Legislature(2017 - 2018)GRUENBERG 120
04/03/2017 01:00 PM House JUDICIARY
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB172 | |
| HB43 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 172 | TELECONFERENCED | |
| += | HB 43 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 172-INDUSTRIAL HEMP PRODUCTION LICENSES
1:02:51 PM
CHAIR CLAMAN announced that the first order of business would be
HOUSE BILL NO. 172, "An Act relating to the regulation and
production of industrial hemp; relating to industrial hemp pilot
programs; providing that industrial hemp is not included in the
definition of 'marijuana'; and clarifying that adding industrial
hemp to food does not create an adulterated food product."
1:03:23 PM
PATRICK FITZGERALD, Staff, Representative Harriet Drummond,
Alaska State Legislature, presented the legislation as follows
[original punctuation provided]:
Good afternoon chairman Claman and members of the
Judiciary committee. My name is Patrick Fitzgerald
Staff for Representative Harriet Drummond and I wanted
to thank you for the opportunity to present House Bill
172 An Act relating to the classification of
industrial hemp from a controlled substance to an
agricultural crop.
Section 7606 of the 2014 Farm bill designates the
approval of industrial hemp to be grown through a
pilot program to monitor the growth, cultivation, and
marketing of industrial hemp. Over 30 states have
taken advantage of the pilot program and have expanded
both domestic and international markets.
HB172 would define industrial hemp under Alaska
Statute 03.05.100 section (5) as "all parts and
varieties of the plans cannabis sativa L containing no
more than 0.3 percent delta-9 tetrahydrocannabinol."
Setting hemp under this classification will move
industrial hemp from a controlled substance with the
Alcohol and Marijuana Control Board to the Division of
Agriculture with the Department of Natural Resources.
One of the most common "taboos" with hemp are the many
similarities it shares with marijuana. Marijuana is
the flower of Cannabis sativa L that is used
medically/recreationally because it produces high
concentration of Delta-9 THC (tetrahydrocannabinol).
Hemp under the classification in HB 172, the must have
0.3% or less of delta-9 tetrahydrocannabinol.
HB 172 classifies industrial hemp as a crop with the
division of agriculture meaning it will be planted,
cultivated, and harvested much like how wheat or
barley is processed. Hemp grown out doors in large
scale crops will have low THC concentration which is
why HB 172 stipulates that the THC content must be
below 0.3%.
Hemp has proved to perform well in Alaskan conditions
th
and was grown with success in the early 20 century.
The toughness of hemp is also what serves as one of
the largest distinctions between itself and marijuana.
Industrial hemp is grown for the stock, seeds, roots,
and cell fluid all for industrial use.
Passing HB172 will incorporate a hemp crop into the
state's economy will expand local markets in multiple
industries, create a new pool of job creation, and
will create a new spur of revenue for the Alaska.
1:06:02 PM
REPRESENTATIVE HARRIET DRUMMOND, Alaska State Legislature,
commented that the business of legalized marijuana is off the
ground and it is now time to recognize that industrial hemp,
marijuana's sister product, does not have a psycho-active
component, but it does have enormous marketable value. She
related that Alaska's farmers want to produce industrial hemp,
and HB 172 recognizes the value of this product and offers the
return of this industry.
1:06:47 PM
MR. FITZGERALD, in response to Chair Claman, advised that he
would not offer the PowerPoint presentation because his opening
remarks covered its content.
CHAIR CLAMAN asked the committee whether it would prefer a more
detailed account within the PowerPoint presentation, or whether
the opening remarks would suffice. There being no hands raised
Mr. Fitzgerald's opening remarks sufficed.
1:07:28 PM
REPRESENTATIVE LEDOUX asked that if hemp is illegal why she is
allowed to buy those creams, and where hemp products are
produced, she asked.
MR. FITZGERALD answered that those products are produced outside
of the state and imported into Alaska through the same pilot
program being discussed. The State of Kentucky has taken the
most advantage of this through the pilot program designated in
Sec. 7606 of the Agricultural Act of 2014 (Farm Bill), and many
products are exported from other states or imported from Canada,
which is a large hemp producer.
REPRESENTATIVE LEDOUX asked whether the State of Alaska allows
the importation of hemp, but it does not allow its own farmers
to grow hemp.
MR. FITZGERALD answered no, because Section 7606 of the
Agricultural Act of 2014 (Farm Bill) designates that each state
must enact the hemp pilot program before producing and
cultivating hemp.
1:08:38 PM
REPRESENTATIVE LEDOUX asked whether the Farm Bill requires that
states allow hemp to be imported in from other states.
MR. FITZGERALD responded that that is not specified.
1:08:51 PM
REPRESENTATIVE LEDOUX stated that in other words, somehow the
state decided it would allow other states to import hemp into
Alaska, and not allow hemp to be grown in Alaska.
MR. FITZGERALD explained that hemp is still classified as a
controlled substance under the Alcohol and Marijuana Control
Board, so the farmers have not had the opportunity to cultivate
and produce hemp as an industrial crop.
CHAIR CLAMAN opened public testimony on HB 172.
1:09:26 PM
STEVE ALBERS advised that he works with the Kenai Soil and Water
Board and expressed interest in the growing of industrial hemp
because its advantages far outweigh any limitations, and it
allows the individual homeowner to grow this crop for their own
use, such as poultry litter and cat litter. The potential for
fodder for the state's agricultural community is quite large
with research rolling in daily, he described, and said he is
emphatically in favor of its use.
