California Hemp Cultivation Business Catches Momentum, One Month After New Laws Fully Executed

It has one month past now since Governor Newsom executed the SB 153 bill on October 12, 2019. This law will go into effect on January 1, 2020, still, the considerable effects are already sensible in the market. Reports on the third quarter of fiscal year statistics from the California Department of Food and Agriculture show that the registered hemp growers in California have increased from 74 in June 2019 to 292 as of August 26. Also, at least 629 registered help cultivation sites and 17,571 acres associated with growers and seed breeders or in business.

Advocacy groups and all stakeholders in the trending Hemp Cultivation business celebrated the passage of SB 153 bill, which realigns California law in the best position to benefit most from the 2018 Farm Bill hemp provisions. This development which proved to be a remarkable victory, will bring California’s hemp laws up to date with the 2018 Farm Bill and omits state statute language that conflicted with the expanded definition of hemp that includes extracts, derivatives, and cannabinoids from the non-intoxicating flowers and leaves.

President Trump signed the 2018 Farm Bill into law legalizing state-regulated commercial hemp farming, on December 20, 2018. Forty-six states to include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming have already removed barriers to production of industrial hemp.

The 2018 federal Farm Bill decriminalized hemp by removing it from the Controlled Substances Act. Meanwhile, the bill did not remove Marijuana. Marijuana is what the federal government has long called cannabis that includes more than trace amounts of THC. The State of California regulates a commercial cannabis industry separate from hemp.

SB-153 bill is aimed at making significant changes to California’s hemp cultivation law. What are the anticipated changes?

• The bill adds a new definition of “industrial hemp”. Separate (and slightly different) definitions for hemp generally under the California Health and Safety Code, and now under the Food and Agriculture Code relative just to hemp cultivation.
• California will be required to submit a 2018 Farm Bill-compliant hemp production plan to the U.S. Department of Agriculture by May 2020. This is required under federal law, for states to comply with the 2018 Farm Bill. We still are awaiting USDA regulations to see how the submission process will work, but CA is now locked into submitting a plan.
• SB-153 will narrow the scope of who qualifies as an established agricultural research institution (“EARIs”) to be more consistent with federal law. Under current California hemp cultivation laws, the definition of EARIs is much broader than under federal law. SB- 153 will, once the USDA approves of CA’s hemp production plan, narrow the scope of who qualifies as an EARI to be consistent with federal law.
• California will mandate registration for commercial and non-commercial growers who don’t qualify as EARIs. Currently, only commercial growers must register. These modifications, in combination with the narrowed definition of EARIs, will require that some current hemp cultivators who qualify as EARIs will then need to register as non- commercial cultivators.
• California will also mandate registration for EARIs and require them to submit “research plans” to their local county agricultural commissioner that detail what their cultivation operations will look like. This is a brand new concept that was not included in the original California Industrial Hemp Farming Act and is likely going to be a major change for cultivators across the state operating under research memoranda of understanding with EARIs.
• The bill will create enforcement provisions, penalties for false statements on applications, and a bar on persons from being a part of the industrial hemp program if they had a conviction relating to controlled substances in the prior 10-year period. SB-153 clarifies that hemp can’t be cultivated in licensed cannabis premises, but that if it is, it will be considered cannabis.

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