BILL ANALYSIS                                                                                                                                                                                                    

                            SENATE AGRICULTURE COMMITTEE
                             Senator Jeff Denham, Chair

          BILL NO:  AB 1147                     HEARING:  6/29/06
          AUTHOR:  Leno                         FISCAL:  Yes
          VERSION:  6/1/06                      CONSULTANT:  John Chandler
                                  Industrial Hemp.


          "Industrial Hemp" or "Hemp" refers to low level psychoactive  
          chemical tetrahydrocannabinol (THC), varieties of Cannabis  
          sativa L.  For centuries countless consumer and industrial  
          products have been produced from Hemp around the world.  Hemp  
          can be cultivated as a fiber or a seed crop.  Hemp fiber can be  
          used for textiles, paper, construction materials, auto parts,  
          and home furnishings while hemp seeds can be used for body care  
          products, industrial oils, pharmaceuticals, and food.  Despite  
          its many uses, Hemp is commonly lost in the shadow of its famous  
          Cannabis relative "Marijuana" most commonly used as a narcotic  
          due to its high THC content.

          Hemp has been grown in the United States before the founding of  
          our nation.  Some of the early growers included our founding  
          fathers, George Washington and Thomas Jefferson.  However, by  
          the 1890's demand for natural fibers began to be met by imported  
          fibers while the greater cost effectiveness of machine harvested  
          cotton became more competitive for clothing fabric.

          Beginning in 1937 with the federal Marihauna Tax Act, the  
          government began to excersize control of the production of  
          Cannabis plants.  Following World War II, the competition of  
          synthetic fibers and a growing anti-drug public resulted in the  
          decline of hemp production.  In 1970, the Controlled Substances  
          Act tightly restricted all Cannabis plants regardless of THC  
          content.  This resulted in all hemp and hemp products being  
          imported or manufactured from imported hemp.  

          Drug Enforcement Agency (DEA) is the federal agency that  
          determines if any industrial hemp production authorized by state  
          statute is permitted.  The DEA also enforces standards for the  
          security conditions under which industrial hemp must be grown if  

          In 1998 Canada, a growing importer of hemp to California, lifted  
          their 50 year ban on Industrial Hemp cultivation.  Farmers could  
          grow hemp only after meeting specific registration requirements  
          such as registering the location of each Hemp field and  
          certifying that the THC levels of the plant are below 10 parts  


          AB 1147 - Page 2

          per million. 

          AB 388 (Strom-Martin) of 2002 was vetoed by Governor Davis.   
          That bill would have requested that the University of California  
          assess the economic opportunities of specialty or alternative  
          fiber crops, including industrial hemp, and report to the  
          legislature by January 1, 2004.


          AB 1147 - Page 3

          PROPOSED LAW

          AB 1147 would permit the cultivation of industrial hemp in  
          California.  Specifically, this bill would:
                 Define "Industrial Hemp" as an agriculture field crop of  
               Cannabis sativa L. with no more than 3/10 THC grown  
               exclusively to produce the mature plant stalks and stalk  
               products, oil or cake made from the seeds, and other  
               by-products except the resin or flowering tops.
                 Specify that industrial hemp seed may only be imported  
               according the federal laws or California seeds from feral  
               plants, cultivated plants, or plants grown for research.
                 Require that before harvest industrial hemp growers  
               obtain a laboratory test report of randomly sampled dried  
               flowering tops from a DEA registered laboratory identifying  
               if the crop meets the California industrial hemp limit of  
               no more than 3/10 percent.  This report shall be retained  
               by the grower for two years.
                 Prohibit the cultivation, production, or possession of  
               resin, flowering tops, or leaves removed from the field and  
               are separate from the rest of the plant.  The only  
               exception to this prohibition is for the purposes of  
               sampling for the required laboratory test of the flowering  
                 Prohibit transportation or sale of any Cannabis sativa  
               L. seed capable of germination across state borders except  
               as permitted by federal law. 
                 Specify that hemp may only be grown for research or as  
               an agriculture field crop.
                 Make legislative declarations and findings on Industrial  


          1.Proponents of this bill state that America's $270 million hemp  
            sales are entirely from imported industrial hemp.  Under the  
            current federal law, California farmers are denied the ability  
            to grow and sell hemp to fulfill our domestic demand.   
            California's state laws are silent on the cultivation of hemp  
            therefore this bill would clarify state law allowing  
            California growers to participate in the hemp market.

