BILL ANALYSIS Ó
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair S
2011-2012 Regular Session B
6
7
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SB 676 (Leno)
As Amended March 31, 2011
Hearing date: April 26, 2011
Food and Agriculture; Health & Safety Codes
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INDUSTRIAL HEMP
HISTORY
Source: Hemp Industries Association; Vote Hemp
Prior Legislation: AB 684 (Leno) - 2007, vetoed
HR 32 (Strom-Martin) - 1999, adopted
AB 388 (Strom-Martin) - 2002, vetoed
AB 1147 (Leno) - 2006, vetoed
Support: American Hemp Inc.; Asher Hemp Gelato; California
Certified Organic Farmers; California State Grange;
Drug Policy Alliance Green Field Paper Company;
Hemp.com; Hemp House; Hemp Shield; Hemp Traders; High
Grade Distribution; Instituto Laboral De La Raza;
Jugmaven Ltd. Living Harvest Foods; Nutiva; Skin & Coat
Supplement; United Food and Commercial Workers, Local 5
Opposition:California Narcotic Officers' Association; California
Police Chiefs Association
(NOTE: THIS BILL IS ANALYZED AS PROPOSED TO BE AMENDED. SEE
COMMENT #7 FOR A SEPARATE DESCRIPTION OF THE AMENDMENTS.)
KEY ISSUES
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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
0.3% TETRAHYDROCANNABINOL (THC) IN THE DRY FLOWERING TOPS, THAT
IS CULTIVATED AND PROCESSED EXCLUSIVELY FOR PRODUCING MATURE
STALKS OF THE PLANT AND BY-PRODUCTS OF THE STALK AND SEED, AS
SPECIFIED?
(CONTINUED)
SHOULD "MARIJUANA" BE DEFINED IN STATUTE TO EXCLUDE INDUSTRIAL HEMP?
SHOULD A CLOSELY-MONITORED 8-YEAR INDUSTRIAL HEMP CULTIVATION PILOT
PROJECT BE ESTABLISHED IN IMPERIAL, KINGS, KERN, SAN JOAQUIN AND
YOLO COUNTIES, AS SPECIFIED, AND SHOULD THE BILL INCLUDE A JANUARY
1, 2020 SUNSET?
PURPOSE
The purpose of this bill, as proposed to be amended in
Committee, is to create an 8-year pilot project to do the
following with respect to the cultivation and processing of
"industrial hemp": 1) define "industrial hemp," as specified;
2) define marijuana as excluding industrial hemp; 3) allow the
closely-regulated cultivation and processing of industrial hemp
during the pilot period, as specified; 4) impose a testing
regimen to ensure program hemp has no psychoactive properties;
and 5) implement the pilot in Imperial, Kern, Kings, San Joaquin
and Yolo Counties.
Existing federal and California law places controlled
substances in five schedules, ranked by medical benefit and
potential for abuse. Schedule I controlled substances are
deemed to have no medical benefits and a high potential for
abuse. (21 U.S.C. § 812; Health & Saf. Code 11054-11058.)
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Existing federal and California law includes marijuana in
Schedule I. (21 U.S.C. § 812; 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 defines marijuana as 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 lists THC as a Schedule I
substance. (21 U.S.C. 812 (17).) Federal court decisions have
held that 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 contains naturally-occurring THC." (Hemp
Industries v. DEA (2004) 357 F.3d 1012, 1015, quoting a related
case.)
Existing federal Drug Enforcement Administration regulations ,
in contrast to the Hemp Industries decision, provide that any
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product intended for human consumption that contains any
measurable quantity of THC is illegal. (21 CFR part 1308.)<1>
Existing law states that every person who possesses not more
than an ounce of marijuana is guilty of an infraction and shall
be punished by a fine of not more than $100. (Health & Saf.
Code § 11357, subd. (b).)
Existing law provides that cultivation of marijuana is a felony,
punishable by a prison term of 16 months, two years or three
years and a fine of up to $10,000. (Health & Saf. Code §
11358.)
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 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
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<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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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 grower and the laboratory shall each retain an original
copy for at least 2 years.
The report shall be made available to law enforcement upon
request. The report shall prominently state whether it
passed or failed the standard for industrial hemp.
