BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 566
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          Date of Hearing:  June 25, 2013
          Counsel:       Stella Choe


                         ASSEMBLY COMMITTEE ON PUBLIC SAFETY
                                 Tom Ammiano, Chair

                      SB 566 (Leno) - As Amended:  June 19, 2013


           SUMMARY  :  Allows the regulated cultivation and processing of  
          industrial hemp upon federal approval, as specified.   
          Specifically,  this bill  :

          1)Establishes the California Industrial Hemp Farming Act.

          2)Defines "industrial hemp" as a fiber or oilseed crop, or both,  
            that is limited to nonpsychoactive types of the plant Cannabis  
            sativa L. and the seed produced therefrom, having no more than  
            three-tenths of 1% tetrahydrocannabinol (THC) contained in the  
            dried flowering tops, and that is 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 any other compound,  
            manufacture, salt, derivative, mixture, or preparation of the  
            mature stalks, except the resin or flowering tops extracted  
            therefrom, fiber, oil, or cake, or the sterilized seed of the  
            plant that is incapable of germination.

          3)Revises the definition of "marijuana" to clarify that it does  
            not include industrial hemp, as defined in this bill, except  
            where the plant is cultivated or processed for purposes not  
            expressly allowed.

          4)Defines the "board" as the Industrial Hemp Advisory Board.

          5)Defines the "commissioner" as the county agricultural  
            commissioner.

          6)Defines an "established agricultural research institution" as  
            a public or private institution or organization that maintains  
            land for agricultural research, including colleges,  
            universities, agricultural research centers, and conservation  
            research centers.









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          7)Defines the "secretary" as the Secretary of Food and  
            Agriculture.

          8)Defines a "seed breeder" as an individual or public or private  
            institution or organization that is registered with the  
            commissioner to develop seed cultivars intended for sale or  
            research.

          9)Defines a "seed cultivar" as a variety of industrial hemp.

          10)States that there is in the Department of Food and  
            Agriculture an Industrial Hemp Advisory Board.

          11)Requires the board to consist of 11 members, appointed by the  
            secretary as follows:

             a)   Three of the board members shall be growers of  
               industrial hemp that are registered pursuant to the  
               provisions of this bill. A member of the board who is a  
               grower of industrial hemp shall be a representative of at  
               least one of the following functions:

               i)     Seed production;

               ii)    Seed condition;

               iii)   Marketing; or,

               iv)    Seed utilization.

             b)   Two of the board members shall be members of an  
               established agricultural research institution;

             c)   One member of the board shall be a law enforcement  
               representative who has experience or a background in  
               agricultural issues;

             d)   One member or the board shall be a county agricultural  
               commissioner.

             e)   One member of the board shall be a representative of the  
               Hemp Industries Association or its successor  industry  
               association;

             f)   One member of the board shall be a representative of  








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               industrial hemp product manufacturers;

             g)   One member of the board shall be a representative of  
               businesses that sell industrial hemp products; and,

             h)   One member shall be a member of the public.

          12)States that the members of the board shall be subject to  
            conflict-of-interest provisions related to financial interest.

          13)Limits the term for a board member to three years.

          14)Provides that the board shall advise the secretary and may  
            make recommendations on all matters pertaining to this bill,  
            including, but not limited to, industrial hemp seeds laws and  
            regulations, enforcement, annual budgets required to  
            accomplish the purposes of this bill, and the setting of an  
            appropriate assessment rate necessary for the administration  
            of the provisions in this bill.

          15)Requires the board to meet at least once a year to review  
            budget proposals and fiscal matters related to the proposals.

          16)Requires the secretary to establish and maintain a list of  
            approved seed cultivars for industrial hemp and determine  
            whether the seed cultivar is viable for grain cultivar, fiber  
            cultivar, or as a dual purpose crop, and states that the list  
            shall include specified varieties.

          17)States that, except for an established agricultural research  
            institution, and before cultivation, a grower of industrial  
            hemp for commercial purposes shall register with the  
            commissioner of the county in which the grower intends to  
            engage in industrial hemp cultivation.

          18)States that, except for an established agricultural research  
            institution, and before cultivation, a seed breeder shall  
            register with the commissioner of the county in which the seed  
            breeder intends to engage in industrial hemp cultivation.

