                    Charisma; Sensuous Beauty, Inc.; Sierra Club  
                    California; Strictly Hemp.com; Sunset Ranch;  
                    Sweetgrass Natural Fibers; City and County of San  
                    Francisco; The Living Temple; Threshold Enterprises;  
                    Ultra Oil for Pets; Whole Balance

          Opposition:Californians for Drug-Free Schools; Save Our Society  
                   from Drugs; California Narcotic Officers' Association
          Assembly Floor Vote:  Ayes 44 - Noes 32

                                             
                                       KEY ISSUES
           
          SHOULD "INDUSTRIAL HEMP" BE DEFINED AS AN AGRICULTURAL FIELD CROP  
          LIMITED TO THE NON-PSYCHOACTIVE VARIETIES OF THE PLANT CANNABIS  
          SATIVA L., HAVING NO MORE THAN THREE TENTHS OF 1%  
          TETRAHYDROCANNABINOL (THC) CONTAINED IN THE DRY FLOWERING TOPS AND  
          CULTIVATED FROM SEEDS ORIGINATING IN CALIFORNIA, AND PROCESSED  
          EXCLUSIVELY FOR THE PURPOSE OF PRODUCING THE MATURE STALKS OF THE  
          PLANT AND BY-PRODUCTS OF THE STALK AND SEED?

          SHOULD NUMEROUS LEGISLATIVE FINDINGS AND DECLARATIONS BE MADE  
          REGARDING INDUSTRIAL HEMP, INCLUDING:  INDUSTRIAL HEMP IS GROWN IN  
          COUNTRIES SUCH AS CANADA, MANY EUROPEAN COUNTRIES, AUSTRALIA AND  
          CHINA; SALE OF HEMP PRODUCTS ARE GROWING; CALIFORNIA COMPANIES  
          IMPORT TONS OF HEMP FROM FOREIGN SOURCES TO PRODUCE HEMP PRODUCTS;  
          AND CONTROLLED SUBSTANCE SCHEDULING DEFINITIONS AND CONCEPTS DO NOT  
          APPLY TO INDUSTRIAL HEMP, AS SPECIFIED?


                                       PURPOSE
          
          The purpose of this bill is to define "industrial hemp" as a  
          legitimate, valuable and non-psychoactive agricultural product.




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           Existing federal law  places controlled substances in five  
          schedules.  Schedule I controlled substances are deemed to  
          have no acceptable medical benefits and a high potential for  
          abuse.  Schedule I substances generally are subject to the  
          most stringent restrictions in law.  (21 U.S.C.  812.)

           Existing law  includes marijuana in the list of Schedule I  
          controlled substances.  (Health & Saf. Code  11054.)

           Existing law  defines "marijuana" as all parts of the plant  
          Cannabis sativa L., whether growing or not; the seeds thereof;  
          the resin extracted from any part of the plant; and every  
          compound, manufacture, salt, derivative, mixture, or preparation  
          of the plant, its seeds or resin.  It does not include the  
          mature stalks of the plant, fiber produced from the stalks, oil  
          or cake made from the seeds of the plant, any other compound,  
          manufacture, salt, derivative, mixture, or preparation of the  
          mature stalks (except the resin extracted therefrom), fiber,  
          oil, or cake, or the sterilized seed of the plant which is  
          incapable of germination.  (Health & Saf. Code  11018.)


           Existing federal law  also defines marijuana as a Schedule I  
          controlled substance.  The federal definition of marijuana in  
          Schedule I is the following:  "All parts of the plant  
          Cannabis sativa L., whether growing or not; the seeds  
          thereof; the resin extracted from any part of such plant; and  
          every compound, manufacture, salt, derivative, mixture, or  
          preparation of such plant, its seeds or resin.  Such term  
          does not include the mature stalks of such plant, fiber  
          produced from such stalks, oil or cake made from the seeds of  
          such plant, any other compound, manufacture, salt,  
          derivative, mixture, or preparation of such mature stalks  
          (except the resin extracted therefrom), fiber, oil, or cake,  
          or the sterilized seed of such plant which is incapable of  
          germination.  (21 U.S.C.  802(16) and 812(10).)

           Existing federal law  separately defines "tetrahydrocannabinols"  




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          (THC) as a Schedule I substance.  (21 U.S.C. 812 (17).)   
          Decisions of the Ninth Circuit Court of Appeals have found that  
          the reference to THC in Schedule I applies only to synthetic  
          THC, because "if naturally-occurring THC were covered under  
          THC, there would be no need to have a separate category for  
          marijuana, which obviously contains naturally-occurring THC.   
          (Hemp Industries v. DEA (2004) 357 F.3d 1012, 1015, quoting an  
          earlier decision in a related case.)

           Existing federal Drug Enforcement Administration regulations  ,  
          in contrast to the Hemp Industries decisions, provide that any  
          product intended for human consumption that contains any  
          measurable quantity of THC is illegal because THC is included  
          as a Schedule I substance.  (21 CFR part 1308.)<1>

           Existing law  states that except as authorized by law, every  
          person who possesses any concentrated cannabis shall be punished  
          by imprisonment in the county jail for a period of not more than  
          one year, by a fine of not more than $500, by both such fine and  
          imprisonment, or shall be punished by imprisonment in the state  
          prison.  (Health & Saf. Code  11357, subd. (a).)

           Existing law  states that except as authorized by law, every  
          person who possesses not more than 28.5 grams (an ounce) of  
          marijuana, other than concentrated cannabis, is guilty of a  
          misdemeanor and shall be punished by a fine of not more than  
          $100.  Following a specified number of repeat convictions, a  
          defendant convicted of simply possession of under an ounce of  
          marijuana shall be diverted and referred for treatment.  (Health  
          & Saf. Code  11357, subd. (b).)

