INCREASED PENALTIES PROPOSED FOR ENVIRONMENTAL DAMAGE CAUSED BY HEMP CULTIVATION IN CALIFORNIA.
SB 1429 was introduced by Senator Monning earlier this year. AB 1429 is an environmental related bill that would seek to impose the same penalties on hemp operators that already exist for cannabis operators. Existing law imposes additional civil penalties on cannabis cultivators who violate laws designed to protect fish and wildlife, water, or other natural resources. For example, if a cannabis cultivator is diverting water illegally from a protected watershed, they can be fined in addition to the typical fines they would receive if the activity was not cannabis related. If passed, SB 1429 would bring hemp cultivators under the same rules that apply to cannabis cultivators for environmental violations.
FEDERALLY, BANKING ACCESS FOR HEMP BUSINESSES CONTINUES TO EXPAND.
Hemp is federally legal, and as such hemp business may obtain a bank account. Nevertheless, many banks are still hesitant to bank hemp businesses and many hemp operators struggle to find reliable financial institutions to work with. To provide more certainty, the Financial Crimes Enforcement Network (FinCEN) has issued guidance to help financial institutions understand their obligations in regard to hemp customers. The guidance, which follows up on earlier guidance last year, explains how financial institutions can conduct due diligence for hemp-related businesses and identifies the types of information that banks need to collect and the due diligence they should conduct on hemp operators.
Banks are advised to request identifying information about hemp-related businesses, including beneficial ownership. They may confirm that a hemp grower is compliant and lawfully operating by obtaining a written attestation by the hemp grower that they are validly licensed, or a copy of such license. In California, a hemp cultivator could provide a financial institution with a copy of their registration form with their county agricultural commissioner. A financial institution could seek additional due diligence information from a potential hemp business customer, including crop inspection or testing reports; license renewals; updated attestations from the business; or correspondence with the state, tribal government, or USDA.
This new FinCen guidance should make it easier for hemp operators to obtain a bank account and provides clear steps for conducting due diligence on hemp businesses.
PROPOSED HEMP REGULATIONS IN NEVADA.
Despite the FDA’s ban on hemp CBD as an ingredient in human-consumables such as food and dietary supplements, some states are forging their own path forward and are regulating these products in lieu of guidance from the FDA. On June 1, 2020, the Nevada Department of Health and Human Services shared its proposed regulations
to govern the sale of consumable hemp and CBD products. Under the draft rules, hemp CBD products may be sold or manufactured if: (1) they have been tested by an independent testing laboratory; (2) the product is manufactured in accordance with all applicable federal and state law and regulations; and (3) the product is labeled in accordance with all applicable federal and state law and regulations. Additionally, the proposed rules provide a set of examples of when a hemp or CBD product is deemed “adulterated”. A product would be adulterated if: (1) the THC concentration exceeds the maximum THC concentration established by federal law for hemp (currently 0.3%); (2) the product exceeds allowable pesticide limits; (3) a pesticide that is not approved for use on hemp is contained in the product; and (4) the product meets any other condition for adulteration prescribed by federal or state law or regulations.