          19)Specifies the application procedures for a seed breeder and a  
            grower of industrial hemp to register with the commissioner of  
            the county.

          20)Requires the commissioner to transmit information collected  








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            during the application process to the Department of Food and  
            Agriculture.

          21)Requires the Department of Food and Agriculture to establish,  
            and each commissioner to collect an assessment rate to be paid  
            by growers of industrial hemp for commercial purposes and seed  
            breeders, not including an established agricultural research  
            institution, to defray the reasonable costs of each  
            commissioner in implementing and enforcing these provisions.

          22)States that the commissioner of each county shall process  
            registrations and renewals within his or her county as  
            economically as possible.  A renewal fee shall not exceed more  
            than one-half of the registration fee. 

          23)States that, except when grown by an established agricultural  
            research institution or seed breeder, industrial hemp shall be  
            grown only as a densely planted fiber or oilseed crop, or  
            both, in acreages of not less than five acres, and no portion  
            of an acreage of industrial hemp shall include plots of less  
            than one contiguous acre. 

          24)Prohibits ornamental and clandestine cultivation, as well as  
            the pruning, culling, and tending of individual plants, of  
            industrial hemp. 

          25)Requires all plots to have adequate signage indicating they  
            are industrial hemp.

          26)Provides that industrial hemp shall include products imported  
            under the Harmonized Tariff Schedule of the United States  
            (2013) of the United States International Trade Commission.

          27)Requires, except when industrial hemp is grown by an  
            established agricultural research institution, a registrant  
            who grows industrial hemp under this section to obtain a  
            laboratory test report indicating the THC levels of a random  
            sampling of the dried flowering tops of the industrial hemp  
            grown before the harvest of each crop and as provided below:

             a)   Sampling shall occur as soon as practicable when the THC  
               content of the leaves surrounding the seeds is at its peak  
               and shall commence as the seeds begin to mature, when the  
               first seeds of approximately 50% of the plants are  
               resistant to compression;








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             b)   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;

             c)   The laboratory test report shall be issued by a  
               laboratory registered with the federal Drug Enforcement  
               Administration, shall state the percentage content of THC,  
               shall indicate the date and location of samples taken, and  
               shall state the Global Positioning System coordinates and  
               total acreage of the crop.  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;

             d)   If the laboratory test report indicates a percentage  
               content of THC that is equal to or less than three-tenths  
               of 1%, the laboratory shall 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;

             e)   If the laboratory test report indicates a percentage  
               content of THC that is greater than three-tenths of 1% and  
               does not exceed 1%, the registrant that grows industrial  
               hemp shall submit additional samples for testing of the  
               industrial hemp grown;

             f)   A registrant that grows industrial hemp shall destroy  
               the industrial hemp grown upon receipt of a first  
               laboratory test report indicating a percentage content of  
               THC that exceeds 1% or a second laboratory test report  
               indicating a percentage content of THC that exceeds  
               three-tenths of 1% but is less than 1%.  If the percentage  
               content of THC exceeds 1%, the destruction shall take place  
               within 48 hours after receipt of the laboratory test  
               report.  If the percentage content of THC in the second  








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               laboratory test report exceeds three-tenths of 1% but is  
               less than 1%, the destruction shall take place as soon as  
               practicable, but no later than 45 days after receipt of the  
               second test report;

             g)   The above paragraph does not apply to industrial hemp  
               grown by an established agricultural research institution  
               or seed breeder 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% THC limit  
               established in this section;

             h)   A registrant that intends to grow industrial hemp and  
               who complies with this section shall not be prosecuted for  
               the cultivation or possession of marijuana as a result of a  
               laboratory test report that indicates a percentage content  
               of THC that is greater than three-tenths of 1% but does not  
               exceed 1%;

             i)   The above paragraph does not apply to industrial hemp  
               grown by an established agricultural research institution.   
               Established agricultural 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% THC limit established in this section;  
               and,

             j)   Except for an established agricultural research  
               institution, a registrant that grows industrial hemp shall  
               retain an original signed copy of the laboratory test  
               report for two years from its date of sampling, make an  
               original signed copy of the laboratory test report  
               available to the department, the commissioner, or law  
               enforcement officials or their designees upon request, and  
               shall provide an original copy of the laboratory test  
               report to each person purchasing, transporting, or  
               otherwise obtaining from the registrant that grows  
               industrial hemp the fiber, oil, cake, or seed of the plant.

