BILL ANALYSIS                                                                                                                                                                                                    







          
                      SENATE COMMITTEE ON PUBLIC SAFETY
                           Senator Gloria Romero, Chair              A
                             2007-2008 Regular Session               B

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          AB 684 (Leno)                                               
          As Amended June 28, 2007 
          Hearing date:  July 10, 2007
          Health and Safety Code
          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
                       AB 1147 (Leno) - 2006, vetoed

          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; 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 Fraternal Order of Police; California  
                   Narcotic Officers' Association; California Peace  
                   Officers' Association; California Police Chiefs  




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                   Association; Long Beach Police Officers Association;  
                   Los Angeles County District Attorney's Office, Los  
                   Angeles County Professional Peace Officers Association;  
                   Riverside Sheriffs' Association; Santa Ana Police  
                   Officers Association

          Assembly Floor Vote:  Ayes 41 - Noes 29

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

          SHOULD "MARIJUANA" BE DEFINED IN STATUTE TO EXCLUDE INDUSTRIAL HEMP?

          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 MAKE HEMP PRODUCTS; AND  
          THAT CONTROLLED SUBSTANCE SCHEDULING DEFINITIONS AND CONCEPTS DO NOT  
          APPLY TO INDUSTRIAL HEMP, AS SPECIFIED?


                                       PURPOSE
          
          The purposes of this bill are to define 1) "industrial hemp" as  
          a legitimate, valuable and non-psychoactive agricultural  
          product; 2) define marijuana as excluding industrial hemp; 3)  
          allow cultivation and processing of industrial hemp, under  
          specified regulations; 4) impose a testing regimen to insure any  
          particular crop has no psychoactive properties; and 5)  
          essentially create a pilot program for industrial hemp in  




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          Imperial, Kings, Mendocino and Yolo Counties.
          
           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"  
          (THC) as a Schedule I substance.  (21 U.S.C. 812 (17).)   




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          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 decision, 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).)

           Existing law  states that except as authorized by law, every  

          --------------------------
          <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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          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  provides that industrial hemp shall include products  
          imported under the first revision of the 2007 Harmonized Tariff  
          Schedule of the United States, including "hemp seed," "hemp  
          oil," "true hemp" and "woven fabrics of true hemp," as specified  
          in statute.

           This bill  provides that the statutory definition of "marijuana"  
          does not include industrial hemp.

           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  




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          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.

           The laboratory test shall be issued by a lab registered with  
            the DEA and samples shall be collected and transported only  
            by an employee or agent of the DEA-registered laboratory.
           The report shall state the percentage of THC in the sample  
            and the time, date and location of the samples taken and the  
            GPS coordinates and total acreage of the crop.
           The person who grew the industrial hemp shall retain an  
            original, signed copy for at least two years.
           The report shall be made available to law enforcement upon  
            request.
           The report shall state, at or near the top of the report,  
            whether it passes or failed the standard for industrial  
            hemp.  (The sample can have a THC content of no more than  
            0.3%.)
           If the report states that the sample passed, the laboratory  
            shall provide the person who requested the report with at  
            least 10 original copies signed by an authorized laboratory  
            employee.  The laboratory shall retain at least one original  
            copy for at least 2 years.

           This bill  provides that if the sample exceeds 0.3%, but does not  
          exceed 1%, THC content, the person submitting the sample shall  
          submit additional samples for testing.  The person submitting  
          the sample shall destroy the crop if second testing indicates a  
          THC content over 0.3%.

           This bill  provides that the person who submitted a sample for  
          testing shall destroy the crop if the first test indicates a THC  
          content over 1%.  

          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  




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          field of cultivation and separated from the other constituent  
          parts of the industrial hemp plant.

           This bill  provides that a crop need not be destroyed if the crop  
          was grown in a research setting if the destruction will impede  
          the development of industrial hemp that will comply with the  
          0.3% THC standard.
           
          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  prohibits possession, outside a field of lawful  
          cultivation, of resin, flowering tops, or leaves that have been  
          removed from the hemp plant, except as necessary for an  
          authorized laboratory employee or agent to test the material for  
          THC content.

           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.

           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  




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            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 $270 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.

           Assessment of the economic benefits of industrial hemp  
            cultivation and the possible impacts on enforcement laws  
            concerning illicit marijuana are important concerns.   
            Thus, a pilot program should be implemented to allow  
            agricultural production of industrial hemp in four  
            counties and for research by "established agricultural  
            research institutions."

