BILL ANALYSIS AB 684 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 684 (Leno) As Amended August 27, 2007 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |41-29|(May 10, 2007) |SENATE: | |(September 11, | | | | | | |2007) | ----------------------------------------------------------------- (vote not available) Original Committee Reference: PUB. S. SUMMARY : Clarifies the definition of "marijuana" contained in the Uniformed Controlled Substance Act (CSA) to exclude industrial hemp, except where the plant is cultivated or processed for purposes not expressly allowed, as specified. The Senate amendments : 1)Include in the definition of "industrial hemp" products imported under various provisions of the First Revision of the 2007 Harmonized Tariff Schedule of the United States (HTSUS). Specified products include "hemp seed," "hemp oil," "true hemp," "true hemp yarn and woven fabrics of true hemp fibers." 2)Require the laboratory test report, as specified, include the Global Positioning System (GPS) coordinates and the total acreage of the industrial hemp crop. 3)State that the provisions of this bill authorizing the growing of industrial hemp shall only apply in Imperial, Kings, Mendocino, and Yolo Counties, except in the following cases: where industrial hemp raw materials are already legal under federal law, the transportation of seed capable of germination in California, and the transportation of samples for testing at a laboratory registered with the federal Drug Enforcement Administration (DEA), as specified. 4)Require, except when grown by an established agricultural research institution, industrial hemp shall be grown only as a densely planted fiber or oilseed crop in acreage of not less than five acres and no portion of an acreage of industrial hemp shall include plots of less than one contiguous acre. Ornamental and clandestine cultivation, as well as the pruning, culling, and tending of individual plants is prohibited. AB 684 Page 2 5)Define "established agricultural research institution" as a public or private institution or organization that maintains land for agricultural research, including colleges, universities, agricultural centers, and conservation research centers. 6)Provide that samples to perform specified testing shall be collected and transported only by an employee or agent of a laboratory that is registered with the federal DEA. 7)State that a person who purchases industrial hemp seed for planting shall retain the original laboratory test report required by provisions of this bill for two years following the harvest and shall make the test report available for inspection by law enforcement upon request. 8)Mandate that all industrial hemp seed from a crop or source not tested, as specified, shall be planted and cultivated only by an established agricultural research institution if it was produced by feral plants or it is the initial California seed stock of a type of planting seed imported in accordance with the laws of the United States (U.S). 9)Require that if the laboratory test report indicates a percentage content of THC that is equal to or less than three-tenths of 1%, the laboratory must provide the person who requested the testing not less than 10 original copies signed by an employee authorized by the laboratory and shall retain one or more original copies of the laboratory test report for a minimum of two years from its date of sampling. 10)Prohibit a person who intends to grow industrial hemp and complies with the provisions of this bill from being prosecuted for the cultivation or possession of marijuana as a result of a laboratory test report that indicated a percentage content of tetrahydrocannabinol (THC) that is greater than three-tenths of 1% but does not exceed 1%. This shall not apply to industrial hemp grown by an established agricultural research institution. 11)State that established research institutions shall be permitted to cultivate or possess industrial hemp with a laboratory test report that indicates a percentage content of THC that is greater than three-tenths of 1% if that cultivation or possession contributes to the development of types of industrial hemp that will comply with the three-tenths of 1% limit AB 684 Page 3 established by this bill. 12)Specify that any person who grows industrial hemp, as specified, must retain an original signed copy of the laboratory rest report and make an original signed copy available to law enforcement. 13)State that only those employees or agents of the federal DEA for the purposes of performing THC testing may cultivate, produce or possess resin, flowering tops or leaves that have been removed from the field of cultivation and separated from the other constituent parts of the industrial hemp plant. 14)Mandate that not later than January 1, 2012, the Attorney General shall report to the Assembly and Senate Committees on Agriculture and the Assembly and Senate Committee on Public Safety the reported incidents, if any, of the following: a) A field of industrial hemp being used to disguise marijuana cultivation; and, b) Claims in a court hearing by a person other than those exempted, as specified, that marijuana is industrial hemp. 15)Require that not later than January 1, 2012, the Hemp Industries Association shall report to the Assembly and Senate Health Committees on Agriculture and the Assembly and Senate Committees on Public Safety the following: a) The economic impacts of industrial hemp cultivation, processing and product manufacturing in California; and, b) The economic impacts of industrial hemp cultivation, proceeding and product manufacturing in other states that may have permitted industrial hemp cultivation. 16)Declare the assessment of the economic benefits of industrial hemp cultivation and determination of possible impacts on the enforcement of laws prohibiting illicit marijuana cultivation are important concerns; and therefore, it is the intent of the Legislature to assess these benefits and impacts by creating a pilot program for both industrial hemp research by established agricultural research institution and for the agricultural production of industrial hemp in five counties. 