            In addition to the potential economic benefits to growers,  
            proponents state that hemp provides a suitable rotation crop  
            that helps improve the soil and requires fewer pesticides or  
            herbicides than many other crops.  Hemp is harvested for its  
            stalks and seeds rather than the flowering tops for which  
            marijuana is harvested.  Advocates maintain that should hemp  
            and marijuana commingle and cross pollinate, the resulting  


          AB 1147 - Page 4

            plants would be undesirable for traditional marijuana use or  
            as industrial hemp. 
            In 2004 the U.S. 9th Circuit Court ruled that hemp products  
            could be sold legally in the United State, overturning a DEA  
            regulation attempting to ban all products from sale that  
            contained any amount of THC.  Since this decision, the federal  
            government has decided not to appeal this decision allowing  
            hemp seed and oil products to be sold and consumed in the U.S.

          2.Opponents of this bill state that since marijuana and hemp are  
            so closely related, legalizing the cultivation of hemp would  
            hinder law enforcement efforts to suppress marijuana.  They  
            also see this as a possible stepping stone to further relax  
            regulations on all Cannabis plants.  The federal government  
            continues to consider the cultivation of hemp illegal.   
            California would then conflict with federal law. California  
            also faces challenges with the hemp industry competing against  
            subsidized hemp growers in Chinese and European countries.

          3.Permitting the cultivation of industrial hemp in California  
            would essentially be introducing a new agriculture product to  
            the State.  While hemp is grown in over 30 other countries  
            worldwide, the variety and cultural practices vary widely from  
            country to country due to such factors as the different  
            climates or soil.  In California there has not been thorough  
            research into the growing of industrial hemp. Previous  
            legislation addressing cultivating industrial hemp in  
            California has focused on research rather than any cultivation  
            of hemp.  The committee may want to consider if the bill  
            should focus on research of this issue before permitting  
            general cultivation of hemp.

          4.Of the products produced from hemp, many are already grown  
            here in California with different commodities such as cotton  
            for fiber and olives for oil.  In California cotton plantings  
            have shrunk over the years due to foreign competition.   
            Similarly, the influence of foreign competition hurt the hemp  
            industry in the 1890's reducing its economic appeal to  
            growers.  It seems that hemp production in California would be  
            for a limited nitch market.  The committee may want to  
            consider if it is appropriate to expose the state to conflict  
            with the federal government for a potential nitch crop when it  
            could prove more beneficial to focusing that energy on  
            improving existing crops.   

          Senate Public Safety     4-2


          AB 1147 - Page 5

          Assembly Floor   44-32
          Assembly Appropriations  13-3
          Assembly Public Safety   4-2

          Hemp Industries Association (co-sponsor)
          Vote Hemp (co-sponsor)
          Alice's Mountain Market
          Alta Vista Growers 
          Alterna Professional Haircare
          Appeal-Democrat - Marysville (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
          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
          Hirai Farms
          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
          N. American Hemp Company
          N. American Industrial Hemp Council, Inc. 


          AB 1147 - Page 6

          Organic Ag Advisors
          Organic Consumers Association
          Orange County Register (editorial)
          Patagonia, Inc. 
          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
          Sunset Ranch
          Sweetgrass Natural Fibers
          The City and County of San Francisco
          The Living Temple 
          Threshold Enterprises
          Ultra Oil for Pets
          Whole Balance
          Californians For Drug Free Schools
          California Narcotics Officers' Association
          Save Our Society From Drugs