HB-6330, As Passed Senate, December 21, 2018
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 6330
A bill to amend 2014 PA 547, entitled
"Industrial hemp research act,"
by amending the title and sections 1, 2, 3, and 4 (MCL 286.841,
286.842, 286.843, and 286.844) and by adding sections 5, 6, 7, 8,
9, 10, 11, 12, 13, 14, 15, 16, 17, 18, and 19.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to authorize the growing and cultivating of industrial
hemp for research and development purposes; to require and provide
for the registration and licensing of certain persons engaged in
the growing, processing, and handling of industrial hemp; to
provide for the collection of fees; to authorize the receipt and
expenditure of funding for research and development related to
industrial hemp; and to prescribe the powers and duties of certain
state agencies and officials and colleges and universities in this
state; and to provide for certain fines and sanctions.
Sec. 1. This act shall be known and may be cited as the
"industrial hemp research and development act".
Sec. 2. As used in this act:
(a) "Broker" means to engage or participate in the marketing
of industrial hemp by acting as an intermediary or negotiator
between prospective buyers and sellers.
(b) "Cannabis" means the plant Cannabis sativa L. and any part
of that plant, whether growing or not.
(c) (a) "Department" means the department of agriculture and
rural development.
(b) "Fund" means the industrial hemp research fund created in
section 4.
(d) "Director" means the director of the department, or his or
her designee.
(e) "GPS coordinates" means latitude and longitude coordinates
derived from a global positioning system.
(f) "Grow" means to plant, propagate, grow, cultivate, or
harvest live plants or viable seeds.
(g) "Grower" means a person registered by the department under
this act to grow industrial hemp.
(h) "Handle" means to possess, store, or transport industrial
hemp on premises owned, operated, or controlled by a registered
grower or licensed processor-handler.
(i) (c) "Industrial hemp" means the plant Cannabis sativa
Cannabis sativaL. and any part of the that plant, including the
viable seeds of that plant and all derivatives, extracts,
cannabinoids, isomers, acids, salts, and salts of isomers, whether
growing or not, with a delta-9-tetrahydrocannabinol concentration
of not more than 0.3% on a dry weight basis. Industrial hemp
includes industrial hemp commodities and products and topical or
ingestible animal and consumer products derived from the plant
Cannabis sativa L. with a delta-9 tetrahydrocannabinol
concentration of not more than 0.3% on a dry weight basis.
(j) "Licensing and registration fund" means the industrial
hemp licensing and registration fund created in section 5.
(k) "Location ID" means the unique identifier established by
the applicant for each unique set of GPS coordinates where
industrial hemp will be grown, handled, stored, processed, or
brokered.
(l) "Market" means to promote or sell industrial hemp or an
industrial hemp commodity or product. Market includes, but is not
limited to, efforts to advertise and gather information about the
needs or preferences of potential consumers or suppliers.
(m) "Nonviable seed" means seed that has been crushed,
dehulled, heat treated, or otherwise rendered to have a 0.0%
germination rate.
(n) "Person" means an individual, partnership, corporation,
association, or other legal entity.
(o) "Plot" means a contiguous area in a field, greenhouse, or
indoor growing structure containing the same variety of industrial
hemp throughout the area.
(p) "Process" means to convert raw industrial hemp into a
marketable form.
(q) "Processor-handler" means a person licensed by the
department under this act to process, handle, broker, or market
industrial hemp.
(r) "Program" means the industrial hemp licensing and
registration program established by this act.
(s) "Propagule" means a plant or plant part that is utilized
to grow a new plant.
(t) "Research fund" means the industrial hemp research and
development fund created in section 4.
(u) "Testing facility" means a safety compliance facility
licensed under the medical marihuana facilities licensing act, 2016
PA 281, MCL 333.27101 to 333.27801, or a testing facility approved
by the department.
(v) "THC" means tetrahydrocannabinol.
(w) "Variety" means a subdivision of a species that has the
following characteristics:
(i) The subdivision is uniform, in the sense that variations
between the subdivision and other subdivisions in essential and
distinctive characteristics are describable.
(ii) The subdivision is distinct, in the sense that the
subdivision can be differentiated by 1 or more identifiable
morphological, physiological, or other characteristics from all
other known subdivisions.
(iii) The subdivision is stable, in the sense that the
subdivision will remain uniform and distinct if reproduced.
(x) "Viable seed" means seed that has a germination rate of
greater than 0.0%.
(y) "Volunteer cannabis plant" means a cannabis plant that is
not intentionally planted and grows of its own accord from seeds or
roots in the years following an intentionally planted cannabis
crop.