           This bill  provides that the program in this bill shall apply  
          only in the Counties of Imperial, Kings, Mendocino and Yolo,  
          except as to industrial hemp raw materials that are legal under  
          federal law, transportation of seeds capable of germination  
          within California and the transportation of samples for testing  
          at a DEA-registered laboratory.

           This bill  provides that the Attorney General, on or before  
          January 1, 2012, shall report to the Assembly and Senate  
          Agriculture and Public Safety Committees on any reported  
          incidents of the following:

                 A field of industrial hemp being used to disguise  




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               marijuana cultivation; and
                 Claims in a court hearing that marijuana is  
               industrial hemp, except where the person making the  
               claim is subject to a specified exemption.

           This bill  provides that the Hemp Industries Association, not  
          later than January 1, 2012, shall report to the Assembly and  
          Senate Committees on Agriculture and Public Safety the  
          following:

                 Economic impacts of industrial cultivation,  
               processing and products in California; and
                 Economic impacts of industrial hemp cultivation,  
               processing and products in other states.

           This bill  includes a January 1, 2013 sunset.
              RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION IMPLICATIONS
          
          California currently faces an extraordinary and severe prison  
          and jail overcrowding crisis.  California's prison capacity is  
          nearly exhausted as prisons today are being operated with a  
          significant level of overcrowding.<2>  In addition, California's  
          jails likewise are significantly overcrowded.  Twenty California  
          counties are operating under jail population caps.  According to  
          the State Sheriffs' Association, "counties are currently  
          releasing 18,000 pre and post-sentenced inmates every month and  
          many counties are so overcrowded they do not accept misdemeanor  
          bookings in any form, . . . ."<3>  In January of this year the  
          Legislative Analyst's office summarized the trajectory of  
          California's inmate population over the last two decades:

              During the past 20 years, jail and prison  
              populations have increased significantly.  County  
              jail populations have increased by about 66  
              percent over that period, an amount that has been  
              limited by court-ordered population caps.  The  
              --------------------
          <2>  Analysis of the 2007-08 Budget Bill:  Judicial and Criminal  
          Justice, Legislative Analyst's Office (February 21, 2007).
          <3>  Memorandum from CSSA President Gary Penrod to Governor,  
          February 14, 2007.



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              prison population has grown even more dramatically  
              during that period, tripling since the  
              mid-1980s.<4>

          The level of overcrowding, and the impact of the population  
          crisis on the day-to-day prison operations, is staggering:

              As of December 31, 2006, the California Department  
              of Corrections and Rehabilitation (CDCR) was  
              estimated to have 173,100 inmates in the state  
              prison system, based on CDCR's fall 2006  
              population projections.  However, . . . the  
              department only operates or contracts for a total  
              of 156,500 permanent bed capacity (not including  
              out-of-state beds, . . . ), resulting in a  
              shortfall of about 16,600 prison beds relative to  
              the inmate population.  The most significant bed  
              shortfalls are for Level I, II, and IV inmates, as  
              well as at reception centers.  As a result of the  
              bed deficits, CDCR houses about 10 percent of the  
              inmate population in temporary beds, such as in  
              dayrooms and gyms.  In addition, many inmates are  
              housed in facilities designed for different  
              security levels.  For example, there are currently  
              about 6,000 high security (Level IV) inmates  
              housed in beds designed for Level III inmates.

              . . .  (S)ignificant overcrowding has both  
              operational and fiscal consequences.  Overcrowding  
              and the use of temporary beds create security  
              concerns, particularly for medium- and  
              high-security inmates.  Gyms and dayrooms are not  
              designed to provide security coverage as well as  
              in permanent housing units, and overcrowding can  
              contribute to inmate unrest, disturbances, and  
              assaults.  This can result in additional state  
              costs for medical treatment, workers'  
              compensation, and staff overtime.  In addition,  

              --------------------
          <4>  California's Criminal Justice System:  A Primer.   
          Legislative Analyst's Office (January 2007).



