1     
HEMP AND CBD AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jennifer Dailey-Provost

5     
Senate Sponsor: Evan J. Vickers

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to the production and sale of industrial hemp and
10     cannabinoid products.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     allows industrial hemp producers to procure background checks through a federal
15     system;
16          ▸     identifies an unlawful act for a person to:
17               •     distribute, sell, or market a product that exceeds a concentration of THC;
18               •     transport material outside the state that exceeds a concentration of THC; and
19               •     produce, sell, or use a cannabinoid product that is added to a conventional food
20     or beverage, enticing to children, or smokable flower;
21          ▸     allows for increased flexibility in dosage forms;
22          ▸     provides for registration of a product class rather than individual products;
23          ▸     repeals a provision related to an industrial hemp research certificate;
24          ▸     repeals the involvement of the Utah Department of Agriculture and Food in the
25     regulation of hemp cultivation; and
26          ▸     makes technical and conforming changes.
27     Money Appropriated in this Bill:
28          None
29     Other Special Clauses:
30          This bill provides a coordination clause.
31     Utah Code Sections Affected:
32     AMENDS:
33          4-41-102, as last amended by Laws of Utah 2020, Chapters 12 and 14
34          4-41-103.1, as enacted by Laws of Utah 2020, Chapter 14
35          4-41-103.2, as enacted by Laws of Utah 2020, Chapter 14
36          4-41-104, as enacted by Laws of Utah 2018, Chapter 227
37          4-41-105, as last amended by Laws of Utah 2020, Chapter 14
38          4-41-106, as enacted by Laws of Utah 2020, Chapter 14
39          4-41-403, as last amended by Laws of Utah 2019, Chapter 23
40     REPEALS:
41          4-41-103, as last amended by Laws of Utah 2020, Chapter 14
42          4-41-204, as enacted by Laws of Utah 2018, Chapter 446
43     Utah Code Sections Affected by Coordination Clause:
44          4-41-105, as last amended by Laws of Utah 2020, Chapter 14
45     

46     Be it enacted by the Legislature of the state of Utah:
47          Section 1. Section 4-41-102 is amended to read:
48          4-41-102. Definitions.
49          As used in this chapter:
50          (1) "Cannabidiol" or "CBD" means the cannabinoid identified as CAS# 13956-29-1.
51          (2) "Cannabidiolic acid" or "CBDA" means the cannabinoid identified as CAS#
52     1244-58-2.
53          [(1)] (3) "Cannabinoid product" means a [chemical compound extracted from a hemp]
54     product that:
55          [(a) is processed into a medicinal dosage form; and]
56          (a) contains or is represented to contain one or more naturally occurring cannabinoids;
57     and
58          (b) contains less than 0.3% tetrahydrocannabinol by dry weight.
59          (4) "Delta-9-tetrahydrocannabinol" or "delta-9-THC" means the cannabinoid identified
60     as CAS# 1972-08-3, the primary psychotropic cannabinoid in cannabis.
61          (5) "Derivative cannabinoid" means any cannabinoid that has been intentionally
62     created using a process to convert one cannabinoid into another.
63          (6) "Dosage form" means the form in which a product is produced for individual
64     dosage and that is not specified as unlawful in this chapter.
65          [(2)] (7) "Industrial hemp" means any part of a cannabis plant, whether growing or not,
66     with a concentration of less than 0.3% tetrahydrocannabinol by dry weight.
67          [(3) "Industrial hemp certificate" means a certificate that the department issues to a
68     higher education institution to grow or cultivate industrial hemp under Subsection
69     4-41-103(1).]
70          [(4) "Industrial hemp certificate holder" means a person possessing an industrial hemp
71     certificate that the department issues under this chapter.]
72          [(5)] (8) "Industrial hemp laboratory permit" means a permit that the department issues
73     to a laboratory qualified to test industrial hemp under the state hemp production plan.
74          [(6)] (9) "Industrial hemp producer license" means a license that the department issues
75     to a person for the purpose of cultivating or processing industrial hemp or an industrial hemp
76     product.
77          [(7)] (10) "Industrial hemp retailer permit" means a permit that the department issues
78     to a retailer who sells any industrial hemp product.
79          [(8)] (11) "Industrial hemp product" means a product derived from, or made by,
80     processing industrial hemp plants or industrial hemp parts.
81          (12) "Industrial hemp product class" means a group of cannabinoid products:
82          (a) that have all ingredients in common; and
83          (b) are produced by or for the same company.
84          (13) (a) "Key participant" means any person who has a financial interest in the business
85     entity, including members of a limited liability company, a sole proprietor, partners in a
86     partnership, and incorporators or directors of a corporation.