Sec. 3. (1) The department or a college or university in this
state may grow or cultivate, or both, industrial hemp for purposes
of research conducted under an agricultural pilot program or other
agricultural or academic research project.
(2) The department or a college or university that transports
industrial hemp as part of a research project authorized under this
act shall include along with a shipment of industrial hemp a letter
on the department's or the college's or university's letterhead
that provides notice that the shipment includes industrial hemp
authorized under the industrial hemp research this act.
(3) A college or university in this state may receive direct
grants from the federal government or any other source for the
purpose of conducting research authorized under this act.
Sec. 4. (1) The industrial hemp research and development fund
is created within the state treasury.
(2) The state treasurer may receive money or other assets from
any source for deposit into the research fund, including federal
research grants. The state treasurer shall direct the investment of
the research fund. The state treasurer shall credit to the research
fund interest and earnings from research fund investments.
(3) Money in the research fund at the close of the fiscal year
shall remain in the research fund and shall not lapse to the
general fund.
(4) The department shall be the administrator of the research
fund for auditing purposes.
(5) The department shall expend money from the research fund,
upon appropriation, only for 1 or more of the following purposes:
(a) Research into growing or cultivating, or both, industrial
hemp.
(b) Providing grants to colleges or universities in this state
to conduct research into growing or cultivating, or both,
industrial hemp.
Sec. 5. (1) The department shall establish, operate, and
administer an industrial hemp licensing and registration program.
(2) The industrial hemp licensing and registration fund is
created within the state treasury.
(3) The state treasurer may receive license and registration
fees and administrative fines under this act for deposit into the
licensing and registration fund. The state treasurer may also
receive money or other assets from any other source for deposit
into the licensing and registration fund. The state treasurer shall
credit to the licensing and registration fund interest and earnings
from licensing and registration fund investments.
(4) The department shall expend money from the licensing and
registration fund to establish, operate, and enforce the licensing
and registration program created under this act.
(5) Money in the licensing and registration fund at the close
of the fiscal year shall remain in the licensing and registration
fund and shall not lapse to the general fund.
(6) The department shall be the administrator of the licensing
and registration fund for auditing purposes.
Sec. 6. (1) Except as otherwise provided under this act for a
college or university in this state, a person shall not grow
industrial hemp in this state unless the person is registered as a
grower under this act. A person other than a college or university
in this state that wishes to grow industrial hemp in this state
shall submit the registration application fee provided under
section 16, and register with the department on a form as
prescribed by the department that includes, but is not limited to,
the following:
(a) The applicant's full name, birth date, mailing address,
telephone number, and valid and monitored electronic mail address.
If the applicant is a person that is not an individual, the full
name of each officer and director, and partner, member, or owner
owning in excess of 10% of equity or stock, including his or her
birth date, title, and valid and monitored electronic mail address.
(b) The proposed acreage and greenhouse or other indoor square
footage to be planted.
(c) The street address, location ID, and GPS coordinates for
each field, greenhouse, building, or other site where industrial
hemp will be grown, handled, or stored.
(d) Maps depicting each field, greenhouse, building, or other
site where industrial hemp will be grown, handled, or stored, with
appropriate indications for entrances, field boundaries, and
specific locations corresponding to the GPS coordinates provided
under subdivision (c).
(e) If applicable, a request by the applicant that a grower
registration issued to the applicant include a designation
authorizing the applicant to sell harvested industrial hemp to a
processor licensed under the medical marihuana facilities licensing
act, 2016 PA 281, MCL 333.27101 to 333.27801, as prescribed under
section 10(6).
(2) An initial grower registration application may be
submitted at any time. An initial grower registration issued by the
department expires at midnight on November 30 in the year in which
it is issued.
(3) Other than an initial grower registration, a grower
registration is valid for 1 year beginning on December 1 and
expiring at midnight on the following November 30 each year.
(4) An application to renew an existing grower registration
shall be postmarked on or before November 30. An application
submitted after November 30 is subject to a late fee of $250.00.
(5) An application and supporting documents submitted to the
department under this section are exempt from disclosure under the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
Sec. 7. (1) Except as otherwise provided under this act for a
college or university in this state, and except for a processor
licensed under the medical marihuana facilities licensing act, 2016
PA 281, MCL 333.27101 to 333.27801, or a testing facility, a person
shall not process, handle, broker, or market industrial hemp in
this state unless the person is licensed as a processor-handler
under this act. A person other than a college or university in this
state that wishes to process, handle, broker, or market industrial
hemp in this state shall submit the license application fee
provided under section 16 and apply to the department for a
processor-handler license on a form as prescribed by the department
that includes, but is not limited to, the following:
(a) The applicant's full name, date of birth, mailing address,
telephone number, and valid and monitored electronic mail address.
