The Hemp Farming Act
The Hemp Farming Act of 2018 was a proposed law to remove hemp (defined as cannabis with less than 0.3% THC) from Schedule I controlled substances and making it an ordinary agricultural commodity. Its provisions were incorporated in the 2018 United States farm bill that became law on December 20, 2018.
In late March 2018, Senate Majority Leader McConnell announced he would introduce legislation legalizing hemp production in his state, Kentucky, and nationally. McConnell introduced the bill, S.2667, on the Senate floor on April 12, 2018, co-sponsored by Oregon senators Wyden and Merkley. McConnell announced that Representative James Comer of Kentucky would introduce a companion bill in the House of Representatives. The companion bill, H.R. 5485, was introduced on April 12, with Colorado Representative Jared Polis co-sponsoring.
In addition to removing low-THC cannabis from regulation under the Controlled Substances Act, the 2018 act would avail hemp farmers of water rights and federal agricultural grants, and make the national banking system (in a gray area for the cannabis industry[a]) accessible to farmers and others involved; and allow for other benefits of production of a recognized crop such as marketing, agronomy research, and crop insurance.
History
Hemp production in the United States essentially ceased in the 1950s due to market conditions and federal regulations. Since the mid-1990s, there has been a resurgence of interest in the United States in producing industrial hemp. Executive Order 12919 (1994) identified hemp as a strategic national product that should be stockpiled.
The 2018 legislation was preceded by a failed Industrial Hemp Farming Act (109th Congress [House] and 114th Congress [Senate]) and a hemp- and CBD-related attempt to amend to the Controlled Substances Act (114th Congress); and the Agricultural Act of 2014, which created a regulated, national agricultural hemp pilot program under which states could create their own pilot program regulations. There existed "ongoing tension between federal and state authorities over state hemp policies" due to non-cooperation of the DEA with state programs, and lawsuits brought or threatened by farmers and states against the DEA. The DEA and conflicting Federal court decisions regarding "low THC content [hemp] and marijuana of greater THC content" left a perplexing environment for would-be producers with "general uncertainty about how federal authorities will respond to production in states where state laws allow cultivation", especially after the Justice Department's 2018 recission of the 2013 Cole Memorandum. By 2018, groups calling for de-scheduling of hemp included the American Farm Bureau Federation, the National Association of State Departments of Agriculture, the National Farmers Union and the National Conference of State Legislatures.
In April, the Senate invoked Rule 14 and skipped over committees or debate, and placed the bill directly on its calendar.
The 2018 farm bill was sent to conference committee in mid 2018. The Associated Press noted appointment of first-term Representative James Comer, a Republican Kentucky hemp supporter and the state's former agriculture commissioner, to the committee. The compromise version of the farm bill reached by both houses of Congress in late November, 2018 – after McConnell put himself on the conference committee – includes the hemp provisions of the Hemp Farming Act. Roll Call called passage of hemp legalization a "an early plank of the Kentucky Republican [McConnell]'s 2020 re-election bid" soon after the $867 billion farm bill was passed by the Senate on December 11, 2018, signed by McConnell with a hemp pen.
State Reactions
In October, 2018, with House and Senate versions of the 2018 Farm Bill being reconciled, the National Association of State Departments of Agriculture made plans to begin harmonizing state-level hemp THC testing in anticipation of passage of the Federal act.
86R2396 TSR-F
By: King of Uvalde H.B. No. 1325
A BILL TO BE ENTITLED
AN ACT
relating to the production and regulation of hemp and products made
from hemp; requiring authorization to produce hemp; authorizing
penalties; authorizing fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act may be cited as the Hemp Farming Act.
SECTION 2. (a) It is the policy of this state that hemp is a
viable agricultural crop and an agricultural commodity in this
state.
(b) It is the purpose of this Act to:
(1) promote cultivating and processing hemp and
develop new commercial markets for farmers and businesses through
the sale of hemp products;
(2) promote the expansion of this state’s hemp
industry to the maximum extent permitted by law allowing farmers
and businesses to cultivate, handle, and process hemp and sell hemp
products for commercial purposes;
(3) encourage and empower research into hemp
production and hemp products at institutions of higher education
and in the private sector; and
(4) move this state and its citizens to the forefront
of the hemp industry.