17)Include that in the stated intent of the Legislature that law AB 684 Page 4 enforcement not be burdened with THC testing of industrial hemp crops when cultivation is in compliance with existing law, therefore, the cultivation of industrial hemp will be tightly controlled by requiring the following: a) Farmers shall not cultivate industrial hemp in acreages smaller than five acres and no acreage of industrial hemp shall be comprised of plots smaller than one acre. The tending of individual plants as well as ornamental and clandestine cultivation is expressly prohibited; b) Farmers are required prior to harvest to obtain a laboratory test report from a federally registered laboratory documenting that the THC content of their crop is within the legal limit and farmers must destroy crops that fail the THC test; c) Farmers must retain an original copy of the THC test report for the planting seed and the harvested crop for two years, make original copies available to law enforcement officials upon request, and are required to provide one of the original 10 copies to each person purchasing, transporting, or otherwise obtaining the fiber, oil, cake, or seed of the plant from the farmer; d) Although they have no psychoactive effect, any resin, flowering tops, or leaves of the industrial hemp plant that are removed from the lawful field of cultivation shall be, by definition, marijuana and subject to prosecution. Farmers should take care to ensure that all flowering tops and leaves remain in the lawful field of cultivation after the harvest of seed or fiber. There is no lawful reason to harvest, collect, or process the flowering tops of industrial hemp; and, e) Except for an agent or employee of a federally registered laboratory involved in THC testing, no person may lawfully possess the flowering tops or leaves of industrial hemp outside of the field of cultivation and the flowering tops or leaves shall be considered marijuana regardless of whether they are in fact industrial hemp. 18)State that only possession, outside a field of lawful cultivation, of resin, flowering tops, or leaves that have been removed from the hemp plant is prohibited. AB 684 Page 5 19)State that no testing of the flowering tops or leaves of any type of cannabis found outside the lawful field of industrial hemp cultivation need be tested by law enforcement for THC content to determine during a drug seizure if the cannabis in question is marijuana or industrial hemp. 20)Provide that in addition to plant structure, height, and method of planting, the horticultural tending of cannabis plants indicates to law enforcement that it is marijuana and not industrial hemp. Signs of horticultural tending include, but are not limited to, pathways or rows within the field to provide access to each plant, the pruning of individual plants, or the culling of male plants from the field. 21)Include in the list of specified prohibited conduct any ornamental or clandestine cultivation of the industrial hemp plant; any pruning, culling, or tending of individual industrial hemp plant, except when the action is necessary to perform THC testing, as specified; and, any cultivation of industrial hemp in acreage of less than five acres, or any acreage comprised of plots of less than one contiguous acre, except when the industrial hemp is grown by an established agricultural research institution. 22)Create a sunset date of January 1, 2013. AS PASSED BY THE ASSEMBLY , this bill: 1)Defined "industrial hemp" as an agricultural field crop limited to the non-psychoactive varieties of the of the plant Cannabis sativa L., having no more than three-tenths of 1% THC contained in the dry flowering tops and cultivated from seeds originating in California, and processed exclusively for the purpose of producing the mature stalks of the plant fiber produced from the stalks, oil or cake made from the seeds of the plant, or any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin or flowering tops extracted), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. 2)Required industrial hemp shall be cultivated only from seeds imported in accordance with the laws of the U.S. or from seeds grown in California from feral plants, cultivated plants, or plants grown in a research setting. 3)Stated all industrial hemp seed sold for planting in California AB 684 Page 6 shall be from a crop having no more than three-tenths of 1% of THC contained in a random sampling of the dried flowering tops and tested, as specified. 4)Mandated any person who grows industrial hemp shall, prior to the harvest of each crop, obtain a laboratory test report indicating the THC levels of a random sampling of the dried flowering tops of the industrial hemp grown. 5)Stated sampling shall occur as practicable when the THC content of the leaves surrounding the seeds is at its peak and shall commence as the seeds being to mature, when the first seeds of approximately 50% of the plants are resistant to compression. 6)Provided the entire fruit-bearing part of the plant, including the seeds, shall be used as a sample. The sample cut shall be made directly underneath the inflorescence found in the top one-third of the plant. 7)Required the laboratory test report be issued by a laboratory registered with the federal DEA state the percentage content of THC, and indicate the date and location of samples taken. 8)Provided that if the laboratory test report indicates a percentage content of THC that is equal to or less than three-tenths of 1%, the words "PASSED AS CALIFORNIA INDUSTRIAL HEMP" shall appear at or near the top of the laboratory test report. If the laboratory test report indicates a percentage content of THC that is greater than three-tenths of 1%, the words "FAILED AS CALIFORNIA INDUSTRIAL HEMP" shall appear at or near the top of the laboratory test report. 9)Provide that the person who grows industrial hemp shall retain a copy of the laboratory test report for two years from its date of sampling, make the laboratory test report available to law enforcement officials upon request, and shall provide a copy of the laboratory test report to each person purchasing, transporting, or otherwise obtaining the oil, cake, or seed of the plant. 10)Stated that notwithstanding the provisions of this bill, a person may not engage in the cultivation, production, or possession of resin, flowering tops, or leaves that have been removed from the field of cultivation and separated from the other constituent parts of the industrial hemp plant unless it is necessary for a grower, agent of a grower, employee or agent AB 684 Page 7 of an employee of a laboratory registered with the federal DEA to perform the laboratory testing provided by this bill. 11)Stated the requirement to destroy industrial hemp because the laboratory report indicates an unlawful amount of THC shall not apply to industrial hemp grown in a research setting if the destruction of the industrial hemp grown will impede the development of types of industrial hemp that will comply with the three-tenths of 1% of the THC limit. 