Background:

Background on Industrial Hemp.

Industrial hemp is generally defined as encompassing various Cannabis sativa plant species intended for agricultural and industrial purposes. These varieties are grown for their seed and fiber content, as well as byproducts such as oil and seed cake. Industrial hemp is low in the hallucinogenic compound delta-9 tetrahydrocannabinol (THC) and high in cannabidiol (CBD). Industrial hemp differs from marijuana in that even though both are varieties of Cannabis sativa, marijuana is high in THC and low in CBD. Industrial hemp is grown primarily as a source of fiber principally used for textiles, rope, paper, and building materials. Hemp seed is increasingly used for food, feed, and oil. Hemp seed oil is low in saturated fats and may be used in pharmaceuticals, cosmetics, inks, lubrication, household detergents, varnishes, resins, and paints. As the biofuels industry matures, industrial hemp may also play a role in cellulosic ethanol production. Approximately 30 countries in Europe, Asia, and North and South America currently permit farmers to grow hemp.

Federal Statute and Regulations.

Industrial hemp and all other Cannabis sativa species, including marijuana, are considered a Schedule I controlled substance under the Controlled Substances Act of 1970 (CSA). Although the CSA exempts from control the parts of mature Cannabis plants intended for industrial uses (e.g. stalks, fiber, oil, cake, etc.), the statute does not distinguish between industrial hemp and other varieties of Cannabis on the basis of THC content. Therefore it is illegal to grow Cannabis plants containing any level of THC without a permit from the Drug Enforcement Agency (DEA).

Regulation of Hemp in Other States.

The Oregon State Legislature has enacted legislation permitting the production, trade and possession of industrial hemp. Similar legislation has also been enacted in Maine. In addition to these two states, seven other states (Hawaii, Kentucky, Maryland, Montana, North Dakota, Vermont and West Virginia,) have also passed legislation removing barriers to the production of industrial hemp. Many other states have passed resolutions or memorials urging Congress to allow states to regulate industrial hemp farming. Additionally, the National Association of State Departments of Agriculture (NASDA) and National Association of State Legislatures (NCSL) have both adopted resolutions supporting revisions to the federal rules and regulations authorizing commercial production of industrial hemp.

Summary of Bill:

The act authorizes the Director of the Department of Agriculture (Director) to issue licenses for the growing of industrial hemp. Industrial hemp is designated as an agricultural product which may be grown, produced, possessed, and commercially traded pursuant to the requirements of the act. The license authorizes the grower to produce hemp at a specified site or sites as identified in the license. The license is valid for 24 months and may be renewed. The licensing fee is $10 per acre of land for the first growing season and thereafter is determined by the Legislature.

"Industrial hemp" is defined as all parts and varieties of the plant cannabis sativa, whether growing or not, that contain a tetrahydrocannabinol concentration of 1 percent or less by weight and are cultivated or possessed by a licensed grower in compliance with the act.

The Director is designated as the only lawful source and supplier of seed for use in industrial hemp production. The price of hemp seed is determined by the Director by rule.

In order to obtain a license, the applicant must meet specified qualifications showing that he or she is capable of growing industrial hemp and can ensure its safe production. To qualify, the prospective licensee must:

provide an affirmation that he or she will comply with state law;
obtain a letter of credit or surety bond in the amount of at least $2,000 in order to cover potential liabilities;
prove his or her ability to secure all of the supply of industrial hemp seed needed for planting;
ensure the integrity of the crop while it is in the field;
ensure that the parts of the hemp plant not used for industrial purposes are destroyed or recycled;
agree to inspections as required by the Director; and
maintain production records for at least three years.

The powers and authority of the Director include:

the promulgation of rules necessary to implement the chapter;
investigation of a grower's compliance with legal requirements;
access to buildings and property, but subject to specified, privacy-related limitations;
the taking and testing of samples of the crop;

access to agricultural records; and
the imposition of license-related sanctions.

The Director may deny, suspend, revoke, or refuse to renew a grower's license for false or misleading statements or other violations of legal requirements.

The act creates an industrial hemp account in the State Treasury. All revenue derived from licensing fees must be deposited in the account. Expenditures from the account may only be used to defray the cost of implementing the act.

Washington State University is authorized to undertake research regarding industrial hemp production in this state. The Director must oversee this research, which is limited to specified subject matter areas related to the development of an industrial hemp industry. Beginning in January 2014, the university must annually report to the Legislature regarding the implementation of the act.

The Director must also report annually to the Legislature regarding the implementation of the act and other related topics.