BILL ANALYSIS Ó
SB 566
Page 1
Date of Hearing: August 14, 2013
ASSEMBLY COMMITTEE ON AGRICULTURE
Susan Talamantes Eggman, Chair
SB 566 (Leno) - As Amended: August 7, 2013
SENATE VOTE : 39-0
PUBLIC SAFETY 7-0
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|Ayes:|Ammiano, Melendez, | | |
| |Jones-Sawyer, Mitchell, | | |
| |Quirk, Skinner, Waldron | | |
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| | | | |
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SUBJECT : Industrial hemp.
SUMMARY : Allows the regulated cultivation and processing of
industrial hemp and its seed, upon federal approval, as
specified. Specifically, this bill :
1)Establishes the California Industrial Hemp Farming Act (Act)
and provides Legislative findings and declarations.
2)Creates the following definitions for this Act:
a) Defines "board" as the Industrial Hemp Advisory Board;
b) Defines "commissioner" as the county agricultural
commissioner;
c) 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; and,
d) 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
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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 "secretary" as the Secretary (secretary) of
[California Department of] Food and Agriculture (CDFA).
5)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.
6)Defines a "seed cultivar" as a variety of industrial hemp.
7)Establishes within CDFA an Industrial Hemp Advisory Board
(board) consisting 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 representative of the
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California State Sheriff's Association or other law
enforcement association 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
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.
8)States that the members of the board shall be subject to
conflict-of-interest provisions related to financial interest.
9)Limits the term for a board member to three years and if a
vacancy occurs, requires the secretary to appoint a
replacement member in accordance to member representative
requirements. Provides that member shall not receive a salary
but may be reimbursed for attendance of board activities.
10)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.
11)Requires the board to elect a chair, meet at the call of the
chair or secretary, or the request of four board members, but
must meet at least once a year to review budget proposals and
fiscal matters related to the proposals.
12)Restricts the growing of industrial hemp to the list of
approved seed cultivars, except when grown by an established
agricultural research institution or a registered seed breeder
developing a California cultivar, pursuant to this division.
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13)Establishes the list of approved seed cultivars to include
those certified by member organizations of the Association of
Official Seed Certifying Agencies, including but not limited
to, the Canadian Seed Growers Association and the Organization
of Economic Cooperation and Development. It shall also
include California varieties certified pursuant to state
requirements.
14)Permits the Secretary to update the list of approved seed
cultivars, upon the recommendation by the board or department.
15)Requires 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, except for an established agricultural
research institution. Specifies requirements of registration
including establishment of a fee.
16)Requires 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, except for
an established agricultural research institution. Specifies
requirements of registration including establishment of a fee
and requires the reporting of the information to CDFA.
17)Requires CDFA 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.
18)Requires the commissioner of each county to process
registrations and renewals within his or her county as
economically as possible and each commissioner is to establish
registration and renewal fees, and restricts the renewal fee
to not more than one-half of the registration fee.
19)Requires that, except when grown by an established
agricultural research institution or registered seed breeder
developing a California cultivar, industrial hemp shall be
grown only as a densely planted fiber or oilseed crop, or
both, in acreages of not less than five acres at the same
time, and no portion of the acreage of industrial hemp shall
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include plots of less than one contiguous acre.
20)Requires a registered seed breeder to grow industrial hemp
for purposes of seed production, only as a densely planted
crop in acreages of not less than two acres at the same time,
and no portion of the acreage of industrial hemp shall include
plots of less than one contiguous acre.
21)Prohibits ornamental and clandestine cultivation, as well as
the pruning, culling, and tending of individual plants, of
industrial hemp and requires all plots to have adequate
signage indicating they are industrial hemp.
22)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.
23)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;
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
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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
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
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
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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.
24)Provides that all of the following are prohibited:
a) The possession, outside of a field of lawful
cultivation, of resin, flowering tops, or leaves that have
been removed from the hemp plant, except as is necessary to
perform testing as previously 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.
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25)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.
26)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.
27)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,
b) The economic impacts of industrial hemp cultivation,
processing, and product manufacturing in other states that
may have permitted industrial hemp cultivation.
28)States that these provisions shall not become operative
unless authorized under federal law.
29) 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 and
shall post the opinion on its Internet Web site.
EXISTING LAW defines "marijuana" as "all parts of the plant
Cannabis sativa L., whether growing or not; the seeds thereof;
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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."
Federal law places controlled substances into 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. Marijuana is listed as a schedule I
controlled substance. THC is listed as a separate schedule I
substance. As clarified by case law, 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. Drug Enforcement Administration (9th
Cir. 2004) 357 F.3d 1012, 1015.]
FISCAL EFFECT : According to the Senate Appropriations
Committee, the Department of Food and Agriculture (CDFA)
estimates likely minor costs. The Seed Services Program is
funded on a fee-for-service basis; thus, hemp seeds would be
treated as another kind of seed that has to be labeled in
accordance to the seed law. The planting of marijuana amongst
hemp could lead to more allegations of bad seed and hence seed
complaints that are costly for CDFA to investigate and
administer. However, this likelihood is unknown.
Additionally, the Department of Justice would incur a one-time,
potentially significant General Fund cost to meet the bill's
reporting requirements.