          28)Provides that all of the following are prohibited:

             a)   The possession, outside of a field of lawful  








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               cultivation, of resin, flowering tops, or leaves that have  
               been removed from the hemp plant, except as is necessary to  
               perform testing as specified;

             b)   Any ornamental or clandestine cultivation of the  
               industrial hemp plant; 

             c)   Any pruning, culling, or tending of individual  
               industrial hemp plants, except when the action is necessary  
               to perform the THC testing as specified; and, 

             d)   Any cultivation of industrial hemp in acreages 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 or seed breeder.

          29)Mandates, not later than January 1, 2019, or five years after  
            the provisions of this bill are authorized under federal law,  
            whichever is later, the Attorney General to report to the  
            Assembly and Senate Committees on Agriculture and the Assembly  
            and Senate Committees on Public Safety the reported incidents,  
            if any, of the following:

             a)   A field of industrial hemp being used to disguise  
               marijuana cultivation; or,

             b)   Claims in a court hearing by persons other than those  
               specifically exempted that marijuana is industrial hemp.

          30)States pursuant to existing law, this section related to the  
            Attorney Generals' report is repealed on January 1, 2023, or  
            four years after the date that the report is due, whichever is  
            later.

          31)Requires, not later than January 1, 2019, or five years after  
            the provisions of this bill are authorized under federal law,  
            whichever is later, the board, in consultation with the Hemp  
            Industries Association, to report the following to the  
            Assembly and Senate Committees on Agriculture and the Assembly  
            and Senate Committees on Public Safety:

             a)   The economic impacts of industrial hemp cultivation,  
               processing, and product manufacturing in California; and,









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             b)   The economic impacts of industrial hemp cultivation,  
               processing, and product manufacturing in other states that  
               may have permitted industrial hemp cultivation.

          32)States that these provisions shall not become operative  
            unless authorized under federal law.

          33) Requires, if these provisions become operative, the Attorney  
            General to issue an opinion on the extent of authorization  
            under federal law and California law, the operative date of  
            those provisions, and whether federal law imposes any  
            limitations that are inconsistent with these provisions.

          34)States that the Attorney General shall post the opinion on  
            its Internet Web site.

          35)Makes various legislative declarations and findings on  
            industrial hemp.

           EXISTING LAW  : 

          1)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 and Safety Code (HSC)  
            Section 11018.]

          2)States that except as otherwise provided by law, every person  
            who plants, cultivates harvests, dries, or processes, any  
            marijuana, or any part thereof, except as otherwise provided  
            by law, shall be punishable by imprisonment in the county jail  
            as specified.  (HSC Section 11358.)

          3)States that except as otherwise provided by law, every person  
            that possesses marijuana for the purposes of sale shall be  
            punished by imprisonment in the county jail as specified.   
            (HSC Section 11359.)









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          4)Provides, except as authorized by law, every person who  
            possesses any concentrated cannabis shall be punished by  
            imprisonment in the county jail for a period of not more than  
            one year or by a fine of not more than $500, or by both such  
            fine and imprisonment, or shall be punished by imprisonment in  
            the county jail as specified. [HSC Section 11357(a).]

          5)States that except as authorized by law, every person who  
            possesses not more than 28.5 grams of marijuana, other than  
            concentrated cannabis, is guilty of an infraction punishable  
            by a fine of not more than $100.  [HSC Section 11357(b).]

          6)States that except as authorized by law, every person who  
            possesses more than 28.5 grams of marijuana, other than  
            concentrated cannabis, shall be punished by imprisonment in  
            the county jail for a period of not more than six months or by  
            a fine of not more than $500, or by both such fine and  
            imprisonment.  [HSC Section 11357(c).]

           EXISTING FEDERAL LAW  :

          1)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).]

          2)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 high potential for abuse.  (21 U.S.C. Section 812.)

          3)Lists marijuana as a schedule I controlled substance.   
            (21.U.S.C. Section 812.)

          4)Lists THC as a separate schedule I substance.  (21 U.S.C.  
            Section 812.)  As clarified by case law, THC in Schedule I  
            applies only to synthetic THC, because "if naturally-occurring  








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            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. Drug  
            Enforcement Administration (9th Cir. 2004) 357 F.3d 1012,  
            1015.]