12)Made the following findings and declarations: a) Industrial hemp is produced in at least 30 nations, including Canada, Great 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; b) The U.S. Court of Appeals for the Ninth Circuit has ruled in Hemp Industries Association v. Drug Enforcement Administration , (9th Cir. 2004) 357 F.3d 1012, that the federal Controlled Substances Act (CSA) of 1970 [21 U.S.C. Sec. 812(b)] explicitly excludes non-psychoactive hemp from the definition of marijuana and the Federal Government has declined to appeal that decision; c) The Controlled Substances Act of 1970 specifies the findings to which the government must attest in order to classify a substance as a Schedule I drug and those findings include that the substance has a high potential for abuse, has no accepted medical use, and has a lack of accepted safety for use, none of which apply to industrial hemp; d) According to a study commissioned by the Hemp Industries Association, sales of industrial hemp products in the U.S. have grown steadily since 1990 to more than $270 million in 2005, increasing at a rate of approximately $26 million per year; e) 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 the intermediate processing of hemp seed, oil, and fiber could create jobs in close proximity to the fields of cultivation; and, AB 684 Page 8 f) In 1999, the Assembly passed House Resolution 32, which resolved that "the domestic production of industrial hemp can help protect California environment, contribute to the growth of the state economy, and be regulated in a manner that will not interfere with the enforcement of marijuana laws." FISCAL EFFECT : DOJ estimates any enforcement costs related to this bill would be minor and absorbable and that its ongoing efforts to combat marijuana propagation (Campaign Against Marijuana Planting) would remain unaltered by this bill. DOJ further contends that this bill, as currently drafted, does not create a "hemp defense" for marijuana growers and that local law enforcement would be able to prosecute marijuana cultivation cases in the four hemp-producing counties without relying on DOJ for THC testing. To the extent that local law enforcement agencies make such referrals in the future, DOJ indicated a reevaluation of such costs might be necessary. In terms of litigation expenses, DOJ did not reflect any such costs associated with this bill. DOJ indicated that the event this bill is challenged in court, it might incur costs for additional deputy attorneys general, but reporting costs ahead of such litigation was premature. DOJ estimates costs to produce a required report of outlining cases of industrial hemp farms used to disguise marijuana plantings will be minor and absorbable. COMMENTS : According to the author, "This bill 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 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, and these products are legally imported into the United States for commercial use. Hemp products are legally sold in all 50 states. Industrial hemp is grown and processed throughout the world for food, body care products, automotive parts, building materials, paper, clothing, canvas, rope, and many other commercial uses. Unique to industrial hemp are the strength of its fibers and the unusually healthy balance of amino acids in the seed oil. The fiber is among the strongest natural fibers in the world and it AB 684 Page 9 can be used to replace wood pulp as well as synthetic fibers in numerous applications. The oil used in foods replaces artery-clogging trans fats with healthy fats necessary for balanced nutrition. " A Fast Growing Industry, But Farmers Left Out : According to a study commissioned by the Hemp Industries Association, the market for industrial hemp products in the United States was $270 million in 2005 and has been growing at a rate of $26 million a year. A large portion of those sales are by California manufacturers of food and personal care products made from hemp seed and oil. These manufacturers must import industrial hemp as a raw material that could be grown by California farmers. Consumers, retailers, manufacturers, and importers are all benefiting from rapidly expanding hemp product sales. The only ones not benefiting are California farmers who are in close proximity to product manufacturing, but are prohibited from growing an otherwise legal agricultural product that is now imported in to California from Canada and other countries. " Significant Agricultural Benefits : However, the agricultural benefits are not limited the versatility of uses. Industrial hemp is an excellent rotational crop because it naturally reduces nematode populations while its dense growth smothers out 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. These benefits save farmers money. " 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. The 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 of several feet 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 carefully 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 AB 684 Page 10 have worked closely with the Farm Bureau to ensure that our regulatory measures make sense for farmers, while also ensuring that industrial hemp production will not impact law enforcement efforts related to illegal growing of marijuana. The bill only permits 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, growers must obtain a laboratory test report from a federal DEA-registered laboratory documenting the THC content of their crop. Farmers must retain a copy of the this test report for two years from its date of sampling; make it available to law enforcement officials upon request; and are required to provide a copy to each person purchasing, transporting, or otherwise obtaining the fiber, oil, cake, or seed of the plant. If you don't pass the test, you can't sell your product. " Spurious Claims That Marijuana Is Hemp Prevented : The valuable part of the marijuana plant is the flowering tops. Under the terms of this bill, all flowering tops of the industrial hemp plant that are removed from the field of cultivation still are 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." Please see the policy committee analysis for full discussion of this bill. Analysis Prepared by : Kimberly Horiuchi / PUB. S. / (916) 319-3744 AB 684 Page 11 FN: 0002601