THE SENATE	S.B. NO.	637
THIRTY-SECOND LEGISLATURE, 2023		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO HEMP.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that hemp is a high-value crop that has the potential to bring significant and diverse revenues to Hawaii. Hemp has over fifty thousand recognized uses, which includes use as a fuel; a food, including the seeds, oil, juice from leaves, and herbal tinctures; and fiber used in supercapacitors, cloth, building materials, and bioplastic. Many Hawaii farms subsidize food production with non-farming income or jobs. Hemp could provide farm-based income for farmers to expand or stabilize their food production.

The legislature further finds that Hawaii's hemp industry remains in a nascent stage largely due to overregulation, which has stifled the State's hemp industry. The Hawaii hemp cannabinoid and cannabidiol market is estimated to be $32,000,000 to $54,000,000 annually, but most of that revenue flows to hemp farmers and businesses outside the State due to Hawaii residents not being able to differentiate between Hawaii branded products made with imported hemp, and products made with Hawaii grown hemp and prohibitions banning Hawaii farmers from making and selling these products in the State. Moreover, overregulation of production and processing has driven many hemp farmers out of business in the State, which further drives down the Hawaii farmer's comparative advantage in the national hemp market.

The legislature also finds that most Hawaii hemp producers cannot afford the tolling fees for processing that often total fifty per cent or more of the crop. Prior to 2021, when hemp processing rules were adopted, Hawaii licensed hemp producers processed small batches of hemp on their farms in agricultural buildings and structures that met the State's definition of agricultural buildings and structures pursuant to section 46-88, Hawaii Revised Statutes, with no adverse consequences. Hemp processing rules adopted in 2021 unintentionally eliminated farmers right to process hemp on their farms in state-defined agricultural buildings that are exempt from building permits and code requirements where the buildings and structures are not more than one thousand square feet in floor area, e.g., properly anchored shipping containers, one-story masonry or wood-framed buildings or structures with a structural span of less than twenty-five feet, etc. These types of buildings and structures are regularly used to store and process other crops with no restrictions. Additionally, the legislature notes that hemp farmers should be allowed to process in food hubs and agricultural parks. Amending hemp processing rules to allow farmers to process in agricultural buildings and structures, food hubs and agricultural parks, like most other crops, is needed for farmers to survive in a competitive national hemp market.

Accordingly, the purpose of this Act is to clarify that licensed hemp farmers may process hemp in agricultural structures and buildings that meet existing state law definitions for these structures and buildings pursuant to section 46-88, Hawaii Revised Statutes, and in food hubs and agricultural parks.

SECTION 2. Section 328G-2, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The applicant shall provide, at a minimum, the following information:

(1) The applicant's name, mailing address, and phone number in Hawaii;

(2) The legal description of the land on which the hemp is to be processed or stored;

(3) A description of the enclosed indoor facility where hemp processing will occur;

(4) Documentation that the indoor facility and planned hemp processing operation complies with all zoning ordinances, building codes, and fire codes; does not include heat or volatile compounds or gases under pressure, such as cold water extraction; is an enclosed indoor facility that is a permit-exempt structure pursuant to section 46-88; or is in an enclosed indoor facility in a food hub or agricultural park;

(5) Documentation showing that the applicant has obtained a license to produce hemp, issued by the Secretary of the United States Department of Agriculture pursuant to title 7 United States Code section 1639q; and

(6) Any other information required by the department."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

Report Title:

Commercial Hemp Processing; Structures and Buildings

Description:

Amends hemp processing rules to allow licensed hemp farmers to process hemp in agricultural structures and buildings that are permit-exempt under section 46-88, Hawaii Revised Statutes, as well as food hubs and agricultural parks, as was allowed prior to 2021. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.