PIERRE, SD — Despite objections from the governor, the Senate Agriculture and Natural Resources Committee endorsed a hemp legalization bill on Thursday.
Earlier in the legislative session, shortly after the same bill passed unanimously through the House Agriculture and Natural Resources Committee, Noem announced her opposition to the bill and asked lawmakers to slow down. The House responded by endorsing the legislation on a vote of 65-2.
Speaking in favor of the bill was Rep. Oren Lesmeister, D-Parade, who explained that passage of the federal Farm Bill late in 2018 opened the door to legalized hemp. He said HB1191 would put in place the structure for a state program to license hemp growers.
Lesmeister noted the many uses for hemp, including rope, nets, sails and baskets and growing interest in using its derivatives in cosmetics and food.
“The list just goes on and on and on forever,” Lesmeister said
Justin Smith, a lobbyist representing A.H. Meyer & Sons of Winfred, said his clients are beekeepers who know that the process they use on beeswax could also be used to extract CBD oil from hemp. Under the legislation, both hemp grown in South Dakota and the CBD oil extract could not have a THC level of more than 3/10ths of 1 percent. THC is the active ingredient in marijuana that allows users to get high.
“You could not ingest enough of the product to get any kind of high,” Smith said.
Because of the Farm Bill, Indian reservations in South Dakota will be allowed to grow industrial hemp and shipments will be allowed to travel through the state because of the rules of interstate commerce, Smith said.
“Industrial hemp products will be coming through South Dakota,” Smith said.
The legislation’s effective date of July 1 means that the first crop of hemp couldn’t be planted until 2020, Smith said.
Jerrod Otta, plant manager for Glanbia Nutritionals in Sioux Falls said Glanbia has had inquiries from national companies about processing hemp. He urged the committee to pass the bill and start the process of legalizing industrial hemp or his company would be forced to do the work at a different location.
Internally, his company is asking, “are we going to do it in Sioux Falls or someplace else,” Otta said.
George Dennert, 18, of Aberdeen, asked the committee to approve the bill so he could stay on the family farm.
“If I plan to stay on the farm, something needs to change,” Dennert said. “I believe this bill would allow me to stay on the farm and make a very good living.”
In the House committee hearing, a lone representative from the Department of Public Safety was the only one to speak in opposition to the bill. At Thursday’s hearing, a parade of executive branch officials offered their opinions on why the bill should be killed.
“South Dakota is not ready to deal with the impact of industrial hemp,” said Craig Price, secretary of the Department of Public Safety.
Price showed a video in which a drug dog could not tell the difference between marijuana and hemp. The video also showed a roadside drug test that showed a positive result for marijuana when hemp was tested.
“Without roadside tests, we are asking our law enforcement officers to guess,” Price said.
The former Highway Patrol colonel said he suspected that the move to legalize hemp was backed by people who want to see marijuana legalized in South Dakota.
“When kids start using drugs, marijuana is the drug they start using,” Price said.
Price estimated that if industrial hemp is legalized, the cost to his department would be between $5 million and $6 million.
Department of Health Secretary Kim Malsam-Rysdon said legalization of industrial hemp would drive up costs at the state health lab where marijuana is tested. It would also cause longer delays in testing.
Malsam-Rysdon estimated that lab testing would jump by 66 percent.
“We need time and resources to accommodate that,” Malsam-Rysdon said.
She estimated an initial cost to her department of $200,000 with an addition $170,000 every year.
Jason Simmons, an ag policy adviser for Noem, said HB1191 doesn’t specify how often fields should be tested or when farmers would make the payments for their tests.
Simmons noted that the latest word from the U.S. Department of Agriculture was that it would be creating rules for growing hemp in the fall and wouldn’t be certifying any state programs this year.
Attorney General Jason Ravnsborg urged caution.
“We believe that the process should take a slow approach,” Ravnsborg said.
Sen. Bob Ewing, R-Spearfish, a member of the ag committee, said he would be voting against the bill because of law enforcement concerns.
“I still feel that this could be a gateway to a marijuana problem,” Ewing said.
Sen. Rocky Blare, R-Ideal, said he would be voting against the bill as well. Blare said lawmakers were taking an attitude of “let’s pass it and see what happens.”
“There is not huge danger in waiting one more year to get it right,” Blare said. “Folks, this is not ready for prime time.”
The bill was endorsed by the committee on a 7-2 vote and now goes to the Senate floor.