BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 676|
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                                      VETO


          Bill No:  SB 676
          Author:   Leno (D)
          Amended:  8/30/11
          Vote:     21

           
           SENATE AGRICULTURE COMMITTEE  :  5-1, 4/5/11
          AYES:  Rubio, Berryhill, Evans, Vargas, Wolk
          NOES:  Cannella
          NO VOTE RECORDED:  La Malfa

           SENATE PUBLIC SAFETY COMMITTEE  :  5-2, 4/26/11
          AYES: Hancock, Calderon, Liu, Price, Steinberg
          NOES: Anderson, Harman

           SENATE APPROPRIATIONS COMMITTEE  :  6-3, 5/16/11
          AYES:  Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
          NOES:  Walters, Emmerson, Runner

           SENATE FLOOR  :  22-14, 5/31/11
          AYES:  Alquist, Corbett, De León, DeSaulnier, Evans, 
            Hancock, Hernandez, Kehoe, Leno, Lieu, Liu, Lowenthal, 
            Negrete McLeod, Pavley, Price, Rubio, Simitian, 
            Steinberg, Vargas, Wolk, Wright, Yee
          NOES:  Anderson, Blakeslee, Calderon, Cannella, Correa, 
            Dutton, Emmerson, Fuller, Gaines, Harman, Huff, 
            Strickland, Walters, Wyland
          NO VOTE RECORDED:  Berryhill, La Malfa, Padilla, Runner

           ASSEMBLY FLOOR  :  49-22, 9/7/11 - See last page for vote

           SENATE FLOOR :  26-13, 9/8/11
          AYES:  Alquist, Berryhill, Calderon, Corbett, De León, 
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            DeSaulnier, Emmerson, Evans, Hancock, Hernandez, Kehoe, 
            Leno, Lieu, Liu, Lowenthal, Negrete McLeod, Padilla, 
            Pavley, Price, Rubio, Simitian, Steinberg, Vargas, Wolk, 
            Wright, Yee
          NOES:  Anderson, Blakeslee, Cannella, Correa, Dutton, 
            Fuller, Gaines, Harman, Huff, Runner, Strickland, 
            Walters, Wyland
          NO VOTE RECORDED:  La Malfa


           SUBJECT  :    Industrial hemp

          SOURCE  :     Hemp Industries Association
                      Vote Hemp


           DIGEST  :    This bill creates an eight-year, four-county 
          pilot project with respect to the cultivation and 
          processing of industrial hemp.   This bill (1) defines 
          industrial hemp, as specified, (2) redefines marijuana to 
          exclude industrial hemp, (3) allows the closely-regulated 
          cultivation and processing of industrial hemp during the 
          pilot period to conclude on January 1, 2020, (4) imposes a 
          testing regimen to ensure program hemp has no psychoactive 
          properties, (5) implements the pilot project in Imperial, 
          Kern, Kings, and San Joaquin Counties, except as specified, 
          and (6) requires the Attorney General and the Hemp 
          Industries Association to submit reports to the Legislature 
          by January 1, 2018, regarding the economic and law 
          enforcement impacts of industrial hemp cultivation.

           Assembly Amendments  remove Yolo County from the pilot 
          project and makes changes to the laboratory testing and 
          cultivation of industrial hemp.

           ANALYSIS  :    Existing law makes it a crime to engage in any 
          of various transactions relating to "marijuana", as 
          defined, except as otherwise authorized by law, such as the 
          Medical Marijuana Program.  

          Existing federal Drug Enforcement Administration (DEA) 
          regulations provide that any product intended for human 
          consumption containing any measurable quantity of 
          tetrahydrocannabinol (THC) is illegal.  In contrast, the 

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           Hemp Industries  decision explicitly excludes 
          nonpsychoactive hemp from the definition of marijuana.  The 
          federal government has declined to appeal that decision.

          This bill permits the cultivation of industrial hemp in 
          California.  Specifically, this bill:

          1. Defines "industrial hemp" as an agricultural field crop 
             of Cannabis sativa L. with no more than three-tenths of 
             one percent THC (tetrahydrocannabinol) grown exclusively 
             to produce the mature plant stalks and stalk products, 
             oil or cake made from the seeds, and other by-products 
             except the resin or flowering tops.

