BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                 UNFINISHED BUSINESS


          Bill No:  SB 566
          Author:   Leno (D)
          Amended:  9/6/13
          Vote:     21

           
           SENATE AGRICULTURE COMMITTEE  :  5-0, 4/2/13
          AYES:  Galgiani, Cannella, Berryhill, Lieu, Wolk

           SENATE PUBLIC SAFETY COMMITTEE  :  7-0, 4/30/13
          AYES:  Hancock, Anderson, Block, De León, Knight, Liu, Steinberg

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 5/23/13
          AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg

           SENATE FLOOR  :  39-0, 5/29/13
          AYES:  Anderson, Beall, Berryhill, Block, Calderon, Cannella,  
            Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,  
            Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,  
            Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen,  
            Padilla, Pavley, Price, Roth, Steinberg, Torres, Walters,  
            Wolk, Wright, Wyland, Yee
          NO VOTE RECORDED:  Vacancy

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    Industrial hemp

           SOURCE  :     Hemp Industries Association 
                      Vote Hemp


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           DIGEST  :    This bill allows the regulated cultivation and  
          processing of industrial hemp upon federal approval, as  
          specified. 

           Assembly Amendments  make numerous additions to this bill  
          including:  (1) findings and declarations related to the use and  
          economic benefits of industrial hemp and the intent of the  
          Legislature that law enforcement not be burdened with  
          tetrahydrocannabinol (THC) testing of industrial hemp crops; (2)  
          includes various definitions for purposes of this bill,  
          including "seed breeder" and "seed cultivator;" (3) revises the  
          membership of the Industrial Hemp Advisory Board; (4) prohibits  
          the pruning and tending of individual industrial hemp plants,  
          except as provided; and (5) deletes and exemption from the  
          destruction requirement, as specified.

           ANALYSIS  :    

          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."  

           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.  

           3. Lists marijuana as a schedule I controlled substance.  

           4. Lists THC 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  

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             marijuana, ? which contains naturally-occurring THC."  

          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.  

           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.  

           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.  

           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. 

           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.  

           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  

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             imprisonment.  

          This bill: 

           1. Establishes the California Industrial Hemp Farming Act  
             (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% 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 or any  
             component of the 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 specified terms related to the cultivation of  
             industrial hemp.

           5. States that there is in the Department of Food and  
             Agriculture (DFA) an Industrial Hemp Advisory Board (Board)  
             and specifies who shall sit on the Board.

           6. States except when grown by an established agricultural  
             research institution or by a registered seed breeder  
             developing a new California seed cultivar, industrial hemp  
             shall only be grown if it is on the list of approved seed  
             cultivars.

           7. Provides guidelines on what shall be included in the list of  
             approved seed cultivars.

           8. Provides the procedure for the adoption, amendment or repeal  
             of the list of approved seed cultivars.

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           9. 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.

           10.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.

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

           12.Requires the County Agricultural Commissioner to transmit  
             information collected during the application process to DFA.

           13.Provides requirements for keeping and maintaining records  
             pertaining to the seed development plan.

           14.Requires DFA to establish a registration fee and appropriate  
             renewal fee to be paid by growers of industrial hemp for  
             commercial purposes and seed breeders, not including an  
             established agricultural research institution, to cover the  
             costs of implementing, administering, and enforcing these  
             provisions.

           15.States that fees collected by the commissioners upon  
             registration or renewal shall be forwarded, according to  
             procedures set by DFA, to the DFA for deposit into the  
             Department of Food and Agriculture Fund to be used for the  
             administration and enforcement of these provisions. 

           16.States that, except when grown by an established  
             agricultural research institution or registered 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 at the same time, and no portion of an acreage of  
             industrial hemp shall include plots of less than one  
             contiguous acre. 


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           17.Requires registered seed breeders to grow industrial hemp as  
             densely as possible in dedicated acreage of not less than one  
             acre and in accordance with the seed development plan.

           18.Requires registered seed breeders, for purposes of seed  
             production, to only grow industrial hemp 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.

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

           20.Prohibits the pruning and tending of individual industrial  
             hemp plants, except as provided.

           21.Prohibits the culling of industrial hemp, except as  
             provided.

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

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

           24.Requires, except when industrial hemp is grown by an  
             established agricultural research institution, a registrant  
             that grows industrial hemp under this Act 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 as specified.

           25.Requires certain documentation to accompany the sample of  
             dried flowering tops of the industrial hemp plant collected  
             for THC testing.