           Existing law  states that except as authorized by law, every  
          person who possesses more than 28.5 grams of marijuana, other  
          than concentrated cannabis, shall be punished by imprisonment in  
          the county jail for a period of not more than six months, by a  
          fine of not more than $500, or by both such fine and  
          imprisonment.  (Health & Saf. Code  11357, subd. (c).)

          ---------------------------
          <1>  It appears that this regulation, perhaps in light of the  
          Hemp I and II decisions, is not currently being enforced.



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           Existing law  states that except as authorized by law, every  
          person 18 years of age or over who possesses not more than  
          28.5 grams of marijuana, other than concentrated cannabis,  
          upon the grounds of, or within, any school providing  
          instruction in Kindergarten or any of Grades 1 through 12  
          during hours the school is open for classes or school-related  
          programs is guilty of a misdemeanor and shall be punished by  
          a fine of not more than $500, by imprisonment in the county  
          jail for a period of not more than 10 days, or both.  (Health  
          & Saf. Code  11357, subd. (d).)

           Existing law  provides that every person who possesses for sale  
          any marijuana, except as otherwise provided by law, shall be  
          punished by imprisonment in the state prison.  (Health & Saf.  
          Code  11359.)

           This bill  defines "industrial hemp" as follows:

           An agricultural field crop limited to the non-psychoactive  
            varieties of the of the plant Cannabis sativa L., and the  
            seeds produced therefrom;
           Industrial hemp shall have no more than three-tenths of 1%  
            (0.3%) tetrahydrocannabinol (THC) contained in the dry  
            flowering tops;
           Industrial hemp shall be cultivated and processed exclusively  
            for the purpose of producing the mature stalks of the plant  
            and  by-products of the stalk and seed, including oil or cake  
            made from seeds, and other preparations.

           This bill  states that industrial hemp shall be cultivated only  
          from seeds imported in accordance with laws of the United States  
          or from seeds grown in California from feral plants, cultivated  
          plants, cultivated plants or plants grown in research.

           This bill  provides that industrial hemp growers shall, prior to  
          harvest, obtain a laboratory test report indicating the THC  
          levels of a random sampling of the dried flowering tops of the  
          crop, as follows.




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           The laboratory test shall be issued by a lab registered with  
            the DEA.
           The report shall state the percentage of THC in the sample and  
            the time, date and location of the samples were taken.
           The person obtaining the report shall retain it for two years.
           The report shall be made available to law enforcement upon  
            request.
           A copy of the report shall be given to each person purchasing,  
            transporting et cetera the oil, cake or seed of the plant.
           The report shall be stamped to reflect whether it meets the  
            standard for industrial hemp or not.  (The sample can have a  
            THC content of no more than 0.3%.)

           This bill  states that nothing in this section shall be construed  
          to authorize the cultivation, production, or possession of  
          resin, flowering tops, or leaves that have been removed from the  
          field of cultivation and separated from the other constituent  
          parts of the industrial hemp plant.

           This bill  includes an exception from this requirement for the  
          mandatory testing of the plant for THC levels.
           

          This bill  prohibits, except in accordance with the laws of the  
          United States, the transportation or sale of a seed capable of  
          germination across state lines of any variety of Cannabis sativa  
          L. and any cultivation of the industrial hemp plant that is not  
          grown in a research setting or as an agricultural field crop.

           This bill  includes the following legislative findings and  
          declarations:

           Industrial hemp is produced in at least 30 nations including  
            Canada, Britain, France, Germany, Romania, Australia, and  
            China and is used by industry to produce thousands of products  
            including:  paper; textiles; food; oils; automotive parts;  
            and, personal care products.





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           The United States Court of Appeals Ninth Circuit has ruled in  
            Hemp Industries v. Drug Enforcement Administration that the  
            Controlled Substances Act of 1970 explicitly excludes  
            non-psychoactive hemp from the definition of marijuana, and  
            the federal government has declined to appeal that decision.

           The Controlled Substances Act of 1970 (21 U.S.C. 812(b))  
            specifies the findings to which the government must attest in  
            order to classify a substance as a Schedule I drug and those  
            findings include that the substance has a high potential for  
            abuse, has no accepted medical use, and has a lack of accepted  
            safety for use, none of which apply to industrial hemp.

           According to a study commissioned by the Hemp Industries  
            Association, sales of industrial hemp products have grown  
            steadily since 1990 to more than $250 million in 2005,  
            increasing at a rate of approximately $26 million per year.

           California manufacturers of hemp products currently import  
            from around the world tens of thousands of acres worth of hemp  
            seed, oil, and fiber products that could be produced by  
            California farmers at a more competitive price and  
            intermediate processing of hemp seed, oil, and fiber could  
            create jobs in close proximity to the fields of cultivation.

                                      COMMENTS

          1.  Need for This Bill  

          According to the author:

              While hemp fiber, oil and non-viable seed are used by  
              many sectors of the economy for a variety of  
              purposes, the Federal Government restricts the  
              growing of hemp and the sale of viable hemp seed.

              In 1937, the United States Government mistakenly  
              categorized hemp with marijuana due to their physical  
              similarities and the fact that hemp contains THC  




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              (although hemp contains only a negligible amount of  
              the chemical).  Hemp has so little THC that it  
              physically cannot be used as an intoxicant and is  
              100% safe for the consumer.  Because hemp has no  
              psychoactive properties, the Federal Government has  
              allowed hemp products of every kind to be  
              manufactured and sold in the United States.   
              Californians can buy hemp clothing and food products  
              in stores throughout the state, but state law is  
              silent on the legality of growing hemp in California  
              for in-state commerce.