          2. Clarifies that "industrial hemp" shall include the 
             defined hemp products in the 2007 Harmonized Tariff 
             Schedule of the United States.

          3. Requires, except as specified, that before harvest, 
             industrial hemp growers obtain a laboratory test report 
             of randomly sampled dried flowering tops from a DEA 
             registered laboratory identifying if the crop meets the 
             California industrial hemp limit of no more than 
             three-tenths of one percent and includes the Global 
             Positioning System coordinates and total acreage of the 
             crop.  This report shall be retained by the grower for 
             two years, and be made available to law enforcement 
             officials or their designees upon request.

          4. Provides for the destruction of the crop, as specified.

          5. Prohibits the cultivation, production, or possession of 
             resin, flowering tops, or leaves removed from the field 
             and separate from the rest of the plant.  The only 
             exception to this prohibition is for the purposes of 
             sampling for the required laboratory test of the 
             flowering tops.  Samples to perform the test shall be 
             taken in the presence of, and shall be collected and 
             transported only by, an employee or agent of a 
             laboratory registered with the DEA.  

          6. Prohibits transportation or sale of any Cannabis sativa 
             L. seed capable of germination across state borders 
             except as permitted by federal law. 

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          7. Specifies that industrial hemp may only be grown for 
             research or as an agricultural field crop.

          8. Requires industrial hemp farmers to post signs 
             identifying the crop, as specified.

          9. Requires the destruction of hemp within 48 hours if the 
             first laboratory test results indicate a THC content 
             over 1%, and the destruction of the hemp within 45 days 
             if a second laboratory test report indicates a THC 
             content over 0.3%.

          10.Requires the Attorney General and the Hemp Industries 
             Association to submit economic and law enforcement 
             impact reports to the Legislature by January 1, 2018.

          11.Makes legislative declarations and findings on 
             industrial hemp.

          12.Provides that the pilot program applies only in 
             Imperial, Kings, Kern, and San Joaquin, except when 
             grown by an established agricultural institution.

          13.Requires industrial hemp to be cultivated only from 
             seeds imported in accordance with laws of the United 
             States or from seeds grown in California from industrial 
             hemp plants or grown from industrial hemp plants grown 
             by an established agricultural research institution.

          14.Sunsets on January 1, 2020.

           Background  

          "Industrial hemp" or "hemp" refers to low-level 
          psychoactive chemical THC varieties of Cannabis sativa L.  
          For centuries, countless consumer and industrial products 
          have been produced from hemp around the world.  Despite its 
          many uses, hemp is commonly lost in the shadow of its 
          famous Cannabis relative "marijuana" most commonly used as 
          a narcotic due to its high THC content.

          The government began to exercise control of the production 
          of Cannabis plants beginning in 1937, with the federal 

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          Marijuana Tax Act.  After World War II, competition from 
          synthetic fibers and a growing anti-drug public resulted in 
          the decline of hemp production.  In 1970, the federal 
          Controlled Substances Act tightly restricted all Cannabis 
          plants regardless of THC content.  This resulted in all 
          hemp and hemp products being imported or manufactured from 
          imported hemp.  

          In 1998, Canada, a growing exporter of hemp to California, 
          lifted their 50-year ban on industrial hemp cultivation.  
          Farmers could grow hemp only after meeting specific 
          registration requirements such as registering the location 
          of each hemp field and certifying that the THC levels of 
          the plant are not more than .3% of the weight of leaves and 
          flowering parts. 

          The DEA is the federal agency that determines if any 
          industrial hemp production authorized by state statute is 
          permitted, and enforces standards for the security 
          conditions under which industrial hemp must be grown if 
          permitted.

          In 2004, the United States Ninth Circuit Court ruled that 
          hemp products could be sold legally in the U.S., 
          overturning a DEA regulation attempting to ban all products 
          from sale that contain any amount of THC.  Since this 
          ruling, the federal government has decided not to appeal 
          this decision allowing hemp seed and oil products to be 
          sold and consumed in the United States.