If the applicant is a person that is not an individual, the full
name of each officer and director, and partner, member, or owner
owning in excess of 10% of equity or stock, including his or her
birth date, title, and valid and monitored electronic mail address.
(b) The street address, location ID, and GPS coordinates for
each building or site where industrial hemp will be processed,
handled, stored, or brokered.
(c) Maps depicting each building, or other site where
industrial hemp will be processed, handled, stored, or brokered
with appropriate indications for entrances and specific locations
corresponding to the GPS coordinates provided under subdivision
(b).
(2) An initial processor-handler license application may be
submitted at any time. An initial processor-handler license issued
by the department expires at midnight on November 30 in the year in
which it is issued.
(3) Other than an initial processor-handler license, a
processor-handler license is valid for 1 year beginning on December
1 and expiring at midnight on the following November 30 each year.
(4) An application to renew an existing processor-handler
license shall be postmarked on or before November 30. An
application submitted after November 30 is subject to a late fee of
$250.00.
(5) An application and supporting documents submitted to the
department under this section are exempt from disclosure under the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
Sec. 8. (1) The department shall approve or deny a
registration or license application submitted under this act in a
timely manner. The department shall deny a registration or license
application if the application is incomplete or if any of the
following apply:
(a) The applicant is under the age of 18.
(b) The applicant's growing, handling, storage, processing, or
brokering sites are not located in this state.
(c) The applicant has not demonstrated, as determined by the
director, a willingness to comply with the department's rules,
instructions from the department, or instructions from a law
enforcement agency.
(d) The applicant has unpaid fees, fines, or civil penalties
owed to this state under this act.
(e) The applicant has made false statements or
representations, as determined by the director, to the department
or a law enforcement agency.
(f) The applicant has had a grower registration or processor-
handler license revoked in the 5 years preceding the date of
application.
(2) If the application is denied because it is incomplete, the
department shall notify the applicant in writing within a timely
manner after the department receives the application describing the
deficiency and requesting additional information.
Sec. 9. (1) If the department denies a registration or license
application under this act, the department shall notify the
applicant of the denial in writing by letter or electronic mail.
(2) An applicant may appeal a denial of his or her
registration or license application by submitting to the department
a written request for a hearing. The applicant shall submit the
request to the department not more than 15 days after the date of
the denial.
(3) The department shall conduct a hearing requested under
this section in accordance with the administrative procedures act
of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 10. (1) A grower consents to all of the following:
(a) Entry onto, and inspection of, all premises by the
department or law enforcement agencies, with or without cause, and
with or without advance notice, where industrial hemp or industrial
hemp cultivation equipment or materials are located, or to be
located.
(b) Testing of samples of cannabis material in possession of
the grower by a testing facility. The fee for testing under this
subdivision shall be limited to reasonable costs of conducting the
testing.
(c) Forfeiture and destruction of any of the following,
without compensation:
(i) Cannabis found to have a measured delta-9-THC content
greater than 0.3% on a dry weight basis.
(ii) Industrial hemp present at a location that is not
included in the grower's registration.
(iii) Industrial hemp that is grown, handled, or stored in a
manner that violates this act.
(d) The risk of financial or other loss under this act is
borne solely by the grower.
(2) A grower shall not do any of the following:
(a) Grow, handle, or store industrial hemp for purposes other
than research into the growing of industrial hemp.
(b) Handle or store industrial hemp not grown under the
authority of his or her grower registration unless licensed as a
processor-handler.
(c) Grow, handle, or store industrial hemp in a location other
than a location listed in his or her grower registration.
(d) Grow, handle, or store industrial hemp on land or within a
structure that is not owned or completely controlled by the grower.
(e) Interplant industrial hemp with any other crop without
express written permission from the department. As used in this
subdivision, "interplant" means to plant a crop of industrial hemp
together with a crop that is not industrial hemp on a single plot
of land.
(f) Sell or transport, or permit the sale or transport of,
living industrial hemp plants, viable industrial hemp seeds,
industrial hemp leaf material, or industrial hemp floral material
to a location not listed in his or her registration or to a person
in this state who is not a registered grower or licensed processor-
handler.
