SB2178 SD1

PART I

SECTION 1. The legislature finds that hemp cultivated for industrial purposes, such as fiber, hurd, and grain, serves a fundamentally different role than hemp that is cultivated for cannabinoid extraction. Industrial or commercial hemp production has the potential to bring significant revenues to the State; however, the industry currently lacks a distinct regulatory and development pathway.

Accordingly, the purpose of this Act is to establish a clear and separate regulatory framework for industrial hemp that is distinct from hemp grown for cannabinoids by:

(1) Establishing an industrial hemp program that includes education and support for non-cannabinoid industrial hemp cultivation and use;

(2) Establishing the industrial hemp program advisory board to develop a strategic plan to establish and expand the processing infrastructure and commercialization of non-cannabinoid industrial hemp;

(3) Supporting research and development focused on local adaptation, sustainability, and economic development goals;

(4) Promoting partnerships with Native Hawaiian practitioners, cooperatives, and aina-based programs; and

(5) Adopting state building codes for hemp-based materials, including hempcrete.

SECTION 2. This Act shall be cited as the "Hawaii Industrial Hemp Infrastructure and Innovation Act".

PART II

SECTION 3. Chapter 141, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . Industrial hemp Program

§141-A Definitions. As used in this part:

"Advisory board" means the industrial hemp program advisory board.

"Chairperson" means the chairperson of the board of agriculture and biosecurity.

"Department" means the department of agriculture and biosecurity.

"Industrial hemp" means the plant Cannabis sativa L. and any part of that plant, except cannabidiol, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 per cent on a dry weight basis grown for its fiber, seed, or oil. "Industrial hemp" includes non-cannabidiol parts including seeds and all derivatives, extracts, isomers, acids, salts, and salts of isomers, whether growing or not. "Industrial hemp" excludes hemp grown for the extraction of cannabidiol.

"Licensee" means cultivars who are licensed by the United States Department of Agriculture to grow non-cannabinoid industrial hemp.

"Program" means the industrial hemp program.

§141-B Industrial hemp program; established. There is established an industrial hemp program within the department for administrative purposes to promote the non-cannabinoid hemp industry. The program shall:

(1) Provide technical assistance to industrial hemp farmers;

(2) Develop Hawaii-adapted industrial hemp seed varieties;

(3) Facilitate market access for industrial hemp products;

(4) Conduct educational outreach and workforce training in industrial hemp applications, with a focus on construction and regenerative agriculture; and

(5) Collaborate with the university of Hawaii, department of land and natural resources, and department of education on research, education, and integration of the program into land restoration efforts and school agriculture programs.

§141-C Licensing. (a) Beginning July 1, 2027, a person who intends to grow non-cannabinoid industrial hemp in the State for fiber, grain, or building materials shall apply to the United States Department of Agriculture for a license to cultivate non-cannabinoid industrial hemp.

(b) Licensees shall comply with all county zoning ordinances, rules, or regulations.

(c) The department may prescribe annual sampling, inspection, and reporting requirements for licensees, including a procedure for conducting annual inspections of a random sample of industrial hemp producers to verify that industrial hemp is not being produced in violation of this part; provided that the procedure shall ensure that an industrial hemp producer is subject to not more than one inspection each calendar year.

§141-D Approved non-cannabinoid industrial hemp. (a) Only non-cannabinoid industrial hemp on the list of approved cultivars grown for fiber, grain, or building materials shall be grown. Notwithstanding chapter 91, the chairperson or the board of agriculture and biosecurity may add or remove any cultivar from the list.

(b) The list of approved cultivars shall include the following:

(1) Industrial hemp cultivars that have been certified by the Organisation for Economic Co-operation and Development;

(2) Hawaii varieties of industrial hemp cultivars that have been certified by the board of agriculture and biosecurity; and

(3) Hemp genetics that are shown to:

(A) Meet federal definitions of hemp;

(B) Originate from any state with a federally approved industrial hemp program; and

(C) Utilize testing and sampling protocols similar to those used in Hawaii's program or utilize a nationally standardized sampling and testing protocol.

§141-E Inspections; fees. (a) A licensee shall be subject to the annual inspection and sampling of the licensee's industrial hemp plants, plant material, seeds, growing area, equipment, and facilities incident to the cultivation of industrial hemp.