SECTION 3. Section 12.020(c), Agriculture Code, is amended
to read as follows:
(c) The provisions of law subject to this section and the
applicable penalty amounts are as follows:
Provision: Amount of Penalty
Chapters 13, 14A, 17, 18, 19, 41, 46, 61, 72, 73, 74, 76, 94, 95, 101, 102, 103, 125, 132,
Chapters 13, 14A, 17, 18, 19, 41, 46, 61, 72, 73, 74, 76, 94, 95, 101, 102, 103, 125, 132,
Chapters 13, 14A, 17, 18, 19, 41, 46, 61, 72, 73, 74, 76, 94, 95, 101, 102, 103, 113, 125, 132,
and 134: not more than $5,000
Subchapters A, B, and C, Chapter 71: not more than $5,000
Chapter 14 : not more than $10,000
Chapter 1951, Occupations Code: not more than $5,000
Chapter 153, Natural Resources Code: not more than $5,000
Section 91.009: not more than $5,000.
SECTION 4. The heading to Subtitle E, Title 5, Agriculture
Code, is amended to read as follows:
SUBTITLE E. PRODUCTION, PROCESSING, AND SALE OF FIBER PRODUCTS
SECTION 5. Subtitle E, Title 5, Agriculture Code, is
amended by adding Chapters 112 and 113 to read as follows:
CHAPTER 112. STATE HEMP PRODUCTION PLAN
Sec. 112.001. DEFINITION. In this chapter, "hemp" means
the plant Cannabis sativa L. and any part of that plant, including
the seeds of the plant and all derivatives, extracts, cannabinoids,
isomers, acids, salts, and salts of isomers, whether growing or
not, with a delta-9 tetrahydrocannabinol concentration of not more
than 0.3 percent on a dry weight basis.
Sec. 112.002. LEGISLATIVE INTENT. It is the intent of the
legislature that this state have primary regulatory authority over
the production of hemp in this state.
Sec. 112.003. DEPARTMENT RULES. (a) The department, after
consulting with the governor and attorney general, shall adopt
rules consistent with Chapter 113 providing:
(1) a practice to maintain relevant information
regarding land on which hemp is produced in this state, including a
legal description of the land, for a period of at least three
calendar years;
(2) a procedure for testing, using
post-decarboxylation or another similarly reliable method, the
delta-9 tetrahydrocannabinol concentration of hemp produced in
this state;
(3) a procedure for the effective disposal of plants,
whether growing or not, that are produced in violation of Subtitle
G, Agricultural Marketing Act of 1946 (7 U.S.C. Chapter 38,
Subchapter VII), and products derived from those plants;
(4) a procedure to comply with the enforcement
procedures described by Section 297B(e), Agricultural Marketing
Act of 1946 (7 U.S.C. Section 1639p(e));
(5) a procedure for conducting annual inspections of,
at a minimum, a random sample of hemp producers to verify that hemp
is not produced in violation of Subtitle G, Agricultural Marketing
Act of 1946 (7 U.S.C. Chapter 38, Subchapter VII);
(6) a procedure for submitting the information
described in Section 297C(d)(2), Agricultural Marketing Act of 1946
(7 U.S.C. Section 1639q(d)(2)), as applicable, to the secretary of
the United States Department of Agriculture not later than the 30th
day after the date the information is received; and
(7) standards for certifying that this state has the
resources and personnel to carry out the practices and procedures
described by Subdivisions (1) through (6).
(b) The department shall attempt to adopt rules under
Subsection (a) that will, in substance, meet the requirements for
approval as a state plan under Section 297B, Agricultural Marketing
Act of 1946 (7 U.S.C. Section 1639p).
Sec. 112.004. SUBMISSION OF STATE PLAN. (a) The
department, after consulting with the governor and attorney
general, shall submit to the secretary of the United States
Department of Agriculture a state plan for monitoring and
regulating the production of hemp in this state as provided by
Section 297B, Agricultural Marketing Act of 1946 (7 U.S.C. Section
1639p).