87          (b) "Key participant" includes an:
88          (i) individual at an executive level, including a chief executive officer, chief operating
89     officer, or chief financial officer; and
90          (ii) operation manager, site manager, or any employee who may present a risk of
91     diversion.
92          [(9)] (14) "Laboratory permittee" means a person possessing an industrial hemp
93     laboratory permit that the department issues under this chapter.
94          [(10)] (15) "Licensee" means a person possessing an industrial hemp producer license
95     that the department issues under this chapter.
96          [(11) "Medicinal dosage form" means:]
97          [(a) a tablet;]
98          [(b) a capsule;]
99          [(c) a concentrated oil;]
100          [(d) a liquid suspension;]
101          [(e) a sublingual preparation;]
102          [(f) a topical preparation;]
103          [(g) a transdermal preparation;]
104          [(h) a gelatinous cube, gelatinous rectangular cuboid, or lozenge in a cube or
105     rectangular cuboid shape; or]
106          [(i) other preparations that the department approves.]
107          [(12)] (16) "Non-compliant material" means a hemp plant or hemp product that does
108     not comply with this chapter, including a cannabis plant or product that contains a
109     concentration of 0.3% tetrahydrocannabinol or greater by dry weight.
110          [(13)] (17) "Permittee" means a person possessing a permit that the department issues
111     under this chapter.
112          [(14)] (18) "Person" means:
113          (a) an individual, partnership, association, firm, trust, limited liability company, or
114     corporation; and
115          (b) an agent or employee of an individual, partnership, association, firm, trust, limited
116     liability company, or corporation.
117          [(15)] (19) "Research pilot program" means a program conducted by the department in
118     collaboration with at least one licensee to study methods of cultivating, processing, or
119     marketing industrial hemp.
120          [(16)] (20) "Retailer permittee" means a person possessing an industrial hemp retailer
121     permit that the department issues under this chapter.
122          [(17) "State hemp production plan" means a plan submitted by the state to, and
123     approved by, the United States Department of Agriculture in accordance with 7 C.F.R. Chapter
124     990.]
125          (21) "Synthetic cannabinoid" means any cannabinoid that:
126          (a) was chemically synthesized from starting materials other than a naturally occurring
127     cannabinoid; and
128          (b) is not a derivative cannabinoid.
129          (22) "Total cannabidiol" or "total CBD" means the combined amounts of cannabidiol
130     and cannabidiolic acid, calculated as "total CBD = CBD + (CBDA x 0.877)."
131          (23) "Total tetrahydrocannabinol" or "total THC" means the sum of the determined
132     amounts of delta-9-THC, tertrahydrocannabinolic acid, calculated as "total THC = delta-9 THC
133     + (THCA x 0.877)."
134          Section 2. Section 4-41-103.1 is amended to read:
135          4-41-103.1. Authority to regulate production, sale, and testing of industrial hemp.
136          (1) The department shall make rules in accordance with Title 63G, Chapter 3, Utah
137     Administrative Rulemaking Act, to:
138          [(a) create a state hemp production plan that meets the standards of the Domestic
139     Hemp Production Program, 7 C.F.R. Chapter 990;]
140          [(b)] (a) establish requirements for an industrial hemp producer license to [cultivate or]
141     process industrial hemp;
142          [(c)] (b) establish requirements for an industrial hemp retailer permit to market or sell
143     industrial hemp products; and
144          [(d)] (c) establish the standards, methods, practices, and procedures a laboratory must
145     use to qualify for a permit to test industrial hemp and industrial hemp products and to dispose
146     of non-compliant material.
147          (2) The department shall maintain a list of each licensee and permittee.
148          Section 3. Section 4-41-103.2 is amended to read:
149          4-41-103.2. Industrial hemp producer license.
150          (1) The department or a licensee of the department may [cultivate or] process industrial
151     hemp.
152          (2) A person seeking an industrial hemp producer license shall provide to the
153     department:
154          (a) the legal description and global positioning coordinates sufficient for locating the
155     [fields or greenhouses] facility the person uses to [grow] process industrial hemp; and
156          (b) written consent allowing a representative of the department and local law
157     enforcement to enter all premises where the person [cultivates,] processes[,] or stores industrial
158     hemp for the purpose of:
159          (i) conducting a physical inspection; or
160          (ii) ensuring compliance with the requirements of this chapter.
161          (3) An individual who has been convicted of a drug-related felony within the last 10
162     years is not eligible to obtain an industrial hemp producer license.
163          (4) The department may set a fee in accordance with Subsection 4-2-103(2) for the
164     application for an industrial hemp producer license.
