Washington State Legislature - Bills
(February 25, 2019) - HB 1401 - "Concerning Hemp Production" - Summary

Observations on the evolution of a bill which would enable Washington farmers to participate in the federal hemp program authorized in the 2018 Farm Bill.

Here are some observations on the evolution of HB 1401, “Concerning hemp production,” a bill which would enable Washington farmers to participate in the federal hemp program authorized in the 2018 Farm Bill.

My top 3 takeaways:

  • On February 5th, the Washington State House Commerce and Gaming Committee hosted a public hearing for HB 1401.
    • Committee Counsel Peter Clodfelter briefed the committee (video); from the House bill analysis:
      • Establishes a new hemp regulatory program, under the Washington State Department of Agriculture’s (WSDA) jurisdiction, to license and regulate hemp producers and hemp production.
      • Requires the WSDA to develop and submit Washington state’s plan for regulating hemp production to the United States Department of Agriculture, with certain minimum components, under a process included in the 2018 Farm Bill.
      • Authorizes hemp growers in the existing Industrial Hemp Research Program to transition into the new hemp program, and repeals the Industrial Hemp Research Program effective January 1, 2020.
      • Deems specific seed cultivars approved for planting by licensed producers and directs the WSDA to develop rules authorizing additional seed cultivars.
      • Directs the WSDA to develop and make accessible an Internet-based application to provide regional communications concerning recommended planting times for hemp crops in Washington state.
      • Establishes a task force on the availability of crop insurance for hemp producers.
      • Amends the Controlled Substances Act to expressly exclude the new definition of hemp from scheduled substances.
    • Representative Matt Shea, prime sponsor of the legislation, testified to his colleagues: “Hemp is not marijuana.” He explained the plant’s domestic history, noting early drafts of the Declaration of Independence had been scribed on hemp paper. Shea then claimed Washington State had been “one of the largest exporters of hemp in the country, if not in the entire world, and we would like to return to that status.” He said the bill incorporated stakeholder input and was compatible with the federal 2018 Farm Bill (Section 7129) adding, “A lot of states are looking at Washington State and this legislation as being a model for the country, so we want to get this right.” Shea told the committee the “cutting edge” bill would enable Washington farmers to utilize established international hemp cultivars and recognized hemp as a food product (video).
      • Representative Shelly Kloba asked about testing standards. Shea said he’d toured state-accredited cannabis laboratory Trace Analytics and vouched for their testing standards for pesticides and determining tetrahydrocannabinol (THC) content in hemp crops. He emphasized proper testing wouldn’t heat up hemp samples as that would raise THC levels. Kloba asked if Shea had meant cannabidiol (CBD). He said some hemp cultivars had both and testing was needed to prove it was below the federal limit of 0.3% THC by dry weight (video).
    • Bonny Jo Peterson, Executive Director of the Industrial Hemp Association of Washington, lauded the bill, saying she’d been a participant stakeholder. In response to Kloba’s question about testing, Peterson concurred with Shea that there were different substances to test for, each with differing testing standards. She highlighted pollen buffer zones between I-502 producers and hemp farmers, and called them “an issue” when it came to implementing the state’s Industrial Hemp Research Pilot (IHRP). Peterson said that experience provided “research knowledge on the pros and cons, and what works and what doesn’t,” but asserted buffer zones weren’t borne out by “strong science.” She claimed buffer zones overregulated who could grow and treated cannabis pollen differently from other agricultural crops. She said the bill’s proposed internet resources could help cannabis growers align planting times. Peterson predicted strong economic potential for hemp and concluded by outlining how the bill’s fee structure would fund the agricultural commodity program (video).
    • Sativa Rasmussen, an attorney from the Lane Powell Professional Corporation, offered support on behalf of her clients in the cannabis industry and called HB 1401 a “good first step” in starting a hemp program (video).
    • Joshua Ashby, co-chair of the cannabis practice at Lane Powell and chair of Seattle University’s School of Law Northwest Marijuana Law Conference, pointed to a “very serious flaw” regarding seed sourcing in the otherwise “great” bill. He said the language for importing seeds was on a timeline that couldn’t be met and some “additional internal conflicts” would best be fixed by substituting SB 5276’s section 4(1)(e) for the corresponding section 8 of HB 1401 (video).
    • Lawmakers had several follow up questions for the panel (video).
