BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 676|
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THIRD READING
Bill No: SB 676
Author: Leno (D)
Amended: 4/28/11
Vote: 21
SENATE AGRICULTURE COMMITTEE : 5-1, 4/5/11
AYES: Rubio, Berryhill, Evans, Vargas, Wolk
NOES: Cannella
NO VOTE RECORDED: La Malfa
SENATE PUBLIC SAFETY COMMITTEE : 5-2, 4/26/11
AYES: Hancock, Calderon, Liu, Price, Steinberg
NOES: Anderson, Harman
SENATE APPROPRIATIONS COMMITTEE : 6-3, 5/16/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
SUBJECT : Industrial hemp
SOURCE : Hemp Industries Association
Vote Hemp
DIGEST : This bill creates an eight-year, five-county
pilot project to do the following with respect to the
cultivation and processing of industrial hemp: (1) define
industrial hemp", as specified, (2) redefine marijuana to
exclude industrial hemp, (3) allow the closely-regulated
cultivation and processing of industrial hemp during the
pilot period to conclude on
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January 1, 2020, (4) impose a testing regimen to ensure
program hemp has no psychoactive properties, (5) implement
the pilot project in Imperial, Kern, Kings, San Joaquin,
and Yolo Counties, and (6) require the Attorney General and
the Hemp Industries Association to submit reports to the
Legislature by January 1, 2018, regarding the economic and
law enforcement impacts of industrial hemp cultivation.
ANALYSIS : Existing law makes it a crime to engage in any
of various transactions relating to "marijuana", as
defined, except as otherwise authorized by law, such as the
Medical Marijuana Program.
Existing federal Drug Enforcement Administration (DEA)
regulations provide that any product intended for human
consumption containing any measurable quantity of
tetrahydrocannabinol (THC) is illegal. In contrast, the
Hemp Industries decision explicitly excludes
nonpsychoactive hemp from the definition of marijuana. The
federal government has declined to appeal that decision.
This bill permits the cultivation of industrial hemp in
California, specifically, it:
1. Defines "industrial hemp" as an agricultural field crop
of Cannabis sativa L. with no more than three-tenths of
one percent THC (tetrahydrocannabinol) grown exclusively
to produce the mature plant stalks and stalk products,
oil or cake made from the seeds, and other by-products
except the resin or flowering tops.
2. Clarifies that "industrial hemp" shall include the
defined hemp products in the 2007 Harmonized Tariff
Schedule of the United States.
3. Requires that before harvest, industrial hemp growers
obtain a laboratory test report of randomly sampled
dried flowering tops from a DEA registered laboratory
identifying if the crop meets the California industrial
hemp limit of no more than three-tenths of one percent
and includes the Global Positioning System coordinates
and total acreage of the crop. This report shall be
retained by the grower for two years, and be made
available to law enforcement upon request.
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4. Provides for the destruction of the crop, as specified.
5. Prohibits the cultivation, production, or possession of
resin, flowering tops, or leaves removed from the field
and separate from the rest of the plant. The only
exception to this prohibition is for the purposes of
sampling for the required laboratory test of the
flowering tops. Samples to perform the test shall be
taken in the presence of, and shall be collected and
transported only by, an employee or agent of a
laboratory registered with the DEA.
6. Prohibits transportation or sale of any Cannabis sativa
L. seed capable of germination across state borders
except as permitted by federal law.
7. Specifies that industrial hemp may only be grown for
research or as an agricultural field crop.
8. Requires industrial hemp farmers to post signs
identifying the crop, as specified.
9. Requires the Attorney General and the Hemp Industries
Association to submit economic and law enforcement
impact reports to the Legislature by January 1, 2018.
10.Makes legislative declarations and findings on
industrial hemp.
11.Provides that the pilot program applies only in
Imperial, Kings, Kern, San Joaquin, and Yolo Counties,
except as to industrial hemp raw materials that are
legal under federal law, transportation of seeds capable
of germination within California and the transportation
of samples for testing at a DEA-registered laboratory.
12.Sunsets on January 1, 2020.
Background
"Industrial hemp" or "hemp" refers to low-level
psychoactive chemical THC varieties of Cannabis sativa L.
For centuries, countless consumer and industrial products
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have been produced from hemp around the world. Hemp can be
cultivated as a fiber or a seed crop. Hemp fiber can be
used for textiles, paper, construction materials, auto
parts, and home furnishings while hemp seeds can be used
for body care products, industrial oils, pharmaceuticals,
and food. Despite its many uses, hemp is commonly lost in
the shadow of its famous Cannabis relative "marijuana" most
commonly used as a narcotic due to its high THC content.