(b) The plan shall include the rules adopted under Section
112.003 and any other required information.
(c) If a plan submitted by the department is disapproved by
the secretary of the United States Department of Agriculture, the
department, after consulting with the governor and attorney
general, shall amend the rules under Section 112.003 as needed to
obtain approval and submit an amended plan.
(d) The department shall, as necessary, seek technical
assistance from the secretary of the United States Department of
Agriculture in adopting rules under Section 112.003 and otherwise
developing the plan.
CHAPTER 113. PRODUCTION OF HEMP
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 113.001. DEFINITIONS. In this chapter:
(1) "Commercial sale" means the sale of a product in
the stream of commerce at retail, at wholesale, or on the Internet.
(2) "Cultivate" means to plant, water, grow, or
harvest a plant or crop.
(3) "Federally defined THC level for hemp" means a
delta-9 tetrahydrocannabinol concentration of not more than 0.3
percent:
(A) on a dry weight basis for hemp; or
(B) in a hemp product.
(4) "Handle" means to possess or store a hemp plant:
(A) on premises owned, operated, or controlled by
a hemp producer for any period of time; or
(B) in a vehicle for any period of time other than
during the actual transport of the plant from a premises owned,
operated, or controlled by a hemp producer to a premises owned,
operated, or controlled by another hemp producer.
(5) "Hemp" has the meaning assigned by Section
112.001.
(6) "Hemp producer" means a person authorized by the
department to cultivate, handle, or process hemp in this state.
(7) "Hemp product" means a finished product with a
delta-9 tetrahydrocannabinol concentration of not more than 0.3
percent that is derived from or made by processing a hemp plant or
plant part and prepared in a form available for commercial sale.
The term includes cosmetics, personal care products, food intended
for human or animal consumption, cloth, cordage, fiber, fuel,
paint, paper, particleboard, plastics, and any product containing
one or more hemp-derived cannabinoids such as cannabidiol.
(8) "Institution of higher education" has the meaning
assigned by Section 61.003, Education Code.
(9) "Process" means to convert hemp into a marketable
form.
Sec. 113.002. DEPARTMENT RULES AND PROCEDURES. The
department may adopt rules and administrative procedures necessary
to implement this chapter.
Sec. 113.003. STATE HEMP PROGRAM ACCOUNT. (a) The state
hemp program account is an account in the general revenue fund
administered by the department.
(b) The account consists of:
(1) appropriations of money to the account by the
legislature;
(2) public or private gifts, grants, or donations,
including federal funds, received for the account;
(3) fees deposited to the account under Section
113.053;
(4) interest and income earned on the investment of
money in the account;
(5) penalties collected under this chapter; and
(6) funds from any other source.
(c) The department may accept appropriations and gifts,
grants, or donations from any source to administer and enforce this
chapter. Money received under this subsection shall be deposited
in the account.
(d) Money in the account may be appropriated only for the
administration and enforcement of this chapter.
Sec. 113.004. APPLICABILITY OF OTHER LAW. This chapter
does not authorize a person to violate federal or other state law.
SUBCHAPTER B. STATE HEMP PROGRAM
Sec. 113.051. APPLICABILITY OF SUBCHAPTER TO HEMP PRODUCTS.
This subchapter does not apply to the possession, transportation,
or sale of hemp products or extracts, including those containing
one or more hemp-derived cannabinoids, including cannabidiol.
Sec. 113.052. PROGRAM RULES. (a) The department shall
adopt rules to establish a state hemp program that:
(1) promotes the cultivating and processing of hemp
and the commercial sale of hemp products; and
(2) regulates hemp production in this state.
(b) In adopting rules under Subsection (a), the department
shall consult with:
(1) relevant public agencies; and
(2) private, nonprofit associations in the hemp
industry that promote standards, best practices, and
self-regulation in the production of hemp.
