Senator David P. Hinkins proposes the following substitute bill:


1     
HEMP REGULATION AMENDMENTS

2     
2021 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: David P. Hinkins

5     
House Sponsor: Jennifer Dailey-Provost

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions of Title 4, Chapter 41, Hemp and Cannabinoid Act, to
10     provide clarity regarding existing and developing cannabinoids and regulate production
11     and sale.
12     Highlighted Provisions:
13          This bill:
14          ▸     defines terms;
15          ▸     allows industrial hemp producers to procure background checks through a federal
16     system;
17          ▸     requires industrial hemp laboratories to demonstrate the ability to test for THC
18     analogs;
19          ▸     identifies an unlawful act for a person to:
20               •     distribute, sell, or market a product that exceeds the acceptable hemp THC
21     level;
22               •     transport material outside of the state that exceeds the acceptable hemp THC
23     level; or
24               •     produce, sell, or use a cannabinoid product that is added to an alcoholic
25     beverage or food, enticing to children, or smokable flower;
26          ▸     allows for increased flexibility in dosage forms;
27          ▸     allows for the sale of unprocessed industrial hemp flower to an individual who is at
28     least 21 years old under certain packaging and labeling requirements; and
29          ▸     makes technical and conforming changes.
30     Money Appropriated in this Bill:
31          None
32     Other Special Clauses:
33          None
34     Utah Code Sections Affected:
35     AMENDS:
36          4-41-102, as last amended by Laws of Utah 2020, Chapters 12 and 14
37          4-41-103.2, as enacted by Laws of Utah 2020, Chapter 14
38          4-41-103.4, as enacted by Laws of Utah 2020, Chapter 14
39          4-41-104, as enacted by Laws of Utah 2018, Chapter 227
40          4-41-105, as last amended by Laws of Utah 2020, Chapter 14
41          4-41-204, as enacted by Laws of Utah 2018, Chapter 446
42     ENACTS:
43          4-41-107, Utah Code Annotated 1953
44     

45     Be it enacted by the Legislature of the state of Utah:
46          Section 1. Section 4-41-102 is amended to read:
47          4-41-102. Definitions.
48          As used in this chapter:
49          (1) "Acceptable hemp THC level" means total tetrahydrocannabinol concentration of
50     not more than 0.3% on a dry weight basis if laboratory testing confirms a result within a
51     measurement of uncertainty that includes the total tetrahydrocannabinol concentration of 0.3%.
52          (2) "Cannabidiol" or "CBD" means the cannabinoid identified as CAS# 3556-78-3.
53          (3) "Cannabidiolic acid" or "CBDA" means the cannabinoid identified as CAS#
54     1244-58-2.
55          [(1)] (4) "Cannabinoid product" means [a chemical compound extracted from a hemp
56     product that] any product that:
57          (a) contains or is represented to contain naturally occurring, derivative, or synthetic
58     cannabinoids; and
59          (b) contains less than 0.3% of delta-9-THC or 0.3% each of any THC analog.
60          [(a) is processed into a medicinal dosage form; and]
61          [(b) contains less than 0.3% tetrahydrocannabinol by dry weight.]
62          (5) "Delta-9-tetrahydrocannabinol" or "delta-9-THC" means the cannabinoid identified
63     as CAS# 1972-08-03, the primary psychotropic cannabinoid in cannabis.
64          (6) "Derivative cannabinoid" means any cannabinoid that has been intentionally
65     created using a process to convert a naturally occurring cannabinoid into another cannabinoid.
66          (7) "Dosage form" means the form in which a product is produced for individual
67     dosage that is not specified as unlawful in this chapter.
68          [(2)] (8) "Industrial hemp" means any part of a cannabis plant, whether growing or not,
69     with a concentration of less than 0.3% tetrahydrocannabinol by dry weight.
70          [(3)] (9) "Industrial hemp certificate" means a certificate that the department issues to a
71     higher education institution to grow or cultivate industrial hemp under Subsection 4-41-103(1).
72          [(4)] (10) "Industrial hemp certificate holder" means a person possessing an industrial
73     hemp certificate that the department issues under this chapter.
74          [(5)] (11) "Industrial hemp laboratory permit" means a permit that the department
75     issues to a laboratory qualified to test industrial hemp under the state hemp production plan.
76          [(6)] (12) "Industrial hemp producer license" means a license that the department
77     issues to a person for the purpose of cultivating or processing industrial hemp or an industrial
78     hemp product.
79          [(7)] (13) "Industrial hemp retailer permit" means a permit that the department issues
80     to a retailer who sells any industrial hemp product.
81          [(8)] (14) "Industrial hemp product" means a product derived from, or made by,
82     processing industrial hemp plants or industrial hemp parts.
