00 HOUSE BILL NO. 325 01 "An Act relating to industrial hemp; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03  * Section 1. AS 03.05.010(a) is amended to read: 04 (a) The commissioner of natural resources shall 05 (1) direct, administer, and supervise promotional and experimental 06 work, extension services, and agricultural projects for the purpose of promoting and 07 developing commercial and noncommercial agricultural industry in the state, 08 including horticulture, dairying, cattle raising, fur farming, grain production, vegetable 09 production, and agricultural products; 10 (2) procure and preserve all information pertaining to developing the 11 agricultural industry in the state and disseminate that information to the public; 12 (3) assist prospective settlers and others to engage in the agricultural 13 industry in the state by providing information about activities and programs essential 14 to developing the agricultural industry and areas in the state that are suitable for 15 agriculture; 01 (4) review the marketing, financing, transportation, and development 02 of agricultural products in the state, with special emphasis on local production, and 03 negotiate for the marketing of agricultural products of the state with federal and state 04 agencies operating in the state; 05 (5) regulate and control the entry in the state and the transportation, 06 sale, or use in the state of plants, seeds, vegetables, shell eggs, fruits and berries, 07 nursery stock, animal feeds, remedies and mineral supplements, fertilizers, and 08 agricultural chemicals to prevent the spread of pests, diseases, or toxic substances 09 injurious to the public interest and protect the agricultural industry against fraud, 10 deception, and misrepresentation; for purposes of this paragraph, the commissioner 11 may require registration, inspection, and testing and may establish procedures and 12 fees; 13 (6) regulate the farming of elk in a manner similar to the manner in 14 which the commissioner regulates domestic animals and livestock, to the extent that is 15 appropriate; 16 (7) adopt regulations relating to industrial hemp, including regulations 17 that 18 (A) specify approved sources or varieties of hemp seed or  19 propagation material to be grown, sold, or offered for sale by an individual 20 registered to produce industrial hemp, including material certified under a  21 federally approved hemp program, federally certified seed scheme, or  22 recognized third-party certifier, without requiring grow-out trials  23 conducted by the department; 24 (B) require testing, paid for by the registrant, for delta-9- 25 tetrahydrocannabinol concentration following harvest of the industrial hemp,  26 allowing for independently accredited laboratories and samplers; 27 (C) provide for general production practices to avoid the 28 unintended distribution of industrial hemp seeds by registrants into 29 nonagricultural land; 30 (D) establish an isolation distance [DISTANCES] for the 31 production of industrial hemp grown for certified or seed-purity production  01 of at least 1,000 meters, and recommend isolation distances for the  02 production of other industrial hemp; in this subparagraph, "isolation 03 distance" means the minimum separation required between two or more 04 varieties of the plant (genus) Cannabis for the purpose of keeping the seed 05 pure; 06 (E) permit manufacturing and retail sale of industrial hemp and 07 products made from industrial hemp; 08 (F) establish a registration and renewal procedure for a 09 participant in the industrial hemp program developed under AS 03.05.076; 10 (G) establish a tiered testing frequency based on risk  11 categories developed in regulation that considers crop history and past  12 compliance;  13 (H) allow a harvest window of not more than 30 days after  14 sample collection, with permissible extensions for weather or other good  15 cause;  16 (I) establish tiered grower categories, including a micro- 17 grower category, with scaled reporting, inspection, testing, and fee  18 requirements;  19 (J) eliminate permits for in-state transportation of  20 industrial hemp between registered parties when a shipment is  21 accompanied by a certificate of analysis or other approved shipping  22 documentation;  23 (K) establish corrective-action-plan procedures to enforce  24 an industrial hemp violation that prioritize compliance, include a written  25 notice of the registrant's noncompliance, provide an opportunity for the  26 registrant to cure the noncompliance, and establish objective criteria for  27 escalation, including civil penalties, suspension, or revocation; 28 (8) submit a list of individuals registered to produce industrial hemp 29 under AS 03.05.076 and the expiration dates of the registrations to the Marijuana 30 Control Board and the Department of Public Safety; 31 (9) regulate the labeling of seed that does not comply with the 01 requirements of AS 03.20.130. 02  * Sec. 2. AS 03.05.010(c) is amended to read: 03 (c) The commissioner of natural resources shall notify the Marijuana Control 04 Board and the Department of Public Safety of a person's repeated or knowing  05 violations of state statutes or regulations relating to industrial hemp. Industrial  06 hemp shall be tested using a federally compliant testing method that accounts for  07 measurement uncertainty. Noncompliant industrial hemp is industrial hemp that  08 tests above 0.3 percent delta-9 tetrahydrocannabinol on a dry-weight basis 09 [WHEN THE COMMISSIONER ISSUES A STOP ORDER]. The commissioner of 10 natural resources shall 11 (1) [SHALL] issue a stop order to a person 12 [(A) NOT REGISTERED UNDER AS 03.05.076 WHO IS 13 FOUND TO BE PRODUCING A PLANT WITH DELTA-9- 14 TETRAHYDROCANNABINOL; OR 15 (B)] registered under AS 03.05.076 who is found to be 16 producing a plant with delta-9-tetrahydrocannabinol over one percent; and 17 (2) allow [MAY ISSUE A STOP ORDER TO] a person registered 18 under AS 03.05.076 who is found to be producing a plant with delta-9- 19 tetrahydrocannabinol between 0.3 percent and one percent to retain and recondition,  20 remediate, or convert the plant to a nonintoxicating industrial use before issuing  21 a stop order requiring destruction of the plant. 