1     
INDUSTRIAL HEMP PROGRAM AMENDMENTS

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Brad M. Daw

5     
Senate Sponsor: Scott D. Sandall

6     

7     LONG TITLE
8     General Description:
9          This bill makes amendments to the industrial hemp program.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     directs the Department of Agriculture and Food to develop a state industrial hemp
14     production plan;
15          ▸     makes changes to the industrial hemp producer license;
16          ▸     establishes requirements for:
17               •     an industrial hemp retail permit; and
18               •     an industrial hemp laboratory permit;
19          ▸     establishes a process for enforcement of legal provisions relating to industrial hemp;
20     and
21          ▸     makes technical changes.
22     Money Appropriated in this Bill:
23          None
24     Other Special Clauses:
25          This bill provides a special effective date.
26     Utah Code Sections Affected:
27     AMENDS:
28          4-41-101, as last amended by Laws of Utah 2019, Chapter 23

29          4-41-102, as last amended by Laws of Utah 2019, Chapter 23
30          4-41-103, as last amended by Laws of Utah 2019, Chapter 23
31          4-41-105, as enacted by Laws of Utah 2018, Chapter 227
32     ENACTS:
33          4-41-103.1, Utah Code Annotated 1953
34          4-41-103.2, Utah Code Annotated 1953
35          4-41-103.3, Utah Code Annotated 1953
36          4-41-103.4, Utah Code Annotated 1953
37          4-41-106, Utah Code Annotated 1953
38     

39     Be it enacted by the Legislature of the state of Utah:
40          Section 1. Section 4-41-101 is amended to read:
41     
Part 1. Industrial Hemp

42          4-41-101. Title.
43          (1) This chapter is known as the "Hemp and Cannabinoid Act."
44          (2) This part is known as "Industrial Hemp [Research]."
45          Section 2. Section 4-41-102 is amended to read:
46          4-41-102. Definitions.
47          As used in this chapter:
48          (1) "Cannabinoid product" means a chemical compound extracted from a hemp
49     product that:
50          (a) is processed into a medicinal dosage form; and
51          (b) contains less than 0.3% tetrahydrocannabinol by dry weight.
52          (2) "Industrial hemp" means any part of a cannabis plant, whether growing or not, with
53     a concentration of less than 0.3% tetrahydrocannabinol by dry weight.
54          (3) "Industrial hemp certificate" means a certificate that the department issues to a
55     higher education institution to grow or cultivate industrial hemp under Subsection 4-41-103(1).

56          (4) "Industrial hemp certificate holder" means a person possessing an industrial hemp
57     certificate that the department issues under this chapter.
58          (5) "Industrial hemp laboratory permit" means a permit that the department issues to a
59     laboratory qualified to test industrial hemp under the state hemp production plan.
60          [(4)] (6) "Industrial hemp producer license" means a license that the department issues
61     to a person for the purpose of [growing, cultivating, processing, or marketing] cultivating or
62     processing industrial hemp or an industrial hemp product.
63          (7) "Industrial hemp retailer permit" means a permit that the department issues to a
64     retailer who sells any industrial hemp product.
65          [(5)] (8) "Industrial hemp product" means a product derived from, or made by,
66     processing industrial hemp plants or industrial hemp parts.
67          (9) "Laboratory permittee" means a person possessing an industrial hemp laboratory
68     permit that the department issues under this chapter.
69          [(6)] (10) "Licensee" means [an individual or business entity] a person possessing [a]
70     an industrial hemp producer license that the department issues under this chapter [to grow,
71     cultivate, process, or market industrial hemp or an industrial hemp product].
72          [(7)] (11) "Medicinal dosage form" means:
73          (a) a tablet;
74          (b) a capsule;
75          (c) a concentrated oil;
76          (d) a sublingual preparation;
77          (e) a topical preparation;
78          (f) a transdermal preparation;
79          (g) a gelatinous cube, gelatinous rectangular cuboid, or lozenge in a cube or rectangular
80     cuboid shape; or
81          (h) other preparations that the department approves.
82          (12) "Non-compliant material" means a hemp plant or hemp product that does not

83     comply with this chapter, including a cannabis plant or product that contains a concentration of
84     0.3% tetrahydrocannabinol or greater by dry weight.
85          (13) "Permittee" means a person possessing a permit that the department issues under
86     this chapter.
87          [(8)] (14) "Person" means:
88          (a) an individual, partnership, association, firm, trust, limited liability company, or
89     corporation; and
90          (b) an agent or employee of an individual, partnership, association, firm, trust, limited
91     liability company, or corporation.
92          [(9)] (15) "Research pilot program" means a program conducted by the department in
93     collaboration with at least one licensee to study methods of cultivating, processing, or
94     marketing industrial hemp.
95          (16) "Retailer permittee" means a person possessing an industrial hemp retailer permit
96     that the department issues under this chapter.
97          (17) "State hemp production plan" means a plan submitted by the state to, and
98     approved by, the United States Department of Agriculture in accordance with 7 C.F.R. Chapter
99     990.
100          Section 3. Section 4-41-103 is amended to read:
101          4-41-103. Industrial hemp -- Agricultural and academic research.
102          (1) The department [and its licensee may grow, cultivate, or process] or a certified
103     higher education institution may cultivate or process industrial hemp for agricultural and
104     academic research.
105          (2) The department shall [certify] issue an industrial hemp certificate to a higher
106     education institution to [grow or] cultivate or process industrial hemp for the purpose of
107     agricultural or academic research if the higher education institution submits to the department:
108          (a) the location where the higher education institution intends to [grow or] cultivate or
109     process industrial hemp;

