Amended in Senate May 24, 2013

Amended in Senate April 11, 2013

Amended in Senate April 1, 2013

Senate Bill No. 566

Introduced by Senator Leno

(Principal coauthor: Assembly Member Mansoor)

An act to add Division 24 (commencing with Section 81000) to, and to repeal Section 81003 of, the Food and Agricultural Code, and to amend Section 11018 of, and to add Section 11018.5 to, the Health and Safety Code, relating to industrial hemp.

LEGISLATIVE COUNSEL’S DIGEST

SB 566, as amended, Leno. Industrial hemp.

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. For purposes of these provisions, marijuana is defined as not including 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, and fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination.

This bill would revise the definition of “marijuana” so that the term would exclude industrial hemp, as defined, except where the plant is cultivated or processed for purposes not expressly allowed. The bill would define industrial hemp as a fiber or oilseed crop, or both, that is limited to the nonpsychoactive types of the plant Cannabis sativa L. and the seed produced therefrom, having no more than 3⁄10 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, 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.

The bill would enact provisions relating to growing industrial hemp that would impose specified procedures and requirements on a person who grows industrial hemp, except when grown by an established agricultural research institution or seed breeder, as defined, that would become operative when authorized under federal law. The bill would require a person growing the industrial hemp to obtain, before the harvest of each crop, a laboratory test of a random sample of the crop to determine the amount of THC in the crop. The bill would require the laboratory test report to be issued by a laboratory registered by the federal Drug Enforcement Administration and would require the person growing industrial hemp to make the report available to law enforcement officials and specified other persons. The bill would require all industrial hemp seed sold for planting in California to be from a crop having no more than 3⁄10 of 1% THC contained in a random sampling of the dried flowering tops and tested under these provisions, and would require the destruction of crops exceeding that content, as specified. begin delete The bill would require the Department of Food and Agriculture to regulate the development, growth, and sale of industrial hemp seed harvesting and activities regarding the sale of viable industrial hemp seeds, and would authorize the department to promulgate additional regulations to ensure compliance with these provisions or with federal law.end delete

The bill would provide that growing industrial hemp shall not be construed to authorize, among other things, 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 necessary to perform the required laboratory testing. This bill would require the Attorney General and the Hemp Industries Association to submit reports to the Legislature by January 1, 2019, or 5 years after the provisions of the measure are authorized under federal law, whichever is later, regarding the economic and law enforcement impacts of industrial hemp cultivation.

The bill would state the findings and declarations of the Legislature relating to industrial hemp.

By revising the scope of application of existing crimes relating to marijuana, this bill would impose a state-mandated local program.

By specifying the conditions of cultivation, the violation of which would be a misdemeanor pursuant to other provisions of existing law, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would provide that the provisions of this act would not become operative unless authorized under federal law, and, when the provisions become operative, would require the Attorney General to post the fact that this act has become operative on its Internet Web site.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P3 1 SECTION 1. This act shall be known, and may be cited, as the

2California Industrial Hemp Farming Act. 3 SEC. 2. The Legislature finds and declares all of the following: 4(a) Industrial hemp is an agricultural crop produced in at least

530 nations, including Canada, Great Britain, France, Germany,

6Romania, Australia, and China, and is used by industry to produce

7thousands of products, including paper, textiles, food, oils,

8automotive parts, and personal care products. 9(b) The United States Court of Appeals for the Ninth Circuit

10has ruled in Hemp Industries Association v. Drug Enforcement

11Administration, (9th Cir. 2004) 357 F.3d 1012, that the federal

12Controlled Substances Act of 1970 (21 U.S.C. Sec. 812(b))

13explicitly excludes nonpsychoactive hemp from the definition of

14marijuana, and the federal government has declined to appeal that

15decision. 16(c) The federal Controlled Substances Act of 1970 specifies the

17findings to which the government must attest in order to classify

18a substance as a schedule I drug and those findings include that

19the substance has a high potential for abuse, has no accepted

20medical use, and has a lack of accepted safety for use, none of

21which apply to industrial hemp. P4 1(d) According to estimates by the Hemp Industries Association,

2sales of industrial hemp products in the United States have grown

3steadily since 1990 to more than $500 million annually in 2012. 4(e) California manufacturers of hemp products currently import