          2.  Industrial Hemp Defined and Hemp Uses  

          According to information provided by the author:

              Hemp is a crop grown and processed throughout the  
              world for paper, clothing, canvas, rope, food  
              products and many other commercial uses.  Hemp is  
              used by the automobile industry as reinforcement  
              fiber in "biocomposites" - press-molded or injection  
              molded parts used in door panels, boot liners etc.,  
              where they are replacing fiberglass composites or  
              more expensive plastics.  Hemp is used in foods such  
              as bread, energy bars, waffles, granola, coffee,  
              beer, veggie burgers, pretzels, salad dressings, and  
              many food products.  Hemp seed oil is an excellent  
              replacement for unhealthy fats in foods due to its  
              excellent balance of the essential fatty acids  
              linoleic acid (omega-6) and alpha-linolenic acid  
              (omega-3).  Consuming the right balance of essential  
              fatty acids found in hemp seed oil offers significant  
              health benefits, including an improved HDL/LDL  
              cholesterol ratio and reducing the symptoms of  
              dermatitis, rheumatoid arthritis and other  
              inflammatory diseases, as well as improving and  
              optimizing development in infants.

              Hemp is used in body care products such as lotions,  




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              lip balms, conditioners, shampoos, and soaps.  Hemp  
              also may be used as biofuel in the production of  
              ethanol, a plant-based gasoline additive and  
              replacement.  The Declaration of Independence was  
              actually written on hemp paper and hemp has a long  
              history of commercial use and cultivation in  
              California and the United States.

          3.  Major Research Study from Purdue University Concerning  
            Industrial Hemp - Evaluation of Hemp for Various Applications  
            and Uses  

          Industrial Hemp has received a significant amount of academic  
          and political attention in recent years.  Researchers at Purdue  
          University - a major research university that is well-known for  
          engineering, scientific and agricultural programs - recently  
          published an exhaustive study of the potential value for hemp  
          cultivation in the United States.  Arguably, the Purdue study  
          includes one of the most unbiased and credible evaluations of  
          the potential for hemp use as food, fiber and composite  
          materials component.  (Note that criticism of the Purdue study  
          is discussed at the end of this comment.)

          The Purdue study opened with this observation:    Hemp "is  
          extremely unusual in the diversity of products for which it is  
          or can be cultivated  ."

          The Purdue study evaluated various current and proposed uses for  
          hemp products:

            Oilseeds  :  "There are remarkable dietary advantages to  
            hempseed oil . . ."  Hemp seeds produce very nutritious oil,  
            high in fatty acids that are found in fish oils.  "[T]hese  
            essential fatty acids do not serve as energy sources, but as  
            raw materials for cell structure and as precursors for  
            biosynthesis for many of the body's regulatory biochemicals."   
            North American diets are seriously deficient in certain fatty  
            acids in hemp oil.  Hemp oil essential fatty acids are found  
            in an optimal ratio of certain chemicals.  Hemp oil also  




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            contains very useful antioxidants known as "tocopherols."

            In the past, hemp oils have been used in paints, inks and  
            other similar industrial and personal applications.  Linseed  
            and other drying oils are favored for such applications.   
            Hemp, classified with soybean oil as "semi-drying" oil, has  
            been thought more suitable as a food source than an industrial  
            oil.  However, it appears that hemp varieties could be  
            selected and cultivated that produced more of a drying oil.   
            Increasing cultivation of such hemp varieties could reduce  
            costs so as to make hemp oils competitive with linseed and  
            similar oils.

            Fiber  :  Hemp fibers are strong and durable.  Hemp was widely  
            used for rope and sail cloth.  China has a wide lead in the  
            development of hemp fibers for textiles.  Technological  
            advances will likely be necessary before North American  
            producers could successfully compete with Chinese firms.

            Pulp and Paper  :  "Hemp is useful for specialty applications  
            such as currency and cigarette papers where strength is  
            needed."  Hemp is not currently competitive with wood pulp for  
            newsprint, books, writing paper and general paper uses.  In  
            northern states, fast-growing poplars can be used to produce  
            pulp for paper.  However, hemp production in the southern US  
            would likely yield at least twice the pulp per acre as a pine  
            plantation (a common southern forestry product).  Technology  
            could increase the economic viability of hemp for paper  
            products by allowing more of the plant to be used.
           
           Plastic Composites for Automobiles and Other Manufacturing  
            Uses  :  Hemp plastic composites may be particularly valuable for  
            industrial products.  These composite materials are light and  
            strong.  Henry Ford used hemp materials in the 1920's.  "Rather  
            ironically in view of today's parallel situation, Ford's hemp  
            innovations in the 1920's occurred at a time of [farm crisis],  
            later to intensify with the depression.  The need to produce  
            new industrial markets for farm products led to a broad  
            movement for scientific research in agriculture that . . .  




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            today is embodied in chemical applications of crop  
            constituents."  Mercedes currently uses hemp composites in  
            automobiles.  Plastics are typically made from petroleum  
            products.  Rising costs of oil may make hemp products  
            increasingly valuable.  "Natural fibers [such as hemp] have  
            considerable advantages for use in conveyance; low density and  
            weight reduction.  Favorable mechanical, acoustical and  
            processing properties (low wear on tools), no splintering in  
            accidents, occupational health benefits (compared to glass  
            fibers), no off-gassing of toxic compounds, and price  
            advantages."  Hemp composites can be used for a wide-range of  
            applications.

            Building Construction Products  :  Hemp is increasingly being  
            used for thermal insulation products in Europe.  Demand for  
            hemp insulation is driven by the rising costs of heating and  
            cooling, ecological concerns about fossil fuels and desires  
            for renewable resources.  The Purdue report noted:   
            "Experimental production of hemp fiberboard has produced  
            extremely strong material.  The economic viability of such  
            remains to be tested."  Hemp could be valuable in producing  
            high-quality concrete:  "Hemp fibers added to concrete  
            increase tensile strength while reducing shrinkage and  
            cracking.  Whole houses have been made based on hemp fiber."   
                                                                           At least at this time, hemp cement material may be more costly  
            than materials made with wood chips or straw from other crops.

