BILL ANALYSIS                                                                                                                                                                                                    



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          CONCURRENCE IN SENATE AMENDMENTS
          AB 684 (Leno)
          As Amended August 27, 2007
          Majority vote
           
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          |ASSEMBLY:  |41-29|(May 10, 2007)  |SENATE: |     |(September 11, |
          |           |     |                |        |     |2007)          |
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                                                  (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.








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          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  







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            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  







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            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.








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          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  







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            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  







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            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,







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             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  







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          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  







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          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








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