HOUSE OF REPRESENTATIVES
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO HEMP PRODUCTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Act 228, Session Laws of Hawaii 2016, which established the industrial hemp pilot program within the department of agriculture, created the promise of a new form of diversified agriculture in Hawaii. Since the inception of the pilot program, thirty-six industrial hemp farmers have registered with the department and are currently cultivating hemp for commercial use.
The legislature recognizes that the United States Congress passed the Agriculture Improvement Act of 2018, otherwise known as the 2018 Farm Bill, which, among other matters, removed hemp-derived extracts, derivatives, and cannabinoids such as cannabidiol from schedule I substances in the Controlled Substances Act. The hemp industry across the country has grown rapidly, and hemp-derived products are used by a wide range of consumers.
The legislature also recognizes that, while the United States Department of Agriculture has opened the hemp market, the United States Food and Drug Administration has continued to exercise jurisdiction over the regulation of ingestible and topical hemp products. In 2019, the Food and Drug Administration started to evaluate regulatory frameworks for hemp-derived compounds, held a public hearing, and opened a public docket for data gathering. The Food and Drug Administration has also issued public statements that assert that it is illegal to market cannabidiol as a food additive or dietary supplement because it is an active ingredient in a pharmaceutical drug. The main psychoactive cannabinoid in cannibis is delta-9 tetrahydrocannabinol. Cannabidiol is an example of a cannabinoid.
While it is expected that the Food and Drug Administration will eventually use its authority to regulate hemp-derived products, the only enforcement action it has taken to date is to send warning letters against improper disease remediation claims made by food and supplement companies.
The legislature finds that, given the time expected for the Food and Drug Administration to act and the existing confusion among consumers and the industry, it is important that a timely regulatory framework be established around hemp products and cannabinoids, both to provide consumer safety requirements and certainty for Hawaii hemp farmers to continue to viably operate their industrial hemp operations in the State.
Accordingly, the purpose of this Act is to:
(1) Establish a hemp processor registry for hemp-derived products that consists of labeling and independent laboratory testing to ensure products do not contain contaminants unfit for human consumption;
(2) Prohibit hemp processors, distributors, and retailers from making unwarranted health claims of their hemp-derived products;
(3) Prohibit the sale or furnish of any hemp product to a person under twenty-one years of age;
(4) Prohibit the sale, hold, offer, or distribution for sale of any hemp-derived products designed to be appealing to children;
(5) Require these products to be properly labeled to be legally allowed for sale in the State;
(6) Require certain warning statements to be placed on the packaging of hemp-derived products; and
(7) Appropriate funds into the Hawaii hemp processing revolving fund.
SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
§ -1 Definitions. As used in this chapter:
"Applicant" means the person applying to register as a hemp processor under this chapter.
"Cannabinoids" means chemicals in cannabis that cause drug-like effects in the body, including the central nervous system and immune system.
"Cannabis" means the genus of the flowering plant in the family Cannabaceae. For the purposes of this chapter, "cannabis" refers to any form of the plant where the delta-9 tetrahydrocannabinol concentration on a dry weight basis has not yet been determined.
"Certificate of registration" means the certificate issued by the department attesting that the hemp products produced by the applicant's company have been registered with the department.
"Decarboxylated" means the completion of the chemical reaction that converts delta-9 tetrahydrocannabinol's acids (THCA) into delta-9 tetrahydrocannabinol. The decarboxylated value may be calculated using a conversion formula that sums delta-9 tetrahydrocannabinol and 87.7 per cent of THCA.
"Delta-9 tetrahydrocannabinol" or "THC" means the primary psychoactive component of cannabis.
"Department" means the department of health.
"Director" means the director of health.
"Disease or health-related condition" means damage to an organ, part, structure, or system of the body such that it does not function properly, or a state of health leading to such dysfunction.
"Dry weight basis" means a method of determining the percentage of a chemical in a substance after removing the moisture from the substance.
"Enclosed indoor facility" means a permanent, stationary structure with a solid floor, rigid exterior walls that encircle the entire structure on all sides, and a roof that protects the entire interior area from the elements of weather. "Enclosed indoor facility" shall not be construed to relieve the registered applicant from the applicant's duty to comply with all applicable building codes and regulations.