            Hemp can be chemically combined with other materials to make  
            high-quality and low-cost building products.  "Hemp with  
            gypsum and binding agents may produce light panels that may  
            compete with drywall.  Hemp [hurds] and lime mixtures make a  
            high quality plaster."  Hemp plaster can be poured like  
            concrete and hardens into a stone-like material that is much  
            lighter than cement and has much better heat and sound  
            insulating qualities than cement.

           Animal Bedding and Absorbent Material  :  Hemp is a superior  
            material for animal bedding and litter material for cats and  
            other pets.  Because hemp hurds (stalk cores) are very  




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            absorbent, they can be used to absorb oil spills and other  
            pollution control uses.

            Soil Erosion Control  :  Hemp materials are useful to control  
            erosion.  Soil erosion has become a matter of concern across  
            the country.  Hemp can also be used as a good alternative to  
            plastics to control weeds in new plantings.  Hemp can be used  
            for biodegradable planting pots and other gardening uses.

            Cosmetics  :  Hemp is popularly used in shampoo, soaps and  
            lotions.  It has been reported that hemp lotion is  
            particularly prized because it can be absorbed into the skin.

            Biofuels Potential  :  Researchers in Europe have touted the use  
            of hemp for biofuels.  Hemp, similar to corn, can be processed  
            to produce ethanol.  A process called pyrolysis - heating in  
            the absence of air - can convert hemp to a form of charcoal, a  
            fuel oil or methane.  The Purdue study concluded that the  
            competitive viability of hemp as a biofuel is "doubtful"  
            because other biomass sources are relatively cheap.  However,  
            the Purdue study concluded that there "may be some potential  
            for hemp biomass fuel near areas where hemp is cultivated."

            Ecological benefits of Hemp  :  "[Hemp] is . . . exceptionally  
            suitable for organic agriculture, and is remarkably less  
            'ecotoxic' in comparison to most other crops."  The use of  
            pesticides and fungicides on hemp is usually unnecessary.


           Opponents' Response to Purdue Study

          Opponents of this bill argued at the hearing of the bill that  
          the Purdue study included an industry bias.  It appears that  
          this argument may have been based on links to hemp industry  
          Websites at the end of the study.  These sites or entities were  
          not listed as sources or references for the study; they appeared  
          to be included to allow interested parties to review industry  
          material.  The references for the study were very voluminous,  
          and included academic and government sources.




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          Opponents argued that other studies, including studies from  
          researchers in Kentucky and Wisconsin, have essentially  
          dismissed the economic potential of hemp.  The opponent's  
          argument in this regard may be overstated.  The Wisconsin study  
          cited by opponents does conclude that hemp is not a panacea for  
          farmers and the improved farm income from hemp would not likely  
          be realized for 4-5 years.  The study did conclude that hemp  
          would be "slightly more profitable than traditional row crops,  
          but less profitable than specialty crops such as tobacco, fruits  
          and vegetables."  It cautioned that widespread planting of hemp  
          could overwhelm a market that is currently quite small.  A  
          summary of the study published by the University of Wisconsin  
          stated:


              Low grain prices have farmers looking for alternative  
              crops, and industrial hemp has generated a great deal  
              of interest.  The crop grows under a wide variety of  
              soil and climatic conditions, and requires few  
              pesticides.  When grown as part of a crop rotation,  
              industrial hemp can break up pest cycles and help  
              growers reduce the pesticides they apply to traditional  
              crops.


              In the most comprehensive overview to date, Fortenbery  
              and his research colleague Michael Bennett, both with  
              the  College of Agricultural and Life Sciences  , reviewed  
              more than 75 studies, articles and reports about  
              industrial hemp.


              "We tried to bring together all the knowledge that has  
              been accumulated over the last 100 years," Fortenbery  
              says.  The study also identified areas where research  
              is needed if American farmers are to grow the crop  
              profitably.





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              "If growing industrial hemp became legal overnight, it  
              would be a useful crop for a few growers.  However, it  
              is not likely to improve farm revenue for at least four  
              or five years," Fortenbery says.  "Studies indicate  
              that it would be slightly more profitable than  
              traditional row crops but less profitable than  
              specialty crops such as tobacco, fruits and  
              vegetables."


              Fortenbery and Bennett caution that widespread  
              production of industrial hemp would drive down prices  
              by quickly swamping the small but growing North  
              American market.  The report suggests that just 25,000  
              acres to 35,000 acres of industrial hemp could meet the  
              current North American demand for hemp fiber and seed.   
              Fewer than 100 farms could supply that market, says  
              Fortenbery.  With such a small market, growers would be  
              vulnerable to wide price fluctuations, he says.   
              (Emphasis added.)


          4.  The THC Issue  

          It is generally accepted that the characteristic "high" produced  
          from ingestion of marijuana is caused by TCH -  
          delta-9-tetrahydrocannabinol.  However, as noted by the Purdue  
          study, "cannabis contains a seemingly unique class of chemicals,  
          the cannabinoids, of which more than 60 have been described, but  
          only a few are psychoactive.  Cannabinoids are produced in  
          specialized epidermal glands [of the plant], which differ  
          notably on different organs of the plant."  The prohibition on  
          marijuana is effectively based on the presence of THC in the  
          flowering tops (buds) and leaves of the plant.  Other parts of  
          the plant essentially have negligible THC content.

            Smoked marijuana generally has about 25 times more THC than  
            hemp and hemp contains an antagonist to THC that cancels the  




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            effects of THC - smoking any amount of hemp would not  
            intoxicate the smoker  

          Industrial hemp has become the term of art for low THC hemp used  
          for commercial and non-intoxicant purposes.  Industrial hemp is  
          generally defined as cannabis plants with a THC content of less  
          than 0.3%.  The Purdue report states that marijuana in the  
          illicit market typically has a THC content of 5-10%.  This is  
          about 17-35 times the amount of THC found in industrial hemp.   
          (Canadian government experimental standards for medicinal  
          marijuana are set at 6% TCH.)

