To the Governor: Nevada Passes Bill to Legalize Commercial Hemp Production, Despite Federal Prohibition

CARSON CITY, Nev. (May 24, 2017) – Yesterday, the Nevada Assembly gave final approval to a bill that would legalize commercial industrial hemp production in the state, despite a federal ban on the same. Passage into law would set the foundation to end federal prohibition in practice and effect within the state.

A bipartisan coalition of 12 legislators introduced Senate Bill 396 (SB396) in March. The legislation would authorize the cultivation of industrial hemp for commercial purposes and the production of agricultural hemp seed in Nevada. The bill expands current law that only allows an institution of higher education or the Nevada Department of Agriculture to cultivate industrial hemp for research purposes conducted under an agricultural pilot program or for other agricultural or academic research. Under the proposed law, the state would create separate licensing programs for growers, handlers and producers of hemp seed.

The federal government currently restricts the acquisition of seed. Encouraging seed development within the state would incentivize the hemp market.

The legislation would give the Department of Agriculture wide latitude in its rule-making authority. How the program would operate in practice would depend on how the department formulates the rules.

Last week, the Assembly Natural Resources, Agriculture, and Mining Committee approved SB396 with a “do-pass” recommendation. The Senate previously passed the bill by a 20-0 vote.  Today, the Assembly passed it by a vote of 34-5.

FEDERAL FARM BILL

Early in 2014, then-President Barack Obama signed a new farm bill into law, which included a provision allowing a handful of states to begin limited research programs growing hemp. The “hemp amendment”

"…allows State Agriculture Departments, colleges and universities to grow hemp, defined as the non-drug oil-seed and fiber varieties of Cannabis, for academic or agricultural research purposes, but it applies only to states where industrial hemp farming is already legal under state law."

In short, current federal law authorizes the farming of hemp – by research institutions, or within state pilot programs – for research only. Farming for commercial purposes by individuals and businesses remains prohibited. SB396 ignores federal prohibition and authorizes commercial farming and production anyway.

OTHER STATES

By rejecting any need for federal approval, SB396 sets the stage to thwart the federal hemp ban in practice. Nevada could join with other states – including Colorado, Oregon, Maine, Massachusetts, California and Vermont – that have simply ignored federal prohibition and legalized industrial hemp production within their state borders.

While prospective hemp growers would still have to take federal law into consideration, by eliminating the state requirement for federal permission, the proposed Nevada law would clear away a major obstacle to widespread commercial hemp farming within the borders of the state.

Farmers in SE Colorado started harvesting the plant in 2013, and farmers in Vermont began harvesting in 2014, effectively blocking federal restrictions on such agricultural activities. On Feb. 2, 2105, the Oregon hemp industry officially opened for business and one week later, the first license went to a small non-profit group. As more people engage in hemp production and the market grows within these states, more people will become emboldened creating an exponential wave, ultimately stopping the federal ban in effect.

HUGE MARKET FOR HEMP

According to a 2005 Congressional Research Service report, the U.S. is the only developed nation that hasn’t developed an industrial hemp crop for economic purposes.

Experts suggest that the U.S. market for hemp is around $600 million per year. They count as many as 25,000 uses for industrial hemp, including food, cosmetics, plastics and bio-fuel. The U.S. is currently the world’s #1 importer of hemp fiber for various products, with China and Canada acting as the top two exporters in the world.

During World War II, the United States military relied heavily on hemp products, which resulted in the famous campaign and government-produced film, “Hemp for Victory!

WHAT’S NEXT

SB396 will now be transmitted to Gov. Brian Sandoval.  The governor must sign or veto legislation within 5 days after the day following transmittal (excluding Sunday), or it becomes law without his signature. If the legislature adjourns at the time of transmittal, the governor must act within 10 days after adjournment (excluding Sunday), or the legislation becomes law without being signed. Bills vetoed after adjournment are returned to the legislature for possible veto override in the next session.