Legislature(2017 - 2018)GRUENBERG 120

04/03/2017 01:00 PM House JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 172(JUD) Out of Committee
-- Public Testimony --
Moved CSHB 43(JUD) Out of Committee
+ Bills Previously Heard/Scheduled 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                                                                    
     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                                                                      
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                                                               
     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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
REPRESENTATIVE  REINBOLD argued  that her  question was  how much                                                               
Ms.  Moran was  paid to  lobby  for the  Industrial Hemp  Farmers                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
               (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                                                               
REPRESENTATIVE  REINBOLD offered  that she  does not  believe the                                                               
conceptual  amendment  was necessary  and  does  not support  its                                                               
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                                                               
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.                                                                                                             

Document Name Date/Time Subjects
HB172 ver A 3.31.17.PDF HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Sponsor Statement 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Sectional Analysis 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Supporting Document-Industrial Hemp Updated Slide Presentation 3.31.17.pptx HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Supporting Document-2014 Farm Bill Sec. 7606 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Supporting Document-Hemp 1916 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Supporting Document-Modern Uses For Cannabis Chart 3.31.17.jpg HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Supporting Document-Letter Kenai Soil & Water Conservation District 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Supporting Document-Letter Constance Fredenberg 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Supporting Document-Letter Jack Bennett 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Supporting Document-Letter Andrew Gray 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Fiscal Note DCCED-CBPL 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Fiscal Note LAW-CRIM 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Fiscal Note DPS-SDAEU 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB172 Fiscal Note DNR-PMC 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 172
HB043 ver D 3.14.17.PDF HJUD 3/29/2017 1:00:00 PM
HJUD 4/3/2017 1:00:00 PM
HB 43
HB043 Sectional Analysis ver D 3.14.17.pdf HJUD 3/29/2017 1:00:00 PM
HJUD 4/3/2017 1:00:00 PM
HB 43
HB043 Amendments #1-2 3.31.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 43
HB043 Amendments #1-2 HJUD Final Votes 4.3.17.pdf HJUD 4/3/2017 1:00:00 PM
HB 43