          Further, the other principal cannabinoids found in cannabis  
          plants is CBD.  CBD antagonizes (cancels or reduces) the effect  
          of THC.  CBD is found in abundance in industrial hemp, but not  
          in the intoxicant form of cannabis.  A ratio 2:1 CBD to THC  
          suppresses the intoxicating effect of THC.  Industrial hemp  
          typically has a CBD-THC ratio of 5:1.  Thus, any possible  
          intoxicating effect from industrial hemp would be cancelled by  
          another cannabinoid.

          Further, unlike alcohol, the intoxicating effects of TCH are not  
          cumulative (after the point required to achieve significant  
          intoxication).  The intoxicating effects of THC are produced  
          when the THC is ingested in a relatively short period of time  
          and then THC amounts fall, even if the person continues to smoke  
          marijuana.

          Thus, ingesting more of lower THC cannabis cannot make one as  
          high as smoking a smaller amount of higher THC marijuana.  For  
          example:  Cigarette A is made from marijuana with 10% TCH.   
          Cigarette B is made from marijuana with 5% THC.  One would not  
          get as intoxicated from smoking two B cigarettes of B as one  
          would from smoking one cigarette of A.

          Simply stated, one could smoke a room full of industrial hemp  
          and not get high.

          It has been reported that CBD can be used to synthetically  




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          produce THC.  However, as stated in the Purdue study, "the  
          illicit drug trade has access to easier methods of synthesizing  
          THC or its analogues than by first extracting CBD from non-drug  
          hemp strains."  Further, marijuana growers have become  
          extremely sophisticated in producing very strong strains of  
          sinsemilla marijuana (female marijuana plants without seeds) in  
          small spaces.  Pollination of drug marijuana by industrial hemp  
          fields would be extremely harmful to drug marijuana growers.   
          Drug marijuana growers would thus not hide marijuana in hemp  
          fields.  Drug marijuana growers would seek to avoid being near  
          hemp fields.

          It appears that 0.3% THC has been described as the standard for  
          industrial hemp largely because this level was the standard for  
          French farmers.  The French have been aggressive in producing  
          and promoting the crop.  France, unlike much of Western Europe,  
          did not previously ban hemp production.  It appears that hemp  
          was also unrestricted in the Soviet Union and satellite states.   
          Setting hemp THC standards has been a matter of some dispute in  
          the European Union.  Countries other than France - including  
          Russia - have developed hemp with lower THC content.  It is  
          likely that hemp with even lower THC concentrations could be  
          developed.

          Hemp seeds have no measurable amounts of THC.  Any THC found on  
          seeds occurs from contact with other parts of the plant.  As  
          industrial hemp has a very low THC content, contamination of the  
          seeds would appear to be of little concern.

                 Drug testing concerns - minute amounts of THC in seed  
               products

          Some law enforcement officials have expressed concerns that  
          wide-spread use of hemp products could interfere with drug tests  
          because it could not be determined whether the metabolites of  
          TCH found in blood or urine samples was produced by legitimate  
          hemp seed products or marijuana.  The Purdue study found this  
          concern largely unsupported.  "Federal US [drug testing]  
          programs utilize a THC metabolite level of 50 parts per billion  




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          in urine.  Leson (2000) found that this level was not exceeded  
          by consuming hemp products, provided that THC levels are  
          maintained below 5 ppm [parts per million] in hemp oil, and  
          below 2 ppm in hulled seeds.  Nevertheless, the presence of even  
          minute trace amounts of THC in foods remains a tool that can be  
          used by those wishing to prevent the hemp oil seed industry from  
          developing."  The Purdue study essentially recommended that  
          stringent standards be set to reduce the amount of trace THC  
          that could be found in hemp oil seed products.

           Marijuana growers would not likely use hemp fields to hide  
            marijuana - hemp pollen would ruin marijuana plants

          As noted above, marijuana production has shifted to cultivation  
          of non-seed plants.  These plants have much higher  
          concentrations of THC than seeded plants.  Pollen from  
          industrial hemp fields would ruin illicit marijuana plants.  It  
          is likely that marijuana growers would avoid planting anywhere  
          near industrial hemp fields.

           The camel's nose under the tent argument

          Discussions about industrial hemp often note the argument that  
          the legalization of industrial hemp could be the proverbial  
          camel's nose under the tent leading to legalization of  
          marijuana.  At its core, this argument appears to assume that  
          the public could conclude that the clear benefits of industrial  
          hemp indicate that marijuana, because it comes from the same  
          species of plant, is an appropriate and beneficial drug.  Some  
          ardent believers in the value of marijuana as a drug could also  
          believe that the usefulness of hemp indicates that all forms of  
          cannabis are good and beneficial.  Such an argument has no  
          logical basis.

          Some would argue that the "camel's nose" argument is a "straw  
          man" that is advanced or identified solely for the purpose of  
          knocking it down.  The fact that a plant is particularly  
          beneficial for one purpose does not mean that it is valuable for  
          a different and unrelated purpose.  The fact that corn can be  




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          used to make an alcohol-based fuel does not mean drinking  
          alcohol from corn is good.  The fact that a marijuana smoker may  
          justify his or her habit because hemp is a very beneficial plant  
          does not mean that the general public would find marijuana any  
          more acceptable than it is now.

          It does not appear that countries that allow hemp cultivation  
          have higher rates of marijuana consumption than comparable  
          countries that do no allow cultivation of hemp.  Many European  
          countries have authorized hemp cultivation in the last 15 years  
          . . .  Marijuana use has not risen with hemp production in  
          Europe.  Numerous studies have noted that European consumption  
          of marijuana (for intoxication) is much lower than in the United  
          States.  (EU Annual Report on Drug Problems in Europe, 2005.)   
          Many of the European countries with particularly low rates of  
          marijuana use allow hemp cultivation.  In general, marijuana  
          consumption appears to be tied to the urbanization of a country.