83          (15) "Industrial hemp product class" means a group of industrial hemp or cannabinoid
84     products that:
85          (a) have all ingredients in common; and
86          (b) differ in dosage strength.
87          (16) "Key participant" means any individual who has access to raw hemp materials
88     within the industrial hemp facility.
89          [(9)] (17) "Laboratory permittee" means a person possessing an industrial hemp
90     laboratory permit that the department issues under this chapter.
91          [(10)] (18) "Licensee" means a person possessing an industrial hemp producer license
92     that the department issues under this chapter.
93          [(11) "Medicinal dosage form" means:]
94          [(a) a tablet;]
95          [(b) a capsule;]
96          [(c) a concentrated oil;]
97          [(d) a liquid suspension;]
98          [(e) a sublingual preparation;]
99          [(f) a topical preparation;]
100          [(g) a transdermal preparation;]
101          [(h) a gelatinous cube, gelatinous rectangular cuboid, or lozenge in a cube or
102     rectangular cuboid shape; or]
103          [(i) other preparations that the department approves.]
104          [(12)] (19) "Non-compliant material" means a hemp plant or hemp product that does
105     not comply with this chapter, including a cannabis plant or product that contains a
106     concentration of:
107          (a) 0.3% [tetrahydrocannabinol] total THC or greater by dry weight[.]; or
108          (b) 0.3% of any THC analog or greater by dry weight.
109          [(13)] (20) "Permittee" means a person possessing a permit that the department issues
110     under this chapter.
111          [(14)] (21) "Person" means:
112          (a) an individual, partnership, association, firm, trust, limited liability company, or
113     corporation; and
114          (b) an agent or employee of an individual, partnership, association, firm, trust, limited
115     liability company, or corporation.
116          [(15)] (22) "Research pilot program" means a program conducted by the department in
117     collaboration with at least one licensee to study methods of cultivating, processing, or
118     marketing industrial hemp.
119          [(16)] (23) "Retailer permittee" means a person possessing an industrial hemp retailer
120     permit that the department issues under this chapter.
121          [(17)] (24) "State hemp production plan" means a plan submitted by the state to, and
122     approved by, the United States Department of Agriculture in accordance with 7 C.F.R. Chapter
123     990.
124          (25) "Synthetic cannabinoid" means any cannabinoid that:
125          (a) was chemically synthesized from starting materials other than a naturally occurring
126     cannabinoid; and
127          (b) is not a derivative cannabinoid.
128          (26) "Tetrahydrocannabinol" or "THC" means a substance derived from cannabis or a
129     synthetic cannabinoid equivalent as described in Subsection 58-37-4(2)(a)(iii)(AA).
130          (27) (a) "THC analog" means a substance that is structurally or pharmacologically
131     substantially similar to, or is represented as being similar to, delta-9-THC.
132          (b) "THC analog" does not include the following substances or their naturally
133     occurring acid forms:
134          (i) cannabichromene (CBC), CAS# 20675-51-8;
135          (ii) cannabicyclol (CBL), CAS# 21366-63-2;
136          (iii) cannabidiol (CBD), CAS# 13956-29-1;
137          (iv) cannabidivarol (CBDV), CAS# 24274-48-4;
138          (v) cannabielsoin (CBE), CAS# 52025-76-0;
139          (vi) cannabigerol (CBG), CAS# 25654-31-3;
140          (vii) cannabigerovarin (CBGV), CAS# 55824-11-8;
141          (viii) cannabinol (CBN), CAS# 521-35-7;
142          (ix) cannabivarin (CBV), CAS# 33745-21-0; or
143          (x) delta-9-tetrahydrocannabivarin (THCV), CAS# 31262-37-0.
144          (28) "Total cannabidiol" or "total CBD" means the combined amounts of cannabidiol
145     and cannabidiolic acid, calculated as "total CBD = CBD + (CBDA x 0.877)."
146          (29) "Total tetrahydrocannabinol" or "total THC" means the sum of the determined
147     amounts of delta-9 THC and tetrahydrocannabinolic acid, calculated as "total THC = delta-9
148     THC + (THCA x 0.877)."
149          Section 2. Section 4-41-103.2 is amended to read:
150          4-41-103.2. Industrial hemp producer license -- Background checks.
151          (1) The department or a licensee of the department may cultivate or process industrial
152     hemp.
153          (2) A person seeking an industrial hemp producer license shall provide to the
154     department:
155          (a) the legal description and global positioning coordinates sufficient for locating the
156     fields or greenhouses the person uses to grow industrial hemp; and
157          (b) written consent allowing a representative of the department and local law
158     enforcement to enter all premises where the person cultivates, processes, or stores industrial
159     hemp for the purpose of:
160          (i) conducting a physical inspection; or
161          (ii) ensuring compliance with the requirements of this chapter.
162          (3) An individual who has been convicted of a drug-related felony within the last 10
163     years is not eligible to obtain an industrial hemp producer license.