1:11:42 PM
GEORGE PIERCE said he represents himself and many Alaskans as
hemp is an excellent source of revenue for the state. He then
referred to the site, "Information Distillery, The Many Uses of
Hemp," and paraphrased as follows:
For thousands of years, humans have used parts of the
hemp plant for food, textiles, paper, fabric, and fuel
oil. Today, modern processing technologies have made
it possible to create alternatives to gasoline,
plastic, and other petroleum products that can help
the human race lessen its reliance on polluting and
expensive fossil fuels.
MR. PIERCE commented that hemp will save the nation's trees, it
is a highly nutritious and delicious food, and is the only plant
that contains all of the essential fatty acids and amino acids
required by the human body. He recommended that the committee
educate itself about hemp because it is nothing like marijuana,
a person doesn't get high, it is good for clothing and animals,
and commented that the constitution and the flag were made out
of hemp, and it is an $80 billion worldwide industry. Mr.
Pierce continued as follows:
The only thing I want you to do is pass this bill and
let the Alaskans invest in this. And, make it to
where the Alaskans only can create this industry.
We're not stupid, it's a weed, I know we can grow
weeds without having outside interests and non-
residents coming up here to exploit our money and our
resources.
MR. PIERCE asked the committee to pass this bill allowing
Alaskans an opportunity to invest in this industry.
1:15:37 PM
STEVE ST.CLAIR said he represents himself, and he opposes this
bill for a myriad of reasons, including the government does not
need to be involved in the growing of a weed, and
constitutionally, where is it mandated that the government needs
to monitor this resource. Additionally, he argued, possibly a
draft of the constitution was written on hemp paper, but the
constitution was not written on hemp paper. He noted that his
research found as follows: the State of Colorado legalized hemp
in 2014, the first year it cost the state $272,000 and it has
not been self-sustaining since enactment; the State of
Washington's program coordinator advised that the state is
allocating $145,000 for the program startup and hiring one
employee; the State of Colorado has cultivated hemp for three
years and it now has to increase its fees because it is not
self-sustaining; and, the State of Kentucky started in 2014,
with zero dollars allocated, and the Department of Agriculture
absorbed the cost and personnel [resources] and it has to hire
three full-time employees. None of these programs are self-
sustaining and if the Alaska Division of Agriculture said it has
the personnel and resources to absorb the inspections and
regulations, he commented, "Well they haven't been cut enough
then. You got too many people with too much free time." He
pointed out that the Division of Agriculture is being cut by $2
million this year, and this is not a self-sustaining program -
it is a money pit. The bottom line is that the government will
end up subsidizing this program for an industry that may only be
used to feed cattle, or whatever. He commented that testimony
indicated 25 people are interested, and he would like to see how
many will actually pay the registration fees.
1:18:48 PM
REPRESENTATIVE LEDOUX asked whether Mr. St. Clair has a problem
with the legalization of hemp other than his concern the
government might initiate a program to help the hemp farmers.
MR. ST. CLAIR answered that he has no problem whatsoever with
the legalization of hemp, his problem is the government's
involvement in the hemp industry.
REPRESENTATIVE REINBOLD asked that Mr. St. Clair forward his
research to Chair Claman's office.
MR. ST. CLAIR answered in the affirmative.
REPRESENTATIVE EASTMAN asked how current his statistics were
regarding those other states.
MR. ST. CLAIR answered that the information is relevant within
the last two to three weeks, and he has the points of contact.
1:20:46 PM
COURTNEY MORAN, Attorney, Earth Law, LLC, offered testimony as
follows:
I am available for any questions, but I am also
testifying today in support of HB 172. It has been my
honor and pleasure to work with Representative
Drummond's office, Patrick Fitzgerald, and the
Division of Agriculture in drafting legislation that
complies with federal law. And, also sets up a
regulatory framework that will provide very successful
and sustainable industrial hemp programs for farmers
and manufacturers throughout Alaska.
First, I wanted to follow up from the question asked
earlier about industrial hemp products. Industrial
hemp products themselves are legal and always have
been, that was clarified in the Ninth Circuit in 2004
in H.A. v. DEA case. It's the only -- the cultivation
of industrial hemp that has that issue federally,
which is why you are able to see industrial hemp
products on store shelves today. It's just that, as
Patrick mentioned, most these products are imported
from around the world.
Sec. 7606 of the Agricultural Act of 2014, Congress
not only defined industrial hemp, notwithstanding a
Controlled Substances Act, but also gave authority for
state departments of agriculture and institutions of
higher education in states that have legalized
industrial hemp to research the growth, cultivation,
and marketing of industrial hemp. So, this is what
provides the clear federal authority for the
implementation of state programs and, in fact, 15 --15
states actually cultivated hemp in 2016. And, HB 172
will create that state legal authority for Alaska
farmers, which upon passage and implementation will
allow Alaska consumers to purchase and domestically
produce hemp rather than imported hemp.
House Bill 172 defines industrial hemp in compliance
with the definition provided by Congress in the
Agricultural Act of 2014. And, removes industrial
hemp from the definition of marijuana, which is what
is provided for in Sec. 3. Most importantly, HB 172
clarified that industrial hemp is an agricultural
product and subject to regulation and registration by
the Department of Natural Resources, Division of
Agriculture. Authority is established for the
department or institution of higher education to
administer an agricultural pilot program and rule
making authority is established for the department to
implement that program. As well as, they are given
authority to establish annual renewable fees for the
application, registration, and renewal of application
fees to pay for the regulatory costs associated with
regulating and implementing industrial hemp program.
So, the budget concerns that were outlined by that
gentleman that just testified can be cured by this
authority for the department
[Technical difficulties at timestamps 1:23:21 - 1:23:33.] Ms.
Moran continued as follows:
1:23:33 PM
or viable [technical difficulties] notices to those
who produced industrial hemp without a current
registration, so this will, again, ensure that anyone
cultivating is registered and paying into the program.