(c) Rules adopted under Subsection (a) must:
(1) establish requirements by which the department
authorizes an individual or business entity to participate in the
state hemp program as a hemp producer;
(2) prescribe the manner in which an institution of
higher education may participate in or be affiliated with the
program;
(3) prescribe sampling and testing procedures to
ensure that hemp plants cultivated, handled, or processed in this
state, and hemp products processed in this state, do not exceed the
federally defined THC level for hemp;
(4) provide due process consistent with Chapter 2001,
Government Code, including an appeals process, to protect hemp
producers from the consequences of imperfect test results; and
(5) prescribe enforcement procedures that are
consistent with Section 297B(e), Agricultural Marketing Act of 1946
(7 U.S.C. Section 1639p(e)).
Sec. 113.053. FEES. (a) The department by rule shall set
and collect fees in amounts that are reasonable and necessary to
cover the costs of administering and enforcing the state hemp
program.
(b) Fees prescribed by the department under this section are
not refundable.
(c) Fees collected under this section must be deposited in
the state hemp program account under Section 113.003.
Sec. 113.054. DEPARTMENT AUTHORIZATION REQUIRED. (a)
Except as provided by Subchapter C, a person or the person's agent
may not cultivate, handle, or process hemp in this state or
transport hemp outside of this state unless the person is
authorized by the department under this section to participate in
the state hemp program as a hemp producer.
(b) A person seeking to participate in the state hemp
program as a hemp producer must apply to the department on a form
and in the manner prescribed by the department. The application
must be accompanied by:
(1) a legal description and the global positioning
system coordinates for each location where the person intends to
cultivate or process hemp;
(2) written consent allowing the department, the
Department of Public Safety, and any other state or local law
enforcement agency to enter onto all premises where hemp is
cultivated, processed, or stored to conduct a physical inspection
or to ensure compliance with this chapter and rules adopted under
this subchapter;
(3) any fees required by the department; and
(4) any other information required by department rule.
(c) If the department determines that a person who submits
an application under this section meets the state hemp program
participation requirements prescribed by department rule, the
department shall authorize the person to participate in the program
as a hemp producer in the manner provided by department rule.
Sec. 113.055. LIMITATION ON PROGRAM PARTICIPATION. (a) A
person who is or has been convicted of a felony relating to a
controlled substance under state or federal law may not participate
in the state hemp program established under this subchapter or
produce hemp in this state under any other law for a period of at
least 10 years after the date of the person's conviction.
(b) A person who materially falsifies any information
contained in an application submitted to the department under
Section 113.054 may not participate in the state hemp program.
Sec. 113.056. ENFORCEMENT. (a) If the department
determines that a hemp producer has negligently violated this
subchapter or a rule adopted under this subchapter, the department
shall enforce the violation in the manner provided by Section
297B(e), Agricultural Marketing Act of 1946 (7 U.S.C. Section
1639p(e)). A hemp producer is not subject to a civil or criminal
penalty under this subsection.
(b) If the department determines that a hemp producer has
violated this subchapter or a rule adopted under this subchapter
with a culpable mental state greater than negligence, Subsection
(a) does not apply and the department shall report the hemp producer
immediately to:
(1) the United States attorney general; and
(2) the attorney general of this state, who may:
(A) on behalf of the department, investigate the
violation and institute proceedings for injunctive or other
appropriate relief; or
(B) report the matter to an appropriate law
enforcement agency.
SUBCHAPTER C. HEMP PRODUCTS
Sec. 113.101. PROCESSING OR MANUFACTURING HEMP PRODUCTS. A
state agency may not prohibit a person who processes or
manufactures a product regulated by the agency from applying for or
obtaining a permit or other authorization to process or manufacture
the product solely on the basis that the person intends to process
or manufacture the product with hemp.
Sec. 113.102. HEMP-DERIVED ADDITIVES. Notwithstanding any
other law, derivatives of hemp, including hemp-derived
cannabidiol, may be added to cosmetics, personal care products, and
products intended for human or animal consumption, and such an
addition is not considered an adulteration of those products.
Sec. 113.103. POSSESSION, TRANSPORTATION, AND SALE OF HEMP
PRODUCTS. (a) Notwithstanding any other law, a person may possess,
transport, sell, and purchase legally produced hemp products in
this state.
(b) The department by rule must provide to a retailer of
hemp products fair notice of a potential violation concerning hemp
products sold by the retailer and an opportunity to cure a violation
made unintentionally or negligently.