          5.  Legislation Concerning Industrial Hemp in Other Jurisdictions

           Several other states and the Federal Government have attempted  
          to pass legislation allowing the commercial and personal growth  
          and development of industrial hemp.  The substance of the  
          proposed legislation has varied, but six states (Hawaii,  
          Kentucky, Maine, Montana, North Dakota and Virginia) have all  
          removed barriers to the growth of hemp.  However, those states  
          that have passed legislation have limited growth for research  
          purposes only and have not sought to redefine criminal marijuana  
          sections.

          Hawaii recently implemented an experiment through permission  
          from the Drug Enforcement Administration (DEA) to grow  
          industrial hemp on a one-quarter acre of government land and  
          under 24-hour security.  It appears that the Hawaii hemp  
          experiment terminated at the end of September 2003.  According  
          to the David P. West, Ph.D., agronomist hired to conduct the  
          experimental planting, the DEA effectively frustrated attempts  
          to fully implement the program.  Although West was able to  
          successfully develop a strain of hemp suitable for the climate  




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          of Hawaii, it appears that the plant material has been lost and  
          that anyone starting a new program in Hawaii would need to re-do  
          West's work.

          For example, Chinese hemp germplasm was lost while West waited  
          for permits.  West explained in his report that hemp has  
          traditionally been a temperate climate (most of the mainland  
          U.S.) crop, not a tropical climate crop.  Under tropical  
          conditions, hemp plants typically mature and reproduce very  
          fast, such that inadequate fiber and stalk growth occurs.   
          Canadian hemp seeds proved to be unsuitable for these reasons.   
          West obtained seed from China and Japan.  He was able to  
          successfully grow large hemp plants through a mixture of Asian  
          and European plants.  He also noted that Hawaii could be used  
          for winter hemp seed production, as is done with corn.

          West stated in his final report:

              Under the burden of the DEA's administrative delays,  
              the project ground to a halt.  I decided I had  
              accomplished all I could in this climate.  And it was  
              time to quit, and, in doing so, to cry "Foul!" at the  
              DEA's shenanigans.

              In this project I was able to demonstrate that the  
              genetic potential exists within the world's germplasm  
              [seed resources] to create a variety of hemp capable  
              of growing in a few months in a tropical environment  
              a forest of 10 foot plants to provide fiber to any of  
              a long list of industries.  I had the plants  
              [obtained from China and Europe]; I showed it could  
              be done.  Perhaps, in some reasonable future, it may  
              be done again.  On September 30, 2003, this hemp  
              germplasm, like Kentucky hemp before it [when hemp  
              production was outlawed by the federal government],  
              was lost to humanity.

          A hemp research bill was introduced in California in 2002.  AB  
          388 (Strom-Martin), of the 2001-2002 Legislative Session,  




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          requested that the University of California conduct a study of  
          the economic opportunities associated with the production of  
          alternative fiber crops, including industrial hemp, flax and  
          kenaf.  However, Gray Davis vetoed AB 388 in September of 2002  
          stating, "There are a number of significant concerns regarding  
          the legality of producing industrial hemp in the United States.  
           The United States Department of Agriculture concluded that  
          'legal issues currently preclude research into the viability of  
          industrial hemp fiber production in the United States.'  In  
          addition, the Drug Enforcement Administration applies the same  
          strict controls to industrial hemp as it does to marijuana.   
          That is, it is a Schedule I Controlled Substance under federal  
          law."

          This past year, House Representatives Ron Paul (R-TX) and George  
          Miller (D-CA) attempted to amend the Federal Controlled  
          Substances Act by excluding industrial hemp from the definition  
          of marijuana.  This measure (109 H.R. 3037) is currently still  
          pending in numerous committees, including the House Energy and  
          Commerce Committee.

          This bill (AB 1147) also seeks to exclude industrial hemp from  
          the definition of marijuana.  However, the attempt to exclude  
          industrial hemp from the definition of marijuana is likely to be  
          challenged as preempted by federal law.

          6.  Industrial Hemp Definition in AB 1147 - Contrast with  
            Federal Schedule I Definition of Marijuana  

          This bill would change the California definition of  
          marijuana (in Schedule I of the controlled substance  
          schedules) to specifically provide that marijuana does not  
          include "industrial hemp."  Under this bill, marijuana  
          would include "all parts of the plant Cannabis sativa L,  
          whether growing or not; the seeds thereof; the resin  
          extracted from . . . the plant;" and every derivative from  
          the plant.  The bill defines industrial hemp thus:

              [A]n agricultural field crop that is limited to  




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              nonpsychoactive varieties of the plant Cannabis  
              sativa L., having no more than three-tenths of one  
              percent tetrahydrocannabinol contained in the dried  
              flowering tops, that is cultivated from seed  
              originating in California, and that is cultivated and  
              processed exclusively for the purpose of producing  
              the mature stalks of the  plants  plant, fiber produced  
              from the stalks, oil or cake made from the seeds of  
              the plant, or any other compound, manufacture, salt,  
              derivative, mixture, or preparation of the mature  
              stalks (except the resin or flowering tops extracted  
              therefrom), fiber, oil, or cake, or the sterilized  
              seed of the plant which is incapable of germination.

              (b) This [definition of industrial hemp] shall not be  
              construed to authorize the following:  (1)  The  
              cultivation, production, or possession of resin,  
              flowering tops, or leaves that have been removed from  
              the field of cultivation and separated from the other  
              constituent parts of the industrial hemp plant.  (2)   
              The transportation or sale across state borders of  
              seed of any variety of Cannabis sativa L. that is  
              capable of germination.  (3)  Any cultivation of the  
              industrial hemp plant that is not grown in a research  
              setting or as an agricultural field crop.