110          (b) the higher education institution's research plan; and
111          (c) the name of an employee of the higher education institution who will supervise the
112     industrial hemp [growth,] cultivation, processing, and research.
113          (3) The department shall maintain a list of each industrial hemp certificate holder [and
114     licensee].
115          (4) The department shall make rules in accordance with Title 63G, Chapter 3, Utah
116     Administrative Rulemaking Act, to[:(a) ensure any] ensure that an industrial hemp project or
117     research pilot project meets the standards of an agricultural pilot project, as defined by Section
118     7606 of the United States Agricultural Act of 2014[;].
119          [(b) establish requirements for a license to participate in an industrial hemp research
120     pilot program;]
121          [(c) establish requirements for a license to grow, cultivate, process, or market industrial
122     hemp;]
123          [(d) set sampling and testing procedures for industrial hemp; and]
124          [(e) define a class or category of an industrial hemp product that is eligible for sale,
125     transfer, or distribution to a member of the public.]
126          [(5) A person seeking to cultivate industrial hemp shall provide to the department:]
127          [(a) the legal description and global positioning coordinates sufficient for locating any
128     field or greenhouse the person uses to grow industrial hemp; and]
129          [(b) written consent allowing a representative of the department and local law
130     enforcement to enter all premises where the person cultivates, processes, or stores industrial
131     hemp for the purpose of:]
132          [(i) conducting a physical inspection; or]
133          [(ii) ensuring compliance with the requirements of this chapter.]
134          [(6) An individual who has been convicted of a drug-related felony within the last 10
135     years is not eligible to obtain a license under this chapter.]
136          [(7)] (5) The department may set a fee in accordance with Subsection 4-2-103(2) for

137     the application for an industrial hemp certificate [and the application for an industrial hemp
138     license].
139          Section 4. Section 4-41-103.1 is enacted to read:
140          4-41-103.1. Industrial hemp state production plan -- Authority to regulate
141     production, sale, and testing of industrial hemp.
142          (1) The department shall make rules in accordance with Title 63G, Chapter 3, Utah
143     Administrative Rulemaking Act, to:
144          (a) create a state hemp production plan that meets the standards of the Domestic Hemp
145     Production Program, 7 C.F.R. Chapter 990;
146          (b) establish requirements for an industrial hemp producer license to cultivate or
147     process industrial hemp;
148          (c) establish requirements for an industrial hemp retailer permit to market or sell
149     industrial hemp products; and
150          (d) establish the standards, methods, practices, and procedures a laboratory must use to
151     qualify for a permit to test industrial hemp and industrial hemp products and to dispose of
152     non-compliant material.
153          (2) The department shall maintain a list of each licensee and permittee.
154          Section 5. Section 4-41-103.2 is enacted to read:
155          4-41-103.2. Industrial hemp producer license.
156          (1) The department or a licensee of the department may cultivate or process industrial
157     hemp.
158          (2) A person seeking an industrial hemp producer license shall provide to the
159     department:
160          (a) the legal description and global positioning coordinates sufficient for locating the
161     fields or greenhouses the person uses to grow industrial hemp; and
162          (b) written consent allowing a representative of the department and local law
163     enforcement to enter all premises where the person cultivates, processes, or stores industrial

164     hemp for the purpose of:
165          (i) conducting a physical inspection; or
166          (ii) ensuring compliance with the requirements of this chapter.
167          (3) An individual who has been convicted of a drug-related felony within the last 10
168     years is not eligible to obtain an industrial hemp producer license.
169          (4) The department may set a fee in accordance with Subsection 4-2-103(2) for the
170     application for an industrial hemp producer license.
171          (5) A licensee may only market industrial hemp that the licensee cultivates or
172     processes.
173          Section 6. Section 4-41-103.3 is enacted to read:
174          4-41-103.3. Industrial hemp retailer permit.
175          (1) A retailer permittee of the department may market or sell industrial hemp products.
176          (2) A person seeking an industrial hemp retailer permit shall provide to the department:
177          (a) the name of the person that is seeking to market or sell an industrial hemp product;
178          (b) the address of each location where the industrial hemp product will be sold; and
179          (c) written consent allowing a representative of the department to enter all premises
180     where the person is selling an industrial hemp product for the purpose of:
181          (i) conducting a physical inspection; or
182          (ii) ensuring compliance with the requirements of this chapter.
183          (3) The department may set a fee in accordance with Subsection 4-2-103(2) for the
184     application for an industrial hemp retailer permit.
185          Section 7. Section 4-41-103.4 is enacted to read:
186          4-41-103.4. Industrial hemp laboratory permit.
187          (1) The department or a laboratory permittee of the department may test industrial
188     hemp and industrial hemp products.
189          (2) The department or a laboratory permittee of the department may dispose of
190     non-compliant material.

191          (3) A laboratory seeking an industrial hemp laboratory permit shall:
192          (a) demonstrate to the department that:
193          (i) the laboratory and laboratory staff possess the professional certifications required by
194     department rule;
195          (ii) the laboratory has the ability to test industrial hemp and industrial hemp products
196     using the standards, methods, practices, and procedures required by department rule;
197          (iii) the laboratory has the ability to meet the department's minimum standards of
198     performance for detecting delta-9 tetrahydrocannabinol (THC) concentration levels; and
199          (iv) the laboratory has a plan that complies with the department's rule for the safe
200     disposal of non-compliant material; and
201          (b) provide to the department written consent allowing a representative of the
202     department and local law enforcement to enter all premises where the laboratory tests,
203     processes, or stores industrial hemp, industrial hemp products, and non-compliant plants for the
204     purpose of:
205          (i) conducting a physical inspection; or
206          (ii) ensuring compliance with the requirements of this chapter.
207          (4) An individual who has been convicted of a drug-related felony within the last 10
208     years is not eligible to obtain a license under this chapter.
209          (5) The department may set a fee in accordance with Subsection 4-2-103(2) for the
210     application for an industrial hemp laboratory permit.
211          Section 8. Section 4-41-105 is amended to read:
212          4-41-105. Unlawful acts.
213          (1) It is unlawful for a person [who is not a licensee] to cultivate, handle, process, or
214     market living industrial hemp plants, viable hemp seeds, leaf materials, or floral materials
215     derived from industrial hemp without the appropriate license or permit issued by the
216     department under this chapter.
217          (2) It is unlawful for any person to distribute, sell, or market an industrial hemp

218     product that is not registered with the department pursuant to Section 4-41-104.
219          (3) The department may seize and destroy [hemp plants or products that do not comply
220     with this chapter, including cannabis plants or products that contain a concentration of 0.3%
221     tetrahydrocannabinol or greater by weight] non-compliant material.
222          (4) Nothing in this chapter authorizes any person to violate federal law, regulation, or
223     any provision of this title.
224          Section 9. Section 4-41-106 is enacted to read:
225          4-41-106. Enforcement -- Fine -- Citation.
226          (1) If a person violates this part, the department may:
227          (a) revoke the person's license or permit;
228          (b) decline to renew the person's license or permit; or
229          (c) assess the person a civil penalty that the department establishes in accordance with
230     Section 4-2-304.
231          (2) The department shall deposit a penalty imposed under this section into the General
232     Fund.
233          (3) The department may take an action described in Subsection (4) if the department
234     concludes, upon investigation, that a person has violated this chapter, a rule made under this
235     chapter, or an order issued under this chapter.
236          (4) If the department makes the conclusion described in Subsection (3), the department
237     shall:
238          (a) issue the person a written administrative citation;
239          (b) attempt to negotiate a stipulated settlement;
240          (c) seize, embargo, or destroy the industrial hemp batch or unregistered product;
241          (d) order the person to cease the violation; and
242          (e) if a stipulated settlement cannot be reached, conduct an adjudicative proceeding
243     under Title 63G, Chapter 4, Administrative Procedures Act.
244          (5) The department may, for a person, other than an individual, that is subject to an

245     uncontested citation, a stipulated settlement, or a finding of a violation in an adjudicative
246     proceeding under this section, for a fine amount not already specified in law, assess the person
247     a fine of up to $5,000 per violation, in accordance with a fine schedule that the department
248     establishes by rule in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
249     Act.
250          (6) The department may not revoke an industrial hemp producer's license, an industrial
251     hemp retailer's permit, or an industrial hemp laboratory permit without first giving the person
252     the opportunity to appear before an adjudicative proceeding conducted under Title 63G,
253     Chapter 4, Administrative Procedures Act.
254          (7) If, within 30 calendar days after the day on which a department serves a citation for
255     a violation of this chapter, the person that is the subject of the citation fails to request a hearing
256     to contest the citation, the citation becomes the department's final order.
257          (8) The department may, for a person who fails to comply with a citation under this
258     section:
259          (a) refuse to issue or renew the person's producer license, retailer permit, or laboratory
260     permit; or
261          (b) suspend, revoke, or place on probation the person's producer license, retailer
262     permit, or laboratory permit.
263          Section 10. Effective date.
264          If approved by two-thirds of all the members elected to each house, this bill takes effect
265     upon approval by the governor, or the day following the constitutional time limit of Utah
266     Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
267     the date of veto override.