THE SENATE

S.B. NO.

1027

THIRTY-FIRST LEGISLATURE, 2021

S.D. 2

STATE OF HAWAII

H.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO HEMP.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


PART I

SECTION 1. Act 14, Session Laws of Hawaii 2020 (Act 14), established a registry for hemp processors within the department of health, created a hemp processing special fund within the department of health, and authorized the department of health to collect fees and fines for the program. Act 14 also tasked the department of agriculture with monitoring the transportation of hemp within the State and enforcing certain state restrictions regarding the growth of hemp within the State. The Act did not establish a special fund within the department of agriculture to perform these duties. Allowing for the industrial hemp special fund to be used for these purposes will allow the department of agriculture to use the existing special fund to perform the new regulatory duties relating to hemp.

The purpose of this part is to redesignate the industrial hemp special fund as the hemp special fund and authorize use of the moneys in the fund for the department of agriculture's duties regarding hemp as established by Act 14, Session Laws of Hawaii 2020.

SECTION 2. Section 141-14, Hawaii Revised Statutes, is amended to read as follows:

"[[]141-14[] Industrial hemp] Hemp special fund; established. (a) There is created in the state treasury a special fund to be designated as the [industrial] hemp special fund to be administered by the department of agriculture. Moneys deposited in this special fund shall be used to fulfill the purposes of [this] part III and shall include:

(1) Any moneys appropriated by the legislature to the special fund;

(2) [Any fees collected by the department of agriculture in relation to the industrial hemp pilot program; and] All revenues from the operations of part III, including all fees and fines;

(3) The interest or return on investments earned from moneys in the special fund[.]; and

(4) Grants and gifts made to the special fund.

(b) The department of agriculture may use the moneys in the special fund to carry out the purposes of [this] part[,III, including hiring employees, specialists, and consultants necessary to complete projects related to the purposes of [this] that part."

SECTION 3. There is appropriated out of the hemp special fund the sum of $           or so much thereof as may be necessary for fiscal year 2021-2022 and the same sum or so much thereof as may be necessary for fiscal year 2022-2023 to be used for the purposes of this part.

The sums appropriated shall be expended by the department of agriculture.

PART II

SECTION 4. Chapter 328G, Hawaii Revised Statutes, is amended to read as follows:

"[[]CHAPTER 328G[]]

HEMP [PROCESSORS] PROCESSING AND

HEMP PRODUCT MANUFACTURING

[[]328G-1[]] Definitions. As used in this chapter:

["Applicant" means the person applying to register as a hemp processor under this chapter.]

"Cannabinoids" means any of the various naturally occurring, biologically active, chemical constituents of cannabis that bind to or interact with receptors of the endogenous cannabinoid system.

"Cannabis" means the genus of the flowering plant in the family Cannabaceae. For the purpose 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 applicant] a person is registered to process hemp[.] or manufacture a hemp product.

"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 eighty-seven and seven tenths (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.

"Dry weight basis" refers to 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. Nothing in this definition shall be construed to relieve the [registered applicant] registrant from the [applicant's] duty to comply with all applicable building codes and regulations.

"FDA" means the United States Food and Drug Administration.

"Gummy" means a gelatinous cube, sphere, prismatoid, or ovoid.

"Hemp" means Cannabis sativa L. and any part of that plant, whether growing or not, including the seeds thereof [and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers], 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 a person processing hemp to manufacture a hemp product.]

"Hemp product" means [a product that:

(1) Contains naturally occurring cannabinoids, compounds, concentrates, extracts, isolates, resins or derivatives from processed hemp;

(2) Does not include any living hemp plants, viable seeds, leaf materials, or floral materials;

(3) Has a delta-9-tetrahydrocannabinol concentration of not more than 0.3 per cent, as measured post-decarboxylation, or other similarly reliable methods;

(4) Is intended to be consumed orally to supplement the human or animal diet; and

(5) Is in the form of a tablet, capsule, powder, softgel, gelcap, or liquid form (e.g. hemp oil) to be used by the consumer to infuse edible items at home for personal use or for topical application to the skin or hair.

For purposes of this chapter, a hemp product shall be considered as intended for oral ingestion in liquid form only if it is formulated in a fluid carrier and it is intended for ingestion in daily quantities measured in drops or similar small units of measure per labeled directions for use.] processed hemp:

(1) Intended to be sold directly to consumers; or

(2) To which additives have been introduced during manufacture.

"Manufacture" means to compound, blend, extract, infuse, or otherwise use processed hemp to 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].

"Person" means an individual, firm, corporation, partnership, association, or any form of business or legal entity.

"Processed hemp" means any compounds, concentrates, extracts, isolates, resins, or derivatives generated from the processing of hemp, excluding any part of the hemp plant and waste byproducts.