"Established and approved hemp program" means a program that meets all federal requirements regarding the lawful and safe cultivation of hemp.
"Food" means a raw, cooked, or processed edible substance, ice, beverage, or ingredient used or intended for use or for sale in whole or in part for human or animal consumption, or chewing gum.
"Health claim" means any claim made on the label or in labeling of a hemp product that expressly or by implication, including third party references, written statements, symbols, or vignettes, characterizes the relationship of any substance to a disease or health-related condition. Implied health claims include those statements, symbols, vignettes, or other forms of communication that suggest, within the context in which they are presented, that a relationship exists between the presence or level of a substance in the hemp product and a disease or health-related condition.
"Hemp" means Cannabis sativa L. and any part of that plant, including the seeds thereof 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 per cent on a dry weight basis, as measured post-decarboxylation or by other similarly reliable methods.
"Hemp processor" means an individual or entity authorized by the State and operating in the State to receive harvested hemp plant material lawfully grown under an established and approved hemp program in any state for the purpose of:
(1) Making a transformative change to the harvested hemp plant into a hemp derived ingredient to be used to manufacture a hemp product; and
(2) Manufacturing of a finished hemp product using a hemp derived ingredient complaint with paragraph (1).
"Hemp product" means a product containing hemp that:
(1) Is a hemp cosmetic for topical application to the skin or hair, or a hemp supplement to be ingested orally by humans or animals, excluding food;
(2) Contains any part of the hemp plant, including naturally-occurring cannabinoids, compounds, concentrates, extracts, isolates, resins, or derivatives; and
(3) Has a delta-9 tetrahydrocannabinol concentration of not more than 0.3 per cent as measured post-decarboxylation or other similarly reliable methods.
"Hemp product" does not include any living hemp plants, viable seeds, leaf materials, or floral materials marketed for retail sale.
"Industrial hemp" means hemp as defined in this chapter.
"Manufacture" means to compound, blend, extract, infuse, or otherwise make or prepare a hemp product, but does not include planting, growing, harvesting, drying, curing, grading, or trimming a hemp plant or part of a hemp plant.
"Marijuana" means all parts of the plant Cannabis, whether growing or not; the seeds thereof, the resin extracted from any part of the plant; and every compound, manufacture, salt derivative, mixture, or preparation of the plant, its seeds, or resin. "Marijuana" shall not include 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, fiber, oil, or cake; or the sterilized seed of the plant that is incapable of germination and with a delta-9 tetrahydrocannabinol concentration of more than 0.3 per cent on a dry weight basis.
"Person" means an individual, firm, corporation, partnership, association, or any form of business or legal entity.
"Processing" means making a transformative change to the hemp plant following harvest by converting a hemp agricultural commodity into a hemp derived ingredient that may be used to manufacture a hemp product.
"Synthetic cannabinoid" means a cannabinoid that is:
(1) Produced artificially, whether from chemicals or from recombinant biological agents, including but not limited to yeast and algae; and
(2) Not derived from the genus Cannabis.
"Synthetic cannabinoid" includes biosynthetic cannabinoids.
§ -2 Hemp processing; sale. (a) No person shall process hemp or manufacture hemp into hemp products without being registered by the department as a hemp processor pursuant to this chapter and any rules adopted thereto.
(b) Hemp, hemp products, and extraction by-products shall be processed and stored within an enclosed indoor facility with proper storage conditions to minimize spoilage and formation of mold and mycotoxins and secured to prevent unauthorized entry.
(c) Hemp shall not be processed within one thousand feet of an existing playground, school, state park, state recreation area, residential neighborhood, hospital, or daycare due to odorous emissions created during processing.
(d) Hemp shall not be processed using butane in an open system where fumes are not contained or any other method the department determines could potentially pose a risk to health and safety.
§ -3 Hemp processor registry. (a) The department shall create a registry for hemp processors.
(b) No person shall process hemp in the State unless the person is registered by the department pursuant to this chapter.
(c) A person who intends to process hemp in the State shall apply to the department for registration on an application form created by the department.