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              overcrowding can limit the ability of prisons to  
              provide rehabilitative, health care, and other  
              types of programs because prisons were not  
              designed with sufficient space to provide these  
              services to the increased population.  The  
              difficulty in providing inmate programs and  
              services is exacerbated by the use of program  
              space to house inmates.  Also, to the extent that  
              inmate unrest is caused by overcrowding,  
              rehabilitation programs and other services can be  
              disrupted by the resulting lockdowns.<5>

          As a result of numerous lawsuits, the state has entered into  
          several consent decrees agreeing to improve conditions in the  
          state's prisons.  As these cases have continued over the past  
          several years, prison conditions nonetheless have failed to  
          improve and, over the last year, the scrutiny of the federal  
          courts over California's prisons has intensified.

          In February of 2006, the federal court appointed a receiver to  
          take over the direct management and operation of the prison  
          medical health care delivery system from the state.   Motions  
          filed in December of 2006 are now pending before three federal  
          court judges in which plaintiffs are seeking a court-ordered  
          limit on the prison population pursuant to the federal Prison  
          Litigation Reform Act.  Medical, mental health and dental care  
          programs at CDCR each are "currently under varying levels of  
                                                           federal court supervision based on court rulings that the state  
          has failed to provide inmates with adequate care as required  
          under the Eighth Amendment to the U.S. Constitution.  The courts  
          found key deficiencies in the state's correctional programs,  
          including:  (1) an inadequate number of staff to deliver health  
          care services, (2) an inadequate amount of clinical space within  
          prisons, (3) failures to follow nationally recognized health  
          care guidelines for treating inmate-patients, and (4) poor  
          coordination between health care staff and custody staff."<6>

           This bill  does not appear to aggravate the prison and jail  

          ---------------------------
          <5>  Analysis 2007-08 Budget Bill, supra, fn. 1.
          <6>  Primer, supra, fn. 4.



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          overcrowding crisis outlined above.

                                      COMMENTS

          1.  Need for This Bill  

          According to the author:

               AB 684 clarifies that California law permits the  
               cultivation of industrial hemp, a variety of Cannabis  
               that has no psychoactive qualities because it contains  
               less than three-tens of one percent THC.  Marijuana  
               usually ranges from 3% to 15% THC.



                Industrial Hemp Products are Legally Sold in All 50  
               States  

               Current state and federal law exempt industrial hemp  
               stalk, fiber, oil, and non-viable seed from the  
               definition of marijuana.  These products are legally  
               imported into the United States and sold in all 50  
               states.  Industrial hemp is grown and used throughout  
               the world for food, body care products, automotive  
               parts, building materials, paper, clothing, canvas, et  
               cetera.  Hemp fibers are extremely strong.  Oil  
               produced from hemp seeds contains an unusually healthy  
               balance of amino acids.  Hemp oil can replace  
               artery-clogging trans fats. 

                A Fast Growing Industry, but Farmers Left Out

                According to a study commissioned by the Hemp  
               Industries Association, the U.S. industrial hemp  
               market was $270 million in 2005 and is growing at a  
               rate of $26 million a year.  A large portion of those  
               sales are by California manufacturers who must import  
               industrial hemp.  California farmers are not  
               benefiting from this growing market because they are  




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               prohibited from growing industrial hemp.

                Significant Additional Agricultural Benefits

                Industrial hemp is an excellent rotational crop  
               because it naturally reduces nematodes (roundworms,  
               cutworms, et cetera) while its dense growth smothers  
               weeds.  Hemp requires less water and agricultural  
               chemicals than other crops and has deep roots that  
               leave the soil in excellent condition for the next  
               crop.

                Looks Different from Marijuana
                
               The primary reason industrial hemp has not been grown  
               in the United States since the 1950's is a perceived  
               similarity to marijuana; however, the plants are very  
               different.  Industrial hemp plant is a stalk similar  
               to bamboo, has few branches, has been bred for maximum  
               production of seed, and grows up to 16 feet tall.  It  
               is planted in densities of 100 to 300 plants per  
               square yard.  Marijuana is a tropical variety of  
               cannabis that grows to a height of six feet tall and  
               has been bred to have many branches to maximize  
               flowering and minimize seeding.  It is planted with  
               wide spaces between plants to maximize flowering.   
               From the moment seedlings sprout from the ground, a  
               crop of industrial hemp looks different from  
               marijuana.