"Processing" means making a transformative change to the hemp plant [following harvest by converting an agricultural commodity into a hemp product.] using mechanical, chemical, or other means to produce processed hemp that is intended:

(1) To be consumed orally to supplement the human or animal diet or be applied topically to the skin or hair; or

(2) For use in manufacture of a hemp product intended to be consumed orally to supplement the human or animal diet or be applied topically to the skin or hair.

"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, including biosynthetic cannabinoids.

[[]328G-2[]] Hemp [processor] processing and manufacture registry[; application; removal from registry]. (a) No person shall process hemp without first obtaining a license to produce hemp, issued by the Secretary of the United States Department of Agriculture pursuant to title 7 United States Code section 1639q.

(b) No person shall process hemp or manufacture a hemp product without being registered by the department [as a hemp processor] pursuant to this [part] chapter and any rules adopted pursuant [[]to[]] this chapter.

(c) A person who intends to process hemp or manufacture a hemp product shall [apply to] register with the department [for registration on an application] by completing a registration form [created] provided by the department[.] in accordance with subsection (d).

(d) [The applicant] Each person who intends to process hemp or manufacture a hemp product shall provide, at a minimum, the following information:

(1) The [applicant's] registrant's name, mailing address, contact person, and phone number in Hawaii;

(2) The [legal description] street address or tax map key information of [the] each parcel of land on which [the] hemp is to be processed [or]; hemp products are to be manufactured; or hemp, processed hemp, or hemp products are to be stored;

(3) A description of [the] each enclosed indoor facility where hemp processing or hemp product manufacturing will occur;

[(4) Documentation that the indoor facility and planned hemp processing operation complies with all zoning ordinances, building codes, and fire codes;

(5)] (4) [Documentation] For persons who intend to process hemp, documentation showing that the [applicant] registrant has obtained a license to produce hemp, issued by the Secretary of the United States Department of Agriculture pursuant to title 7 United States Code section 1639q; and

[(6)] (5) Any other information required by the department.

(e) In addition to the [application] registration form, each [applicant] registrant shall submit a non-refundable [application] registration fee established by the department. If the fee does not accompany the [application,] registration form, the [application for] registration shall be deemed incomplete.

[(f) Any incomplete application shall be denied.

(g)] (f) Upon the department's receipt of a complete and accurate [application] registration form that meets the requirements adopted by the department pursuant to this chapter, any other information requested by the department, and [remittal of] the [application] registration fee, the [applicant shall be registered and shall be issued] department shall issue a certificate of registration [to process hemp].

[(h) The certificate of registration shall be renewed] (g) Each person who processes hemp or manufactures a hemp product shall re-register annually by [payment of] paying the [annual renewal] re-registration fee to be determined by the department[.] and certifying that there has been no change to the information required in subsection (d) or submitting an update as provided in subsection (h).

(h) The information required by subsection (d) shall:

(1) Be updated by the registrant on a form provided by the department not later than sixty days after the event giving rise to the need to make any corrections or to otherwise update information in the registry; and

(2) Accurately account for any changes to the information.

(i) [Hemp processors shall allow any member of the department, or any agent or third party authorized by the department, to enter at reasonable times upon any private property in order to inspect, sample, and test the hemp processing area, hemp products, equipment, facilities incident to the processing or storage of hemp, and review all pertinent records.] A registrant shall notify the department on a form provided by the department within sixty days after ceasing hemp processing or hemp product manufacturing operations.

(j) [The department may remove any person from the registry for failure to comply with any law or regulation under this chapter. It is the responsibility of the hemp processor to make sure it 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 in accordance with the procedures set forth in section 328H-F.] Upon request of the department, a registrant shall submit to the department documentation that the indoor facility and hemp processing or hemp product manufacturing operation comply with all zoning ordinances, building codes, and fire codes.

[[]328G-3[]] Hemp [processing;] processing and hemp product [sale and prohibitions; labeling.] manufacturing. (a) No hemp shall be processed [into hemp products], nor shall any [hemp processor] person hold for processing or sale any hemp, unless lawfully obtained from a person [approved or otherwise authorized by applicable federal, state or local law to cultivate hemp plants.] who holds a valid license issued by the United States Department of Agriculture pursuant to title 7 United States Code section 1639q or by a state or tribal agency administering a plan approved by the United States Department of Agriculture pursuant to title 7 United States Code section 1639p.

(b) Hemp shall be processed and hemp products shall be [processed] manufactured within an enclosed indoor facility secured to prevent unauthorized entry. Hemp, hemp products, and any toxic or otherwise hazardous by-products of hemp processing[, or by-products,] or hemp product manufacturing, including but not limited to delta-9 tetrahydrocannabinol, shall be stored within an enclosed indoor facility, secured to prevent unauthorized entry in a manner that prevents cross-contamination and unintended exposures.