(d) The applicant shall provide, at a minimum, the following information:
(1) The applicant's name, mailing address, and phone number in the State;
(2) The legal description of the land on which the hemp is to be processed or stored;
(3) A description of the enclosed indoor facility where hemp processing will occur;
(4) Documentation that the indoor facility and planned hemp processing operation complies with all zoning ordinances, building codes, and fire codes; and
(5) Any other information required by the department.
(e) In addition to the application form, each applicant shall submit a non-refundable application fee established by the department. If the fee does not accompany the application, the application for registration shall be deemed incomplete.
(f) Any incomplete application shall be denied.
(g) Upon the department receiving a complete and accurate application and remittal of the application fee, the applicant shall be sent a certificate of registration that indicates that the applicant is registered to process hemp in the State.
(h) No person shall process hemp without receiving a certificate of registration from the department.
(i) Upon receiving a certificate of registration, the registrant shall apply to the department of public safety narcotics enforcement division and obtain a certificate to possess and handle delta-9 tetrahydrocannabinol as a byproduct of the cannabinoid extraction process; provided that:
(1) The registrant shall provide proof of the certificate to process from the department of public safety narcotics enforcement division to the department within seven days of obtaining the certificate; and
(2) The registrant shall maintain the certificate throughout the licensing period and shall notify the department immediately if the certificate to process from the department of public safety narcotics enforcement division is suspended or revoked.
(j) The certificate of registration shall be renewed annually by payment of an annual renewal fee to be determined by the department and subject to verification by the department.
(k) All hemp processors shall allow federal, state, or local authorities, including any member of the department, or any agent or third party authorized by the department, entry at reasonable times upon any private property in order to inspect, sample, and test the hemp processing area, hemp products, plants, plant materials, seeds, equipment, facilities incident to the processing or storage of hemp, and review all pertinent records.
(l) The department may remove any person from the registry for failure to comply with any law or regulation. It shall be the responsibility of the hemp processor to make sure that the hemp processor is registered and legally allowed to process hemp and in compliance with any and all laws and regulations. The removal of a hemp processor from the registry shall be accompanied by a cease and desist order, any violation of which constitutes a violation of this chapter.
§ -4 Hemp used as ingredient in hemp supplement or hemp cosmetic. (a) The hemp plant material used as an ingredient in a hemp supplement or hemp cosmetic shall meet the following conditions:
(1) The hemp plant shall be grown in Hawaii or in another state under a valid license issued by an established and approved hemp program allowing for the lawful growth of production legal hemp; and
(2) Hemp supplements or hemp cosmetics imported into the State shall be manufactured, labeled, and tested in accordance with the approved hemp program having primary jurisdiction; provided that:
(A) Hemp supplements or hemp cosmetics shall not be sold, held, offered, or distributed for sale without a certificate of analysis from an independent testing laboratory that indicates every batch of product is in compliance with all contaminant testing and that the total delta-9 tetrahydrocannabinol concentration does not exceed 0.3 per cent in accordance with the approved hemp program having primary jurisdiction;
(B) The certificate of analysis shall be provided to every distributor and retailer for every batch of product received and shall be provided to consumers by request; and
(C) Hemp supplements or hemp cosmetics that are manufactured in a jurisdiction that does not have an approved hemp program shall be in compliance with required testing and labeling requirements pursuant to this chapter and subsequent rules adopted to implement this chapter.
(b) For the purposes of this section, "production legal hemp" means a hemp plant that:
(1) Has satisfactorily complied with all testing requirements, conducted by a third-party independent laboratory, to determine the delta-9 tetrahydrocannabinol concentration as required by the established and approved hemp program having primary jurisdiction; and
(2) Does not meet the definition of marijuana or cannabis by state law.
§ -5 Labeling. (a) No person shall sell, hold, offer, or distribute for sale hemp products without a label prescribed by the department identifying that the hemp product has been tested and satisfies the criteria for quality control established by the department pursuant to this chapter.
(b) The label of any package of a hemp supplement or hemp cosmetic shall include the contents and potency of cannabinoids and the following boxed warning statements in all capital letters and printed in not less than eighteen-point font:
(1) "USING PRODUCTS CONTAINING CANNABINOIDS WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. KEEP OUT OF REACH OF CHILDREN."; and
(2) "WARNING: MAY INTERACT WITH OTHER DRUGS. CONSULT A HEALTH PROFESSIONAL BEFORE USE.".