If the report states that the sample passed, the laboratory
shall provide the person who requested the report with at
least 10 original, signed copies.
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
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 as allowed by United States law,
transportation or sale of a seed capable of germination across
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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 authorized
laboratory personnel to test the material for THC content.
This bill provides that industrial hemp farmers shall post signs
identifying the crop, as specified.
This bill includes uncodified legislative findings and
declarations relating to industrial hemp, as specified.
This bill provides that the program in this bill shall apply
only in the Counties of Imperial, Kings, Kern, San Joaquin 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, 2018, 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
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, 2018, 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
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Economic impacts of industrial hemp cultivation,
processing and products in other states.
This bill includes a January 1, 2020 sunset.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
prisons has been the focus of evolving and expensive litigation.
As these cases have progressed, prison conditions have
continued to be assailed, and the scrutiny of the federal courts
over California's prisons has intensified.
On June 30, 2005, in a class action lawsuit filed four years
earlier, the United States District Court for the Northern
District of California established a Receivership to take
control of the delivery of medical services to all California
state prisoners confined by the California Department of
Corrections and Rehabilitation ("CDCR"). In December of 2006,
plaintiffs in two federal lawsuits against CDCR sought a
court-ordered limit on the prison population pursuant to the
federal Prison Litigation Reform Act. On January 12, 2010, a
three-judge federal panel issued an order requiring California
to reduce its inmate population to 137.5 percent of design
capacity -- a reduction at that time of roughly 40,000 inmates
-- within two years. The court stayed implementation of its
ruling pending the state's appeal to the U.S. Supreme Court.
On Monday, June 14, 2010, the U.S. Supreme Court agreed to hear
the state's appeal of this order and, on Tuesday, November 30,
2010, the Court heard oral arguments. A decision is expected as
early as this spring.
In response to the unresolved prison capacity crisis, in early
2007 the Senate Committee on Public Safety began holding
legislative proposals which could further exacerbate prison
overcrowding through new or expanded felony prosecutions.
This bill does not appear to aggravate the prison overcrowding
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crisis described above.
COMMENTS
1. Need for This Bill
SB 676 clarifies that California law permits the
cultivation of industrial hemp, a variety of cannabis
that has no psychoactive qualities because it contains
less than .3 % THC. Marijuana ranges from 3-15% THC
content.
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 for normal commerce.
This bill moves the exemption for legal industrial
hemp products into a new statute defining industrial
hemp and permits its cultivation under restricted
circumstances. Under the bill, the Attorney General
is required to report law enforcement impacts to the
Legislature after five years and the Hemp Industries
Association must report to the Legislature after five
years on the economic affects of the bill.
Industrial hemp will only be permitted in plots
greater than five acres or in research settings. Any
other cultivation will be treated as marijuana,
regardless of THC content. Prior to harvest, farmers
would be required to document the low THC content of
their hemp through a DEA certified laboratory and then
destroy hemp that fails the test. Test results must
be retained and made available to law enforcement.
Hemp has an incredible variety of beneficial uses,
from high-tech use in composite materials for
automobiles to animal bedding. Hemp seeds and oils
make especially nutritious foods and excellent
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skin-care products. Hemp can be used for biofuel.
Hemp fibers have many applications, including
clothing. Hemp has been used for hundreds of years
for rope and paper. The value of the U.S. hemp market
was $400 in 2009, and growing rapidly. California is
the largest hemp market (77% of sales) in the country.
California farmers should be able to profit from
supplying the dynamic market for a truly beneficial
crop.
2. Research Study from Purdue University Concerning Industrial
Hemp - Evaluation of Hemp for Various Applications and Uses
Industrial hemp has received significant attention in recent
years. Researchers at Purdue University published an exhaustive
study of the potential value for hemp cultivation in the United
States.<2> The study noted: Hemp "is extremely unusual in the
diversity of products for which it is or can be cultivated."
Oilseeds : Hemp seeds produce nutritious oil, high in fatty
acids found in fish oils. "İT]hese essential fatty acids ?
İserve] as raw materials for cell structure and as precursors
for biosynthesis?" Hemp oil contains antioxidants known as
"tocopherols." Hemp oils have been used in paints, inks and
other similar industrial and personal applications.