                Law Enforcement Provisions Balanced with Farmers'  
               Concerns

                AB 684 has been crafted to comply with federal law;  
               minimize impact to law enforcement; and utilize a  
               smart, largely self-regulating mechanism without undue  
               burdens on farmers.  We worked closely with the Farm  
               Bureau to ensure that our regulatory measures make  
               sense for farmers, while not harming law enforcement  
               marijuana interdiction.  The bill only permits  




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               cultivation of industrial hemp when grown as an  
               agricultural field crop or in a research setting.   
               Back yard or horticultural cultivation is prohibited.   
               Any clandestine grove of cannabis will be considered  
               marijuana regardless of THC content.

                Strict Testing and Documentation Requirements

                Prior to harvest, farmers must obtain a laboratory  
               test report from a federal DEA-registered laboratory  
               documenting the crop's THC content.  They must retain  
               an original copy for two years, make it available to  
               law enforcement officials, and provide an original  
               copy to each person purchasing, transporting, or  
               otherwise obtaining the products of the plant.  If you  
               don't pass, you can't sell your product.

                Defendants Cannot Claim that Marijuana Is Hemp

                The valuable part of the marijuana plant is the  
               flowering tops.  Under this bill, all flowering tops  
               of the industrial hemp plant that are removed from the  
               field are still defined as "marijuana".  Although hemp  
               flowers have no psychoactive effects and no legal  
               commercial application, this control prevents spurious  
               claims that marijuana is hemp in drug busts.  The  
               bright-line definitions and requirements in this bill  
               ensure that law enforcement will not be negatively  
               impacted.  Our goal is to relieve California farmers  
               of the over-reaching prohibition on industrial hemp  
               cultivation.  California must assert its right to  
               regulate industrial hemp as permitted by the United  
               States Constitution, the United States Congress, and  
               the 2004 9th United States Circuit Court decision in  
               Hemp Industries Association v. DEA.  Until we do, our  
               farmers will be denied access to a profitable and  
               beneficial crop; our industry will pay a premium to  
               import hemp seed, fiber, and oil; and our state will  
               be denied the environmental benefits of a crop that  
               can provide food, clothing, shelter, and energy."




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          2.  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  
            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  




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            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 . . .  
            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  




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            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  
            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.





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            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, in reference to AB 1147 (Leno)  
          (the predecessor to this bill in the previous legislative  
          session) that the Purdue study included an industry bias.  The  
          opponents state that the study was funded by the hemp industry.   
          Committee staff has re-reviewed the study online and found no  
          specific statement that the study was funded by industry  
          sources.  In any event, the references for the study were very  
          voluminous, and included academic and government sources.  The  
          study did caution farmers that hemp was not a panacea, that hemp  
          markets were not mature and that rushing new crops into  
          production has been a traditional source of financial trouble  
          for farmers. The study noted:  "Hemp is currently a most  
          uncertain crop, but has such a diversity of possible uses, is  
          being promoted by extremely enthusiastic market developers, and  
          attracts so much attention that it is likely to carve out a much  
          larger share of the North American marketplace than its  




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          detractors are willing to concede."

          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.)


          3.  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.
          Hemp contains an antagonist to THC that cancels the effects of  




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          THC - smoking or otherwise ingesting any amount of hemp could  
          not intoxicate someone
          
          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 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 obtain a "high."

          It has been reported that CBD can be used to synthetically  
          produce THC.  However, as stated in the Purdue study, "the  




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          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  
          anywhere 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  
          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  




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          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  
          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  




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          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.

          4.  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  
          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  




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          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,  
          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, in part, "There are a number of significant concerns  
          regarding the legality of producing industrial hemp in the  




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          United States."

          In 2007, 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.   
          It appears that this measure (110 H.R. 1009) is currently still  
          pending in Congress.  A similar bill in 2005-2006 did not pass.

          This bill (AB 684) 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.


          5.  Industrial Hemp Definition in AB 684 - 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)<7> to specifically provide that marijuana does  
          not include "industrial hemp," except where industrial hemp  
          is cultivated or processed contrary to the express  
          provisions in this bill.

          The bill specifically defines industrial hemp thus:

              "Industrial hemp" means an agricultural field crop  
              that is limited to nonpsychoactive types of the plant  
              Cannabis sativa L. and the seed produced therefrom,  
              having no more than [0.3%] tetrahydrocannabinol (THC)  
              contained in the dried flowering tops, and that is  
              cultivated and processed exclusively for the purpose  
              of producing the mature stalks of the plant, fiber  
              produced from the stalks, oil or cake made from the  
              seeds of the plant, or any other compound,  
              ----------------------
          <7>  Marijuana is defined as "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.  (Health & Saf. Code  11018.)