          5)Provides, in the supremacy clause, that if federal law has  
            preempted state law, either expressly or implied, then state  
            law is required to yield.  (US Constitution, Article 6, Clause  
            2.)

          6)Provides in the Commerce Clause that Congress has the  
            exclusive authority to manage commerce between the states,  
            with foreign nations, and Indian tribes.  (US Constitution  
            Article 1, Section 8, Clause 3.)

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

           1)Author's Statement  :  According to the author, "SB 566 will  
            allow California farmers to be one of the most prepared  
            farmers in America to grow hemp once the federal government  
            allows it.  Industrial hemp is a variety of the species  
            Cannabis sativa L. that has no psychoactive qualities because  
            it contains less than three-tenths of one percent THC.  Even  
            though it is a distant cousin of marijuana, which ranges from  
            three to 15 percent THC content, industrial hemp is not a drug  
            and it is not marijuana.

            "This bill creates jobs.  California companies account for  
            over 50 percent of the revenues of the United States retail  
            market for hemp products which is approximately $500 million  
            and growing.  California hemp cultivation will create the need  
            for hemp seed and fiber processing facilities.  With so many  
            California-based hemp industry companies, investors will take  
            the opportunity to support the development of hemp processing  
            operations that would employ numerous Californians.  

            "Hemp is an extremely beneficial crop for farmers.  Because it  
            grows in dense groves, hemp is a smother crop that requires  
            little or no pesticides or herbicides.  Hemp is also a great  
            rotation crop as it leaves nutrients in the soil for the next  
            crop.









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            "Because of the perceived similarity to marijuana, industrial  
            hemp has not been grown in United States since the 1950s;  
            however, the two 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 to a height up  
            to 16 feet.  It is planted in densities of 100 to 300 plants  
            per square yard.  Marijuana is a tropical variety of cannabis  
            that usually grows to a height of six feet and has been bred  
            to have many branches to maximize flowering and minimize  
            seeding.  Unlike hemp, marijuana is planted with wide spaces  
            between plants to maximize flowering. 

            "Because this bill is operative only upon federal approval,  
            there are no conflicts with federal law.  Federal approval may  
            take several different forms including a federal  
            administrative waiver or a change in federal law.  The  
            Industrial Hemp Farming Act of 2013 (H.R. 525 and S. 359) has  
                                   been introduced in both houses of Congress with bipartisan  
            support including strong support from Senate Majority Leader  
            Mitch McConnell and Senator Rand Paul.  If the current federal  
            legislation passes, the federal government will defer to  
            states to regulate hemp cultivation.  

            "SB 566 provides the necessary framework, provisions and  
            regulations for California hemp cultivation.  Once federal  
            permission for cultivation is given, the Attorney General will  
            issue an opinion on the extent of federal approval and will  
            note whether federal law imposes any limitations that are  
            inconsistent with the provisions of this bill.  The Attorney  
            General will then post the opinion on their website.  From  
            there, the provisions of the bill outline the cultivation  
            requirements and restrictions.

            "Before planting, farmers must register with their County  
            Agricultural Commissioner and give basic information about the  
            cultivation plot location and what type of California  
            Department of Food and Agriculture-approved hemp they will  
            grow.  In addition, hemp must be grown in a minimum of five  
            continuous acres and farmers must post signage surrounding the  
            field of cultivation to indicate that industrial hemp is grown  
            and not anything else.  Similar requirements are in place in  
            Canada and have been effective in thwarting people from  
            stealing crops.

            "This bill also contains a number of safeguards to ensure that  








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            hemp crops meet the three-tenths of one percent THC.  Prior to  
            harvest, growers must obtain a laboratory test report from a  
            federal DEA registered laboratory documenting the THC content  
            of their crop, the size of the acreage, and its G.P.S.  
            location.  Farmers must retain a copy of the 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 oil, fiber, or seed of the plant. If  
            you do not pass the test, you cannot sell your product.