          Nothing in federal law defines marijuana in relation to the  
          level of THC in the plant.  The reference to THC in the  
          federal scheduling is a separate listing of THC in the list  
          of hallucinogenic substances.  Federal law includes  
          marijuana as a Schedule I substance.  The federal  
          definition states several exceptions to the definition of  
          marijuana.  These exceptions include "the mature stalks of  
          such plant, fiber produced from such stalks, oil or cake  
          made from the seeds of the plant, any other compound,  
          manufacture, salt, derivative, mixture or preparation of  
          such mature stalks (except the resin therefrom), fiber, oil  
          or cake, or the sterilized seed of such plant which is  
          incapable of germination."  (21 U.S.C. 802 (16).)




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          7.  Issues of Possible Federal Law Preemption Flowing from the  
            Definition of Industrial Hemp in This Bill  

          Drug Preemption Issues Generally
          
          The federal Controlled Substance Act of 1970 defined five  
          schedules of narcotics based on medical uses and the likelihood  
                                                                        of addiction.  (21 U.S.C. 801-844.)  As noted above, California  
          and federal law define "marijuana" as all parts of the plant  
          Cannabis sativa L and derivatives therefrom.  However, the  
          definition of marijuana includes relatively broad exceptions  
          from the definition of marijuana for the stalks of the plant,  
          products produced from the stalks, the sterilized seed and oil  
          and other products made from the seed.  (21 USCS 802(16) and  
          Health & Saf. Code  11018.)  Essentially, marijuana is defined  
          as the leaves, flowering tops and non-sterile seed of the  
          cannabis plant.

          Federal law and California law separately schedule THC, the  
          primary psychoactive substance in marijuana.  (21 U.S.C.  
          812(17).)  California law specifically provides that the  
          reference to "tetrahydrocannabinols" in Schedule I concerns  
          synthetic THC.  As noted in the "Purpose" section, above,  
          standing decisions of the federal Ninth Circuit provide that THC  
          in the federal schedules refers only to synthetic THC, not the  
          naturally-occurring THC found in (the separately scheduled)  
          marijuana.  However, DEA regulations, based on the inclusion of  
          THC in Schedule I, purport to ban any product intended for human  
          consumption that contains any amount of THC, including any  
          product from a cannabis plant that includes naturally-occurring  
          THC.

          One issue presented by this bill is whether or not the  
          California law can define "marijuana" differently than federal  
          law.  A significant way in which the Federal Government  
          regulates state conduct is through the interstate commerce  
          clause.  The United States Constitution states that of the  
          powers granted to Congress is "[the power] [t]o regulate  




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          commerce with foreign nations, and among the several states, and  
          with the Indian Tribes."  (United States Const., Art. I,  8.)   
          The United States Supreme Court has stated that the Congress is  
          within its right to supersede state drug laws because even  
          intrastate manufacturing and sales affects a national and  
          international drug trade that poses a risk to the United States  
          as a whole.  (21 USCS 801, Gonzales v. Raich (2004) 125 S.Ct.  
          3195.)

          The Federal Government may use the interstate commerce clause  
          to affect state law if the activity regulates the use of the  
          channels of interstate commerce, the instrumentalities of  
          interstate commerce, and activities that substantially affect  
          interstate commerce.  (Lopez v. United States (1995) 514 U.S.  
          549.)  In viewing those factors, the court has held that if  
          legislators have a rational basis for believing that a  
          regulation affects interstate commerce and the means chosen are  
          reasonable and appropriate, congressional action will probably  
          be deemed a fair use of the interstate commerce clause.  (Heart  
          of Atlanta Motel v. United States (1964) 379 U.S. 241 and  
          Katzenbach v. McClung (1964) 379 U.S. 294.)

          There are two analogous cases that might shed light on whether  
          the State of California may amend its marijuana statute in  
          manner different than the federal statute.  First, in Wickard  
          v. Filburn, the Supreme Court held that the Agricultural  
          Adjustment Act of 1938 permitted the Secretary of Agriculture  
          to regulate the growth and consumption of wheat on every farm  
          in the United States.  The Court reasoned that even one  
          farmer's growth and consumption has a "cumulative effect" on  
          the overall wheat industry and, hence, the national economy.   
          (Wickard v. Filburn (1942) 317 U.S. 111.)

          Second, is Raich.  In late 2004, the United States Supreme  
          Court, relying heavily on the aforementioned Wickard case, held  
          that California could not exempt marijuana for medicinal  
          purposes from the criminal possession statute.  The court based  
          its ruling on the idea that use of "any commodity, be it wheat  
          or marijuana, has a substantial effect on the supply and demand  




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          in the national market for that commodity."  (Raich at p.  
          2208.)

          The Preemption Issue in This Bill
          
          It does appear that California controlled substance laws need  
          not be exactly the same as federal law, especially where  
          California law does not directly conflict with federal law.  For  
          example, MDMA (so-called ecstasy) is not scheduled in  
          California, although the drug is not legal under California law.  
           There is no specific California law banning possession or  
          distribution of MDMA, although persons who possess or distribute  
          MDMA can be prosecuted under California law because MDMA is an  
          analog of specifically banned substances.  This state of affairs  
          is different than the circumstances concerning medical  
          marijuana, as California law purports to make possession of  
          marijuana at the recommendation of a physician not a crime.

          It appears that the core of the preemption issue presented by  
          this bill is the following:  Does the definition of industrial  
          hemp under this bill make it legal under California law to grow  
          specified kinds of cannabis when that activity is illegal under  
          federal law?  Federal law exempts from the definition of  
          marijuana the stalks of the plant, sterilized seed, and products  
          made from these parts of the plant.  Federal law thus includes  
          in the definition of marijuana the flowering tops, leaves and  
          un-sterilized seed of the plant.  This bill defines as  
          industrial hemp - and thus excludes from the definition of  
          marijuana - the entire cannabis plant, including flowers and  
          leaves, if the THC content of every part of the plant is very  
          low.  (Even under this bill, the leaves and tops could not be  
          removed from the field of cultivation and separated from the  
          rest of the plant.)