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              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.

              Industrial hemp shall include products imported under  
              the first revision of the 2007 Harmonized Tariff  
              Schedule of the United States (HTSUS), [including  
              hemp seed, et cetera, as specified].

          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).)

          6.  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  




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          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.  In particular, this bill provides that marijuana does not  
          include industrial hemp.  Such a distinction does not appear to  
          exist in 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 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.  




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          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  
          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  




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          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 may be 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 if the THC content of the  
          in the "dried flowering tops" of the plant does not exceed 0.3%.

          7.  The Hemp Industries Cases and White Plume Case  

          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;  
          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  




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          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.

          The Federal 8th Circuit Court of Appeals has ruled that  
          members of the Oglala Sioux Indian tribe on the Pine Ridge  
          Reservation in South Dakota could not grow cannabis plants  
          with less than 1% THC content.  (U.S. v. White Plume (8th  
          Cir. 2006) 447 F.3d 1067.)  Tribal law had been amended to  
          allow the cultivation of industrial hemp, which was defined  
          as cannabis plants that have been traditionally harvested  
          for fiber and seed and that have a THC content under 1%.   
          Further, tribal law excluded from the definition of  
          marijuana, cannabis plants with a THC content under 1%.

          Alex White Plume grew industrial hemp under contract with a  
          hemp processing company.  The federal government  
          confiscated and destroyed the crop.  White Plume grew two  
          more crops that were similarly confiscated and destroyed.    
          The federal government then sought and obtained an  
          injunction to permanently enjoin White Plume from  
          "manufacturing or distributing cannabis."  (Id. at p.  
          1070.)

          The Court of Appeals upheld the injunction, finding that  
          industrial hemp, as defined in the applicable tribal law,  
          was subject to the Controlled Substances Act (CSA).  The  
          court essentially found that federal law bars growing of  
          cannabis plants because whole, growing cannabis plants are  







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          included in the definition of marijuana.<8>  Federal law  
          does exempt from the definition of marijuana the "mature  
          stalks of [cannabis], fiber produced from such stalks, oil  
          or cake made from the seeds of such plant," et cetera,  
          despite the fact that such products or substances contain  
          trace amounts of THC.  The fact that federal law  
          specifically bans synthetic THC did not change the ruling  
          of the court.  Further, the court found no exception in the  
          CSA for cannabis plants containing very low amounts of THC.  
           The court in White Plume noted that other courts have  
          found that banning hemp (cannabis with virtually no THC)  
          served the purpose of making detection of psychoactive  
          versions of the plant, and prosecution of crimes concerning  
          psychoactive cannabis, easier.  (Id. at p. 1072-1073;  
                                                                 citing Hemp Council v. Marshall (1st Cir. 2000) 203 F.3d 1,  
          6.)
          It appears that the state of federal law on industrial hemp  
          is in flux.  Final resolution of the state or federal law  
          may not occur until the United States Supreme Court  
          considers these issues.

          8.  Governor's Veto of AB 1147 (Leno) 2006
           
          In his veto message of AB 1147 last year the Governor  
            stated:

              I appreciate and applaud the Legislature's interest  
              in actually expanding California's economy; however,  
              I am concerned about the impact of the particular  
              type of expansion that is being proposed.  I  
              recognize and am proud of that fact that California  
              is a national and world leader in the production of  
              high-quality agricultural commodities.  Our state has  
              a rich agricultural environment and we must strive to  
              protect and promote farming, ranching and  
              ----------------------
          <8>  As noted in "existing law," above, marijuana is defined in  
          federal law as "all parts of the plant Cannabis sative L.,  
          whether growing or not; the seeds thereof, the resin extracted .  
          . . from the plant; and every compound . . . derivative," et  
          cetera, of such plant.



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              agri-business in California, while preserving natural  
              resources and protecting consumers.

              Given these facts, I would like to support the  
              expansion of a new agricultural commodity in this  
              State.  Unfortunately, I am very concerned that this  
              bill would give legitimate growers a false sense of  
              security and a belief that production of industrial  
              hemp is somehow a legal activity under federal law.

