CS FOR SENATE BILL NO. 6(JUD) "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." 2:40:32 PM Co-Chair Foster OPENED public testimony. JOHN BUADIUG, SELF, FAIRBANKS (via teleconference), testified in favor of the legislation. He reported that it was possible to convert hemp oil into biodiesel, which contained hydrogen, carbon, and oxygen molecules creating cleaner burning fuel. He cited statistics from the Sequential Biodiesel Fuels Company that claimed emissions reductions in carbon dioxide, carbon monoxide, hydrocarbons, particulate matter, and sulfur dioxide through its use. Representative Wilson queried whether he knew anything about cannabidiol (CBD) oil. Mr. Bauding answered that CBD oil fell under a "different category" and that only 0.3 percent or less was contained in industrial hemp. He declared that an individual "could not get high with industrial hemp." 2:45:26 PM EMBER HAYNES, SELF, TALKEETNA (via teleconference), testified in favor of the legislation. She relayed that her business, Denali Hemp Company, created salves, soaps, and body products with hemp seeds and oil that she had to outsource. She wanted to use Alaskan grown hemp for her products. In addition, she wished to supplement her livestock with hemp for greens, bedding, and fodder. She offered that hemp grew well in Alaska, was a beneficial cover crop, and that commonly used harvesting equipment worked for hemp. Hemp was successfully harvested in other parts of the world and that specific harvesting equipment had been invented. She asked for the committees support. Representative Grenn asked how long the Denali Hemp Company was in business. Ms. Haynes answered that the company had been making products with hemp seed oil since 2014 and she operated another business that used it since 2008. Representative Grenn asked for verification that she had to outsource hemp. Ms. Haynes answered in the affirmative. Representative Grenn asked how much her costs would decrease if she could grow her own hemp. Ms. Haynes answered that one acre of hemp produced approximately 50 to 70 gallons of oil per year, which was enough for her products. In addition, the harvest would feed her livestock. One of the challenges of the hemp industry was finding the particular varieties that would grow in Alaska and produce oil or other desired qualities of the plant. Representative Grenn stated that Alaska's growing season for hemp was challenging and asked for clarification. Ms. Haynes answered in the affirmative. She briefly described methods and varieties that would likely work in the state. 2:51:17 PM COURTNEY MORAN, ATTORNEY, EARTHLAW LLC, PORTLAND, OREGON (via teleconference), testified in support of the bill. She related that she was an industrial hemp attorney and advised the bill's sponsors and state's Division of Agriculture on how to design a regulatory framework that would support a sustainable industrial hemp program in compliance with federal law. She hoped the bill passed unanimously from committee. Representative Guttenberg indicated that an issue had been raised about the legal distance between a hemp and a marijuana farm. He asked who administered control over the issue in other jurisdictions. Ms. Moran answered that Oregon did not currently have any specific isolation designations. She detailed that farmers were encouraged to plant only female plants as a prevention to any cross pollination. Oregon encouraged farmers to talk with their neighbors to limit the risk as much as possible. She suggested the Canadian system as a model for Alaska. She delineated that Canada had a certified seed program and the minimum isolation distance was 5 kilometers (3.1 miles). She qualified that specific guidelines for Alaska was necessary to accommodate variables based on the time of planting and pollinating, the geographic region, and climate. 2:55:07 PM REGINA MANTEUFEL, EXECUTIVE DIRECTOR, BACK TO WORK, ANCHORAGE (via teleconference), testified in favor of the bill. She was currently healing from stage IV breast cancer and believed CBD oil was assisting in her recovery. She listed the health benefits of CBD oil, juice from the hemp leaves, and hemp powder and shared the methods she used to intake hemp products. She mentioned that she was the owner of Regina's Hotel in the Fairview neighborhood of Anchorage as well as the Executive Director of the Back to Work Network. She believed that her clients and customers would benefit from taking hemp products for health. She related antidotes and made suggestions from personal experience regarding the use of hemp products as health supplements. Vice-Chair Gara was glad Ms. Manteufel was recovering and noted his support for the bill. 3:01:49 PM STEVE ALBERS, KENAI SOIL AND WATER CONSERVATION DISTRICT, KENAI (via teleconference), testified in support of the bill. He had researched the numerous benefits of industrial hemp and endorsed the legislation. 