164          (4) The department may set a fee in accordance with Subsection 4-2-103(2) for the
165     application for an industrial hemp producer license.
166          (5) A licensee may only market industrial hemp that the licensee cultivates or
167     processes.
168          (6) (a) Each applicant for a license to cultivate or process industrial hemp shall submit
169     to the department, at the time of application, from each key participant:
170          (i) a fingerprint card in a form acceptable to the Department of Public Safety;
171          (ii) a signed waiver in accordance with Subsection 53-10-108(4) acknowledging the
172     registration of the individual's fingerprints in the Federal Bureau of Investigation Next
173     Generation Identification System's Rap Back Service; and
174          (iii) consent to a fingerprint background check by:
175          (A) the Bureau of Criminal Identification; and
176          (B) the Federal Bureau of Investigation.
177          (b) The Bureau of Criminal Identification shall:
178          (i) check the fingerprints the applicant submits under Subsection (6)(a) against the
179     applicable state, regional, and national criminal records databases, including the Federal
180     Bureau of Investigation Next Generation Identification System;
181          (ii) report the results of the background check to the department;
182          (iii) maintain a separate file of fingerprints that applicants submit under Subsection
183     (6)(a) for search by future submissions to the local and regional criminal records databases,
184     including latent prints;
185          (iv) request that the fingerprints be retained in the Federal Bureau of Investigation Next
186     Generation Identification System's Rap Back Service for search by future submissions to
187     national criminal records databases, including the Next Generation Identification System and
188     latent prints; and
189          (v) establish a privacy risk mitigation strategy to ensure that the department only
190     receives notifications for an individual with whom the department maintains an authorizing
191     relationship.
192          (c) The department shall:
193          (i) assess an individual who submits fingerprints under Subsection (6)(a) a fee in an
194     amount that the department sets in accordance with Section 63J-1-504 for the services that the
195     Bureau of Criminal Identification or another authorized agency provides under this section; and
196          (ii) remit the fee described in Subsection (6)(c)(i) to the Bureau of Criminal
197     Identification.
198          Section 3. Section 4-41-103.4 is amended to read:
199          4-41-103.4. Industrial hemp laboratory permit.
200          (1) The department or a laboratory permittee of the department may test industrial
201     hemp and industrial hemp products.
202          (2) The department or a laboratory permittee of the department may dispose of
203     non-compliant material.
204          (3) A laboratory seeking an industrial hemp laboratory permit shall:
205          (a) demonstrate to the department that:
206          (i) the laboratory and laboratory staff possess the professional certifications required by
207     department rule;
208          (ii) the laboratory has the ability to test industrial hemp and industrial hemp products
209     using the standards, methods, practices, and procedures required by department rule;
210          (iii) the laboratory has the ability to meet the department's minimum standards of
211     performance for detecting delta-9 tetrahydrocannabinol (THC) concentration levels and THC
212     analog concentration levels; and
213          (iv) the laboratory has a plan that complies with the department's rule for the safe
214     disposal of non-compliant material; and
215          (b) provide to the department written consent allowing a representative of the
216     department and local law enforcement to enter all premises where the laboratory tests,
217     processes, or stores industrial hemp, industrial hemp products, and non-compliant plants for the
218     purpose of:
219          (i) conducting a physical inspection; or
220          (ii) ensuring compliance with the requirements of this chapter.
221          (4) An individual who has been convicted of a drug-related felony within the last 10
222     years is not eligible to obtain a license under this chapter.
223          (5) The department may set a fee in accordance with Subsection 4-2-103(2) for the
224     application for an industrial hemp laboratory permit.
225          Section 4. Section 4-41-104 is amended to read:
226          4-41-104. Product registration required for distribution -- Application -- Fees --
227     Renewal.
228          (1) An industrial hemp product that is not registered with the department may not be
229     distributed in this state.
230          (2) A person seeking registration for an industrial hemp product shall:
231          (a) apply to the department on forms provided by the department; and
232          (b) submit an annual registration fee, determined by the department pursuant to
233     Subsection 4-2-103(2), for each industrial hemp product class the person intends to distribute
234     in this state.
235          (3) The department may conduct tests, or require test results, to ensure that any claim
236     made by an applicant about an industrial hemp product is accurate.
237          (4) Upon receipt by the department of a proper application and payment of the
238     appropriate fee, as described in Subsection (2), the department shall issue a registration to the
239     applicant allowing the applicant to distribute the registered hemp product in the state [through
240     June 30 of each year] for one year from the date of the payment of the fee, subject to
241     suspension or revocation for cause.
242          (5) The department shall mail, either through the postal service or electronically, forms
243     for the renewal of a registration to a registrant at least 30 days before the day on which the
244     registrant's registration expires.
245          Section 5. Section 4-41-105 is amended to read:
246          4-41-105. Unlawful acts.
