SB651

SECTION 1. The legislature finds that although existing State law prohibits the sale of cannabinoid, or CBD, -infused foods, such as chocolates or gummies, these products are sold on all islands at multiple venues, including gas stations, airport kiosks, and grocery stores. Although food products account for the most cannabinoid-infused product sales across the country, Hawaii farmers and manufacturers are prohibited from selling these products, losing significant sales to mainland farmers and manufacturers.

The legislature also finds that Hawaii's rules for testing hemp products manufactured in the State are among the most stringent in the U.S. To protect consumers, testing is done by using medical standards that ensure that Hawaii hemp products are free of contaminants and meet requirements for disclosing accurate levels of cannabinoids in each batch of products.

The legislature finds that although the Hawaii hemp cannabinoid and cannabidiol market is estimated to be $32,000,000 to $54,000,000 annually, most of that money flows to out-of-state hemp farmers and businesses due, in part, to consumers in Hawaii not being able to differentiate between products that are made with Hawaii-grown hemp and Hawaii-branded products made with imported hemp because the labeling does not provide where the hemp originated from.

The legislature acknowledges that Hawaii branded products often garner more in the marketplace, and given the number of "Buy Local", "Buy Aloha", and "Eat Local" campaigns that have been launched, Hawaii residents, when given the opportunity and transparent data, will often choose Hawaii grown products. Hemp farmers in the State have the highest costs of production among U.S. hemp farmers, and capturing consumers who wish to purchase products that use hemp grown in Hawaii is one of the few ways for Hawaii hemp farmers to remain competitive.

The legislature finds that origin labeling for hemp products in Hawaii will provide transparency to consumers, give recognition to the hard work of Hawaii hemp farmers, and help protect the quality and authenticity of Hawaii's hemp industry. Allowing Hawaii consumers to purchase Hawaii products will also contribute to a more circular economy that benefits Hawaii residents.

Finally, the legislature notes the recent concerns being raised over the safety testing standards for delta-8-tetrahydrocannabinol, or delta-8-THC, products. The legislature finds that the amount of delta-8-tetrahydrocannabinol in natural hemp is very low, and therefore, chemicals are added to convert other cannabinoids in hemp into delta-8-tetrahydrocannabinol. Delta-8-tetrahydrocannabinol products that are created through this process, known as synthetic conversion, likely expose consumers to a much higher level of substance compared to natural hemp cannabis raw extracts. Therefore, historical data on the use of natural cannabis cannot be relied upon in establishing a level of safety for delta-8-tetrahydrocannabinol products.

Accordingly, the purpose of this Act is to:

(1) Allow the sale of food infused with cannabinoid, hemp extract, hemp derivatives, or other hemp product;

(2) Prohibit the sale of delta-8-tetrahydrocannabinol products;

(3) Allow the sale of hemp leaf and hemp floral material; and

(4) Require a producer of any hemp product to include in the identity statement used for labeling or advertising any hemp product:

(A) The percentage of Hawaii grown hemp in the hemp product; and

(B) For any hemp product not from Hawaii, the origin of the hemp and percentage of the hemp from the origin.

SECTION 2. Section 328G-1, Hawaii Revised Statutes, is amended by amending the definition of "hemp product" to read as follows:

""Hemp product" means a product that:

(1) Contains naturally occurring cannabinoids, compounds, concentrates, extracts, isolates, resins or derivatives from processed hemp;

(2) Does not include [~~any living hemp plants, viable seeds, leaf materials, or floral materials~~;] delta-8-tetrahydrocannabinol;

(3) Has a delta-9-tetrahydrocannabinol concentration of not more than 0.3 per cent, as measured post-decarboxylation, or other similarly reliable methods;

(4) Is intended to be consumed orally to supplement the human or animal diet; and

(5) Is in the form of a tablet, capsule, powder, softgel, gelcap, or liquid form (e.g. hemp oil) to be used by the consumer to infuse edible items at home for personal use or for topical application to the skin or hair.

For purposes of this chapter, a hemp product shall be considered as intended for oral ingestion in liquid form only if it is formulated in a fluid carrier and it is intended for ingestion in daily quantities measured in drops or similar small units of measure per labeled directions for use."

SECTION 3. Section 328G-3, Hawaii Revised Statutes, is amended to read as follows:

"[[]§328G-3[]] Hemp processing; hemp product sale and prohibitions; labeling. (a) No hemp shall be processed into hemp products, nor shall any hemp processor hold for processing or sale any hemp, unless lawfully obtained from a person approved or otherwise authorized by applicable federal, state or local law to cultivate hemp plants.

(b) Hemp and hemp products shall be processed within an enclosed indoor facility secured to prevent unauthorized entry. Hemp, hemp products, and any toxic or otherwise hazardous by-products of hemp processing, or by-products, including but not limited to delta-9 tetrahydrocannabinol, shall be stored within an enclosed indoor facility, secured to prevent unauthorized entry in a manner that prevents cross-contamination and unintended exposures.

(c) Hemp shall not be processed within 500 feet of a pre-existing playground, school, state park, state recreation area, residential neighborhood, hospital, or daycare facility.

(d) Hemp shall not be processed using butane in an open system where fumes are not contained or by use of any other method of processing the department determines poses a risk to health and safety.

(e) No person shall sell, hold, offer, or distribute for sale any food, as that term is defined in section 328-1, into which a [~~cannabinoid,~~] synthetic cannabinoid[~~, hemp extract, hemp derivatives or other hemp product that~~] or delta-8-tetrahydrocannabinol has been added as an ingredient or component. This section shall not apply to hemp that is generally recognized as safe (GRAS) by FDA for use in foods, as intended, in a public GRAS notification.

(f) No person shall sell, hold, offer, or distribute for sale any hemp product into which a synthetic cannabinoid or delta-8-tetrahydrocannabinol has been added.

(g) No person shall sell, hold, offer, or distribute for sale any cannabinoid products used to aerosolize for respiratory routes of delivery, such as an inhaler, nebulizer or other device designed for such purpose.

[(h) No person shall sell, hold, offer, or distribute for sale, any hemp leaf or hemp floral material that is intended to be smoked or inhaled, including but not limited to hemp cigars or hemp cigarettes.

~~(i)~~] (h) Except for hemp products intended for external topical application to the skin or hair, no person shall sell, hold, offer, or distribute for sale any products containing hemp or hemp derivatives that are intended to be introduced via non-oral routes of entry to the body, including but not limited to, use in eyes, ears, and nasal cavities.

[~~(j)~~] (i) No person shall sell, hold, offer or distribute for sale, hemp products without a label, in a form prescribed by the department, affixed to the packaging that identifies the hemp product as having been tested pursuant to department rules[.] and clearly identifies the percentage of Hawaii grown hemp in hemp products in a font size large enough for consumers to easily read on the label on the physical product; provided that any hemp product not grown in Hawaii shall identify the origin and percentage of the hemp from outside Hawaii in the hemp product; provided further that if the hemp product contains hemp from multiple origins, the hemp product shall identify the percentage of hemp origin as "United States" or "Foreign" if the hemp product includes hemp from a source outside of the United States."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on June 29, 2023.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	651
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII