SB 6-INDUSTRIAL HEMP PRODUCTION  3:31:21 PM CHAIR GIESSEL announced consideration of SB 6, sponsor by Senator Hughes. [CSSB 6, labeled 30-LS0173\U, was before the committee.] Public testimony was open. JONATHAN SCHUMACHER, representing himself, Anchorage, Alaska, said the industrial hemp industry would bring in much needed revenue for the state. EMBER HAYNES, Denali Hemp Company, Talkeetna, Alaska, supported SB 6. She and her husband own a business in Talkeetna that grows and harvests Alaska plants to create herbal sundries. She looks forward to the day she can incorporate Alaska-grown hemp seed oil into her Alaskan Devil's Club Balm. Her family and many others across Alaska are currently adding protein to their diets with hemp seed, powder, and meal. She personally supplements their animals' feed with high-protein, non-viable hemp seeds, and right now she has a new litter of pigs nestled in some Dove Tree Hemp Herd Bedding, a product she uses on a daily basis that she wished could be all-Alaskan grown. She asked if there might be further clarification on the language in Section 1 (l) and (n) where it asks a registrant to keep three years of records, and to add that the department shall provide at least three days' notice before inspecting the records. She said these could be working days and that is why further time should be allowed. Other than that, she hopes to see this industry flourish in Alaska and be exported worldwide. 3:36:33 PM DON HART, Professional Paralegal Services, Wasilla, Alaska, supported SB 6 and said it's extremely important for cultivation of hemp to be legalized in Alaska, because Canada has made such a success after legalizing it there; they ship all of their hemp products into the United States. He said that hemp grows very well in the northern climate and Alaska has a lot of land to grow it on. Instead of saying it can be raised as an affirmative defense or using the definition only in the criminal statutes, to really benefit the farmers it would be better to remove it entirely from AS 17.38. The reason is that the definition of marijuana includes all parts of the plant of genus cannabis. If it's not removed it will be illegal anyway. Secondly, AS 17.38.210 (a) allows hemp growing in Alaska to be excluded by initiative. Two Alaska Supreme Court cases, Carmen v. McKechnie and Griswold v. the City of Homer, state that zoning by initiative or the municipality is invalid and unconstitutional, because it creates a taking action. 3:40:57 PM RHONDA MARCY, Alaska Hemp Industries, Wasilla, Alaska, supported SB 6. She said she has an undergraduate degree, a Master's degree, and along the way she studied industrial hemp at Oregon State University. She supports the industry in Alaska and to that end her business is trying to help the people who want to have an industry in Alaska to process and have end products for the hemp they are growing. She visited a University of Kentucky hemp field two years ago and found that the nutritional contents of the green part of plant is higher than in alfalfa and when the meat of the seed is added it is 100 percent complete nutrition with Omegas 3, 6 and 9. One of the reasons hemp will be such an asset to Alaska is that it can be food for fish/salmon fry. Currently, last years fry are ground up and fed back to the current years fry, a decreasing nutritional cycle. Hemp is a perfect fish/salmon food that Alaskans could grow, and that would also contribute to having a stronger salmon industry in Alaska. She suggested making a tribute to Senator Johnny Ellis for starting this issue last year. 3:43:25 PM CARRIE HARRIS, representing herself, Anchor Point, Alaska, supported SB 6. She believes industrial hemp should be allowed as well as cannabis. "The benefits are amazing." She feels that in voting to legalize cannabis people set aside the issues the federal government has with it. 3:44:10 PM KAREN BERGER, representing herself, Homer, Alaska, supported SB 6. She said she was also testifying in the spirit of Julie Suzerini, another hemp advocate. Thirty other states favor this type of legislation and she would like to see Alaska as number 31. Agriculture is a big part of Homer's economy and the economic base of our state needs all the help it can get. 3:45:08 PM FRANCINE BENNIS, representing herself, Trapper Creek, Alaska, supported SB 6. She also wanted to thank Senator Ellis for his work on this issue. She said hemp is an amazing substance that can be used for many things. The U.S. Declaration of Independence was written on hemp paper, and both Thomas Jefferson and George Washington had hemp plantations. Alaska can really use another viable industry, and it will be well received here. It is easy to grow here; Canada is begging the United States to develop an infrastructure for growing hemp products, because they can barely keep up with U.S. demand. Canada started growing legally in 1998 and by 2010 they had over 25,000 acres in cultivation. China is also producing hemp, but is buying it from Canada, as well. Right now this country is importing over $1 billion worth of hemp products from Canada including food and clothing. 3:48:07 PM AARON RALPH, representing himself, Anchorage, Alaska, supported SB 6. Hemp has over 50,000 uses. It is great as a dietary supplement and many food products can be made out of it. It produces a higher amount of cannabidiol, which is a great tool in treating most neurological disorders. 3:48:51 PM LARRY DEVILBISS, representing himself, Palmer, Alaska, said he doesn't use marijuana, but supported SB 6. He is a farmer in Palmer and has been in many places around the world where hemp is grown. It is unfortunate that it happens to be in the cannabis family. Hemp has a lot of practical benefits that could become an economic driver in Alaska. He mentioned that a Palmer initiative banned marijuana products but exempted hemp, because of its beneficial uses and none of the negatives that are associated with other cannabis products. 3:50:28 PM BRUCE SCHULTE, representing himself, Anchorage, Alaska, supported SB 6, but shared some of the concerns over the scope of regulation and government involvement as well as the fees. He hoped the fees could be kept to an absolute minimum. He knew of a lot of large tracts of land that could benefit from the hemp industry, but there are also smaller land owners who could benefit, and he would hate to see them left out because of high fees. He observed recent news about CBD-containing products around the state and he hoped that a clear distinction could be made between hemp-based CBD products and its distance cousin, marijuana products, so it wouldn't be open to challenge later on. 3:52:56 PM COURTNEY MORAN, Earth Law, LLC, Portland, Oregon, supported SB 6. She is an industrial hemp attorney with her firm, Earth Law, LLC, and it has been her honor and pleasure to work with Senator Hughes and Buddy Whitt and with all the comments from the Division of Agriculture and this committee in drafting legislation that does conform with federal law. SB 6 sets up a robust regulatory framework that will provide for a successful and sustainable industrial hemp program for farmers and manufacturers throughout Alaska. She thanked the committee for their thoughtful questions and discussion on SB 6 clarifying that industrial hemp is an agricultural product subject to regulation by the Division of Agriculture. MS. MORAN noted that industrial hemp products, themselves, are legal and always have been, but its cultivation has been a federal issue for the past 80 years. The legality of industrial hemp products was clarified by the Ninth Circuit Court in the 2004 Hemp Industries Association (HIA) v. Drug Enforcement Agency (DEA) case. Mr. Carter with the Division of Agriculture mentioned during this committee's March 13th hearing that Section 763 of the Consolidated Appropriations Act of 2016 provides that: No funds may be used by any federal agency to prohibit the transportation, processing, sale, or use of industrial hemp that is grown or cultivated in accordance with Section 7606 of the Agricultural Act, in or outside the state in which industrial hemp is grown or cultivated. This language provides clarity for industrial hemp product sales across state lines. Also, as discussed in the past two hearings, Section 7606 of the U.S. Agriculture Act of 2014 (the Federal Farm Bill) provides a directive from Congress by not only defining industrial hemp notwithstanding the Controlled Substances Act and giving authority for the State Department of Agriculture and institutions of higher education in states that have already legalized industrial hemp to research the growth, cultivation, and marketing of it. This measure provides clear federal authority for the implementation of a state program. She recalled comments about why Alaska is following federal guidance for industrial hemp if the state is not following federal guidance for marijuana, and the rationale was that clear legal authority is lacking federally for marijuana except for the Department of Justice's Cole Memo Guidance of 2013. In contrast, there is clear federal statutory authority, and SB 6 will create the state legal authority for Alaska. That institutions of higher education and universities can engage in industrial hemp research is also provided in Section 7606. Approximately 20 universities throughout the U.S. are currently conducting industrial hemp research and SB 6 will provide that authority for Alaska institutions of higher education. Another important provision of SB 6 provides that food is not adulterated solely because it contains industrial hemp. Other states, such as Colorado, have had this issue, because it is not clarified, and SB 6 will take care of this right away for farmers and manufacturers at the beginning of the program's implementation. She closed thanking them for their support and encouragement for agricultural industrial hemp development in Alaska. 3:56:09 PM CHAIR GIESSEL, finding no one else to testify on SB 6, closed public testimony. She said the committee had updated fiscal notes and asked Senator Von Imhof, the member who is on the Senate Finance Committee, if she had any comments on them. SENATOR VON IMHOF reviewed the four fiscal notes as follows: 1. The DNR provides a zero value. The cost of administering the registration program will be determined after regulations are drafted. Those costs will be recovered by approximately 25 farms and the department anticipates to register that in the first year. Additionally, the department anticipates a 10 percent growth of interest from the agricultural community each year after. 2. The Department of Law: does not anticipate a fiscal impact at this time. Zero value. 3. The Department of Public Safety: passage of this legislation is not expected to result in a significant increase in the crime labs controlled substance analysis workload. Therefore, no fiscal impact to the crime lab is anticipated. Zero fiscal note. 4. The Department of Public Safety: passage of this legislation is not expected to have an impact on the enforcement efforts of the Alaska State Troopers. Therefore, a zero fiscal note is being submitted. CHAIR GIESSEL recognized Division of Agriculture personnel who were ready to answer questions. She invited Senator Hughes to make closing remarks. SENATOR HUGHES thanked the committee for hearing the bill and everyone who testified. She thanked the Division of Agriculture for their work with them. She also recognized Bruce Bush from MatSu. 3:58:20 PM SENATOR COGHILL moved to report CSSB 6(RES), labeled 30- LS0173\U, from committee with individual recommendations and attached fiscal note(s). There were no objections and it was so ordered.