Beginning in 1937, with the federal Marijuana Tax Act, the
government began to exercise control of the production of
Cannabis plants. Following World War II, competition from
synthetic fibers and a growing anti-drug public resulted in
the decline of hemp production. In 1970, the federal
Controlled Substances Act tightly restricted all Cannabis
plants regardless of THC content. This resulted in all
hemp and hemp products being imported or manufactured from
imported hemp.
The DEA is the federal agency that determines if any
industrial hemp production authorized by state statute is
permitted, and enforces standards for the security
conditions under which industrial hemp must be grown if
permitted.
In 1998, Canada, a growing exporter of hemp to California,
lifted their 50-year ban on industrial hemp cultivation.
Farmers could grow hemp only after meeting specific
registration requirements such as registering the location
of each hemp field and certifying that the THC levels of
the plant are not more than .3% of the weight of leaves and
flowering parts.
In 2004, the United States Ninth Circuit Court ruled that
hemp products could be sold legally in the U.S.,
overturning a DEA regulation attempting to ban all products
from sale that contain any amount of THC. Since this
ruling, the federal government has decided not to appeal
this decision allowing hemp seed and oil products to be
sold and consumed in the U.S.
A 2010 Congressional Research Service Report on hemp listed
the wide uses for hemp products and noted criticisms that
the hemp market was limited. However, the report cited the
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growth of the Canadian hemp industry: "�S]tudies by
Canadian agriculture agencies ? provide a more positive
market outlook, given growing consumer demand and also
certain production advantages to growers, such as
relatively low input and management requirements ?" (CSR,
2010, Hemp as an Agricultural Commodity, p. 10.)
Industrial hemp has received significant attention in
recent years. Researchers at Purdue University published
an exhaustive study of the potential value for hemp
cultivation in the United States. The study noted: Hemp
"is extremely unusual in the diversity of products for
which it is or can be cultivated."
Comments
Under the Controlled Substances Act (CSA), the DEA
determines whether any industrial hemp production is
authorized and would issue permits for cultivation.
Further, SB 676 would require a hemp grower to have tests
performed by a DE- certified lab and DEA registered
transporter. DEA has viewed industrial hemp as a
controlled substance under the CSA. Currently, there are
no federal permits authorizing hemp production in any of
the nine states already authorizing some form of industrial
hemp cultivation. The committee may want to consider if it
is appropriate to expose the state to conflict with the
federal government for a potential niche crop.
According to the Senate Public Safety Committee analysis:
"SB 676 clarifies that California law permits the
cultivation of industrial hemp, a variety of cannabis
that has no psychoactive qualities because it contains
less than .3 % THC. Marijuana ranges from 3-15% THC
content.
"Current state and federal law exempt industrial hemp
stalk, fiber, oil, and non-viable seed from the
definition of marijuana. These products are legally
imported into the United States for normal commerce.
"This bill moves the exemption for legal industrial hemp
products into a new statute defining industrial hemp and
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permits its cultivation under restricted circumstances.
Under the bill, the Attorney General is required to
report law enforcement impacts to the Legislature after
five years and the Hemp Industries Association must
report to the Legislature after five years on the
economic affects of the bill.
"Industrial hemp will only be permitted in plots greater
than five acres or in research settings. Any other
cultivation will be treated as marijuana, regardless of
THC content. Prior to harvest, farmers would be required
to document the low THC content of their hemp through a
DEA certified laboratory and then destroy hemp that fails
the test. Test results must be retained and made
available to law enforcement.
"Hemp has an incredible variety of beneficial uses, from
high-tech use in composite materials for automobiles to
animal bedding. Hemp seeds and oils make especially
nutritious foods and excellent skin-care products. Hemp
can be used for biofuel. Hemp fibers have many
applications, including clothing. Hemp has been used for
hundreds of years for rope and paper. The value of the
U.S. hemp market was $400 in 2009, and growing rapidly.
California is the largest hemp market (77% of sales) in
the country. California farmers should be able to profit
from supplying the dynamic market for a truly beneficial
crop."
Prior Legislation
AB 388 (Strom-Martin, 2002 ), vetoed by Governor Davis,
would have requested that the University of California
assess the economic opportunities of specialty or
alternative fiber crops, including industrial hemp, and
report to the Legislature by January 1, 2004.
AB 1147 (Leno, 2006), vetoed by Governor Schwarzenegger,
would have permitted the cultivation of industrial hemp in
California. In his veto message, the Governor stated that
hemp is still considered a cannabis plant regardless of its
THC content and, therefore, illegal under federal law.