Another important provision of HB 172 is that it
provides that food is not adulterated solely because
it contains industrial hemp which will alleviate any
issue as the program is developing.
So, I hope this committee provides a unanimous "do
pass" motion for HB 172, and I thank you for your
support and encouragement for agricultural industrial
hemp development in Alaska.
1:24:29 PM
CHAIR CLAMAN closed public testimony on HB 172 after
ascertaining no one further wished to testify.
1:24:35 PM
REPRESENTATIVE REINBOLD asked Ms. Moran to explain current
federal law with regard to marijuana and hemp.
MS. MORAN responded that marijuana is federally defined under
the Controlled Substances Act as any part of the plant cannabis
sativa, and it goes into specific details of what that does, and
does not entail. However, in 2014 under the Agricultural Act of
2014, more commonly known as the federal Farm Bill, Congress
included Sec. 7606 which not only defined industrial hemp as any
part of the plant cannabis sativa with not more than 0.3 percent
tetrahydrocannabinol (THC) concentration, but also established
authority for state departments of agriculture and institutions
of higher education in states that have already legalized
industrial hemp, the authority to establish agricultural pilot
programs to research the cultivation growth and marketing of
industrial hemp. She explained, that is the clear authority
from Congress for a bill such as HB 172 to be implemented in a
state, and almost 30 states have legalized industrial hemp, and
15 of those states are currently cultivating.
1:26:34 PM
REPRESENTATIVE LEDOUX inquired as to the problem with Alaska
legalizing hemp, the need for a pilot program, and whether there
are similar programs for wheat, alfalfa, or barley, for example.
MR. FITZGERALD answered that hemp is defined as a controlled
substance and is not specifically a crop. The pilot program, he
explained, initiates the allowance of the study, whether it
yields positive revenue such as cultivation, and [allows] the
entire process.
1:27:44 PM
REPRESENTATIVE LEDOUX argued that if the federal government
allows the Alaska legislature to pass a law allowing people to
grow industrial hemp, why Alaska would have to study it rather
than give people the opportunity to make money in the industry,
or lose money. She then referred to Sec. 03.05.079 of the bill,
and asked whether the federal government requires that language
as opposed to allowing the legislature to simply legalize hemp.
MR. FITZGERALD deferred to Ms. Moran.
1:29:00 PM
MS. MORAN responded that in strict compliance with the
provisions provided in Sec. 7606, the federal government does
require the implementation of a pilot program to study the
growth, cultivation, and marketing of industrial hemp. She
related that several states have gone beyond that and
established full legalization programs for full commercial
cultivation, such as in the State of Colorado and the option to
perform research, participate, or engage in commercial
cultivation. In the event this legislature elects to go for
full commercial cultivation, it definitely can do so, but in
order to comply with Sec. 7606 of the Agricultural Act of 2014,
this section of HB 172 should be maintained.
1:29:52 PM
REPRESENTATIVE LEDOUX asked that in the event the legislature
chose full legalization of hemp, could the study be deleted,
thereby, giving people the opportunity to either make money on
the industry, or lose money, because she was still unsure why
this legislature must study hemp.
MS. MORAN answered that Congress has not defined, specifically,
what is and is not required for research, so the department
could require as much or as little information and research as
it felt comfortable while implementing the program.
With regard to sales, she explained that [the issue of the]
marketing of industrial hemp is included within research, which
is how many folks are engaging and making sales of their
products.
1:31:24 PM
REPRESENTATIVE LEDOUX asked whether it has to be the government
performing the market research.
MS. MORAN responded no, the registered farmers themselves
perform the research, and the department can require that
farmers turn in their research, similar to what is being done in
the State of Kentucky.
1:31:50 PM
REPRESENTATIVE LEDOUX surmised that the farmers in the State of
Kentucky perform the research and send that information into the
state.
MS. MORAN agreed, and she said there are universities in
Kentucky actively engaged in the research program. Kentucky
farmers are required to submit a research plan, and those with
viable plans are selected, issued licenses, and are able to
cultivate and conduct those research studies throughout that
production season.
1:32:24 PM
REPRESENTATIVE LEDOUX asked the least the legislature could do
to meet the federal requirements and still not ask hemp farmers
do anything more than that of a barley farmer, for example.
MS. MORAN answered that this bill is exactly regarding that
issue because it creates registration authority for the
department, it sets up the establishment of an agricultural
pilot program, and it establishes rule making authority for the
department for its required research standards for the farmers
to provide, without any overly burdensome regulation.
REPRESENTATIVE LEDOUX asked whether Ms. Moran said that HB 172
was the absolute minimal in meeting the federal requirements.
MS. MORAN answered in the affirmative.
1:33:43 PM
CHAIR CLAMAN asked whether the states she described as having a
more robust hemp production program than the pilot program, had
a pilot program before moving onto the more robust structure.
MS. MORAN responded that they did not, some states have
implemented full commercial programs and whether or not they are
compliant with federal law is up for debate. She referred to
the new national administration and recommended establishing
legislation in compliance with the Farm Bill, thereby allowing
farmers to engage in a sustainable program long term. In the
event it becomes necessary in the future to change a few words
wherein the pilot program becomes a full program, that can
definitely be accomplished, she offered.
1:34:44 PM
REPRESENTATIVE KREISS-TOMKINS asked the names of the states that
have gone full bore on commercial production bypassing the pilot
program phase.
MS. MORAN replied that the states of Colorado and Oregon are the
two leading states.
1:35:28 PM
REPRESENTATIVE KREISS-TOMKINS asked Ms. Moran to speak to the
gross revenue of industrial hemp in the various states pursuing
hemp agriculture, and the pilot programs in Colorado and Oregon.