Fiber : Hemp fibers are strong and durable. China leads in
the development of hemp fibers for textiles. Technological
advances will be necessary before North American producers can
successfully compete with Chinese firms.
Pulp and Paper : Hemp is useful for applications such as
currency where strength is needed, but is not currently
competitive with wood pulp for newsprint and general paper
uses.
Plastic Composites for Automobiles and Other Manufacturing
Uses : Light and strong hemp plastic composites may be
particularly valuable. Mercedes currently uses hemp
composites. Rising oil prices may make hemp products
competitive for plastics.
Building Construction Products : Hemp is increasingly used for
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<2> See http://www.hort.purdue.edu/newcrop/ncnu02/v5-284.html.
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insulation in Europe. Hemp fiberboard is strong and hemp
could be used in high-quality concrete and building products.
Animal Bedding and Absorbent Material : Hemp is a superior
material for animal bedding. Absorbent hemp stalk cores can
be used for oil spills and other pollution control uses.
Soil Erosion Control : Hemp materials are useful to control
erosion and are good alternatives to plastics for weed control
and planting material.
Cosmetics : Hemp is popularly used in shampoo, soaps and
lotions.
Biofuels Potential : Researchers in Europe have touted hemp
biofuels.
Ecological Benefits of Hemp : İHemp] is well suited for
organic agriculture, and is much less "ecotoxic" than most
other crops. Pesticides and fungicides are usually
unnecessary.
University of Kentucky Study
The University of Kentucky released a study in 1998 that reached
many of the same conclusions as the Purdue study. The Kentucky
study, however, specifically considered how industrial hemp
could benefit Kentucky. The study noted that hemp had
historically been an important crop in Kentucky. Kentucky
produced one-half on national hemp production in the 1800s.
Kentucky is well-suited for hemp production because of its soil
and relatively long growing season. (Economic Impact of
Industrial Hemp in Kentucky (1998) Center for Business and Econ.
Res., Univ. of Kentucky.) The Kentucky study was funded by the
Kentucky Hemp Museum and Library and the Deni Montana
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Foundation.<3>
3. 2010 Congressional Research Report on Hemp
The Congressional Research Service wrote a hemp economic
analysis in 2010. The report listed the wide uses for hemp
products and noted criticisms that the hemp market for was
limited. However, the report cited the growth of the Canadian
hemp industry: "İS]tudies by Canadian agriculture agencies ?
provide a more positive market outlook, given growing consumer
demand and also certain production advantages to growers, such
as relatively low input and management requirements ?" (CSR,
2010, Hemp as an Agricultural Commodity, p. 10.)
4. The THC Issue
It is generally accepted that the dominant marijuana "high" is
caused by TCH. The prohibition on marijuana is based on the
presence of THC in the flowering tops and leaves. 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 THC - smoking or otherwise ingesting any amount of
hemp could not intoxicate someone.
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.
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<3> The museum describes its mission: "The Kentucky Hemp
Growers Cooperative Museum & Library was established in October
1994, as a non-profit organization, to educate the public about
the cultural, historic and economic importance of the hemp
industry in Kentucky and the United States." According to a
July 4, 1998 article in the Lexington Herald-Leader, the study
cost $23,000. The Deni Montana Foundation appears to be
associated with actor Woody Harrelson.
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The other principal chemical found in cannabis is CBD. CBD
antagonizes (cancels) the effect of THC. CBD is abundant in
industrial hemp, but not in the drug marijuana. A ratio 2:1 CBD
to THC suppresses any intoxicating effect of THC. Industrial
hemp typically has a CBD-THC ratio of 5:1. A person could smoke
a room full of industrial hemp and not become "high."
It appears that 0.3% THC became the standard for industrial hemp
because this level was the standard for French farmers. France,
unlike much of Western Europe, never banned hemp production.
Hemp was also unrestricted in the Soviet Union. Russia has
developed hemp with lower THC content.
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 İdrug 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 İparts per million] in hemp oil, and
below 2 ppm in hulled seeds."<4>
Drug 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.
