Nebraskans may grow, process and handle hemp and hemp products in the state under a bill passed by the Legislature May 24.

Congress legalized the cultivation and sale of hemp with the 2018 Farm Bill by removing it from the federal Controlled Substances Act. States that wish to regulate hemp production first must submit a plan to the U.S. Department of Agriculture for approval.

LB657, sponsored by Omaha Sen. Justin Wayne, requires the state Department of Agriculture to establish, operate and administer a program to license and regulate those who cultivate, process, handle or broker hemp, defined as cannabis with no more than 0.3 percent delta-9 tetrahydrocannabinol (THC), the plant’s main psychoactive compound.

Among other requirements, license holders must be at least 18; not have had a cultivator, processor-handler or broker license revoked in the five years preceding the application; and not have been convicted of a felony related to a controlled substance within the preceding 10 years.

License holders consent to background checks; entry onto and inspection of all sites where hemp would be cultivated or processed; testing of hemp samples; destruction of hemp found to have THC concentration greater than that allowed by the act; and annual inspections by the department to verify that hemp is being grown in accordance with the law.

The bill requires the department’s director to submit a state regulatory plan to the U.S. Secretary of Agriculture no later than Dec. 31, 2019.

The plan will describe practices to maintain information regarding land where hemp is cultivated, handled or processed; procedures governing the sampling and testing of hemp; procedures for destroying hemp plants or products that violate the act; procedures for implementing the act’s enforcement provisions; and a procedure for conducting annual inspections of a random sample of hemp cultivators.

Prior to the state plan’s approval, a person with a valid licensing agreement with the state Department of Agriculture may cultivate, handle or process hemp as part of the department’s agricultural pilot program, which federal law authorized in 2014.

LB657 requires any person other than a hemp cultivator or processor-handler who is transporting hemp to carry a bill of lading indicating the hemp’s owner, its point of origin and its destination, as well as documentation affirming that it was produced in compliance with federal law.

Finally, the bill creates a commission that periodically will report to the governor and the Legislature on policies and practices that result in the legal growth, management, marketing and use of the state’s hemp industry. A fee on hemp seed and hemp fiber sold or delivered in Nebraska will fund the commission.

Senators voted 43-4 to pass LB657.