MS. MORAN asked Representative Kreiss-Tomkins to clarify his
request.
REPRESENTATIVE KREISS-TOMKINS clarified that he requests
specific figures, or the order of magnitude, in order to obtain
a sense of the economic scope and scale of the nascent industry
in these various states because he is interested in the economic
potential for Alaska.
MS. MORAN answered that she does not have specific figures,
although, she could say that the amount of cultivation increased
significantly in each state. She continued that with regard to
the State of Oregon, during its first production season of 2015,
only 9 farmers actually cultivated, during the 2016 production
season 77 farmers cultivated, and already in 2017, 118 farmers
are registered with the Oregon Department of Agriculture. She
explained that 2015 was Oregon's first successful production
season, and its first products are being produced with the first
sales being made right now so she doesn't have those figures.
She suggested reaching out to the Colorado Department of
Agriculture for specific figures.
REPRESENTATIVE KREISS-TOMKINS asked the same question of the
Alaska Division of Agriculture and the gross revenue figures...
1:38:16 PM
CHAIR CLAMAN interjected that he received a note from a member
requesting that Ms. Moran explain her organization.
1:38:30 PM
MS. MORAN responded that she is an industrial hemp attorney with
her law firm, Earth Law, LLC, she is an Oregon registered
lobbyist for the Industrial Hemp Farmers Association, and she
has been advocating nationally and internationally for
industrial hemp law reform.
CHAIR CLAMAN surmised that Ms. Moran's client is the Industrial
Hemp Farmers Association.
MS. MORAN advised that she is not being paid to work on this
legislation, she is doing it to provide an opportunity for
Alaska farmers, and a return to all of the United States farmers
their right to freely cultivate industrial hemp which was
outlawed in 1937.
1:39:19 PM
REPRESENTATIVE LEDOUX asked whether the State of Oregon went to
simply legalizing the "whole shebang."
MS. MORAN answered that within the State of Oregon there was
full legalization of cannabis, similar to Alaska except
industrial hemp. The state legalized medical marijuana in 1998,
legalized industrial hemp in 2009, and legalize recreational
cannabis in 2014. In 2016, she said she lobbied on behalf of
the Oregon Industrial Hemp Farmers Association wherein the
Oregon legislature passed HB 4060, a law that revitalized the
state's industrial hemp program and set up a program that has
been continually sustainable and successful for the farmers.
The Oregon Industrial Hemp Farmers Association is currently
working on specific legislation to provide specific language
calling the program an "agricultural research pilot program" and
giving additional regulatory authority to the Oregon Department
of Agriculture.
1:40:36 PM
REPRESENTATIVE LEDOUX asked whether the Oregon government was
actually studying the growth, cultivation, and marketing of
industrial hemp, or letting people go off on their own to grow
industrial hemp.
MS. MORAN explained that currently farmers perform the research
on their own as the government is not requiring or performing
its own research. Currently, she offered, legislation is moving
through the Oregon legislature that will provide authority for
the department to require additional record keeping and research
by the farmers, and that the Oregon State University, and other
universities, engage in research with the registered farmers.
1:41:32 PM
REPRESENTATIVE LEDOUX noted that Ms. Moran continues to say,
"Your farmers are the ones who are researching the growth," and
she imagined that most farmers would say they are just growing
hemp. Representative LeDoux asked whether Ms. Moran was using
the term "research" in conjunction with what the farmers are
actually doing to stay in compliance with the Farm Bill.
MS. MORAN explained that "Everyone is doing research," because
even though this crop has been cultivated over 12,000 years and
the history of the United States cultivating industrial hemp is
rich, farmers have not cultivated this plant for the past 80
years and it is a learning process. She explained that farmers
are studying the various types of irrigation, how much
fertilizer to use, plant spacing, what to put into their soils;
therefore, no matter what anyone is doing, it truly is research
at this stage.
1:42:45 PM
REPRESENTATIVE LEDOUX asked whether farmers are reporting this
information to the government, or [keeping records] just for
themselves.
MS. MORAN answered that some farmers are Ph.D. farmers
performing their own research and submitting it to the
government, and some farmers are keeping their own records.
1:43:24 PM
REPRESENTATIVE KREISS-TOMKINS asked whether Mr. Keyes had a
sense of the gross revenue from industrial hemp production in
the states with the more full-fledged approach, and states with
pilot programs. He requested a ballpark figure as to his sense
of the size of this emerging agricultural sector in other
states.
1:44:07 PM
ARTHUR KEYES, Director, Division of Agriculture, answered that
other state programs are not far enough along to determine
values. He advised that while attending the Hemp Regulatory
Meeting in Colorado last year, Kentucky was a big presenter and
some of their numbers are as follows: 2015 Kentucky had 1,742
acres in hemp production, and in 2016 that number jumped to
4,600 acres. The representatives from Kentucky also advised
that they imported 60,000 pounds of hemp seeds from nine
different countries for these hemp farm activities. That being
said, he opined that 4,600 acres was a substantial amount of
acreage and he imagined there was a significant economic benefit
for this kind of growth to take place.
REPRESENTATIVE KREISS-TOMKINS asked the Division of Agriculture
or the sponsor to track down economic data as to how large these
sectors are in other states to determine the upside potential in
Alaska. He then asked Mr. Keyes to speak to the climatic
advantages or disadvantages Alaska farmers will have in
cultivating industrial hemp.
MR. KEYES pointed out that the intention of the pilot program in
Alaska is to determine whether Alaska has climatic advantages or
disadvantages, and those questions cannot be answered until the
farmers are allowed to grow hemp. He commented, that some of
those questions would be answered after the opportunity to
actually determine what can be done, and he then deferred to Rob
Carter, the state agronomist.