           Prior and Related Legislation
           
          AB 1017 (Ammiano), 2011-12 Session, would have made the 
          penalty for the cultivation of marijuana an alternate 
          felony/misdemeanor.  The bill failed passage on the 
          Assembly Floor.

          AB 684 (Leno, 2007), substantially similar to this bill, 
          would have permitted the cultivation of industrial hemp in 
          California under a pilot program in five counties - Butte, 
          Imperial, Kings, Mendocino, and Yolo.  The bill was vetoed 
          by Governor Schwarzenegger.  In his veto message, the 
          Governor stated that hemp is still considered a cannabis 
          plant regardless of its THC content and, therefore, illegal 

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          under federal law.  Additionally, the Governor stated:  
          "California law enforcement has expressed concerns that 
          implementation of this measure could place a drain on their 
          resources and cause significant problems with drug 
          enforcement activities."

          AB 1147 (Leno, 2006), vetoed by Governor Schwarzenegger, 
          would have permitted the cultivation of industrial hemp in 
          California.  In his veto message, the Governor stated that 
          hemp is still considered a cannabis plant regardless of its 
          THC content and, therefore, illegal under federal law.  

          AB 388 (Strom-Martin, 2002 ), vetoed by Governor Davis, 
          would have requested that the University of California 
          assess the economic opportunities of specialty or 
          alternative fiber crops, including industrial hemp, and 
          report to the Legislature by January 1, 2004.

          HR 32 (Strom-Martin), 1999-2000 Session, would have 
          resolved that "the domestic production of industrial hemp 
          can help protect California's 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."

          Federal legislation introduced in 2005, 2007, and 2009, by 
          Representative Ron Paul, excluded industrial hemp from the 
          definition of marijuana.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Assembly Appropriations Committee, there 
          would be a minor increase in revenues, likely less than 
          $30,000 per year, for the Seed Services Program.  The cost 
          of the report would be minor and absorbable within existing 
          DOJ resources.

          The DOJ indicates that there would not be a significant 
          fiscal impact to them as a result of this bill.

           SUPPORT  :   (Verified  9/7/11)

          Hemp Industries Association (co-source) 

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          Vote Hemp (co-source) 
          American Hemp Inc. 
          Asher Hemp Gelato 
          Azida, Inc. 
          Business Alliance for Commerce in Hemp 
          California Conference of Machinists 
          California Certified Organic Farmers 
          California State Grange 
          California Teamsters Public Affairs Council 
          Calyx Clothing 
          Colorganics Inc. 
          Community Alliance with Family Farmers 
          Dash Hemp Santa Cruz 
          Dr. Bronner's Magic Soaps 
          Drug Policy Alliance 
          Green Field Paper Company 
          Hemp.com 
          Hemp House 
          Hemp Shield 
          Hemp Technologies 
          Hemp Traders 
          High Grade Distribution 
          Imperial County Farm Bureau 
          Instituto Laboral De La Raza 
          Jungmaven Ltd. 
          Kern County Sheriff 
          Kings County Sheriff 
          Kings County Board of Supervisors 
          Living Harvest Foods 
          Nutiva 
          Santa Barbara Hemp 
          Santori Movement, Inc. 
          Skin & Coat Supplement 
          UFCW- Local 5 
          UFCW - Western States Conference

           OPPOSITION  :    (Verified  9/7/11)

          Association for Los Angeles Deputy Sheriffs
          California Narcotic Officers' Association
          California Peace Officers' Association
          California Police Chiefs Association
          Imperial County District Attorneys
          League of California Cities

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          Riverside Sheriffs' Association

           ARGUMENTS IN SUPPORT  :    According to the author, "SB 676 
          is about job creation and allowing farmers to choose crops 
          that suit their business needs and prospects.  Preventing 
          American farmers from cultivating industrial hemp has 
          created a growing market for other countries to supply the 
          state's food and personal care product manufacturers.  The 
          U.S. imports millions of pounds of hemp fiber, seed and 
          oil.  The current U.S. market for industrial hemp products 
          is $400 million and growing at a rate of $26 million per 
          year.  Of the U.S.-based hemp product companies, more than 
          55 percent are based in California, many of which would 
          expand their business if a local and more economical source 
          of industrial hemp was available.  These are our companies 
          and our farmers should be able to supply them. 