      • Representative Jeremie Dufault, temporarily sitting in for Representative Bill Jenkin, asked why the seed change was in the senate bill. Ashby replied that HB 1401’s companion bill, SB 5719, had the same mistake and senators modified SB 5276 instead because that bill was already under consideration. He said international seed suppliers had already lobbied to be the primary source of hemp genetics but that broader sourcing options were preferable. Dufault asked if any in-state seed supplier existed and Ashby replied none had been licensed to do so.
      • Representative Jesse Young said he had “a lot of hope” for the bill and asked for ways to “accelerate our competitiveness” to aid the state’s return to leading hemp exporter status. Ashby recommended passing the bill as soon as possible so the state could submit paperwork to the U.S. Department of Agriculture (USDA).
      • Dufault offered Peterson an opportunity to weigh in on the issue of seed sourcing. She responded that there was “confusion” about that section of the bill. Peterson said the intent was to describe approved “pedigree” seed cultivars proven to be stable while opening up breeding programs. She said interstate seed sourcing should be possible once the bill was implemented. Dufault said that farmers from his district had concerns that the specific approved cultivars listed in the bill wouldn’t grow well in his central Washington district. Peterson said seed genetics developed in states like Oregon, Kentucky, and Colorado would be accessible under the bill. Though Dufault had further questions, Chair Derek Stanford requested that he follow up with the panel after the hearing and potentially propose an amendment.
      • SB 5276’s Bill Report summarizes that legislation’s initial public hearing.
    • Gregg Gnecco from Hemp Northwest and Queen of Hearts Hemp Foods in Oregon told members he was licensed in both Oregon and Washington to grow hemp, and that his was one of the first hemp crops brought to market in Washington. He criticized ESSB 6206, passed in 2016 to authorize hemp production, as “a very poorly written bill that was very prohibitive” and left the state “as far behind in hemp as states that don’t have a program.” He said the old law’s problems were primarily seed sourcing and restrictions on interstate processing (video).
    • Kelly McLain, a senior policy advisor with WSDA, testified as “other” on the bill because it hadn’t been factored into the agency’s proposed budget. She said “there are still changes needed” between the 2018 Farm Bill and current statute to make the industry feasible. She said WSDA’s pilot program had only one grower in 2018 harvesting from 141.7 acres, compared with over 7,000 acres harvested that year in Oregon. She pledged her department’s cooperation in implementing the bill (video)
    • Liz Kasser, a cannabis industry employee, spoke in support, calling the difference between marijuana and hemp “basically night and day.” Saying she’d seen the regulations around cannabis THC edibles, she suggested, “Why don’t we create those same regulations for hemp as well?” (video).
  • On February 19th, the Commerce and Gaming Committee hosted an executive session for HB 1401 and moved a substitute bill out of committee with a “do pass” recommendation.
  • On Monday February 25th, the House Appropriations Committee hosted a public hearing for Substitute HB 1401 (video).
    • Commerce and Gaming Committee Counsel Peter Clodfelter briefed the Appropriations Committee on the substitute bill. He emphasized the bill would:
      • Create a new agricultural commodity program under the WSDA replacing the IHRP
      • Require the WSDA to “develop and submit Washington State’s plan for regulating hemp production to the United State Department of Agriculture, the USDA, with certain minimum requirements included in the bill.”
      • Regulate hemp seed sourcing for hemp producers, and require the WSDA to adopt rules for certified hemp seeds
      • Establish regulatory fees on licensed hemp producers
      • Require Washington State University (WSU) to “develop and make accessible an Internet-based application to provide regional communications” for producers to help recommended planting times
      • Amend Washington’s Controlled Substances Act to exclude hemp
    • Dan Jones, a Fiscal Analyst for the Committee, gave an overview of the bill’s fiscal note. He emphasized the note was from the original draft of the bill but he expected “the fiscal note for the substitute bill, when available, to show similar total costs.” However, the cost of the online application, a one-time expenditure of roughly $440,000, would be transferred from WSDA to WSU. The bill included a $300,000 appropriation to WSDA for implementation. Annual costs, described as staffing for “testing, enforcement, and inspections,” were estimated at around $200,000 and would be paid through the state’s General Fund for the first year before being funded by application and licensing fees (video).
    • No one signed up to testify to the Appropriations Committee on SHB 1401.
    • SHB 1401 must be scheduled for executive session and passed out of the Appropriations Committee this week before the March 1st session cutoff calendar deadline to move bills originating in the House out of the fiscal committee.