22  * Sec. 3. AS 03.05.010 is amended by adding a new subsection to read: 23 (e) The commissioner of natural resources may issue enforcement actions for 24 an industrial hemp violation using the corrective-action plan developed under 25 (a)(7)(K) of this section. 26  * Sec. 4. AS 03.05.076(a) is amended to read: 27 (a) Industrial hemp is an agricultural crop in the state. An individual who 28 produces industrial hemp shall apply to the department for registration under this 29 section. Registration is valid for one year but may be renewed. An application for 30 registration or renewal must be on a form prescribed by the department that includes 31 (1) the name and address of the applicant; 01 (2) the address and global positioning system coordinates of the area to 02 be used for the production of industrial hemp; and 03 (3) the applicant's acreage or estimated plant count sufficient to  04 determine the applicant's tiered grower category under AS 03.05.010(a)(7)(I) [A 05 SIGNED STATEMENT BY THE APPLICANT, MADE UNDER THE PENALTY 06 OF PERJURY, AFFIRMING THAT THE APPLICANT 07 (A) HAS NOT BEEN CONVICTED OF A FELONY 08 RELATED TO A CONTROLLED SUBSTANCE IN THIS OR ANOTHER 09 JURISDICTION WITHIN THE 10 YEARS IMMEDIATELY PRECEDING 10 THE DATE OF APPLICATION; OR 11 (B) WAS LAWFULLY GROWING HEMP BEFORE 12 DECEMBER 20, 2018, AND WAS NOT CONVICTED OF A FELONY 13 RELATED TO A CONTROLLED SUBSTANCE IN THIS OR ANOTHER 14 JURISDICTION AFTER THAT DATE]. 15  * Sec. 5. AS 03.05.076(b) is amended to read: 16 (b) An individual registered under this section may 17 (1) produce industrial hemp, including growing, harvesting, 18 possessing, transporting, processing, selling, or buying industrial hemp; 19 (2) use any propagation method, including planting seeds or starts or 20 using clones or cuttings to produce industrial hemp; 21 (3) retain industrial hemp seeds for the purpose of propagating 22 industrial hemp in future growing seasons [YEARS]; 23 (4) retain and recondition, remediate, or convert any industrial hemp 24 that tests between 0.3 percent and one percent delta-9-tetrahydrocannabinol on a dry- 25 weight basis. 26  * Sec. 6. AS 03.05.076(c) is amended to read: 27 (c) An individual registered under this section shall 28 (1) comply with testing standards and procedures established by the 29 commissioner of natural resources by regulation; 30 (2) maintain, for at least three years following the sale or transfer of 31 industrial hemp, records showing 01 (A) the name and address of the person that received the 02 industrial hemp; 03 (B) the amount of industrial hemp transferred; 04 (3) make the records required under (2) of this subsection available for 05 inspection by the department during normal business hours if the department provides 06 at least 10 [THREE] days' notice before inspecting the records. 07  * Sec. 7. AS 03.05.076(d) is amended to read: 08 (d) The department shall 09 (1) establish fee levels for application, registration, and renewal of 10 registration so that the total amount of fees collected under this section approximately 11 equals the regulatory costs for regulating the industrial hemp industry, with reduced  12 or waived fees for micro-growers; 13 (2) annually review each fee level to determine whether the regulatory 14 cost of industrial hemp is approximately equal to the fees collected; 15 (3) notify the Marijuana Control Board and the Department of Public 16 Safety when the department issues a notice for a repeated or knowing [A STOP- 17 SALE ORDER AND ISSUES A] violation [NOTICE] under this section; 18 (4) require an individual registered under this section whose industrial 19 hemp tests over one percent delta-9-tetrahydrocannabinol to destroy the product so 20 that it cannot be used for the purpose of reconditioning other hemp crops or gifted or 21 transferred to another individual other than for the purpose of having the industrial 22 hemp destroyed in full form;  23 (5) issue a notice to an individual for a repeated or knowing  24 violation of state statutes or regulations relating to industrial hemp. 25  * Sec. 8. AS 03.05.076(e) is amended to read: 26 (e) The department may 27 (1) [SHALL] issue a stop-sale order and issue a violation notice to a 28 person who is producing industrial hemp without a current registration; 29 (2) [MAY] adopt regulations regarding approved shipping 30 documentation for the transportation of industrial hemp and eliminate permits for in- 31 state transportation between registered parties; 01 (3) [MAY] conduct random tests and inspections of industrial hemp 02 for delta-9-tetrahydrocannabinol concentration produced by an individual registered 03 under this section; random tests and inspections under this paragraph may use  04 risk-based tiers with reduced frequency for low-risk growers, products, or  05 production or testing methods approved by the department in regulation. 06  * Sec. 9. AS 03.05.079 is amended to read: 07 Sec. 03.05.079. Production in violation of delta-9-tetrahydrocannabinol  08 limit. (a) Notwithstanding AS 11.71.040 - 11.71.060, an individual registered under 09 AS 03.05.076 to produce industrial hemp whose product has a delta-9- 10 tetrahydrocannabinol content between 0.3 percent and one percent may retain and 11 recondition, remediate, or convert the product as provided in AS 03.05.076(b)(4). 12 (b) An individual who retains but fails to recondition, remediate, or convert 13 an industrial hemp product described in (a) of this section is guilty of a violation. 14  * Sec. 10. AS 03.05.100 is amended by adding a new paragraph to read: 15 (6) "micro-grower" means an individual registered under AS 03.05.076 16 to produce industrial hemp whose product is cultivated on less than one-quarter of an 17 acre or who has fewer than 200 plants, including indoor or greenhouse production. 18  * Sec. 11. This Act takes effect July 1, 2026.