REPRESENTATIVE KREISS-TOMKINS asked Rob Carter whether Alaska
would have climatic advantages or disadvantages in the growing
industrial hemp.
1:47:50 PM
ROB CARTER, Manager, Plant Materials Center, Division of
Agriculture, Department of Natural Resources, described that
when considering whether Alaska has a climatic advantage is a
"two-edged sword" given that it is a rather large state and the
difference between the Southeast Panhandle and north of the
Alaska Range is dramatic. He offered that from a general
agronomics viewpoint, Alaska has the potential to utilize
industrial hemp for a multitude of reasons, even beyond
harvesting it as a traditional agricultural crop. Extensive
research was conducted in bio-remediation wherein hemp could be
used in the far north where the intent might not be to harvest a
crop, but to improve soils, and research in Sweden found that it
reduces cadmium in soil levels in some of its regions. He
suggested there could be seed production in the Southeast used
for cannabidiol (CBD), and noted that research in 1916, and
again in the 1950s, showed that it produced hemp in the
Fairbanks region. That, he said, together with the changes in
Alaska's climate and longer growing seasons coupled with modern
technology should produce a significant advantage. Also, he
pointed out Alaska provides isolation as it is remote from other
large macro-agricultural production, including cannabis
production, which may offer Alaska the opportunity to be a
relatively clean seed source for these low tetrahydrocannabinol
(THC) industrial hemp seeds.
1:49:31 PM
MR. FITZGERALD pointed to the news clip contained within the
members' packets from the Alaska Agricultural Experiment
Stations of 1916, U.S. Department of Agriculture, and he
paraphrased as follows [original punctuation provided]:
A small plat of 4 drill rows seeded May 21 began to
bloom June 30 and was harvested September 14. The
best plants were 40 inches tall, the poorest 12
inches. The plants fruited abundantly, about 75 per
cent of the crop ripening.
MR. FITZGERALD reiterated that hemp has had successes growing in
Alaska in the past.
1:50:26 PM
REPRESENTATIVE EASTMAN asked Ms. Moran to explain whether there
is legal significance to the phrase "pilot program" in HB 172 or
in [Sec. 7606 of the Agricultural Act (Farm Bill)].
MS. MORAN responded that the language is directly from the Farm
Bill, and it is reflected within the provisions of HB 172.
1:51:27 PM
REPRESENTATIVE EASTMAN asked whether the definition of pilot
program means that he can do anything and call it a pilot
program, and whether there was anything to say that "he was not
doing a pilot program."
MS. MORAN answered that within the Farm Bill, an agricultural
pilot program means a pilot program to study the growth,
cultivation, and marketing of industrial hemp. She paraphrased
the section as follows:
Subsection (a), in states that permit the growth or
cultivation of industrial hemp under the laws of the
state, and sub (b) in a manner that, sub (i) inserts
that only institutions of higher education and state
departments of agriculture are used to grow or
cultivate industrial hemp, sub Q requires that sites
used for growing or cultivating industrial hemp in a
state be certified by and registered with the state
department of agriculture, and sub (3) authorizes
state departments of agriculture to promulgate
regulations to carry out the pilot program in states
in accordance with the purposes of this section.
1:52:37 PM
REPRESENTATIVE EASTMAN advised that "all of that simply spells
new program to me, whether it's a pilot or otherwise" because he
looks at it as synonymous with creating a new hemp agricultural
program. He asked whether there was any legal difference
between what is offered in HB 172, and what Ms. Moran described
as a more aggressive full program pursued in Colorado, for
example.
MS. MORAN explained that the language in HB 172 is directly
compliant with the definition provided for agricultural pilot
program in the Farm Bill. The bill language sets up the pilot
program to study growth, cultivation, and marketing of
industrial hemp, it is regulated by the state Division of
Agriculture, and all sites certified and registered by the
division, and this language provides direct compliance with Sec.
7606. She offered that the Drug Enforcement Administration
(DEA) put out a statement after the enactment [of the Farm Bill]
and pointed out that it is specifically looking for research to
be performed in compliance with Sec. 7606 of the Agriculture
Act, and not necessarily general commercial cultivation in the
[hemp] program.
1:54:21 PM
REPRESENTATIVE REINBOLD asked Ms. Moran the amount of money
lobbyists are paid in Oregon, while noting that lobbyist's fees
are posted in Alaska.
CHAIR CLAMAN pointed out that, previously, Ms. Moran testified
she was not testifying on behalf of the Industrial Hemp Farmers
Association.
REPRESENTATIVE REINBOLD argued that her question was how much
Ms. Moran was paid to lobby for the Industrial Hemp Farmers
Association.
MS. MORAN responded that an Oregon lobbyist's specific figures
are listed under the Government Ethics Commission, and she was
paid just over $5,000. Ms. Moran reiterated that this is her
passion as she believes in industrial hemp as it provides
incredible opportunities for [the nation's] environment, public
health, and general economy, and "I'm doing this because it's
the right thing to do." She reiterated that she is not being
paid by anyone in Alaska to "do this, I just do it because I
believe in this."
CHAIR CLAMAN surmised that in 2016, she was paid $5,000 from the
industrial hemp growers in Oregon.
MS. Moran clarified that it was just over $5,000.
1:56:08 PM
REPRESENTATIVE REINBOLD referred to growing hemp and asked
whether Ms. Moran believes it was the state's business to know
how much fertilizer was used, and whether it was the
government's business to have more proprietary information. She
further asked whether farmers receive any form of subsidy from
the government for that type of information.