              Under current federal statutes there is no definition  
              of industrial hemp nor is there a distinction between  
              cannabis plants based on Tetrahydrocannabinols (THC)  
              content as delineated in AB 1147.  In fact, under  
              federal law, all cannabis plants, regardless of  
              variety or THC content, are simply considered to be  
              marijuana, which is a federally regulated Schedule I  
              controlled substance.  Any person in the United  
              States that wishes to grow cannabis plants for any  
              purpose, including industrial purposes, must first  
              obtain permission and register with the U.S. Drug  
              Enforcement Administration (DEA).  Failure to do so  
              would be a violation of federal law and could subject  
              an individual to criminal penalties.

              I understand there are several court decisions that  
              may cloud this issue such as Hemp Industries  
              Association v. DEA, 357 F.3d 1012, 1018 (9th Cir.  
              2004) and United States v. White Plume, 447 F.3d 1067  
              (8th Cir. 2006).  Yet, no court has specifically  
              ruled that a live cannabis plant is a non-controlled  
              substance or that farming these plants is not a  
              regulated activity.  As a result, it would be  
              improper to approve a measure that directly conflicts  
              with current federal statutes and court decisions.   
              This only serves to cause confusion and reduce public  
              confidence in our government system.


              Finally, California law enforcement has expressed  




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              concerns that implementation of this measure could  
              place a drain on their resources and cause  
              significant problems with drug enforcement  
              activities.  This is troubling given the needs in  
              this state for the eradication and prevention of drug  
              production.

              In the future, I would encourage the Legislature to  
              work with state and federal law enforcement agencies  
              to craft a measure that would reduce the burden on  
              law enforcement agencies and would comply with  
              federal law in order to avoid the unnecessary  
              prosecution of unwitting individuals in this state.































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          9.  Argument in Opposition  

          The California Narcotic Officers' Association argues in  
          opposition:

              The California Narcotic Officers' Association  
              strongly opposes AB 684.  First, cultivation of hemp  
              is illegal in the United States.  The prohibition is  
              found in federal law, which would be unaffected by  
              passage of AB 684.  Even Eric Steenstra, President of  
              Vote Hemp, has admitted that "under current national  
              drug control policy, industrial hemp can be imported,  
              but it cannot be grown by American farmers."  (Vote  
              Hemp news release February 13, 2007.)  It was the  
              unassailable fact that federal law prohibits the  
              cultivation of hemp that contributed to Governor  
              Schwarzenegger's veto of AB 1147 last legislative  
              session.  Since that time, nothing has changed with  
              respect to federal law.

              Proponents argue that the recent Ninth Circuit ruling  
              in Hemp Industries v. DEA permits the cultivation of  
              industrial hemp.  This is not correct.  That case was  
              decided on narrow procedural grounds which found that  
              DEA had not followed its own rules in ordering  
              destruction of hemp related products.  The best  
              evidence of this fact is that Congressman Paul has  
              introduced a federal bill to legalize hemp  
              cultivation.

              There are sound public policy reasons for prohibiting  
              the cultivation of hemp.  Hemp is indistinguishable  
              from marijuana.  Its cultivation will compromise  
              marijuana enforcement, as is established by  
              photographs we have submitted.  The burdens this will  
              place on law enforcement are simply incalculable.   
              Enforcement operations will have to await lab tests  
              prior to taking any action.  Due to laboratory  
              backups, marijuana enforcement will likely be  




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              curtailed, although large criminal combines are  
              firmly ensconced in marijuana production.  Hemp could  
              be a useful device by drug traffickers to evade  
              detection:  A marijuana producer might grow a portion  
              of his/her grow area in hemp (the THC reduction  
              caused by hemp-marijuana cross pollination, contrary  
              to assertions of proponents, does not occur in a  
              plant's first generation) to fool law enforcement.

               Proponents incorrectly argue (with a vigor that calls  
               to mind the patent medicine salesmen of the old west)  
               that hemp cultivation will be a virtual economic and  
               ecological panacea.  According to Dr. Valerie  
               Vantreese-Askren, Professor of Agricultural Economics,  
               hemp will remain a niche product.  American farmers  
               will not be able to compete against heavily subsidized  
               Chinese and European hemp producers.  Dr. Hayo M. G.  
               van der Werf, with the French Institute of Agronomic  
               Research, and former editor of the Official Journal of  
               the International Hemp Association, has stated that  
               many of the claims for hemp's benefits are  
               "inaccurate" and "may be due to the emotional  
               commitment many individuals have in making this a  
               viable crop."  Finally, European production of hemp  
               has reduced significantly over the last decade.



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