Arguments have been made that hemp legalization could be the
proverbial camel's nose under the tent leading to marijuana
legalization. This argument appears to assume that the public
would conclude that the benefits of hemp indicate that
marijuana, because it comes from the same species of plant, is
an appropriate and beneficial drug. It does not appear that
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<4> See fn. (2), supra.
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countries that allow hemp cultivation have higher rates of
marijuana consumption than comparable countries that do not.
While many European countries have authorized hemp cultivation
in the last 15 years, marijuana use has not risen with hemp
production. 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 European countries with low rates of
marijuana use allow hemp cultivation. Marijuana consumption
appears to be tied to the urbanization of a country.
5. Legislation Concerning Industrial Hemp in Other Jurisdictions
Several states and the federal government have passed or sought
to pass hemp legislation. The substance of the proposed
legislation has varied, but at least eight states (Hawaii,
Kentucky, Maine, Maryland Montana, North Dakota, Oregon and
Vermont and West Virginia) have sought to remove barriers to the
cultivation of hemp. Hawaii received DEA permission to grow
industrial hemp on a one-quarter acre of government land and
under 24-hour security. 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. (Kolosov, Evaluating The Public Interest: Regulation
Of Industrial Hemp Under The Controlled Substances Act, UCLA Law
Review, Vol. 57, No. 1, 2009, p 253.)
AB 388 (Strom-Martin), of the 2001-2002 Legislative Session,
requested the University of California to conduct a study of
the economic opportunities associated with the production of
alternative fiber crops, including industrial hemp. The bill
was vetoed.
In 2005, 2007 and 2009, Representatives Ron Paul (R-TX)
introduced federal legislation to exclude industrial hemp from
the definition of marijuana.
6. Federal Preemption Issues Flowing from the Definition of
Industrial Hemp in This Bill
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The federal government can regulate state conduct through the
commerce clause of the U.S. Constitution. (Art. I, § 8.)
The Supreme Court has stated that the Congress can supersede
state drug laws because even intrastate drug activity affects
the national and international drug trade. "İA]ny commodity,
be it wheat or marijuana, has a substantial effect on the
supply and demand in the national market for that commodity."
(Gonzales v. Raich (2005) 545 U.S. 1, 19.)
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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? 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%.
In contrast, nothing in federal law defines marijuana in
relation to the level of THC in the plant.
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.
The 8th Circuit Court of Appeals has ruled that members of the
Oglala Sioux Indian tribe on the Pine Ridge Reservation in South
Dakota may not grow cannabis plants with less than 1% THC
content. (U.S. v. White Plume (8th Cir. 2006) 447 F.3d 1067.)
Tribal law defines cannabis plants with a THC content under 1%
as industrial hemp, not marijuana. The court found that
industrial hemp, as defined in tribal law, was subject to the
Controlled Substances Act (CSA). The court essentially found
that federal law defines any cannabis plants as marijuana.<5>
DOES THIS BILL PRESENT SUBSTANTIAL ISSUES CONCERNING THE
INTERPLAY OF STATE AND FEDERAL LAW ON THE DEFINITIONS OF
MARIJUANA AND HEMP?
7. Summary of Author's Proposed Amendments
The author will offer the following amendments in Committee:
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<5> As noted in "existing law," above, marijuana is defined in
federal law as "all parts of the plant Cannabis sativa 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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Amendment No. 1 - Eight-Year Pilot Project in Five Counties
The author proposes that the bill create an 8-year pilot project
in Imperial, Kern, Kings, San Joaquin and Yolo counties. The
pilot project will allow the Legislature to assess the benefits
of industrial hemp before enacting a state-wide program.
The bill also includes a specific January 1, 2020, sunset.
Amendment No. 2 - Signage in Hemp Plots
The author proposes to require hemp farmers to include "adequate
signage" identifying the crop.
Amendment No. 3 - Due Date for Report
The amendments change the due date from January 1, 2107, to
January 1, 2018, for a report by the Attorney General to the
Public Safety committees of the Assembly and Senate regarding
any attempts to disguise marijuana cultivation as hemp and court
claims that marijuana is hemp.
The amendments change the due date from January 1, 2107, to
January 1, 2018, for a report by the Hemp Industries Association
to the Public Safety committees of the Assembly and Senate on
the economic impacts of hemp cultivation, processing and
products in California and nationally.
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