(c) Hemp shall not be processed within [500] five hundred feet of a pre-existing playground, school, state park, state recreation area, residential neighborhood, hospital, or daycare facility.

(d) Hemp shall not be processed nor shall hemp products be manufactured using butane in an open system where fumes are not contained or by use of any other method of processing the department determines poses a risk to health and safety.

(e) Hemp processing and hemp product manufacturing facilities and operations shall comply with all applicable local rules and regulations.

328G-4 Sale and prohibitions. (a) No person shall sell, hold[,] for sale, offer, or distribute [for sale] any food, as that term is defined in section 328-1, into which [a cannabinoid, synthetic cannabinoid, hemp extract, hemp derivatives or other] hemp, processed hemp, a hemp product, or a synthetic cannabinoid [that] has been added as an ingredient or component. This section shall not apply to hemp that is generally recognized as safe (GRAS) by the FDA for use in foods, as intended, in a public GRAS notification.

[(f)] (b) No person shall sell, hold[,] for sale, offer, or distribute [for sale] any hemp product into which a synthetic cannabinoid has been added[.] nor any synthetic cannabinoid for oral consumption or topical use.

[(g)] (c) No person shall sell, hold[,] for sale, offer, or distribute [for sale any cannabinoid products used to aerosolize] any product containing hemp, made from hemp, or containing synthetic cannabinoids for respiratory routes of delivery, [such as an inhaler, nebulizer] including cigarettes, cigars, pre-rolls, inhalers, nebulizers, electronic smoking devices, or any other device designed for such purpose.

[(h)] (d) No person shall sell, hold[,] for sale, offer, or distribute [for sale,] directly to a consumer within the State any hemp leaf or hemp floral material [that is intended to be smoked or inhaled, including but not limited to hemp cigars or hemp cigarettes].

[(i)] (e) Except for hemp products intended for external topical application to the skin or hair, no person shall sell, hold[,] for sale, offer, or distribute [for sale] any products containing hemp [or hemp derivatives], made from hemp, or containing synthetic cannabinoids that are intended to be introduced via non-oral routes of entry to the body, including [but not limited to,] use in the eyes, ears, and nasal cavities.

(f) No person shall sell, hold for sale, offer, or distribute any processed hemp or hemp product, unless the hemp used to make the processed hemp or hemp product was grown by a person holding a valid license issued by the United States Department of Agriculture pursuant to title 7 United States Code section 1639q or by a state or tribal agency administering a plan approved by the United States Department of Agriculture pursuant to title 7 United States Code section 1639p.

(g) No person shall sell, hold for sale, offer, or distribute any processed hemp or hemp product that has a delta‑9-tetrahydrocannabinol concentration of more than 0.3 per cent, as measured post-decarboxylation, or by other similarly reliable methods.

(h) No person shall sell, hold for sale, offer, or distribute any hemp product intended to be consumed orally to supplement the human or animal diet, unless the product is in the form of a tablet, capsule, powder, softgel, gelcap, gummy, or liquid to be ingested in daily quantities measured in drops or similar units of measure.

(i) No person shall sell, hold for sale, offer, or distribute processed hemp or a hemp product, unless the processed hemp or hemp product has been tested in accordance with, and meets the standards established by, rules adopted by the department.

(j) No person shall sell, hold[,] for sale, offer, or distribute [for sale,] any processed hemp or hemp [products] product without a label, in a form prescribed by the department, affixed to the packaging that [identifies] includes confirmation that the processed hemp or hemp product [as having] has been tested pursuant to department rules.

[[328G-4]] 328G-5 Rulemaking. (a) The department [shall] may adopt rules pursuant to chapter 91 that include [but are not limited to]:

(1) [Inspection and sampling requirements of hemp products;] Handling, storage, and quality control requirements for persons processing hemp and manufacturing hemp products;

(2) Labeling requirements and restrictions for processed hemp and hemp products, including those related to intended use, health advisories and warnings, and medical claims;

[(2)] (3) [Testing protocols, including certification by state laboratories or independent third-party laboratories,] Requirements for sampling and testing of processed hemp and hemp products to determine delta-9-tetrahydrocannabinol concentration and [screening for contaminants of hemp products;] the presence of contaminants;

(4) Procedures for the certification of state laboratories and independent third-party laboratories;

[(3)] (5) Reporting and record-keeping requirements[;] for persons processing hemp and manufacturing hemp products;

[(4)] (6) Assessment of fees for [application,] registration, inspecting, sampling, and other fees as deemed necessary[;] to implement this chapter;

[(5)] (7) Penalties for any violation; and

[(6)] (8) Any other rules and procedures 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 any interim rules shall only remain in effect until July 1, 2025, or until rules are adopted pursuant to subsection (a), whichever occurs sooner.