COMMENTS : According to the author, SB 566 seeks to create an
exemption for the cultivation of, and a separate legal
definition for, industrial hemp, and places regulatory
provisions for the production of hemp into statute. These
provisions of the bill become operative only upon federal
approval.
Industrial Hemp is an agricultural crop that is grown and
processed in over 30 countries for paper, clothing, canvas,
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rope, food, personal care products, automotive parts, building
materials, and many other commercial uses. It has no
psychoactive properties in any part of the plant, and is
cultivated as an agricultural field crop. Industrial hemp is
not planted in the same fashion as marijuana; typically hemp is
planted in close spacing and narrow rows, while marijuana is
larger spacing and much wider separation of the rows. The
exception would be when hemp is grown for the development of a
new cultivar or variety, and then plantings may be similar to
marijuana plantings.
According to estimates by the Hemp Industries Association, the
market for industrial hemp products in the United States was
$500 million in 2012 and has been growing at a rate of $26
million a year. A large portion of those sales are by California
manufacturers of food and personal care products made from hemp
seed and oil. .
Although both, marijuana and hemp are members of the Cannabis
sativa L. species, hemp and marijuana are distinct physically
and chemically. Marijuana is a tropical variety of cannabis
that grows to a height of six feet. It has been cultivated to
grow as a bush with many branches and leaves to maximize the
number of flowers where tetrahydrocannabinol (THC) potency is
the strongest. Hemp has an appearance similar to bamboo and has
few branches and leaves. Unlike marijuana, hemp leaves tend to
cluster at the crown of the plant. The most important
distinction between hemp and marijuana is that hemp has less
than three tenths of one percent THC while marijuana contains
three to 25 percent THC.
The federal Drug Enforcement Administration has classified
industrial hemp as a controlled substance. However, in 2004 the
U.S. 9th Circuit Court of Appeals ruled that the Drug
Enforcement Authority (DEA) did not have the authority to
regulate hemp under the Controlled Substances Act of 1970. In
addition, the court clarified that the products produced from
industrial hemp are legal for possession, sale, and consumption
in all parts of the United States. This includes the stalk,
fiber, seed, and oil from the plant. The DEA dropped its appeal
for that decision and the 9th Circuit Court ruling now stands as
U.S. law.
SB 566 is structured to relieve law enforcement of the burden of
having to discern hemp from marijuana in clandestine groves and
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removes any potential federal preemption issues by requiring
federal approval for the provisions of the bill to be operative
and for hemp cultivation to proceed.
Opponents state that industrial hemp cultivation would undermine
law enforcements' efforts to curtail illegal marijuana groves
and would significantly increase cost of such prosecutions.
They state that hemp crops could camouflage illegal plants and
cause law enforcement to test all plants for THC before taking
action, potentially enabling criminals to escape. Additionally,
no state crime lab are equipped to test for THC, and they would
need to incur the cost of gearing up for such testing, or have
the additional cost of using private labs to conduct the
testing.
Further, they cite a non-reviewed January 2001 University of
Kentucky, Department of Agricultural Economics staff paper
titled Industrial Hemp: Legislative Briefing that answers the
question 'is hemp profitable for US farmers?' with "the bottom
line is we don't know for sure. But, in examining other
countries experiences, it looks doubtful. The US has no hemp
manufacturing industry to speak of, and demand is small and of
questionable durability."
Contrarily, a Congressional Research Service paper titled Hemp
as an Agricultural Commodity dated March 21, 2013, has
concluding remarks stating: "..., the U.S. market for hemp-based
products has a highly dedicated and growing demand base, as
indicated by recent U.S. market and import data for hemp
products and ingredients, as well as market trends for some
natural foods and body care products. Given the existence of
these small-scale, but profitable, niche markets for a wide
array of industrial and consumer products, commercial hemp
industry in the United States could provide opportunities as an
economically viable alternative crop for some U.S. growers."
Two bills have been introduced in Congress, H.R. 525 and S. 359,
titled The Industrial Hemp Farming Act of 2013, providing a new
definition for industrial hemp and deferring to the states the
regulation of hemp.
The author continues to work to better define the funding
structure with the agricultural commissioners and CDFA. The
committee may wish to ask the author his intentions regarding
resolving the funding and fee structure.
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The committee may wish to consider if the wording in Section
81008(d), page 13, line 20, after the word "or" needs to be
amended to read "registered seed breeder in accordance to
section 81004." (Any amendments agreed to in this committee
would be adopted in the Assembly Committee on Appropriations.)
This would make the language consistent with other sections of
the bill.
Prior Legislation : 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. The Governor's veto
message 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 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."
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.
AB 1147 (Leno), of the 2005-06 Legislative Session, would have
permitted the cultivation of industrial hemp in California. AB
1147 was vetoed.
AB 388 (Strom-Martin), of the 2001-02 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. AB 388 was
vetoed.
REGISTERED SUPPORT / OPPOSITION :
Support
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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
California Narcotic Officers' Association
California Police Chiefs Association
San Diego County Sheriff's Department
Analysis Prepared by : Jim Collin / AGRI. / (916) 319-2084
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