5from around the world tens of thousands of acres’ worth of hemp

6seed, oil, and fiber products that could be produced by California

7farmers at a more competitive price, and the intermediate

8processing of hemp seed, oil, and fiber could create jobs in close

9proximity to the fields of cultivation. 10(f) In 1999, the Assembly passed House Resolution 32, which

11resolved that “the domestic production of industrial hemp can help

12protect California’s environment, contribute to the growth of the

13state economy, and be regulated in a manner that will not interfere

14with the enforcement of marijuana laws.” 15(g) Assessment of the economic benefits of industrial hemp

16cultivation and determination of possible impacts on the

17enforcement of laws prohibiting illicit marijuana cultivation are

18important concerns. 19(h) It is the intent of the Legislature that law enforcement not

20be burdened with tetrahydrocannabinol (THC) testing of industrial

21hemp crops when cultivation is in compliance with Section 11018.5

22of the Health and Safety Code; therefore, the cultivation of

23industrial hemp will be tightly controlled begin delete and enforced by the

24Department of Food and Agricultureend delete consistent with the following: 25(1) Farmers shall not cultivate industrial hemp in acreages

26smaller than five acres, and no acreage of industrial hemp shall be

27comprised of plots smaller than one acre. The tending of individual

28plants, as well as ornamental and clandestine cultivation, is

29expressly prohibited. 30(2) Farmers are required, before harvest, to obtain a laboratory

31test report from a federally registered laboratory documenting that

32the THC content of their crop is within the legal limit and farmers

33must destroy crops that fail the THC test. 34(3) Farmers must retain an original copy of the THC test report

35for the planting seed and the harvested crop for two years, make

36original copies available to law enforcement officials upon request,

37and are required to provide an original copy to each person

38purchasing, transporting, or otherwise obtaining the fiber, oil, cake,

39or seed of the plant from the farmer. P5 1(4) Although they have no psychoactive effect, any resin,

2flowering tops, or leaves of the industrial hemp plant that are

3removed from the lawful field of cultivation shall be, by definition,

4marijuana and subject to prosecution. Farmers should take care to

5ensure that all flowering tops and leaves remain in the lawful field

6of cultivation after the harvest of seed or fiber. There is no lawful

7reason to harvest, collect, or process the flowering tops of industrial

8hemp. 9(5) In addition to plant structure, height, and method of planting,

10the horticultural tending of cannabis plants indicates to law

11enforcement that it is marijuana and not industrial hemp. Signs of

12horticultural tending include, but are not limited to, pathways or

13rows within the field to provide access to each plant, the pruning

14of individual plants, or the culling of male plants from the field. 15 SEC. 3. Division 24 (commencing with Section 81000) is added

16to the Food and Agricultural Code , to read: 17 18 Division 24. Industrial Hemp 19 20 81000. For purposes of this division, “industrial hemp” has the

21same meaning as that term is defined in Section 11018.5 of the

22Health and Safety Code. 23 81001. (a) Except when grown by an established agricultural

24research institution or seed breeder, industrial hemp shall be grown

25only as a densely planted fiber or oilseed crop, or both, in acreages

26of not less than five acres, and no portion of an acreage of industrial

27hemp shall include plots of less than one contiguous acre.

28Ornamental and clandestine cultivation, as well as the pruning,

29culling, and tending of individual plants, of industrial hemp is

30prohibited. All plots shall have adequate signage indicating they

31are industrial hemp. 32(b) Industrial hemp shall include products imported under the

33Harmonized Tariff Schedule of the United States (2013) of the

34United States International Trade Commission, including hemp

35seed, per subheading 1207.99.03, hemp oil, per subheading

361515.90.80, true hemp, per heading 5302, true hemp yarn, per

37subheading 5308.20.00, and woven fabrics of true hemp fibers,

38per subheading 5311.00.40. 39(c) Except when industrial hemp is grown by an established

40agricultural research institution or seed breeder, a person who

P6 1grows industrial hemp under this section shall, before the harvest

2of each crop and as provided below, obtain a laboratory test report

3indicating the tetrahydrocannabinol (THC) levels of a random

4sampling of the dried flowering tops of the industrial hemp grown. 5(1) Sampling shall occur as soon as practicable when the THC