§ -6 Health claims; prohibited. A hemp processor, manufacturer, distributor, or seller of a hemp product shall not include on the label of the product, or publish or disseminate in advertising or marketing, any health claims of a curative or therapeutic nature that, expressly or impliedly, suggests a relationship between the consumption or use of hemp or hemp products and health benefits or effects on the diagnosis, cure, mitigation, treatment, or prevention of any disease.
§ -7 Products designed to be appealing to children; sale or distribution prohibited. No person shall manufacture, or sell, hold, offer, or distribute for sale in the State any hemp product designed to be appealing to children, including but not limited to:
(1) Any product bearing any resemblance to a cartoon character, fictional character whose target audience is children or youth, or pop culture figure;
(2) Any product bearing a reasonable resemblance to a product available for consumption as a commercially available candy;
(3) Any product whose design resembles, by any means, another object commonly recognized as appealing to, or intended for use by, children; or
(4) Any product whose shape bears the likeness or contains characteristics of a realistic or fictional human, animal, or fruit, including artistic, caricature, or cartoon renderings.
§ -8 Hemp products; food; manufacture, sale, or distribution prohibited. (a) No person shall manufacture, or sell, hold, offer, or distribute for sale, in the State any food into which a cannabinoid, synthetic cannabinoid, or other hemp product has been added. This section shall not apply to hemp that is generally recognized as safe by the Food and Drug Administration for use in foods, as intended, in a public generally recognized as safe notification.
(b) No person shall manufacture, or sell, hold, offer, or distribute for sale, in the State any hemp supplement into which a synthetic cannabinoid has been added.
(c) No person shall manufacture, or sell, hold, offer, or distribute for sale, in the State any cannabinoid products used to aerosolize for respiratory routes of delivery, such as with an inhaler or nebulizer.
§ -9 Rulemaking. (a) The department shall adopt rules pursuant to chapter 91 that include but are not limited to:
(1) Inspection and sampling requirements of any hemp or hemp products;
(2) Testing protocols, including certification by independent third-party laboratories, to determine delta-9-tetrahydrocannabinol concentration of hemp or hemp products and screen for contaminants;
(3) Reporting and record-keeping requirements;
(4) Assessment of fees for application, inspecting, sampling, and testing hemp processing;
(5) A procedure for the disposal or destruction of unwanted or unused hemp, hemp products, and extraction by-products to include but not limited to delta-9 tetrahydrocannabinol;
(6) Penalties for any violation of this chapter; and
(7) Any other rules necessary to carry out this chapter.
(b) The department may adopt and amend interim rules, which shall be exempt from chapter 91 and chapter 201M, to effectuate the purposes of this chapter; provided that:
(1) The department shall hold at least one public hearing prior to the adoption of interim rules with at least thirty days' notice for that public hearing; and
(2) Any interim rules shall remain in effect until June 30, 2023, or until rules are adopted pursuant to subsection (a), whichever occurs sooner.
§ -10 Laboratory standards and testing; certification. (a) The department shall establish and enforce standards for laboratory-based testing of the hemp products for content, contamination, and consistency; provided that in establishing these standards, the department shall:
(1) Review and consider the testing programs and standards utilized in other jurisdictions;
(2) Consider the impact of the standards on the retail cost of the product;
(3) Review and consider the testing programs and standards for pesticides under the regulations of the United States Environmental Protection Agency; and
(4) For the testing of microbiological impurities, consider the benefits of organically grown hemp that features the use of bacteria in lieu of pesticides.
(b) The department may certify laboratories that are qualified to test hemp products for quality control prior to sale.
(c) If a hemp processor obtains a laboratory result indicating that a sample of a batch of its hemp product does not meet the department's standards, the hemp processor, at its own expense, may have the same sample or a different sample from the same batch retested by the same laboratory or a different laboratory, both of which must be certified or otherwise approved by the department. If a retest at a different laboratory yields a different result, the department shall determine which result controls whether the batch may be approved for sale or whether further testing shall be required.
(d) Any hemp product that fails to meet the standard for testing and re-testing established by the department pursuant to this chapter shall be destroyed in a manner prescribed by the department in accordance with rules adopted pursuant to this chapter.
