BILL ANALYSIS SENATE AGRICULTURE COMMITTEE Senator Abel Maldonado, Chairman BILL NO: AB 684 HEARING: 6/19/07 AUTHOR: Leno FISCAL: Yes VERSION: 6/13/07 CONSULTANT: John Chandler Industrial hemp. BACKGROUND AND EXISTING LAW "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 Marijuana 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 permitted. 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 AB 684 - Page 2 certifying that the THC levels of the plant are below 10 parts 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. A nearly identical bill, AB 1147 (Leno) of 2006, was vetoed by Governor Schwarzenegger last year. In his veto message, the governor stated that hemp is still considered a cannabis plant regardless of its THC content and therefore illegal under federal law. PROPOSED LAW AB 684 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. Clarify that "industrial hemp" shall include the defined hemp products in the 2007 Harmonized Tariff Schedule of the United States. Specify that industrial hemp seed may only be imported according to 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 and includes the Global Positioning System coordinates and total acreage of the crop. 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 tops. Prohibit transportation or sale of any Cannabis sativa L. seed capable of germination across state borders except AB 684 - Page 3 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 hemp. COMMENTS 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. Because California's state laws are silent on the cultivation of hemp, 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 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 ruling, 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. Marijuana farmers could potentially camouflage their fields within hemp fields. 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 AB 684 - Page 4 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 on the cultivation of hemp. The committee may want to consider if the bill should focus on research of this issue before permitting the general cultivation of hemp. 4.Of the products produced from hemp, many are already grown 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. 5.The Senate Rules Committee has doubled referred this bill to the Senate Public Safety Committee as the second committee of referral. Therefore, if this measure is approved by this committee, the motion should include an action to re-refer the bill to the Senate Committee on Public Safety. PRIOR ACTIONS Assembly Floor 41-29 Assembly Appropriations11-5 Assembly Public Safety5-2 SUPPORT Agriculture and Land-Based Training Association American Federation of State, County, and Municipal Employees California Certified Organic Farmers California Coastkeeper Alliance California League of Conservation Voters California State Grange Community Alliance With Family Farmers Dynamic Nutraceuticals Inc. Fiddler's Green Farm, Inc AB 684 - Page 5 Hemp Industries Association Imperial County Farm Bureau Nutiva Organic Consumers Association Planning and Conservation League Sensuous Beauty, Inc Sierra Club California Ultra Oil Whole Foods Market OPPOSITION Association for Los Angeles Deputy Sheriffs California District Attorneys Association California Fraternal Order of Police California Narcotic Officers Association California Peace Officers' Association California Police Chiefs Association Long Beach Police Officers Association Los Angeles County Professional Peace Officers Association Riverside Sheriffs' Association Santa Ana Police Officers Association