6content of the leaves surrounding the seeds is at its peak and shall

7commence as the seeds begin to mature, when the first seeds of

8approximately 50 percent of the plants are resistant to compression. 9(2) The entire fruit-bearing part of the plant including the seeds

10shall be used as a sample. The sample cut shall be made directly

11underneath the inflorescence found in the top one-third of the plant. 12(3) The laboratory test report shall be issued by a laboratory

13registered with the federal Drug Enforcement Administration, shall

14state the percentage content of THC, shall indicate the date and

15location of samples taken, and shall state the Global Positioning

16System coordinates and total acreage of the crop. If the laboratory

17test report indicates a percentage content of THC that is equal to

18or less than three-tenths of 1 percent, the words “PASSED AS

19CALIFORNIA INDUSTRIAL HEMP” shall appear at or near the

20top of the laboratory test report. If the laboratory test report

21indicates a percentage content of THC that is greater than

22three-tenths of 1 percent, the words “FAILED AS CALIFORNIA

23INDUSTRIAL HEMP” shall appear at or near the top of the

24laboratory test report. 25(4) If the laboratory test report indicates a percentage content

26of THC that is equal to or less than three-tenths of 1 percent, the

27laboratory shall provide the person who requested the testing not

28less than 10 original copies signed by an employee authorized by

29the laboratory and shall retain one or more original copies of the

30laboratory test report for a minimum of two years from its date of

31sampling. 32(5) If the laboratory test report indicates a percentage content

33of THC that is greater than three-tenths of 1 percent and does not

34exceed 1 percent, the person who grows industrial hemp shall

35submit additional samples for testing of the industrial hemp grown. 36(6) A person who grows industrial hemp shall destroy the

37industrial hemp grown upon receipt of a first laboratory test report

38indicating a percentage content of THC that exceeds 1 percent or

39a second laboratory test report pursuant to paragraph (5) indicating

40a percentage content of THC that exceeds three-tenths of 1 percent.

P7 1If the percentage content of THC exceeds 1 percent, the destruction

2shall take place within 48 hours after receipt of the laboratory test

3report. If the percentage content of THC in the second laboratory

4test report exceeds three-tenths of 1 percent, the destruction shall

5take place as soon as practicable, but no later than 45 days after

6receipt of the second test report. 7(7) Paragraph (6) does not apply to industrial hemp grown by

8an established agricultural research institution or seed breeder if

9the destruction of the industrial hemp grown will impede the

10development of types of industrial hemp that will comply with the

11three-tenths of 1 percent THC limit established in this section. 12(8) A person who intends to grow industrial hemp and who

13complies with this section shall not be prosecuted for the cultivation

14or possession of marijuana as a result of a laboratory test report

15that indicates a percentage content of THC that is greater than

16three-tenths of 1 percent but does not exceed 1 percent. 17(9) Paragraph (8) does not apply to industrial hemp grown by

18an established agricultural research institution or seed breeder.

19Established agricultural research institutions or seed breeders shall

20be permitted to cultivate or possess industrial hemp with a

21laboratory test report that indicates a percentage content of THC

22that is greater than three-tenths of 1 percent if that cultivation or

23possession contributes to the development of types of industrial

24hemp that will comply with the three-tenths of 1 percent THC limit

25established in this section. 26(10) The person who grows industrial hemp shall retain an

27original signed copy of the laboratory test report for two years

28from its date of sampling, make an original signed copy of the

29laboratory test report available to law enforcement officials or their

30designees upon request, and shall provide an original copy of the

31laboratory test report to each person purchasing, transporting, or

32otherwise obtaining from the person who grows industrial hemp

33the fiber, oil, cake, or seed of the plant. begin delete 34(d) The department shall regulate the development, growth, and

35sale of industrial hemp seed harvesting and activities regarding

36the sale of viable industrial hemp seeds. end delete begin delete 37(e) The department may promulgate additional regulations to

38ensure compliance with this division or federal law. end delete begin delete 39(f) end delete P8 1 begin insert(d)end insert For purposes of this section, the following terms have the

2following meanings: 3(1) “Established agricultural research institution” means a public

4or private institution or organization that maintains land for

5agricultural research, including colleges, universities, agricultural

6research centers, and conservation research centers. 7(2) “Seed breeder” means an individual or public or private