(b) Any authorized member of the department, or any agent or third party authorized by the department, with prior notice to the applicable licensee, may enter between sunrise and sunset upon any property utilized for the cultivation of industrial hemp pursuant to this part to conduct the annual inspection and sampling pursuant to subsection (a).

(d) The department may employ temporary inspectors to assist in certification, audit, and inspection services under this part.

§141-F Transportation. A licensee may transport, to another site for processing and in a department-approved manner, the resin, flowering tops, and leaves of the licensee's crop that passed department-ordered compliance testing.

§141-G Violations. (a) In addition to any other violations of this part, the following acts and omissions by any licensee or authorized representative thereof shall constitute violations:

(1) Refusal or failure by a licensee or authorized representative to fully cooperate and assist the department with the inspection or sampling process;

(2) Failure to provide any information reasonably required or requested by the department for purposes pursuant to this part;

(3) Providing materially false information pertaining to the licensee's cultivation of industrial hemp to the department by any means, including information provided in any application form, report, record, or inspection required or maintained pursuant to this part;

(4) Failure to pay reasonable fees assessed by the department for inspection or laboratory analysis costs; or

(5) A material violation of any other state or federal law or regulation regarding industrial hemp.

(b) For any violation of this part, the department may impose civil penalties up to $500 and disciplinary sanctions; provided that:

(1) If the department determines that a licensee has negligently violated this part, the licensee shall comply with a corrective action plan established by the department to correct the violation, which may include disposal of any industrial hemp crop, plant, plant material, or seed, whether growing or not, and products derived from those plants;

(2) An individual licensee that negligently violates this part three times in a five-year period shall be ineligible for the industrial hemp program, as either an individual or as a principal or member of an entity, for a period of five years beginning on the date of the third violation;

(3) Each principal or member of an entity licensee that negligently violates this part three times in a five‑year period shall be ineligible for the industrial hemp program, as either an individual or as a principal or member of an entity, for a period of five years beginning on the date of the third violation; and

(4) Any applicant that materially falsifies any information contained in an application shall be ineligible to participate in the industrial hemp program.

§141-H Rules. (a) The department shall adopt rules pursuant to chapter 91 for the purposes of this part, which, at a minimum, shall include:

(1) Annual inspection of a random sample of producers of industrial hemp during growth or after harvest to determine tetrahydrocannabinol levels;

(2) Reporting requirements; provided that pre-planting reporting shall not be required;

(3) Assessment and collection of fees for inspections and the sampling and testing of industrial hemp;

(4) A procedure for the disposal of industrial hemp crop, plant, plant material, or seed, whether growing or not, found to be in violation of this part, and products derived from those plants;

(5) Civil penalties for any violation of this part; and

(6) Any other rules and procedures necessary to carry out this part.

(b) By October 1, 2026, the department shall adopt interim rules to effectuate the purposes of this part; provided that the interim rules shall remain in effect until July 1, 2027, or until rules are adopted pursuant to subsection (a), whichever occurs sooner.

§141-I Authority to modify operations. Notwithstanding any other provision of this part to the contrary, the board of agriculture and biosecurity may authorize the chairperson to modify the industrial hemp program to effectuate any other federal or state industrial hemp law or regulations.

§141-J Industrial hemp program advisory board; established. (a) There is established an industrial hemp program advisory board within the department for administrative purposes to be appointed by the governor under section 26-34. The advisory board shall consist of seven members, as follows:

(1) Three farmers, including at least one farmer who shall have demonstrated expertise in Native Hawaiian traditional and customary practices;

(2) One materials scientist;

(3) One environmental economist; and

(4) Two representatives from the university of Hawaii college of tropical agriculture and human resilience.

The members of the advisory board shall serve without compensation but shall be reimbursed for expenses, including travel expenses, actually incurred in the performance of their duties.

(b) The advisory board shall develop a strategic plan to establish and expand the processing infrastructure and commercialization of industrial hemp, including fiber, hurd, grain, and non-cannabinoid components. Priority shall be given to scalable and regenerative technologies that align with the State's climate and economic goals. The strategic plan shall include the following areas of support:

(1) Development of processing infrastructure;

(2) Support for value-added industrial hemp products;

(3) Standards, safety, and market readiness; and

(4) Inclusive participation and community benefit."