Sec. 113.104. RULES RELATED TO SALE OF HEMP PRODUCTS. The
department, in consultation with the Department of State Health
Services, may adopt rules to regulate the sale of hemp products that
reflect the following principles:
(1) hemp-derived cannabinoids, including cannabidiol,
are not considered controlled substances or adulterants; and
(2) products containing one or more hemp-derived
cannabinoids, such as cannabidiol, intended for ingestion are to be
considered foods, not controlled substances or adulterated
products.
Sec. 113.105. RETAIL SALE OF OUT-OF-STATE HEMP PRODUCTS.
Retail sales of hemp products processed outside of this state may be
conducted in this state when the products and the hemp used in the
products were processed and cultivated legally in another state or
jurisdiction that has the same or substantially similar
requirements for processing hemp products or cultivating hemp as
provided by this chapter.
Sec. 113.106. TRANSPORTATION AND EXPORTATION OF HEMP
PRODUCTS OUT OF STATE. Hemp products may be legally transported
across state lines and exported to foreign countries in a manner
that is consistent with federal law and the laws of respective
foreign countries.
SUBCHAPTER D. ENFORCEMENT; PENALTIES
Sec. 113.151. PENALTY SCHEDULE. (a) The department by rule
shall adopt a schedule of sanctions and penalties for violations of
this chapter and rules adopted under this chapter that does not
conflict with Section 297B(e), Agricultural Marketing Act of 1946
(7 U.S.C. Section 1639p(e)).
(b) A penalty collected under this chapter must be deposited
in the state hemp program account under Section 113.003.
Sec. 113.152. ADMINISTRATIVE PENALTY. The department may
impose an administrative penalty or other administrative sanction
for a violation of this chapter or a rule or order adopted under
this chapter, including a penalty or sanction under Section 12.020
or 12.0201.
SECTION 6. Sections 481.002(5) and (26), Health and Safety
Code, are amended to read as follows:
(5) "Controlled substance" means a substance,
including a drug, an adulterant, and a dilutant, listed in
Schedules I through V or Penalty Group 1, 1-A, 2, 2-A, 3, or 4. The
term includes the aggregate weight of any mixture, solution, or
other substance containing a controlled substance. The term does
not include hemp, as defined by Section 112.001, Agriculture Code,
or any tetrahydrocannabinols or other substances in hemp.
(26) "Marihuana" means the plant Cannabis sativa L.,
whether growing or not, the seeds of that plant, and every compound,
manufacture, salt, derivative, mixture, or preparation of that
plant or its seeds. The term does not include:
(A) the resin extracted from a part of the plant
or a compound, manufacture, salt, derivative, mixture, or
preparation of the resin;
(B) the mature stalks of the plant or fiber
produced from the stalks;
(C) oil or cake made from the seeds of the plant;
(D) a compound, manufacture, salt, derivative,
mixture, or preparation of the mature stalks, fiber, oil, or cake;
[or]
(E) the sterilized seeds of the plant that are
incapable of beginning germination; or
(F) hemp or a hemp product, as those terms are
defined by Sections 112.001 and 113.001, Agriculture Code.
SECTION 7. (a) Not later than the 90th day after the
effective date of this Act, the Department of Agriculture shall
adopt rules under Section 112.003, Agriculture Code, as added by
this Act, and submit for approval a state plan to the secretary of
the United States Department of Agriculture as provided by Section
112.004, Agriculture Code, as added by this Act.
(b) The Department of Agriculture shall submit amended
state plans as provided by Section 112.004(c), Agriculture Code, as
added by this Act, as necessary until the plan is approved.
SECTION 8. (a) Not later than January 1, 2020, the
Department of Agriculture shall adopt rules and procedures
necessary to implement Chapter 113, Agriculture Code, as added by
this Act.
(b) Not later than the 30th day after the date on which rules
and procedures are adopted under Subsection (a) of this section,
the Department of Agriculture shall begin authorizing
participation in the state hemp program established under Chapter
113, Agriculture Code, as added by this Act.
SECTION 9. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2019.