8institution or organization that develops viable industrial hemp

9seed intended for sale or research. 10 81002. This division shall not be construed to authorize any

11of the following, and all of the following are prohibited: 12(a) The possession, outside of a field of lawful cultivation, of

13resin, flowering tops, or leaves that have been removed from the

14hemp plant, except as is necessary to perform testing pursuant to

15subdivision (c) of Section 81001. 16(b) Any ornamental or clandestine cultivation of the industrial

17hemp plant. 18(c) Any pruning, culling, or tending of individual industrial

19hemp plants, except when the action is necessary to perform the

20THC testing pursuant to subdivision (c) of Section 81001. 21(d) Any cultivation of industrial hemp in acreages of less than

22five acres, or any acreage comprised of plots of less than one

23contiguous acre, except when the industrial hemp is grown by an

24established agricultural research institution or seed breeder. 25 81003. (a) Not later than January 1, 2019, or five years after

26the provisions of this division are authorized under federal law,

27whichever is later, the Attorney General shall report to the

28Assembly and Senate Committees on Agriculture and the Assembly

29and Senate Committees on Public Safety the reported incidents,

30if any, of the following: 31(1) A field of industrial hemp being used to disguise marijuana

32cultivation. 33(2) Claims in a court hearing by persons other than those

34exempted in subdivision (c) of Section 81001 that marijuana is

35industrial hemp. 36(b) A report submitted pursuant to subdivision (a) shall be

37submitted in compliance with Section 9795 of the Government

38Code. P9 1(c) Pursuant to Section 10231.5 of the Government Code, this

2section is repealed on January 1, 2023, or four years after the date

3that the report is due, whichever is later. 4 81004. Not later than January 1, 2019, or five years after the

5provisions of this division are authorized under federal law,

6whichever is later, the Hemp Industries Association shall report

7the following to the Assembly and Senate Committees on

8Agriculture and the Assembly and Senate Committees on Public

9Safety: 10(a) The economic impacts of industrial hemp cultivation,

11processing, and product manufacturing in California. 12(b) The economic impacts of industrial hemp cultivation,

13processing, and product manufacturing in other states that may

14have permitted industrial hemp cultivation. 15 81005. This division shall not become operative unless

16authorized under federal law. 17 SEC. 4. Section 11018 of the Health and Safety Code is

18amended to read: 19 11018. “Marijuana” means all parts of the plant Cannabis sativa

20L., whether growing or not; the seeds of that plant; the resin

21extracted from any part of the plant; and every compound,

22manufacture, salt, derivative, mixture, or preparation of the plant,

23its seeds or resin. It does not include industrial hemp, as defined

24in Section 11018.5, except where the plant is cultivated or

25processed for purposes not expressly allowed for by Division 24

26(commencing with Section 81000) of the Food and Agricultural

27Code. 28 SEC. 5. Section 11018.5 is added to the Health and Safety

29Code , to read: 30 11018.5. “Industrial hemp” means a fiber or oilseed crop, or

31both, that is limited to nonpsychoactive types of the plant Cannabis

32sativa L. and the seed produced therefrom, having no more than

33three-tenths of 1 percent tetrahydrocannabinol (THC) contained

34in the dried flowering tops, and that is cultivated and processed

35exclusively for the purpose of producing the mature stalks of the

36plant, fiber produced from the stalks, oil or cake made from the

37seeds of the plant, or any other compound, manufacture, salt,

38derivative, mixture, or preparation of the mature stalks, except the

39resin or flowering tops extracted therefrom, fiber, oil, or cake, or

40the sterilized seed of the plant that is incapable of germination. P10 1 SEC. 6. No reimbursement is required by this act pursuant to

2Section 6 of Article XIII B of the California Constitution because

3the only costs that may be incurred by a local agency or school

4district will be incurred because this act creates a new crime or

5infraction, eliminates a crime or infraction, or changes the penalty

6for a crime or infraction, within the meaning of Section 17556 of

7the Government Code, or changes the definition of a crime within

8the meaning of Section 6 of Article XIII B of the California

9Constitution. 10 SEC. 7. (a) This act shall not become operative unless

11authorized under federal law. 12(b) When this act becomes operative, the Attorney General shall

13post the fact that this act has become operative on its Internet Web

14site.

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