BILL ANALYSIS Ó
SENATE COMMITTEE on AGRICULTURE
Senator Cathleen Galgiani, Chair
BILL NO: SB 566 HEARING: 04/02/13
AUTHOR: Leno FISCAL: Yes
VERSION: 04/01/13 CONSULTANT: Anne Megaro
Industrial hemp
SUMMARY :
This bill would allow hemp to be grown in California, upon
federal approval, by defining "industrial hemp" to be excluded
from the definition of "marijuana," a schedule I controlled
substance. This bill provides for hemp cultivation practices,
laboratory testing, reporting requirements, and regulatory
authority.
BACKGROUND AND EXISTING LAW :
Industrial hemp is a variety of the plant Cannabis sativa L. and
has been grown as a fiber and seed crop for centuries. It is
currently grown in 30 countries including Canada, China, Great
Britain, and several other countries throughout Europe. Hemp
products are available in the U.S. marketplace as components of
goods such as textiles, paper, and body care products. However,
it is illegal to grow hemp in the United States due to its
similar characteristics to marijuana (also a variety of Cannabis
sativa L.) and presence of tetrahydrocannabinol (THC), a
schedule I controlled substance. Therefore, all hemp materials
are grown outside the United States and imported for domestic
use.
Existing state and federal 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 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. Section
802(16); Health and Safety Code § 11018].
Existing state and federal law lists both marijuana and the
hallucinogenic substance found in this plant,
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tetrahydrocannabinol (THC), as schedule I controlled substances
(21 U.S.C. Section 812; Health and Safety Code § 11054).
Existing federal Drug Enforcement Administration regulations: In
2001, the Drug Enforcement Administration (DEA) issued an
interim rule (and final rule in 2003) in regards to hemp
products and stated that any product containing THC is a
schedule I controlled substance, unless the product is
formulated such that THC cannot be used for human consumption.
In addition, no person may cultivate hemp for any purpose (66 FR
51539, Oct. 9, 2001; 68 FR 14119, Mar. 21, 2003; 21 CFA Part
1308).
However, in 2003, the Ninth Circuit Court of Appeals ruled that
the DEA "cannot regulate naturally-occurring THC not contained
within or derived from marijuana - i.e., non-psychoactive hemp
products - because non-psychoactive hemp is not included in
Schedule I" (Hemp Industries Association v. DEA (2004) 357 F.3d
1012).
Congressional Research Service (CRS) Report: In 2012, CRS
issued a report titled "Hemp as an Agricultural Commodity."
This report describes the current state of hemp in the United
States, including production and use, legal status, and
legislative activity. CRS reports that "although marijuana is
also a variety of cannabis, it is genetically distinct from
industrial hemp and is further distinguished by its use and
chemical makeup." The report continues that "nine states have
legalized the cultivation and research of industrial hemp,
including Hawaii, Kentucky, Maine, Maryland, Montana, North
Dakota, Oregon, Vermont, and West Virginia. However, because
federal law still prohibits cultivation, a grower still must get
permission from the DEA in order to grow hemp or face the
possibility of federal charges or property confiscation, despite
having a state-issued permit." Several federal legislative
bills have also been introduced, although none have been signed
into law. (CRS Report RL32725).
PROPOSED LAW :
This bill:
1. Redefines "marijuana" to exclude industrial hemp when
cultivated or processed for defined purposes.
2. Defines "industrial hemp" to mean a nonpsychoactive type
of the plant Cannabis sativa L. that contains no more than
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0.3% THC contained in the flowering tops, and cultivated
and processed exclusively for the purpose of producing the
mature stalks of the plant, fiber produced from the stalks,
oil or cake made from the seeds of the plant, or for other
defined purposes.
3. States findings, declarations, and intent of the
Legislature in regards to industrial hemp and this act.
4. Creates a new division under the Food and Agriculture
Code to specifically address industrial hemp.
a. Provides for cultivation requirements, minimum
acreage, signage, and various plant cultivation
prohibitions to allow visual differentiation between
hemp and marijuana fields, with exceptions for
established agricultural research institutions or seed
breeders.
b. Includes industrial hemp, hemp seed, oil,
yarn, and woven fabrics as products imported under the
Harmonized Tariff Schedule of the United States of the
United States International Trade Commission.
c. Provides that a person who grows industrial
hemp and is not an established agricultural research
institution or seed breeder shall abide by specified
sampling and laboratory testing procedures.
d. Requires that laboratory test reports be
issued by a laboratory registered with the federal DEA
and such reports shall state the percentage content of
THC, the date and location of samples taken, the
Global Positioning System coordinates, and total crop
acreage.
e. Requires that laboratory test reports be
marked with the appropriate test result of "PASSED AS
CALIFORNIA INDUSTRIAL HEMP" or "FAILED AS CALIFORNIA
INDUSTRIAL HEMP" at or near the top of the report. A
"passed" result is a THC level at or below 0.3%
content in a random sample of dried flowering tops of
the industrial hemp grown.
f. Requires the laboratory to provide not less
than 10 original signed copies of the report for the
farmer to 1) retain at least one copy of this report
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for a minimum of two years, and 2) make available
these copies to law enforcement officials and to each
person purchasing, transporting, or otherwise
obtaining from the grower hemp plant materials.
g. Provides that industrial hemp be destroyed if
laboratory testing indicates THC content greater than
0.3%.
h. Provides that a person who grows hemp with THC
content greater than 0.3% not be prosecuted for
cultivation or possession of marijuana.
i. Authorizes the California Department of Food
and Agriculture (CDFA) to regulate the development,
growth, harvesting, and sale of industrial hemp seeds.
j. Authorizes CDFA to promulgate additional
regulations to ensure compliance with this division or
federal law.
aa. Defines "established agricultural research
institution" and "seed breeder."
bb. Prohibits the possession of hemp resin,
flowering tops, or leaves, except as it is necessary
to conduct laboratory testing.
cc. Requires that within a specified timeframe the
Attorney General report to the legislature any
reported incident where marijuana is falsely claimed
to be hemp, or where hemp cultivation is used to
disguise marijuana cultivation. Hemp Industries
Association shall also provide a report on the
economic impacts of industrial hemp cultivation.
dd. Provides that this act not be operative unless
authorized under federal law.