            "SB 566 ensures that law enforcement will not be negatively  
            impacted.  Under the terms of this bill, all flowering tops of  
            the industrial hemp plant, which have no legal commercial  
            application, are not permitted if removed from the field of  
            cultivation.  Although hemp flowers have no psychoactive  
            effect, this relieves law enforcement of any need to  
            distinguish hemp from marijuana.  For these reasons, the bill  
            enjoys the support of the California State Sheriffs'  
            Association.

            "Five years after federal approval, the Attorney General will  
            report to the Legislature on any law enforcement impacts of  
            industrial hemp cultivation and the Industrial Hemp Advisory  
            Board, which is in place to advise the Secretary of the  
            California Department of Food and Agriculture on issues  
            related to hemp, is also required to report to the Legislature  
            regarding the economic impacts of hemp cultivation.
             
            "All together, these provisions lay the necessary groundwork  
            for California farmers to be prepared for the federal  
            government's allowance of hemp cultivation and to quickly  
            begin meeting the needs and demands of California businesses  
            and consumers.  Adding no cost to law enforcement efforts,  
            industrial hemp will provide a huge benefit to farmers,  
            manufacturers, and the environment and will create jobs."

           2)Uses for Hemp  :  In 2002, researchers at Purdue University  
            published an exhaustive study of the potential value for hemp  
            cultivation in the United States.  (See  
            .)  The study noted hemp "is  
            extremely unusual in the diversity of products for which it is  
            or can be cultivated." 









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             a)   Oilseeds:  Hemp seeds produce nutritious oil, high in  
               fatty acids found in fish oils.  "[T]hese essential fatty  
               acids . . . [serve] 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.

             b)   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.

             c)   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.  

             d)   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. 

             e)   Building Construction Products:  Hemp is increasingly  
               used for insulation in Europe.  Hemp fiberboard is strong  
               and hemp could be used in high-quality concrete and  
               building products.  

             f)   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.

             g)   Soil Erosion Control:  Hemp materials are useful to  
               control erosion and are good alternatives to plastics for  
               weed control and planting material.

             h)   Cosmetics:  Hemp is popularly used in shampoo, soaps and  
               lotions.  

             i)   Biofuels Potential:  Researchers in Europe have touted  
               hemp biofuels. 









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             j)   Ecological Benefits of Hemp:  Hemp is well suited for  
               organic agriculture, and is much less "ecotoxic" than most  
               other crops.  Pesticides and fungicides are usually  
               unnecessary.

           3)Congressional Study  :  In December, 2010, a Congressional  
            Research Study on Hemp as an Agricultural Commodity was  
            released (see )  
            and provided an overview of Cannabis varieties and a  
            comparison of hemp and marijuana:   

           "There are many different varieties of cannabis plants.   
            Marijuana and hemp come from the same species of plant,  
            Cannabis sativa, but from different varieties or cultivars.   
            However, hemp is genetically different and is distinguished by  
            its use and chemical makeup.  

           "Hemp . . . is characterized by plants that are low in THC  
            (delta-9 tetrahydrocannabinol, marijuana's primary  
            psychoactive chemical).  THC levels for hemp are generally  
            less than 1%.  

           "Marijuana refers to the flowering tops and leaves of  
            psychoactive cannabis varieties, which are grown for their  
            high content of THC.  Marijuana's high THC content is  
            primarily in the flowering tops and to a lesser extent in the  
            leaves.  THC levels for marijuana are much higher than for  
            hemp,  and are reported to average about 10%; some sample  
            tests indicate THC levels reaching 20%- 30%, or greater. 

           "A level of about 1% THC is considered the threshold for  
            cannabis to have a psychotropic effect or an intoxicating  
            potential."  (2010 CRS, Hemp as an Agricultural Commodity, p.  
            1.)
           
          4)Governor's Veto of SB 676  :  SB 676 (Leno), of the 2011-12  
            Legislative Session, would have authorized a five-county pilot  
            project with respect to the cultivation and processing of  
            industrial hemp.  SB 676 was vetoed.  In his veto message, the  
            Governor stated:

          "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  








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            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."

          In order to address the Governor's concerns expressed in his  
            veto message and concerns over federal preemption raised in  
            veto messages in AB 684 (Leno), of the 2007-08 Legislative  
            Session and AB 1147 (Leno), of the 2005-06 Legislative  
            Session, SB 566 includes a provision that states that the bill  
            will only become operative upon federal approval.  This  
            approval could be obtained through a federal waiver or a  
            change in federal law.  Two bills have been introduced in  
            Congress, H.R. 525 and S. 359, that would exclude industrial  
            hemp from the definition of marijuana and allow individuals to  
            grow or process industrial hemp in accordance with state law.