165          (5) A licensee may only market industrial hemp that the licensee cultivates or
166     processes.
167          (6) (a) Each applicant for a license to process industrial hemp shall submit to the
168     department, at the time of application, from each key participant:
169          (i) a fingerprint card in a form acceptable to the Department of Public Safety;
170          (ii) a signed waiver in accordance with Subsection 53-10-108(4) acknowledging the
171     registration of the individual's fingerprints in the Federal Bureau of Investigation Next
172     Generation Identification System's Rap Back Service; and
173          (iii) consent to a fingerprint background check by:
174          (A) the Bureau of Criminal Identification; and
175          (B) the Federal Bureau of Investigation.
176          (b) The Bureau of Criminal Identification shall:
177          (i) check the fingerprints the applicant submits under Subsection (6)(a) against the
178     applicable state, regional, and national criminal records databases, including the Federal
179     Bureau of Investigation Next Generation Identification System;
180          (ii) report the results of the background check to the department;
181          (iii) maintain a separate file of fingerprints that applicants submit under Subsection
182     (6)(a) for search by future submissions to the local and regional criminal records databases,
183     including latent prints;
184          (iv) request that the fingerprints be retained in the Federal Bureau of Investigation Next
185     Generation Identification System's Rap Back Service for search by future submissions to
186     national criminal records databases, including the Next Generation Identification System and
187     latent prints; and
188          (v) establish a privacy risk mitigation strategy to ensure that the department only
189     receives notifications for an individual with whom the department maintains an authorizing
190     relationship.
191          (c) The department shall:
192          (i) assess an individual who submits fingerprints under Subsection (6)(a) a fee in an
193     amount that the department sets in accordance with Section 63J-1-504 for the services that the
194     Bureau of Criminal Identification or another authorized agency provides under this section; and
195          (ii) remit the fee described in Subsection (6)(c)(i) to the Bureau of Criminal
196     Identification.
197          Section 4. Section 4-41-104 is amended to read:
198          4-41-104. Product registration required for distribution -- Application -- Fees --
199     Renewal.
200          (1) An industrial hemp product class or cannabinoid product that is not registered with
201     the department may not be distributed in this state.
202          (2) A person seeking registration for an industrial hemp product class or cannabinoid
203     product shall:
204          (a) apply to the department on forms provided by the department; and
205          (b) submit an annual registration fee, determined by the department pursuant to
206     Subsection 4-2-103(2), for each industrial hemp product class or cannabinoid product the
207     person intends to distribute in this state.
208          (3) The department may conduct tests, or require test results, to ensure that any claim
209     made by an applicant about an industrial hemp product class or cannabinoid product is
210     accurate.
211          (4) Upon receipt by the department of a proper application and payment of the
212     appropriate fee, as described in Subsection (2), the department shall issue a registration to the
213     applicant allowing the applicant to distribute the registered industrial hemp product class or
214     cannabinoid product in the state [through June 30 of each year] for one year from the date of
215     the payment of the fee, subject to suspension or revocation for cause.
216          (5) The department shall mail, either through the postal service or electronically, forms
217     for the renewal of a registration to a registrant at least 30 days before the day on which the
218     registrant's registration expires.
219          Section 5. Section 4-41-105 is amended to read:
220          4-41-105. Unlawful acts.
221          (1) It is unlawful for a person to [cultivate,] handle, process, or market living industrial
222     hemp plants, viable hemp seeds, leaf materials, or floral materials derived from industrial hemp
223     without the appropriate license or permit issued by the department under this chapter.
224          (2) It is unlawful for any person to:
225          (a) distribute, sell, or market an industrial hemp product or cannabinoid product that is:
226          (i) not registered with the department [pursuant to] under Section 4-41-104[.]; or
227          (ii) noncompliant material;
228          (b) transport outside the state extracted material or final product that is noncompliant
229     material;
230          (c) produce, sell, or use a cannabinoid product that is:
231          (i) added to a conventional food or beverage, as the department further defined in rules
232     described in Section 4-41-403; or
233          (ii) marketed or manufactured to be enticing to children, as further defined in rules
234     described in Section 4-41-403; or
235          (iii) smokable flower.
236          (3) The department may seize and destroy non-compliant material.
237          (4) Nothing in this chapter authorizes any person to violate federal law, regulation, or
238     any provision of this title.
239          Section 6. Section 4-41-106 is amended to read:
240          4-41-106. Enforcement -- Fine -- Citation.