COMMENTS :
Need for this bill: According to the author, this bill "is
necessary to prepare California farmers to grow industrial hemp
immediately following federal approval. The bill will allow
California farmers to take advantage of this economic
opportunity and more quickly meet the demands of California
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businesses and manufacturers for a local source for raw hemp
material."
Market demands: According to the author and sponsors, "the
annual United States retail market for hemp products has grown
steadily since 1990 to approximately $500 million in 2012,
increasing at a rate of about $26 million annually." However,
according to those opposed, "Dr. Vantreese-Askren, who is
recognized as the nation's leading authority on the economics of
hemp cultivation, is dubious about the viability of a hemp
cultivation industry in the United States because American hemp
farmers would be unable to compete with the heavily subsidized
Chinese and European cultivation industries."
Agricultural Benefits : The author states that hemp has strong
agricultural benefits in that "hemp requires little or no
pesticides and herbicides and improves soil conditions making it
an excellent rotational crop which is of particular interest to
organic farmers. Hemp also reduces nematode populations in
rotation with soy crops and is an excellent smother crop leaving
the field virtually free of weeds for the next crop. The
positive role hemp plays in sustainable crop rotations reduces
chemical use and saves farmers money."
Industrial use: According to the author, "the fast maturation
and projection of hemp may help meet the growing demand for wood
products. An acre of hemp produces two to four times more fiber
than an acre of timber and it grows from seeding to maturity in
just 90 days? Additionally, hemp is an alternative to petroleum
to manufacturer platics and may be used as a raw material for
ethanol fuel."
Enforcement concerns: According to those in opposition, "this
bill will undermine law enforcement efforts to curtail marijuana
cultivation and will result in significantly increased costs in
connection with the prosecution of marijuana trafficking cases."
Additionally, "The impact of legalizing hemp will be that
marijuana cultivators will be able to camouflage their illegal
grows with a perimeter of same sex hemp plants. Effectively,
this will require law enforcement to test plants for THC content
before taking any action."
Laboratory costs: According to those in opposition, "Since the
state crime labs currently are not equipped to test for THC
content, they will either have to incur the costs of gearing up
for this function, or local agencies will have to incur the
additional costs of finding a private lab to conduct testing?
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The increased costs for marijuana trafficking prosecutions are
incalculable."
Breeder exceptions : The committee may wish to consider that
given the exceptions provided to "established agricultural
research institutions" and "seed breeders" in this bill, there
may be value in specifically stating that any seed purchased or
acquired from such persons be accompanied by a "PASSED" THC
laboratory analysis.
Double referral: The Senate Rules Committee has doubled referred
this bill to the Senate Committee on Public Safety. Therefore,
if this measure is approved by this committee, the motion should
include an action to re-refer the bill to the Senate Committee
on Public Safety.
AUTHOR AMENDMENTS:
The following amendments were inadvertently left out of the
author's 4/1/13 bill amendment. Therefore, the author will
offer the following amendments in committee:
Amendment 1: On Page 7, in line 32, after "institutions"
insert: or seed breeders
Amendment 2: On page 8, in line 22, after "institution" insert:
or seed breeder
RELATED LEGISLATION :
AB 388 (Strom-Martin) of 2002, Vetoed. Would have requested the
University of California to assess the economic opportunities of
specialty or alternative fiber crops, including industrial hemp,
and report to the legislature by January 1, 2004.
AB 448 (Strom-Martin) of 2001, failed passage in committee.
Would have authorized the secretary of CDFA to issue licenses to
cultivate hemp for commercial purposes.
AB 1147 (Leno) of 2006, Vetoed. 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 684 (Leno) of 2007, Vetoed. Would have permitted the
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cultivation of industrial hemp in California under a pilot
program in four counties. 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.
In addition, "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."
SB 676 (Leno) of 2011, Vetoed. Would have permitted the
cultivation of industrial hemp in California under a pilot
program in four counties. In his veto message, the governor
stated that hemp is still a federally regulated controlled
substance, although "it is absurd that hemp is being imported
into the state, but our farmers cannot grow it."
SUPPORT :
Hemp Industries Association (Sponsor)
Vote Hemp (Sponsor)
American Civil Liberties Union of California
Business Alliance for Commerce in Hemp
California Certified Organic Farmers
California State Grange
California State Sheriffs' Association
California Teamsters Public Affairs Council
Colorganics Inc.
Dash Hemp
Datsusara
Dr. Bronner's Magic Soaps
Drug Policy Alliance
Ecological Farming Association
Hempsteads
Hempy's Inc.
Humboldt Traders
Instituto Laboral de la Raza
Jungmaven Ltd.
Kings County Sheriff David S. Robinson
Knoll Farms
Lafe's Natural BodyCare
The Living Temple
Nutiva, Inc.
Planning and Conservation League
Santa Barbara Hemp Company
United Food & Commercial Workers 8 - Golden State
United Food & Commercial Workers, Western States Council
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US Hemp Oil Inc.
OPPOSITION :
California Narcotic Officers' Association
California Police Chiefs Association