3:02:32 PM Representative Guttenberg asked whether the Department of Commerce, Community and Economic Development (DCCED) was satisfied with DNR regulations regarding the distance between an industrial hemp and legal marijuana farm. ERIKA MCCONNELL, DIRECTOR, ALCOHOL AND MARIJUANA CONTROL OFFICE, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT (via teleconference), felt that the bill "adequately addressed" the regulatory issues. She indicated that the Division of Agriculture was tasked with writing the regulations regarding industrial hemp farms, including the distance issue. She assured the committee that the Marijuana Control Board would "pay close attention to the regulation's" development. In addition, provisions in the legislation required division communications with the board. 3:05:07 PM AT EASE 3:26:44 PM RECONVENED Co-Chair Foster CLOSED public testimony. Representative Kawasaki referred to provisions in the legislation requiring that the fees for application or registration equaled regulatory costs. He wondered whether estimates for the regulatory costs were known. BUDDY WHITT, STAFF, SENATOR SHELLEY HUGHES, deferred the question to the Department of Natural Resources. Representative Kawasaki indicated that he would obtain the answer at a later time. Co-Chair Foster MOVED to ADOPT Amendment 1, 30-LS0173\E.1 (Bruce, 5/3/17) (copy on file): Page 1, line 3, following "marijuana;": Insert "providing that cannabidiol oil is not included in the definition of 'hashish oil';" Page 5, line 25: Delete ", but do not include cannabidiol oil" Page 6, following line 23: Insert new bill sections to read: "* Sec. 6. AS 11.71.900(11) is amended to read: (11) "hashish oil" means the viscous liquid concentrate of tetrahydrocannabinols extracted from the plant (genus) Cannabis, but does not include cannabidiol oil; * Sec. 7. AS 11.71.900 is amended by adding a new paragraph to read: (31) "cannabidiol oil" means the viscous liquid concentrate of cannabidiol extracted from the plant (genus) Cannabis containing not more than 0.3 percent delta-9 tetrahydrocannabinol;" Renumber the following bill sections accordingly. Representative Wilson OBJECTED for discussion. Co-Chair Foster explained that the amendment had been brought to his attention by the Department of Law. He detailed that the definition of hash oil in AS 11.71.900(11) had not been amended and would include cannabidiol oil (CBD) therefore, CBD would still fall under the definition of hashish oil in the criminal code. The amendment, if adopted, required the definition of hash oil in statute to be redefined and necessitated a Concurrent Resolution due to triggering a title change in the bill. 3:30:10 PM Representative Kawasaki asked for the Department of Law (DOL) to address the difference between the CBD oil and the recent confiscation by the state of cannabidiol oils. Mr. Whitt delineated that the section was added in response to concerns that a method of concentrating large amounts of industrial hemp to create a THC product would be discovered. He reminded the committee that industrial hemp contained 0.3 percent or below of delta-9 tetrahydrocannabinol (THC). He related that hash oil contained the "psycho addictive" elements of marijuana. Due to the current legal definitions of hashish oil CBD oil was illegal in the state. He acknowledged that three confiscations of CBD oil took place since January 2017, which was a costly and wasteful endeavor since CBD oil had no psycho addictive effects. The amendment ensured that CBD oil was removed from the criminal statute. Representative Guttenberg referred to earlier public testimony regarding extracting 55 gallons of hemp oil from an acre of hemp. He asked whether the amendment was designed to prevent the ability to concentrate the 55 gallons down to one ounce of hash oil. Mr. Whitt replied in the affirmative. Additionally, he spoke to the desire to prevent creating an illegal product out of a legal product. Co-Chair Seaton surmised that the percentage over 0.3 percent was the part that made the product change from cannabidoil to hashish oil. Mr. Whitt answered in the affirmative. He elaborated that the goal of SB 6 was to create a program that produced products that excluded the possibility of any associated criminal activity. 3:36:39 PM Representative Guttenberg wondered at what point - if someone had a 55 gallon drum of hemp oil, they could legally turn it into hash oil. He asked if there was a way to legally go above 0.3 percent with industrial hemp. KACI SCHROEDER, ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT OF LAW, offered that she did not know the science behind the issue and whether it was possible to produce hash oil from CBD oil. However, producing anything above the 0.3 percent threshold was illegal. Representative Wilson WITHDREW her OBJECTION. There being NO OBJECTION, Amendment 1 was ADOPTED. SB 6 was HEARD and HELD in committee for further consideration. Co-Chair Foster reviewed the schedule for the following day.