241          (1) If a person violates this part, the department may:
242          (a) revoke the person's license or permit;
243          (b) decline to renew the person's license or permit; or
244          (c) assess the person a civil penalty that the department establishes in accordance with
245     Section 4-2-304.
246          (2) [The] Except for a fine that the department assesses for an unlicensed processor or
247     unregistered product, the department shall deposit a penalty imposed under this section into the
248     General Fund.
249          (3) The department may take an action described in Subsection (4) if the department
250     concludes, upon investigation, that a person has violated this chapter, a rule made under this
251     chapter, or an order issued under this chapter.
252          (4) If the department makes the conclusion described in Subsection (3), the department
253     shall:
254          (a) issue the person a written administrative citation;
255          (b) attempt to negotiate a stipulated settlement;
256          (c) seize, embargo, or destroy the industrial hemp batch or unregistered product;
257          (d) order the person to cease the violation; and
258          (e) if a stipulated settlement cannot be reached, conduct an adjudicative proceeding
259     under Title 63G, Chapter 4, Administrative Procedures Act.
260          (5) The department may, for a person, other than an individual, that is subject to an
261     uncontested citation, a stipulated settlement, or a finding of a violation in an adjudicative
262     proceeding under this section, for a fine amount not already specified in law, assess the person
263     a fine of up to $5,000 per violation, in accordance with a fine schedule that the department
264     establishes by rule in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
265     Act.
266          (6) The department may not revoke an industrial hemp producer's license, an industrial
267     hemp retailer's permit, or an industrial hemp laboratory permit without first giving the person
268     the opportunity to appear before an adjudicative proceeding conducted under Title 63G,
269     Chapter 4, Administrative Procedures Act.
270          (7) If, within 30 calendar days after the day on which a department serves a citation for
271     a violation of this chapter, the person that is the subject of the citation fails to request a hearing
272     to contest the citation, the citation becomes the department's final order.
273          (8) The department may, for a person who fails to comply with a citation under this
274     section:
275          (a) refuse to issue or renew the person's producer license, retailer permit, or laboratory
276     permit; or
277          (b) suspend, revoke, or place on probation the person's producer license, retailer
278     permit, or laboratory permit.
279          Section 7. Section 4-41-403 is amended to read:
280          4-41-403. Standards for registration.
281          (1) The department shall make rules in accordance with Title 63G, Chapter 3, Utah
282     Administrative Rulemaking Act[,]:
283          (a) to determine standards for a registered cannabinoid product, including standards
284     for:
285          [(a)] (i) testing to ensure the product is safe for human consumption; and
286          [(b)] (ii) accurate labeling; [and]
287          (b) governing an entity that manufactures cannabinoid products, including standards
288     for health and safety;
289          (c) regarding what constitutes:
290          (i) a conventional food or beverage; and
291          (ii) a product that is marketed or manufactured to be enticing to children; and
292          [(c)] (d) regarding any other issue the department considers necessary for the safe
293     production and sale of cannabinoid products.
294          (2) The department shall set a fee for a registered cannabinoid product, in accordance
295     with Section 4-2-103.
296          (3) (a) A producer, manufacturer, or distributor of a cannabinoid product may pay the
297     fee described in Subsection (2).
298          (b) A cannabinoid product may not be registered with the department until the fee
299     described in Subsection (2) is paid.
300          (4) The department shall set an administrative fine, larger than the fee described in
301     Subsection (2), for a person who sells a cannabinoid product that is not registered by the
302     department.
303          Section 8. Repealer.
304          This bill repeals:
305          Section 4-41-103, Industrial hemp -- Agricultural and academic research.
306          Section 4-41-204, Department to make rules regarding cultivation and processing.
307          Section 9. Coordinating H.B. 385 with S.B. 190 -- Substantive and technical
308     amendments.
309          If this H.B. 385 and S.B. 190, Medical Cannabis Act Amendments, both pass and
310     become law, it is the intent of the Legislature that the Office of Legislative Research and
311     General Counsel shall prepare the Utah Code database for publication by amending Subsection
312     4-41-105(2) to read:
313          "(2) It is unlawful for any person to:
314          (a) distribute, sell, or market an industrial hemp product or cannabinoid product that is:
315          (i) not registered with the department [pursuant to] under Section 4-41-104[.]; or
316          (ii) noncompliant material;
317          (b) transport outside the state extracted material or final product that is noncompliant
318     material; or
319          (c) produce, sell, or use a cannabinoid product that is:
320          (i) added to a conventional food or beverage, as the department further defined in rules
321     described in Section 4-41-403;
322          (ii) marketed or manufactured to be enticing to children, as further defined in rules
323     described in Section 4-41-403; or
324          (iii) smokable flower."