           5)Argument in Support  :   Vote Hemp  (a co-sponsor of this bill)  
            writes, "Markets for hemp products in the United States are  
            growing rapidly including foods, bodycare, textiles and  
            composites. According to SPINS, retail sales of hemp food and  
            body care products in the stores they track grew by more than  
            16.5% to $52 million in 2012. Mainstream companies like Ford,  
            Daimler Chrysler, Calvin Klein and Adidas use hemp in their  
            products. A Zogby poll conducted in 2007 shows 71% of likely  
            voters in California support changing state law to allow  
            California farmers to grow industrial hemp. A number of  
            California companies like Dr. Bronner's, Nutiva and Alterna  
            use imported hemp in their products and want a cheaper  
            domestics source. The Hemp Industries Association estimates  
            that total U.S. retail sales of hemp products in 2012 were in  
            excess of $500 million.

          "Currently one of the largest markets for hemp is in  
            bio-composites. Ford, GM, Daimler Chrysler, Saturn, and BMW  
            are currently using hemp based composites for their door  
            panels, trunks, head liners and other interior parts. Hemp,  
            with its superior tensile strength and light weight, is an  
            outstanding raw material for this potentially huge market.   
            Replacing fiberglass with bio-composite materials is also  
            better for the environment because hemp bio-composites are  








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            recyclable.

          "Unfortunately U.S. businesses can only use imported hemp  
            because of the confusion in our country between  
            non-psychoactive industrial hemp and marijuana.  Passage of SB  
            566 would recognize industrial hemp as distinct in California  
            and we strongly urge members of the California legislature to  
            support it."

           6)Argument in Opposition  :  The  California Narcotic Officers'  
            Association  argues, "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.

          "Grown in the wild, hemp and marijuana are visually  
            indistinguishable.  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 - and beguiling hemp  
            camouflage can enable the cultivator to potentially escape  
            accountability altogether.  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."

           7)Prior Legislation  :  

             a)   SB 676 (Leno), of the 2011-12 Legislative Session, would  
               have authorized an eight-year, five-county pilot project  
               with respect to the cultivation and processing of  
               industrial hemp.  SB 676 was vetoed.

             b)   AB 684 (Leno), of the 2007-08 Legislative Session, would  
               have permitted the cultivation of industrial hemp in  
               California under a pilot program in five counties.  AB 684  
               was vetoed.  

             c)   AB 1147 (Leno), of the 2005-06 Legislative Session,  
               would have permitted the cultivation of industrial hemp in  
               California.  AB 1147 was vetoed.

             d)   AB 388 (Strom-Martin), of the 2001-02 Legislative  








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                                                                  Page  17

               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.  AB 388 was vetoed.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Hemp Industries Association (Co-Sponsor)
          Vote Hemp (Co-Sponsor)
          American Civil Liberties Union
          California Alliance with Family Farmers
          California Certified Organic Farmers
          California State Grange
          California State Sheriffs' Association
          Colorganics, Inc.
          County of Lake
          Dash Hemp Santa Cruz
          Datsusara
          Dr. Bronner's Magic Soaps
          Drug Policy Alliance
          Ecological Farming Association
          HempAware
          Hempteads
          Hemptopia Inc.
          Hempy's Inc.
          Humboldt Traders
          Instituto Laboral de la Raza
          Jungmaven Ltd.
          Kern County Sheriff
          Kings County Sheriff
          Knoll Farms LLC
          Lafe's Natural Body Care
          Nutiva Inc.
          Planning and Conservation League
          Santa Barbara Hemp Company
          The Hemp Road
          The Living Temple
          U.S. Hemp Oil
          United Food & Commercial Workers 8/Golden State
          United Food & Commercial Workers Union Local 5
          United Food & Commercial Workers Western States Council

           Opposition 








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          California Narcotic Officers' Association
          California Police Chiefs Association
          San Diego County Sheriff's Department  

          Analysis Prepared by  :    Stella Choe / PUB. S. / (916) 319-3744