MS. MORAN stressed that the industrial hemp industry is not
subsidized in any manner, and that the information is beneficial
to the industry as a whole. Over the years, she expressed, the
industrial hemp industry she has seen develop is collaborative
and communicative and everyone wants to work together. This
legislation's intent, she pointed out, is to return the same
right to the farmers they had prior to 1937, and to provide a
renewable, sustainable crop for everyone. The information is to
help the industry get up off the ground and truly establish best
practices, she said.
1:57:22 PM
REPRESENTATIVE REINBOLD asked whether she was aware of negative
or positive impacts in Oregon with the hemp industry.
MS. MORAN stated that she had not seen specific negatives, other
than trying to develop an industrial hemp industry in Oregon by
working on obtaining seeds and genetics so the farmers can get
their plants into the ground, developing proper harvesting
techniques, developing processing facilities, and developing the
infrastructure to actually establish these products and truly
have a program and an industry in Oregon. She related that
getting the industry off the ground has been incredible because
she has seen new farmers become educated about a new crop, folks
that wanted to grow crops actually being able to fulfill that
dream and grow those crops and provide rotation for the other
crops that they are growing. She added that there are fiber
remediation studies involving the ability of a plant to cleanup
toxins in soils. She related that she has seen a lot of
potential in developing the hemp industry, such that local
governments are engaged in working with different state and
county agencies, people are visiting the Oregon House of
Representatives and those people are working with legislators
and governors' offices, and people are involved in Oregon's
legal system.
1:59:12 PM
REPRESENTATIVE REINBOLD noted that Alaska legalized marijuana
and it was estimated that Alaska coffers would receive $5
million in revenue a year, except the state has only collected
approximately $472,000. She asked whether hemp is taxed in
Oregon, and if so, how much money had gone into the state
coffers.
MS. MORAN answered that hemp is not taxed in Oregon.
1:59:56 PM
REPRESENTATIVE LEDOUX asked Mr. Keyes whether his intention was
to allow anyone desiring to grow hemp to obtain a [license].
MR. KEYES responded that the intent of the division, initially,
was to develop a pilot program as a learning process while not
anticipating many growers would apply. He related that "as this
has developed momentum," the division has been contacted by so
many people that it would need to limit the number of growers
because it did not anticipate hiring new staff. He offered that
its vision was to create a simple program to understand how this
crop grows and its agronomics principles. Currently, he
related, the division will probably have to limit the number of
growers.
2:01:40 PM
REPRESENTATIVE LEDOUX stated that she would like to see the
greatest number of people being allowed to participate in this
program, with the least amount of involvement from the division.
While she understands the pilot program language is necessary in
order to comply with federal law and to not go over what was
required, she asked exactly what the division had in mind.
MR. KEYES explained that, initially, the division anticipated a
simple program to get the [growing of industrial hemp] off the
ground. He related that even if the state makes hemp legal, one
of the challenges is obtaining seed because it is classified as
a Schedule 1 drug. Therefore, he explained, the only manner in
which to obtain seed must be through the Plant Material Center
because it would be in charge of the procuring and importing of
the seeds, and commented that that is probably the biggest
involvement the division would have. He reiterated, it would be
illegal for a farmer to import hemp seed into Alaska so division
would obtain that seed and, with an absolutely minimal amount of
paperwork, register the farmers and provide them with seed to
grow this crop. In the event the program became more
complicated, it could be difficult for the division to
administer.
2:04:01 PM
REPRESENTATIVE LEDOUX referred to the division solely providing
the hemp seed, and asked the reason for not allowing everyone to
grow hemp crops.
MR. KEYES deferred to Rob Carter.
2:04:45 PM
MR. CARTER opined that after seeing what is happening around the
states and Canada with its large scale production since
approximately 1998, the registration process, with the division
as the sole source of seeds, is the basis of a simple pilot
program that may have unlimited membership as an opportunity to
use what is needed in Alaska and export the rest. He opined
that following those true federal guidelines in the Farm Bill
and creating a pilot program that follows those guidelines will
provide sustainability and integrity to Alaska's industrial hemp
program and industry. Although, it may be a little more onerous
than just a simple registration and here's your seeds, he said.
2:06:33 PM
REPRESENTATIVE LEDOUX noted her surprise regarding the
difficulty in obtaining seeds because a person can go to various
websites and order marijuana seeds, and asked why not industrial
hemp seeds.
MR. CARTER answered that she was correct, cannabis seeds and
cannabis seeds deemed inviable - consumed in protein products
and so forth - can be purchased on the internet. He explained
that the division is not looking for three cannabis seeds
shipped in illegally, but rather it is looking for 1.2 million
live seeds per acre when considering the principles behind the
agronomy of growing industrial hemp.
2:08:25 PM
REPRESENTATIVE EASTMAN asked the reason he couldn't order a
semi-truck full of seeds.
MR. CARTER responded that currently the DEA would shut that down
quickly, and most industrial hemp seed farmers around the states
and within Canada, work hard to follow federal guidelines to
make certain their business model is sound. He said he heard
that in Kentucky, during the implementation of its first
program, proper forms were not in place and the DEA seized its
first semi-truck of seed shipment.
2:09:48 PM
CHAIR CLAMAN surmised there is an effort on the part of the
division to have a large enough program to bring in the seeds
that only the state can bring in legally under the federal
restrictions, which is why the pilot program becomes important
for the state to bring in the seeds. He suggested that the
pilot program will assist the division in determining the
correct number of seeds to bring in because it doesn't want to
end up with five or six truckloads of seeds that no one wants.
He explained that finding the correct balance is the intent of
the pilot program, under the recognition the state has budget
challenges and it can't buy tens of thousands of truckloads of
hemp seeds.