AB 684 (Leno, 2007), substantially similar to this bill,
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would have permitted the cultivation of industrial hemp in
California under a pilot program in five counties - Butte,
Imperial, Kings, Mendocino, and Yolo. The bill was vetoed
by Governor Schwarzenegger. In his veto message, the
Governor stated that hemp is still considered a cannabis
plant regardless of its THC content and, therefore, illegal
under federal law. Additionally, the Governor stated:
"California law enforcement has expressed concerns that
implementation of this measure could place a drain on their
resources and cause significant problems with drug
enforcement activities."
HR 32 (Strom-Martin), 1999-2000 Session, would have
resolved that "the domestic production of industrial hemp
can help protect California's environment, contribute to
the growth of the state economy, and be regulated in a
manner that will not interfere with the enforcement of
marijuana laws."
Federal legislation introduced in 2005, 2007, and 2009, by
Representative Ron Paul, excluded industrial hemp from the
definition of marijuana.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Enforcement unknown; non-reimbursable local
costsLocal
DOJ reporting minor, absorbable costs
General
Seed revenue $25 in annual revenue to Seed Services
Program Special*
Seed labeling complaints unknown; potentially $20-$40
per Special*
to DFA investigation
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* Department of Food and Agriculture Fund
The Senate Appropriations Committee states that "DOJ
indicates the cost of reporting to the Legislature
incidents of industrial hemp being used to disguise
marijuana cultivation and court claims by persons that
marijuana is industrial hemp will be minor and absorbable.
Under existing law, the Department of Food and Agriculture
(CDFA) enforces the California Seed Law for agricultural
seed, and would subsequently provide enforcement for
industrial hemp seed once it is recognized as an
agricultural crop. Seed Services is responsible for
investigating the false representation of seeds that are
not the variety stated on the label so would likely be
authorized to pursue a seed complaint if/when an allegation
is made that the planting seed contained THC levels that
are higher than the legal limits. To the extent seed
labeling issues arise from the hemp seed, there would be a
cost to CDFA to initiate the investigation, (exclusive of
THC content) which could result in costs of $20,000 -
$40,000 per complaint, offset to a degree by estimated
annual seed revenue of $25,000. It is unknown how many
complaints might be filed, but at least five complaints
would need to be filed annually in order to exceed the
Suspense File threshold of $150,000 from a special fund.
CDFA indicates any complaints would be turned over to
federal law enforcement for investigation of a DEA permit
violation."
SUPPORT : (Verified 5/18/11)
Hemp Industries Association (co-source)
Vote Hemp (co-source)
American Hemp Inc.
Asher Hemp Gelato
Azida, Inc.
Business Alliance for Commerce in Hemp
California Certified Organic Farmers
California Conference of Machinists
California State Grange
California Teamsters Public Affairs Council
Calyx Clothing
Colorganics Inc.
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Dash Hemp Santa Cruz
Dr. Bronner's Magic Soaps
Drug Policy Alliance
Green Field Paper Company
Hemp House
Hemp Shield
Hemp Technologies (USA) Inc.
Hemp Traders
Hemp.com
High Grade Distribution
Instituto Laboral De La Raza
Jungmaven Ltd.
Living Harvest Foods
Nutiva
Santa Barbara Hemp Company
Satori Movement, Inc.
Skin & Coat Supplement
United Food and Commercial Workers - Local 5
United Food and Commercial Workers - Western States
Conference
OPPOSITION : (Verified 5/18/11)
Association for Los Angeles Deputy Sheriffs
California Narcotic Officers' Association
California Police Chiefs Association
Riverside Sheriffs' Association
ARGUMENTS IN SUPPORT : Proponents of this bill state that
America's $400 million hemp sales are entirely from
imported industrial hemp. Under the current federal law,
California farmers are denied the ability to grow and sell
hemp to fulfill our domestic demand. Because California's
state laws are silent on the cultivation of hemp, this bill
clarifies state law allowing California growers to
participate in the hemp market.
In addition to the potential economic benefits to growers,
proponents state that hemp provides a suitable rotation
crop that helps improve the soil and requires fewer
pesticides or herbicides than many other crops. Hemp is
harvested for its stalks and seeds rather than the
flowering tops for which marijuana is harvested. Advocates
maintain that should hemp and marijuana commingle and
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cross-pollinate the resulting plants would be undesirable
for traditional marijuana use or as industrial hemp.
ARGUMENTS IN OPPOSITION : Opponents state that "Hemp is
virtually indistinguishable from marijuana, and thus
cultivation will seriously undermine the ability of law
enforcement to enforce marijuana laws. Further SB 676
contravenes federal law (21 USC 802) and passage will
create confusion to growers who may not understand they
would be subject to federal prosecution even if growing
hemp were permitted by state law. Creating physical or
legal ambiguity is not good criminal justice policy?"
MEL:mw 5/18/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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