           26.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 (AG) to  
             report to the Assembly and Senate Agriculture Committees and  
             the Assembly and Senate Public Safety Committees the reported  
             incidents, if any, of the following:

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              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.

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

           2. 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 or its successor  
             industry association, to report the following to the Assembly  
             and Senate Agriculture Committees and the Assembly and Senate  
             Public Safety Committees:

              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.

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

           2. Requires, if these provisions become operative, the AG 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.

           3. Requires the AG to complete the opinion required in the  
             provisions of this Act as soon as possible or within four  
             months of authorization under federal law.

           4. States, if in the AG's opinion it is determined that the  
             provisions of this Act are not sufficient to comply with  
             federal law, the DFA, in consultation with the Board, shall  
             establish procedures that meet the requirements of federal  
             law.

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           5. States that the AG shall post the opinion on its Internet  
             Web site.

           6. Makes various legislative declarations and findings on  
             industrial hemp.

           Background
           
           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 U.S.,  
          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."  

           Prior Legislation
           
          AB 388 (Strom-Martin, 2002) 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.  The bill was  
          vetoed by Governor Davis.

          AB 448 (Strom-Martin, 2001) would have authorized the Secretary  
          of Department of Food and Agriculture (DFA) to issue licenses to  
          cultivate hemp for commercial purposes.  The bill failed passage  
          in the Assembly Agriculture Committee,

          AB 1147 (Leno, 2006) would have permitted the cultivation of  
          industrial hemp in California.  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 under federal law. 


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          AB 684 (Leno, 2007) would have permitted the cultivation of  
          industrial hemp in California under a pilot program in four  
          counties.  The bill was vetoed by Governor Schwarzenegger.  In  
          his veto message, the Governor stated 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, 2011) would have permitted the cultivation of  
          industrial hemp in California under a pilot program in four  
          counties.  The bill was vetoed by Governor Brown.  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.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Assembly Appropriations Committee:

             Minor, likely absorbable, costs to DFA to support the  
             Industrial Hemp Advisory Board. 

             Minor, likely absorbable, costs to DFA to establish and  
             maintain a list of approved seed varietals. 

             Unknown administrative costs, fully covered by fee revenue,  
             to county agricultural commissions to operate a registration  
             program and to implement and enforce the Act.

             Costs of laboratory reports would be borne by registrants.

             Minor absorbable reporting costs to the Department of  
             Justice.

           SUPPORT  :   (Verified  9/10/13)

          Hemp Industries Association (co-source)
          Vote Hemp (co-source)
          American Civil Liberties Union 
          Business Alliance for Commerce in Hemp
          California Certified Organic Farmers
          California State Grange

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          California State Sheriffs' Association
          Colorganics Inc.
          Community Alliance of Family Farmers
          County of Lake
          Dash Hemp
          Datsusara            
          Dr. Bronner's Magic Soaps
          Drug Policy Alliance
          Ecological Farming Association
          Hemp Aware
          Hempsteads
          Hemptopia Inc.
          Hempy 
          Humbolt Traders
          Instituto Laboral de la Raza
          Jungmaven
          Kern County Sheriff Donny Youngblood
          Kings County Sheriff Dave Robinson
          Knoll Farms
          Lafes Natural BodyCare
          Lazy Dog Designs
          Nutiva
          Planning and Conservation League
          Santa Barbara Hemp Company
          Sierra Club California
          Teamsters
          The Hemp Road
          The Living Temple
          United Food and Commercial Workers 8 - Golden State
          United Food and Commercial Workers, Western States Council
          US Hemp Oil, Inc.

           OPPOSITION  :    (Verified  9/10/13)

          Association for Los Angeles Deputy Sheriffs
          Association of Orange County Deputy Sheriffs
          California Fraternal Order of Police
          California Narcotic Officers' Association
          California Police Chiefs Association
          Long Beach Police Officers Association
          Los Angeles County Professional Peace Officers Association
          Los Angeles Police Protective League
          Riverside Sheriffs Association
          Sacramento Deputy Sheriffs Association

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          San Diego County Sheriff's Department
          Santa Ana Police Officers Association

           ARGUMENTS IN SUPPORT  :    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.  

           ARGUMENTS IN OPPOSITION  :    According to the opponents, "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 opponents state, "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."  

          According to the opponents, "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? The increased costs for  
          marijuana trafficking prosecutions are incalculable."  

          JL:k  9/10/13   Senate Floor Analyses 
                                                                        
                           SUPPORT/OPPOSITION:  SEE ABOVE

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