MR. CARTER answered that Chair Claman was correct. Creating
this pilot program will take a bit of time to implement with the
drafting of regulations, identifying seed sources, and getting
best management practices set in place for Alaska's agricultural
industry, but in that manner the division will know the intent
of folks and how many acres would be produced. By no means is
the state looking to become the hemp store seed house for the
State of Alaska, he stressed, and the division wants to make
certain that the viable seed coming to Alaska is planted in the
ground through a registrant of the pilot program.
2:11:29 PM
REPRESENTATIVE REINBOLD asked Mr. Carter whether the government
was subsidizing agriculture in any manner, and whether the
farmers are actually making money "growing this."
MR. CARTER asked Representative Reinbold to repeat her question.
CHAIR CLAMAN advised Representative Reinbold to only ask
questions with regard to the hemp industry.
REPRESENTATIVE REINBOLD asked whether there were any government
subsidies with regard to hemp, and whether it was fruitful for
the farmers.
MR. CARTER explained that he doesn't work with any industrial
hemp grower in Alaska because it is not legal, but through his
counterparts in Kentucky, Colorado, and Oregon, revenue has been
generated. He offered that Colorado had approximately 89 acres
in production last year and those farmers were successful with a
good generation of revenue on their farms, plus revenue then
went back into the community with the production of oils from
the crops.
2:13:06 PM
REPRESENTATIVE REINBOLD asked why marijuana and hemp were
illegal, its biggest concerns, why it took Alaska this long to
consider hemp production, and whether there were any unintended
consequences.
MR. CARTER responded that to the best of his knowledge,
recreational cannabis was outlawed for multiple reasons,
including its psychoactive effects. Industrial hemp was
federally outlawed in 1932 because it was very successful in
building rope and cordage for our servicemen in the war. He
opined that it was strictly a business decision because farmers
liked to produce hemp and cotton, and hemp was a competitor. It
was easy to cull hemp out of the system because it was guilty by
association being in the same genus and species as recreational
marijuana, he explained.
2:14:40 PM
REPRESENTATIVE REINBOLD noted that marijuana growers couldn't'
use federal banks, regarding sales, due to federal banking laws,
and asked whether hemp was under the same regulations.
MR. CARTER opined no, once the State of Alaska deems it is an
agricultural crop and follows those strict federal guidelines in
creating a pilot program with the growers being registrants,
there should be no difference in growing hemp as when growing
potatoes, barley, or wheat, for example.
2:15:38 PM
REPRESENTATIVE KOPP opined that in looking at this bill, "0.3
percent THC, it has to be regulated and tested. In Alaska,
we're doing 10 percent THC, 35 times more, there are more than
five strains of marijuana now that are over 20 percent THC,
which is 70 times more. So, this is not -- it's not even the
same thing, you don't get high off this, you don't get ..." He
commented that as a mariner, nearly every single ship's hawser
rope is a hemp rope, and it is common in the marine industry
because it works. Currently, he pointed out, twine, nets,
ropes, and all kinds of cosmetic are made out of hemp and he
believes this is a good bill.
2:18:12 PM
REPRESENTATIVE LEDOUX referred to [Section 1, AS 03.05.05(d),
page 2, line 3, and offered language which would read as
follows:
(d) Registration under this section is valid
for one year and shall not be limited in the number of
registrants. A registrant may renew registration in
the form and manner prescribed by the department.
REPRESENTATIVE LEDOUX asked Representative Drummond whether she
would consider that as a friendly amendment.
2:19:15 PM
REPRESENTATIVE DRUMMOND responded that she does not have a
problem with that friendly amendment, other than the Division of
Agriculture's ability to handle that number of registrants.
Initially, she pointed out, Mr. Keyes advised that the division
would limit the number of registrants and to be certain a fee
structure was in place to cover the work, so the government was
not subsidizing this industry and it paid its own way.
Initially, she imagined the division would collect fees and
order seeds based upon those fees and the acreage intended to be
planted so the first crop could get off the ground.
Subsequently, she opined, the Division of Agriculture could
decide how many registrants it would want to license.
2:20:28 PM
REPRESENTATIVE LEDOUX argued that the division could order a
semi-truck and simply charge the registrant the cost of shipping
and handling. She stressed that she does not like to see the
government choose "winners and losers" and if someone wants to
grow hemp, let them do it.
REPRESENATIVE DRUMMON related that she does not have a problem
with inserting that language because the bill does not limit the
number of registrants. She then referred to AS 03.05.05(e)
which read as follows:
(e) The department shall establish fee levels for
application, registration, and renewal of registration
so that the total amount of fees collected under this
section approximately equals the regulatory costs for
regulating the industrial hemp industry. ...
2:21:40 PM
REPRESENTATIVE LEDOUX moved to adopt Conceptual Amendment 1 to
HB 172, page 2, line 3, and said, after the word "year" insert
"and shall not be limited in number of registrants."
REPRESENTATIVE REINBOLD objected for purposes of discussion.
2:22:15 PM
REPRESENTATIVE LEDOUX explained that the conceptual amendment
does not allow the government to decide who can, and cannot,
grow hemp.
REPRESENTATIVE REINBOLD surmised that Representative LeDoux was
saying that [the bill allows the government the] right to pick
and choose who grows hemp, except she did not believe that was
an issue in the bill.
REPRESENTATIVE LEDOUX referred to a statement made by the
Division of Agriculture that, initially, the number of
registrants would be limited. She stressed her belief there
should not be a limit because that would put the government in
the position of choosing "winners and losers," and the
conceptual amendment prevents that from happening.