§ -11 Enforcement; penalties. (a) Any person who violates this chapter or any rules adopted by the department pursuant to this chapter shall be fined not more than $10,000 for each separate offense. Any action taken to collect the penalty provided in this subsection shall be considered a civil action. In addition to any other administrative or judicial remedy provided by this chapter, or by rules adopted pursuant to this chapter, the director may impose by order the administrative penalty specified in this section. Factors to be considered in imposing the administrative penalty include the nature and history of the violation and of any prior violation, and the opportunity, difficulty, and history of corrective action.
(b) For any judicial proceedings to recover an administrative penalty imposed by order or to enforce a cease and desist order against a hemp processor removed from the registry, the director may petition any court of appropriate jurisdiction and need only show that notice was given, a hearing was held or the time granted for requesting a hearing has expired without such a request, the administrative penalty was imposed or the hemp processor was removed from the registry, and that the penalty remains unpaid or the hemp processor continues to process hemp.
(c) Nothing in this chapter shall limit any other legal remedy, or limit any civil or criminal action, available under any other statute, rule, or ordinance.
§ -12 Hemp products; persons under twenty-one years of age. (a) It shall be unlawful to sell or furnish a hemp product in any shape or form to a person under twenty-one years of age.
(b) All persons engaged in the retail sale of hemp products shall check the identification of hemp product purchasers to establish the age of the purchaser if the purchaser reasonably appears to be under twenty-seven years of age.
(c) It shall be an affirmative defense that the seller of a hemp product to a person under twenty-one years of age in violation of this section had requested, examined, and reasonably relied upon a photographic identification from the person establishing that person's age as at least twenty-one years of age prior to selling the person a hemp product. The failure of a seller to request and examine photographic identification from a person under twenty-one years of age prior to the sale of a hemp product to the person shall be construed against the seller and form a conclusive basis for the seller's violation of this section.
(d) Signs using the statement, "The sale of hemp products to persons under twenty-one is prohibited", in letters at least one-half inch high shall be posted on or near any vending machine at or near the point of sale of any other location where hemp products are sold.
(e) It shall be unlawful for a person under twenty-one years of age to purchase or possess any hemp product. This subsection does not apply if a person under the age of twenty-one, with parental authorization, is participating in a controlled purchase as part of a law enforcement activity or a study authorized by the department of health under the supervision of law enforcement to determine the level of incidence of hemp product sales to persons under twenty-one years of age.
(f) Any person who violates subsection (a) or (d), or both, shall be subject to enforcement and penalties pursuant to this chapter and subsequent rules to carry out this chapter.
§ -13 Hawaii hemp processing revolving fund; established. (a) There is established a Hawaii hemp processing revolving fund.
(b) The department of health shall use moneys from the Hawaii hemp processing revolving fund to repay the general fund pursuant to Act , Session Laws of Hawaii 2020."
SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2020-2021 to be deposited into the Hawaii hemp processing revolving fund established pursuant to section -13, Hawaii Revised Statutes.
The sum appropriated shall be expended by the department of health for the purposes of this Act.
SECTION 4. Not later than July 1, 2027, the department of health shall establish a repayment plan and schedule to repay the general fund, the sums deposited into the Hawaii hemp processing revolving fund established pursuant to section ‑13, Hawaii Revised Statutes. The department of health shall use moneys from the Hawaii hemp processing revolving fund to repay the general fund.
SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 6. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 7. This Act shall take effect on July 1, 2050.
Hemp Products; Cannabidiol; Cosmetics; Label; Manufacture; Sale; Prohibition; Medical Cannabis Dispensaries; Appropriation
Establishes a hemp processor registry for hemp-derived products that consists of labeling and independent laboratory testing to ensure products do not contain contaminants unfit for human consumption. Prohibits hemp processors, distributors, and retailers from making unwarranted health claims of their hemp-derived products. Prohibits the sale or furnish of any hemp product to a person under twenty-one years of age. Prohibits the sale, hold, offer, or distribution for sale of any hemp-derived products designed to be appealing to children. Requires these products to be properly labeled to be legally allowed for sale in the State. Requires certain warning statements to be placed on the packaging of hemp-derived products. Establishes penalties. Appropriates funds. Effective 7/1/2050. (SD1)
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