(3) A grower shall post signage in a conspicuous location at
each boundary line of a growing location. The signage shall include
the following:
(a) The statement, "Industrial Hemp Registered with the
Michigan Department of Agriculture and Rural Development".
(b) The registered grower's name.
(c) The registered grower's registration number.
(4) Upon request from the department or a law enforcement
agency, immediately produce a copy of his or her registration for
inspection.
(5) A grower may transfer up to 2-1/2 ounces of industrial
hemp per transfer to a testing facility for the purpose of
measuring THC, cannabidiol, or other phytocannabinoid levels.
(6) A grower may sell harvested industrial hemp to a processor
licensed under the medical marihuana facilities licensing act, 2016
PA 281, MCL 333.27101 to 333.27801. If a grower intends to sell
harvested industrial hemp to a processor described in this
subsection, the grower must apply for that designation on his or
her grower registration application. Before selling harvested
industrial hemp to a processor described in this subsection, the
grower shall enter the sale into the seed-to-sale tracking system
established under section 3 of the marihuana tracking act, 2016 PA
282, MCL 333.27903.
Sec. 11. (1) A processor-handler consents to all of the
following:
(a) Entry onto, and inspection of, all premises by the
department or law enforcement agencies, with or without cause, and
with or without advance notice, where industrial hemp or industrial
hemp processing equipment or materials are located or to be
located.
(b) Collection by the department of samples of cannabis
material in possession of the processor-handler at any time.
(c) Forfeiture and destruction of any of the following,
without compensation:
(i) Cannabis found to have a measured delta-9-THC content
greater than 0.3% on a dry weight basis.
(ii) Industrial hemp that is processed, handled, stored, or
brokered in a manner that violates this act.
(iii) Live industrial hemp plants unless the processor-handler
is also registered as a grower.
(d) The risk of financial or other loss under this act is
borne solely by the processor-handler.
(2) A processor-handler shall not sell or transport, or permit
the sale or transport of, viable industrial hemp seeds, industrial
hemp leaf material, or industrial hemp floral material to a
location not listed in his or her current license or to a person in
this state who is not a registered grower or licensed processor-
handler.
(3) Upon request from the department or a law enforcement
agency, a processor-handler shall immediately produce a copy of his
or her license for inspection.
(4) A processor-handler may transfer up to 2-1/2 ounces of
industrial hemp per transfer to a testing facility for the purpose
of measuring THC, cannabidiol, or other phytocannabinoid levels.
Sec. 12. (1) If any of the following allegations are made
concerning a registered grower or licensed processor-handler, the
department shall suspend his or her registration or license for not
more than 60 days:
(a) The registered grower or licensed processor-handler
intentionally grew or was in possession of cannabis with a delta-9-
THC content greater than 0.3% on a dry weight basis.
(b) The registered grower or licensed processor-handler
violated a provision of this act.
(c) The registered grower or licensed processor-handler made a
false statement, as determined by the department, to the department
or a law enforcement agency.
(d) The registered grower or licensed processor-handler failed
to comply with an instruction or order from the department or a law
enforcement agency.
(2) If the department suspends a registration or license, the
department shall notify the registered grower or licensed
processor-handler in writing that his or her registration or
license has been suspended.
(3) A person whose grower registration has been suspended
under this section shall not harvest or remove industrial hemp from
the premises where industrial hemp was located at the time the
department issued its notice of suspension, except as authorized in
writing by the department.
(4) A person whose processor-handler license has been
suspended under this section shall not process or remove industrial
hemp from the premises where industrial hemp was located at the
time the department issued its notice of suspension, except as
authorized in writing by the department.
Sec. 13. (1) The department shall not permanently revoke a
registration or license suspended under section 12 unless the
department has notified the registered grower or licensed
processor-handler of the allegation against him or her and given
the registered grower or licensed processor-handler an opportunity
for a hearing to appeal the revocation.
(2) The department shall schedule a registration or license
revocation hearing for a date as soon as practicable that is not
more than 60 days after the date of notification of a registration
or license suspension.
(3) The department shall conduct the hearing required under
this section in accordance with the administrative procedures act
of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(4) If the director finds by a preponderance of the evidence
that an allegation under section 12(1) concerning the person
subject to the registration or license revocation hearing is true,
the director shall revoke the registration or license effective
immediately and the department or a law enforcement agency shall
order destroyed, or confiscate, all cannabis that is in the
person's possession.
(5) The department or a law enforcement agency shall not owe
compensation or indemnity for the value of the cannabis that is
destroyed or confiscated under this section.