          Sponsor's Arguments Concerning Preemption
          
          Sponsor Vote Hemp argues that federal law does not preempt this  
          bill:





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              It has been suggested that state legislation  
              authorizing the cultivation of industrial hemp may be  
              federally pre-empted because the federal definition  
              of "Marihuana," listed as a Schedule 1 substance  
              under the Controlled Substances Act (CSA) at 21  
              U.S.C.  802(16), covers all varieties and breeds of  
              the Cannabis Sativa plant, including the special,  
              distinct breed that is grown as industrial hemp.  AB  
              1147, however, has been specifically designed to  
              avoid any conflict with the federal CSA and should  
              not be federally pre-empted.

              AB 1147 (1) requires the planting of industrial hemp  
              seed originating in California and (2) permits only  
              those parts of the hemp plant that are exempted from  
              the CSA's definition of "Marihuana" to enter  
              interstate commerce.  In 2004, the Ninth Circuit held  
              that the CSA's definition of "Marihuana" clearly  
              exempts non-psychoactive hemp (e.g. sterilized seed,  
              oil and fiber) from regulation under the CSA.  Hemp  
              Indus. Ass'n v. DEA, 357 F.3d 1012, 1018 (9th Cir.  
              2004).  The federal government did not seek Supreme  
              Court review of this decision.

              The U.S. Supreme Court has made clear that, under the  
              Commerce Clause of the U.S. Constitution, Congress  
              has the power to regulate activities that  
              "substantially affect" interstate commerce and that  
              even a purely local activity "'may still, whatever  
              its nature, be reached by Congress if it exerts a  
              substantial economic effect on interstate commerce.'"  
               Gonzales v. Raich, 125 S.Ct. 2195, 2205-06 (2005),  
              quoting Wickard v. Filburn, 317 U.S. 111, 125 (1942).  
               Under AB 1147, however, the only activity that will  
              affect interstate commerce is the sale of  
              non-psychoactive hemp fiber, sterilized seed and oil,  
              substances that are not covered at all by the CSA.   
              While viable hemp seed will be traded in some fashion  
              intrastate, this activity will have no affect on  




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              interstate commerce because there is no national  
              market for that commodity.  (Gonzales v. Raich, 125  
              S.Ct. at p. 2207.)








































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              The Supreme Court's decision in Gonzales v. Oregon,  
              No. 04-623 (2006), provides additional support for AB  
              1147 not being federally pre-empted.  The Court  
              recognized the CSA's chief purpose is to combat  
              "recreational drug abuse."  (Slip Op., at p. 25.)   
              The court noted that the CSA itself provides that,  
              "absent a positive conflict, none of the Act's  
              provisions should be construed as indicating an  
              intent" to exclude state law.  (Id. at 24.)  Here,  
              industrial hemp is clearly not a recreational drug  
              and, as AB 1147 is drafted, the federal government  
              will be hard pressed to show a positive conflict  
              between it and the CSA.

              AB 1147 does not undermine . . . efforts to combat  
              recreational drug abuse.  In fact, to specifically  
              address any potential impact the bill might have on  
              drug enforcement, AB1147 prohibits growth of  
              industrial hemp outside a research or agricultural  
              field crop setting.  Any living Cannabis plant,  
              whether hemp or marijuana, grown outside of these  
              specified locations, is considered marijuana under AB  
              1147.  Further, removal from the field of cultivation  
              of leaves and flowering tops of the industrial hemp  
              plant is prohibited to avoid spurious claims that  
              marijuana is industrial hemp.  These prohibitions  
              should negate the bill's potential impact on  
              enforcement of federal and state marijuana laws.   
              Accordingly, AB 1147 is not in positive conflict with  
              the CSA and, therefore, not subject to federal  
              pre-emption.

          8.  The Hemp Industries Cases  

          In two related cases - Hemp I and Hemp II - the Ninth  
          Circuit Court of Appeals considered whether or not the  
          scheduling of THC in Schedule I of the federal controlled  
          substance schedules includes any parts of cannabis plant  
          that contain THC.  (Hemp I - (9th Cir. 2003) 333 F.3d 1082;  




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          Hemp II - (9th Cir.) 357 F.3d 1012.)  Marijuana is  
          separately scheduled under federal law.  The definition of  
          marijuana in the federal schedules excludes the mature  
          stalks of the plant, sterile seed of the plant, and  
          products made therefrom.

          The DEA has issued regulations stating that because THC is  
          specifically included in the controlled substance  
          schedules, any product intended for human consumption that  
          contains THC is illegal.  (The initial regulations stated  
          that "any product that contains any amount of THC" is a  
          controlled substance.)  The Ninth Circuit in Hemp I and  
          Hemp II essentially rejected the DEA regulations.  Hemp I  
          and II found that THC in the federal schedules refers to  
          synthetic THC only, not THC that occurs naturally in the  
          cannabis plant.  The court found that if the scheduling of  
          THC included naturally occurring THC there would be no need  
          to separately schedule marijuana, as the psychoactive  
          substance in the marijuana plant is THC.  Further, Hemp II  
          found that the DEA had improperly failed to follow  
          essential procedures for issuing the regulations banning  
          any product intended for human consumption that contained  
          any THC, regardless of whether the product was essentially  
          excepted from definition of marijuana in Schedule I.

          The DEA regulations have not been changed.  The Ninth  
          Circuit decisions in Hemp I and Hemp II are in effect.  The  
          DEA did not challenge the decisions.



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