REPRESENTATIVE REINBOLD asked Mr. Carter to speak to Conceptual
Amendment 1.
2:23:53 PM
MR. CARTER advised that during the last few minutes, the
director and he had a discussion and, while noting that the
division looks forward to building the pilot program, it is not
the division's intent to limit who can produce hemp. He
explained that its goal is to be certain it can cover the work
and help grow this industry, giving everyone an equal
opportunity. There is no intent by the division to determine
who can and cannot grow hemp if it is a seed source and a
registration simple process. In the event a person files an
application within the deadline to be set forth, follows the
registration process, and pays for the seeds at the cost the
state paid including shipping, the division will not limit these
people, he advised.
2:25:11 PM
REPRESENTATIVE REINBOLD asked whether Conceptual Amendment 1 was
duplicative and unnecessary.
MR. CARTER related that, at this point, changing the language
was unnecessary because the general intent of the division is to
support Alaska's agricultural industries, and this is a new
industry.
REPRESENTATIVE REINBOLD offered that she does not believe the
conceptual amendment was necessary and does not support its
adoption.
2:26:24 PM
REPRESENTATIVE EASTMAN commented that the conceptual amendment
can do no harm, and it is good to have it out there to the
public that this isn't another example of government bureaucracy
limiting things through regulations unnecessarily. He opined
that the desire of this committee is to help get this industry
get off the ground as quickly as possible, and a person should
not be estopped from joining this program just because someone
else submitted their application five minutes earlier.
CHAIR CLAMAN noted that due to Representative Reinbold's
comments, he assumed she maintains her objection.
2:27:35 PM
A roll call vote was taken. Representatives Kopp, Kreiss-
Tomkins, LeDoux, Fansler, Eastman, and Claman voted in favor of
adopting Conceptual Amendment 1. Representative Reinbold voted
against it. Therefore, Conceptual Amendment 1 was adopted by a
vote of 6-1.
2:28:45 PM
REPRESENTATIVE REINBOLD asked the bill sponsor to explain Sec. 3
and Sec. 5, and further asked whether hemp could be added to
different foods and not be considered adulterated.
REPRESENTATIVE DRUMMOND responded that she purchases Costco bags
of hemp seeds to add to her cereal, or to use with any food
products, because hemp is an accepted healthy grain containing
many types of important nutrients, plus all of the essential
fatty acids a grain provides.
2:30:19 PM
REPRESENTATIVE REINBOLD commented that she has not studied the
impacts of hemp, but has seen lotions and clothing, and such,
but food was a little different. She asked the sponsor's
intention in not making it adulterated food, and whether in the
past, [manufacturers had to label] that it had added hemp and
was, therefore, adulterated.
MR. FITZGERALD responded that this provision specifically states
that, included with the separation of industrial hemp fitting
the 0.3 percent THS mark from marijuana distinction, it does not
contaminate foods that goes with animal feed, or anything used
in foods, such as granola bars.
2:31:07 PM
REPRESENTATIVE REINBOLD offered concern as to allergens and
impacts to people, and commented that while there had been
positive testimony, it didn't necessarily satisfy her curiosity
because when "people digest stuff it is a big deal." She asked
whether the purpose was to not require a disclaimer advising
hemp seed was in foods, such as genetically modified labels, or
whether it was the sponsor's intention that it is just like any
other grain.
MR. FITZGERALD answered in the affirmative in that it would be
included with foods such as, any oats, grains and such, which
would be the idea of the person cultivating the hemp.
2:32:02 PM
REPRESENTATIVE REINBOLD inquired as to whether this is similar
to other states that have legalized hemp, had there been any
reports or medical reports, or was it the standard practice that
once it's legalized it can be put in any food.
MR. FITZGERALD deferred to Ms. Moran.
CHAIR CLAMAN noted that he did not believe this exempts them
from listing the ingredient in the food.
2:32:40 PM
MS. MORAN answered that last year in Oregon, she specifically
put "similar language in" clarifying that industrial hemp food
is unadulterated specifically because it contains industrial
hemp. Similar legislation is currently being put forward in
Colorado, prompted because foods were being called adulterated
simply because industrial hemp was included, such as industrial
hemp grain. She explained that industrial hemp grain has been
consumed for thousands of years, and there is incredible
nutritional value with plenty of research out there verifying
her testimony. Canada, she offered, is the largest exporter of
industrial hemp grain in the world, and the United States is the
largest importer of those products with industrial hemp food
products on store shelves everywhere. There should be no
concern regarding this provision, she said.
2:33:38 PM
REPRESENTATIVE REINBOLD surmised there are no known allergies or
interactions with foods, or known effects to hamper any hemp
products.
MS. MORAN answered, "Not that I'm aware of."
2:34:04 PM
REPRESENTATIVE EASTMAN commented the only thing he might add to
the bill is simply that by virtue of the state starting this
pilot program, the state was not giving away its rights to deal
with agriculture in the manner it deems fit. He opined that
this is probably the most classic special interest example in
the history of the United States because the cotton industry and
its allies deprived citizens of the United States of reasonable
economic freedom with this product. This is a fine time to
reverse that trend, he described, and he was hopeful the pilot
project did not become a study in bureaucracy. He advised that
he looks at every agricultural exercise as a study in trying to
determine how best to grow something, and whether a person has a
degree or is tied to a university was beside the point.
2:36:13 PM
REPRESENTATIVE KREISS-TOMKINS commented that he wanted to
associate himself with the comments of Representatives Eastman
and Kopp.
2:36:25 PM
REPRESENTATIVE FANSLER moved to report HB 172, Version 30-
LS0707\A, as amended, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, HB 172(JUD) was moved from the House Judiciary
Standing Committee.