247          (1) It is unlawful for a person to:
248          (a) cultivate, handle, process, or market living industrial hemp plants, viable hemp
249     seeds, leaf materials, or floral materials derived from industrial hemp without the appropriate
250     license or permit issued by the department under this chapter[.];
251          [(2)] (b) [It is unlawful for any person to] distribute, sell, or market an industrial hemp
252     or cannabinoid product that is not registered with the department pursuant to Section
253     4-41-104[.];
254          (c) distribute, sell, or market an industrial hemp or cannabinoid product that contains
255     greater than 0.3% of either total THC or a THC analog under this chapter;
256          (d) transport outside the state extracted material or final product that exceeds the
257     acceptable hemp THC level; or
258          (e) produce, sell, or use a cannabinoid product that is:
259          (i) added to a conventional food or alcoholic beverage if:
260          (A) the conventional food item is unpackaged; or
261          (B) the conventional food item contains more than 25mg of CBD per serving; or
262          (ii) marketed or manufactured to be enticing to children, as the department specifies in
263     rule in accordance with Section 4-41-204; or
264          (f) for unprocessed industrial hemp flower:
265          (i) sell industrial hemp flower to an individual younger than 21 years old; or
266          (ii) possess, except for during actual use, or sell industrial hemp flower that is not
267     packaged in accordance with Section 4-41-107.
268          [(3)] (2) The department may seize and destroy non-compliant material.
269          [(4)] (3) Nothing in this chapter authorizes any person to violate federal law,
270     regulation, or any provision of this title.
271          Section 6. Section 4-41-107 is enacted to read:
272          4-41-107. Industrial hemp flower.
273          (1) For any industrial hemp flower that an industrial hemp producer produces for sale
274     as unprocessed industrial hemp flower, the industrial hemp producer shall:
275          (a) package the industrial hemp flower in a container that:
276          (i) is tamper evident and tamper resistant;
277          (ii) does not appeal to children;
278          (iii) does not mimic a candy container;
279          (iv) is opaque; and
280          (v) complies with child-resistant effectiveness standards that the United States
281     Consumer Product Safety Commission establishes;
282          (b) include a label on the container described in Subsection (1)(a) that:
283          (i) clearly and unambiguously states that the container contains industrial hemp flower;
284          (ii) clearly displays the weight of the industrial hemp flower and the amount of total
285     THC in the labeled container;
286          (iii) does not display an image, word, or phrase that the facility knows or should know
287     appeals to children; and
288          (iv) identifies the industrial hemp producer; and
289          (c) includes a warning label that states: "WARNING: KEEP OUT OF REACH OF
290     CHILDREN. This product is for medical use only."
291          (2) For any industrial hemp flower that an industrial hemp retailer offers for sale, the
292     industrial hemp retailer shall:
293          (a) ensure that the industrial hemp flower is in a sealed and labeled container described
294     in Subsection (1);
295          (b) add a label to the container described in Subsection (1) that specifies:
296          (i) the date of purchase; and
297          (ii) the industrial hemp retailer;
298          (c) provide the purchaser with an opaque, child-resistant bag; or
299          (d) ensure that the unprocessed industrial hemp flower is registered in accordance with
300     Sections 4-41-104 and 4-41-403.
301          (3) (a) An industrial hemp producer may not produce unprocessed industrial hemp
302     flower for sale except as provided in Subsection (1).
303          (b) An industrial hemp retailer may not offer unprocessed industrial hemp flower for
304     sale except as provided in Subsection (2).
305          (c) An individual may not:
306          (i) purchase, possess, or use unprocessed industrial hemp flower if the individual is
307     younger than 21 years old;
308          (ii) purchase unprocessed industrial hemp flower for sale that is not in a sealed and
309     labeled container described in Subsections (1) and (2);
310          (iii) possess or transport industrial hemp flower in public outside of a sealed and
311     labeled container described in Subsections (1) and (2) that is contained within the bag
312     described in Subsection (2)(c); or
313          (iv) sell or purchase unprocessed industrial hemp flower that is not registered in
314     accordance with Sections 4-41-104 and 4-41-403.
315          Section 7. Section 4-41-204 is amended to read:
316          4-41-204. Department to make rules regarding cultivation and processing.
317          The department shall make rules, in accordance with Title 63G, Chapter 3, Utah
318     Administrative Rulemaking Act:
319          (1) to ensure:
320          (a) cannabis cultivated in the state pursuant to this chapter is cultivated from
321     state-approved seed sources; and
322          (b) a private entity contracted to cultivate cannabis has sufficient security protocols;
323     [and]
324          (2) governing an entity that puts cannabis into a [medicinal] dosage form, including
325     standards for health and safety[.]; and
326          (3) regarding what constitutes a product that is marketed or manufactured to be
327     enticing to children.