          "In addition to the economic opportunities, hemp is an 
          environmentally-friendly and sustainable crop that reduces 
          the use of chemicals and saves farmers money.  Hemp 
          requires little or no pesticides and herbicides, puts 
          nutrients back into the soil and leaves the field virtually 
          free of weeds making it an excellent rotational crop. As a 
          source for paper, hemp produces more fiber per acre than 
          timber and hemp matures in 90 days as opposed to the 
          decades required for timber.  Hemp can also be used for 
          plywood-type building materials.  Over time, hemp 
          cultivation could allow us to meet an ever growing demand 
          for paper products as well as the demand for building 
          materials traditionally met by timber. 

          "Industrial hemp, by definition, has no psychoactive 
          properties and is distinct from marijuana; however, the 
          bill has been carefully crafted to address concerns of law 
          enforcement.  The bill establishes a limited pilot program 
          and hemp cultivation is permitted only as an agricultural 
          field crop or in an established research setting.  Upon 
          request of law enforcement, farmers must show the lab 
          report verifying that THC level of the crop meets the 
          three-tenths of one percent THC standards.  All crops that 
          fail THC requirement or failure to meet other requirements 
          outlined in the bill be considered marijuana under the law. 
           Although they contain no psychoactive properties and have 
          no legal commercial application, all industrial hemp 

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          flowering tops and leaves that are removed from the field 
          of cultivation are still defined as marijuana in the bill.  
          This ensures that in the event of a drug bust, law 
          enforcement does not need to question if cannabis leaves 
          are hemp or marijuana." 

           ARGUMENTS IN OPPOSITION  :    According to the Association 
          for Los Angeles Deputy Sheriffs, "Hemp is virtually 
          indistinguishable from marijuana, and thus cultivation will 
          seriously undermine the ability of law enforcement to 
          enforce marijuana laws.  Further SB 676 contravenes federal 
          law (21 USC 802) and passage will create confusion to 
          growers who may not understand they would be subject to 
          federal prosecution even if growing hemp were permitted by 
          state law.  Creating physical or legal ambiguity is not 
          good criminal justice policy?"  
           
           GOVERNOR'S VETO MESSAGE:
           
            "I am returning Senate Bill 676 without my signature. 

            This measure would establish a pilot program for the 
            cultivation of industrial hemp in four counties in 
            California. 

            Federal law clearly establishes that all cannabis plants, 
            including industrial hemp, are marijuana, which is a 
            federally regulated controlled substance.  Failure to 
            obtain a permit from the U.S. Drug Enforcement 
            Administration prior to growing such plants will subject 
            a California farmer to federal prosecution. 

            Although I am not signing this measure, I do support a 
            change in federal law.  Products made from hemp - 
            clothes, food, and bath products - are legally sold in 
            California every day.  It is absurd that hemp is being 
            imported into the state, but our farmers cannot grow it."


           ASSEMBLY FLOOR  :  49-22, 9/7/11
          AYES:  Alejo, Allen, Ammiano, Atkins, Beall, Bill 
            Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Butler, Charles Calderon, Campos, Carter, 
            Chesbro, Dickinson, Eng, Feuer, Fong, Fuentes, Galgiani, 

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            Gatto, Gordon, Hall, Hayashi, Roger Hernández, Hill, 
            Huber, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, 
            Mansoor, Mendoza, Mitchell, Monning, Norby, Portantino, 
            Skinner, Smyth, Solorio, Swanson, Valadao, Wieckowski, 
            Williams, Yamada, John A. Pérez
          NOES:  Achadjian, Buchanan, Conway, Cook, Donnelly, 
            Fletcher, Beth Gaines, Garrick, Grove, Hagman, Halderman, 
            Harkey, Jeffries, Jones, Knight, Logue, Miller, Morrell, 
            Nestande, Nielsen, Silva, Wagner
          NO VOTE RECORDED:  Cedillo, Davis, Furutani, Gorell, Olsen, 
            Pan, Perea, V. Manuel Pérez, Torres


          MEL:mw  1/4/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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