HSB 241

The 2018 Farm Bill authorizes states to assume primary regulatory authority over the production of hemp by submitting a state plan (plan) for approval by the United States department of agriculture (USDA) which has days to approve, disapprove, or amend the plan. The 2018 Farm Bill provides that state regulations may be more but not less stringent than the federal regulations. DEPARTMENT OF PUBLIC SAFETY. The department of public safety (DPS) is required to assist DALS in preparing the plan and administering and enforcing the provisions of the Code chapter. DPS is designated the chief criminal enforcement agency under the new Code chapter. The bill also provides for police involvement by local law enforcement agencies. HEMP LICENSES AND FEES. _____ approve or disapprove applications for the issuance of a hemp license (license) on a one-year basis subject to renewal. A license covers a crop site which cannot exceed contiguous acres. DALS may issue any number of licenses to a single applicant. However, a person is prohibited from holding more than crop sites under all current licenses issued to the person. DALS must assess and collect hemp fees (fees) for the issuance of a license and for an annual fall inspection until June 30, 2022. After that date, fees are to be established by rule based on the amount required to administer and enforce the provisions of the bill. Moneys collected from the fees are to be deposited into a hemp fund (fund) which are appropriated to DALS for purposes of administering and enforcing these provisions. CONTROLLED SUBSTANCE —— REGULATIONS —— HEMP. Marijuana produced on a licensee’s crop site is not a controlled substance, so long as certain conditions are satisfied. Generally, production, possession, or distribution of a controlled substance is a criminal offense. The bill provides that new Code chapter 204 does not prohibit a person from producing, handling, transporting, marketing, or processing a hemp product. Both DALS and DPS are required to adopt rules regulating licensees and are authorized to inspect crop sites. DPS may require a licensee to maintain business records which are also subject to inspection. DPS is required to conduct an annual inspection of a licensee’s crop site and obtain a sample for official testing by a laboratory designated by DPS. A test result that indicates a sample exceeds the maximum concentration of THC is deemed conclusive that the crop is a controlled substance. ENFORCEMENT AND PENALTIES. DPS, in cooperation with DALS, may order the disposal of a crop produced on a licensee’s crop site if official test results indicate that a crop is a controlled substance. The disposal, including the crop’s destruction, must be at the licensee’s expense. _____ also suspend or revoke a license if the licensee fails to comply with a requirement of the bill. A person who violates a provision of the bill is subject to a civil penalty of not less than $500 and not more than $2,500. DALS or the attorney general may apply to district court to obtain an injunction to enforce the bill’s provisions. EFFECTIVE DATES and CONTINGENT IMPLEMENTATION. The new Code chapter authorizing the production of hemp under a federally approved state plan takes effect on July 1, 2019; but is not to be implemented until DALS certifies that USDA has approved the state plan. Coordinating provisions, including amendments to Code chapter 124 regulating controlled substances, take effect upon certification.