[[328G-5] 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.

(b) The department may certify laboratories and recognize certifications from other jurisdictions of laboratories that are qualified to test hemp products for quality control prior to sale.

[]328G-6[]] Enforcement; penalty. (a) Persons who process hemp or manufacture hemp products shall:

(1) Provide the department, or any agent or third party authorized by the department, access at reasonable times to conduct an inspection of real property and facilities (including equipment), or any portions thereof, used in hemp processing; hemp product manufacturing; or storing hemp, processed hemp, or hemp products; and

(2) Make available to the department, or any agent or third party authorized by the department:

(A) Processed hemp and hemp products, so that samples may be collected; and

(B) Business records related to hemp processing or hemp product manufacturing.

(b) Any person who violates this chapter or any rule 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 for 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.

[(b)] (c) Any order issued under this chapter shall become final, unless not later than twenty days after the notice of order is served, the person or persons named therein request in writing a hearing before the director. Any penalty imposed[, including removal from the registry,] shall become final, and any monetary penalty shall become due and payable, twenty days after the order is served unless the person or persons named therein request in writing a hearing before the director. Whenever a hearing is requested, the penalty imposed[, including removal from the registry,] shall become final, and any monetary penalty shall become due and payable, only upon completion of all review proceedings and the issuance of a final order confirming the penalty in whole or in part. Any hearing shall be conducted in accordance with chapter 91.

[(c)] (d) For any judicial proceeding 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:

(1) Notice was given;

(2) A hearing was held, or the time granted for requesting a hearing has expired without such a request;

(3) The administrative penalty was imposed [or the hemp processor was removed from the registry]; and

(4) The penalty remains unpaid [or the hemp processor continues to process hemp].

[(d)] (e) The director, in the event there is deemed a potential health hazard, may take precautionary measures to protect the public through imposition of a cease and desist order, an embargo, the detention and removal of processed hemp or hemp products from the market, and the sequestration of processed hemp or hemp products suspected to be contaminated or otherwise harmful to human health. In the event of any cease and desist order, embargo, or detention of processed hemp or hemp products, the person or persons so named in the order imposing the cease and desist, embargo, or detention shall be afforded an opportunity to contest the [findings of the department] order in a hearing pursuant to chapter 91.

[(e)] (f) The director may institute a civil action in any court of competent jurisdiction for injunctive relief to prevent violation of any order issued or rule adopted pursuant to this chapter, in addition to any other remedy or penalty provided for under this chapter. 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.

[[]328G-7[]] Hawaii hemp processing and hemp product manufacturing special fund established. (a) There is established within the state treasury the Hawaii hemp processing and hemp product manufacturing special fund into which shall be deposited:

(1) Appropriations made by the legislature to the special fund;

(2) Any income and capital gains earned by the fund; and

(3) Any fees or fines collected by the department pursuant to this [part.] chapter.

(b) Moneys in the Hawaii hemp processing and hemp product manufacturing special fund shall be used by the department for the following purposes:

(1) To establish and regulate a system of registering persons who intend to process hemp [processors;] or manufacture hemp products;

(2) To fund positions and operating costs authorized by the legislature; and

(3) For any other expenditure necessary, consistent with this chapter, to implement the Hawaii hemp processing and hemp product manufacturing program."

SECTION 5. Act 14, Session Laws of Hawaii 2020, is amended by amending section 9 to read as follows:

"SECTION 9. This Act shall take effect upon its approval[, and shall be repealed on June 30, 2022; provided that the definition of "marijuana" in section 329-1, Hawaii Revised Statutes, and the definitions of "marijuana" and "marijuana Concentrate" in section 712-1240, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day prior to the effective date of this Act]."

PART III

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2050.



 

Report Title:

Department of Agriculture; Hemp Special Fund; Appropriation; Hemp Processing; Hemp Product Manufacturing

 

Description:

Part I: Redesignates the industrial hemp special fund as the hemp special fund for the department of agriculture's duties regarding hemp. Makes an appropriation. Part II: Amends chapter 328G, Hawaii Revised Statutes, to better distinguish processing and manufacturing, distinguish processed hemp and hemp products, clarify the purpose and functions of the registry system, clarify the scope of regulated hemp products and prohibitions, and clarify the department of health's rulemaking and enforcement authorities. Makes Act 14, Session Laws of Hawaii 2020, permanent. Effective 7/1/2050. (HD1)

 

 

 

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