SECTION 4. Section 141-14, Hawaii Revised Statutes, is amended to read as follows:

"§141-14 Industrial hemp special fund; established. (a) There is created in the state treasury a special fund to be designated as the industrial hemp special fund to be administered by the department of agriculture and biosecurity. Moneys deposited in this special fund shall be used to fulfill the purposes of [~~this~~] part and shall include:

(1) Any moneys appropriated by the legislature to the special fund;

(2) Any fees collected by the department of agriculture and biosecurity in relation to the industrial hemp [~~pilot~~] program; and

(3) The interest or return on investments earned from moneys in the special fund.

(b) The department of agriculture and biosecurity may use the moneys in the special fund to carry out the purposes of [~~this part,~~] part , including hiring employees, specialists, and consultants necessary to complete projects related to the purposes of this part."

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the industrial hemp special fund.

SECTION 6. There is appropriated out of the industrial hemp special fund the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the purposes of this part.

The sum appropriated shall be expended by the department of agriculture and biosecurity for the purposes of this Act.

PART III

SECTION 7. Section 107-25, Hawaii Revised Statutes, is amended to read as follows:

"§107-25 Hawaii state building codes; requirements. There is established the Hawaii state building codes applicable to all construction in the State of Hawaii. The Hawaii state building codes shall be based upon:

(1) The state fire code as adopted by the state fire council;

(2) The Uniform Plumbing Code, as copyrighted and published by the International Association of Plumbing and Mechanical Officials, including its appendices;

(3) The International Building Code, the International Residential Code, and the International Energy Conservation Code, as published by the International Code Council;

(4) The National Electrical Code, as published by the National Fire Protection Association;

(5) Hawaii design standards implementing the criteria pursuant to Act 5, Special Session Laws of Hawaii, 2005, as applicable to:

(A) Emergency shelters built to comply with hurricane resistant criteria, including enhanced hurricane protection areas capable of withstanding a five hundred-year hurricane event as well as other storms and natural hazards; and

(B) Essential government facilities requiring continuity of operations; [~~and~~]

(6) Code provisions based on nationally published codes or standards that include but are not limited to residential and hurricane resistant standards related to loss mitigation standards in accordance with section 431P-12, elevator, mechanical, flood and tsunami, existing buildings, and onsite sewage disposal[.]; and

(7) The 2024 International Residential Code Appendix BL for hemp-line (hempcrete) construction and code provisions for load-bearing criteria for hemp-based insulation."

PART IV

SECTION 8. By April 1, 2027, the university of Hawaii college of tropical agriculture and human resilience, in partnership with the department of agriculture and biosecurity, shall lead a coordinated research agenda focused exclusively on non-cannabinoid industrial hemp applications. Research shall support adaptation, sustainability, and economic development goals. Priority areas shall include but not be limited to:

(1) Carbon sequestration and soil health, including the ability of hemp to restore degraded or fallow agricultural lands;

(2) Seed development and agronomic performance, including conducting trials to optimize fiber, hurd, and grain yield under varying conditions;

(3) Industrial material research that analyzes the structural performance, moisture regulation, and insulation capacity of hempcrete and other hemp-derived construction materials; and

(4) Circular economy and lifecycle assessment by evaluating industrial hemp's role in closed-loop production systems, local supply chains, and waste to resource models.

SECTION 9. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the purposes of this part.

The sum appropriated shall be expended by the university of Hawaii for the purposes of this Act.

PART V

SECTION 10. (a) The department of agriculture and biosecurity shall invite Native Hawaiian traditional and customary practitioners and community members to actively participate in stewardship initiatives relating to industrial hemp innovation. Areas of collaboration may include:

(1) Supporting aina-based learning and land restoration projects led by Native Hawaiian communities;

(2) Integrating cultural stewardship practices, including traditional ecological knowledge, into cultivation, processing, and education frameworks; and

(3) Engaging in participatory planning and decision-making processes to ensure culturally aligned program development.

(b) The department of agriculture and biosecurity may adopt rules to provide exemptions for agricultural cooperatives or organizations that utilize traditional and customary practices protected by article XII, section 7, of the Hawaii State Constitution, from the industrial hemp program established under section 141‑B, Hawaii Revised Statutes, in recognition of their cultural, environmental, and community contributions.

SECTION 11. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for farmer incentives pursuant to this part.

The sum appropriated shall be expended by the department of agriculture and biosecurity for the purposes of this Act.

PART VI

SECTION 12. In codifying the new sections added by section 3 and referenced in section 10 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 13. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	2178
THIRTY-THIRD LEGISLATURE, 2026		S.D. 1
STATE OF HAWAII