(6) A person whose registration or license has been revoked is
barred from participation in the program in any capacity for a
minimum of 5 years from the date on which the registration or
license was revoked.
(7) If the director does not find by a preponderance of the
evidence that an allegation under section 12(1) concerning the
person subject to a registration or license revocation hearing is
true, the department shall lift the suspension imposed under
section 12 within 24 hours.
Sec. 14. (1) A grower that intends to harvest or destroy an
industrial hemp crop shall schedule a test of a sample of the crop
by a testing facility, and the testing facility shall test the
sample not less than 15 days before the intended harvest or
destruction date.
(2) A grower who harvests or destroys a crop before receiving
the results of testing under this section is subject to suspension
and revocation of his or her registration.
(3) The testing facility shall measure the THC concentration
of each sample collected under this section. The following apply to
the THC test results:
(a) If the result of the THC test indicates a delta-9-THC
concentration of less than 0.3% on a dry weight basis, the testing
facility shall provide to the grower and to the department a
certified report stating that result.
(b) If the result of the THC test indicates a delta-9-THC
concentration that is equal to or greater than 0.3% on a dry weight
basis, the grower may destroy the crop or repeat the testing an
additional 2 times. The testing facility shall provide to the
grower and to the department a certified report stating the result
of each test performed under this subdivision.
(c) If a third THC test under this subsection indicates a
delta-9-THC concentration that is equal to or greater than 0.3%,
the testing facility shall provide to the grower and to the
department a certified report stating that result and the
department or a law enforcement agency shall order destroyed, or
confiscate, all cannabis that is in the grower's possession.
(4) The department shall establish rules for testing under
this section in accordance with the administrative procedures act
of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(5) An individual who allows a falsified sample of an
industrial hemp crop to be taken by a testing facility under this
section is guilty of a felony and shall be imprisoned for not less
than 1 year or more than 2 years and shall be fined $5,000.00.
Sec. 15. (1) Before implementing an alteration to a site
listed in a grower's registration, the grower shall submit a site
modification request form, as prescribed by the department, and the
required fee, as provided in section 16, based on the number of
requested alterations and obtain written approval from the
department.
(2) The department shall not approve a site modification
request under this section unless the grower has paid the site
modification fee in full.
Sec. 16. (1) An applicant for a grower registration or
processor-handler license, or a registered grower or licensed
processor-handler, under this act is subject to the following fees,
as applicable:
(a) A grower registration fee of $100.00.
(b) A processor-handler license application fee of $1,350.00.
(c) A site modification fee of $50.00 for each alteration to a
site listed in a grower registration after the registration has
been issued.
(2) All fees under this act shall be paid with a check or
money order payable to the department within 15 days of invoice.
(3) A fee required under this section is nonrefundable.
Sec. 17. (1) A person who individually, or by the action of
his or her agent or employee, or as the agent or employee of
another, violates this act or a rule promulgated under this act is
subject to an administrative fine. Upon the request of a person to
whom an administrative fine is issued, the director shall conduct a
hearing in accordance with the administrative procedures act of
1969, 1969 PA 306, MCL 24.201 to 24.328. The department shall
impose a fine authorized by this section as follows:
(a) For a first violation, not less than $100.00 or more than
$500.00, plus actual costs of the investigation and double the
amount of any economic benefit associated with the violation.
(b) For a second violation within 5 years after the first
violation, not less than $500.00 or more than $1,000.00, plus
actual costs of the investigation and double the amount of any
economic benefit associated with the violation.
(c) For a third or subsequent violation within 5 years after
the date of the first violation, not less than $1,000.00 or more
than $2,000.00, plus actual costs of the investigation and double
the amount of any economic benefit associated with the violation.
(2) A decision of the director under this section is subject
to judicial review as provided by law.
(3) The director shall advise the attorney general of the
failure of any person to pay an administrative fine imposed under
this section. The attorney general shall bring an action in a court
of competent jurisdiction to recover the fine.
(4) Any administrative fine, investigation costs, or recovery
of economic benefit associated with a violation that is collected
under this section shall be paid to the state treasury and
deposited into the licensing and registration fund.
Sec. 18. The department shall establish rules for the
implementation of this act in accordance with the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 19. A political subdivision of this state shall not adopt
any rule, regulation, code, or ordinance to restrict or limit any
requirements under this act relating to industrial hemp. This act
supersedes and preempts any rule, regulation, code, or ordinance of
any political subdivision of this state relating to industrial
hemp.
Enacting section 1. This amendatory act takes effect January
15, 2019.