Industrial Hemp Bill

Second Reading

Mr PICTON (Kaurna) (10:53): I move:

That this bill be now read a second time.

The Industrial Hemp Bill 2017 will provide for a licensing system for the new industry of industrial hemp production in South Australia. The bill being debated today started as a private member's bill in the other place from the Hon. Tammy Franks MLC, and I acknowledge her work on this bill. Since the introduction of the bill there, the government has made the decision to support the implementation of this policy. The Hon. Kyam Maher MLC, Minister for Employment and Minister for Manufacturing, has been working with Ms Franks on the bill, including on the inclusion of a number of government amendments. I understand that the bill received unanimous support in the other place.

Currently, industrial hemp may be commercially grown in all states and territories, except for the Northern Territory and South Australia. The legalisation of industrial hemp production in South Australia would open up a new avenue for the further expansion of our state's agricultural industry. According to the New South Wales parliamentary research library document, 'Hemp as food and fibre', while international hemp production in 2013 was well short of the record high of 670,000 tonnes reached in 1966, it is generally trending upwards. In 2013, China was the leading producer of hemp fibre, with 16,000 tonnes, and France was the leading producer of hemp seeds, with 48,000 tonnes.

In 2014, the US industrial hemp market was estimated to be worth at least $US620 million. This includes food and body care products, clothing, auto parts and building materials. Australia is a newer participant in the global industry but certainly a possible future force. Currently, those in South Australia who are manufacturing and selling products made from hemp are forced to source their hemp from interstate and overseas. To remedy the situation, this bill provides for a scheme for South Australia to cultivate industrial hemp, known as low THC hemp.

THC, otherwise known as delta-9-tetrahydrocannabinol, is the psychoactive compound associated with the use of cannabis as a drug in marijuana or, in some cases, used for medicinal purposes. To clarify—and this is very important—the hemp being used for this production for industrial purposes is very different from the use of cannabis for marijuana.

As mentioned previously, commercial cultivation of industrial hemp is already legal in six Australian jurisdictions: the ACT, New South Wales, Queensland, Tasmania, Western Australia and Victoria. All six of these jurisdictions now permit the cultivation, possession and supply of industrial hemp for commercial purposes. Five of these, being the ACT, New South Wales, Queensland, Tasmania and Victoria, permit the cultivation, possession and/or supply of industrial hemp for research purposes. In New South Wales and Tasmania, licences may be granted for up to five years. The remaining jurisdictions have a three-year upper limit.

The Hon. T.R. KENYON: Ma'am, I call your attention to the state of the house.

A quorum having been formed:

Mr PICTON: This bill provides for a licence of up to five years. The main difference between the Australian jurisdictions when defining industrial hemp in their respective acts is the amount of THC permitted. Typically, the older the legislation is, the lower the THC levels that are allowed. The more recently the legislation has been amended or updated, the more THC is permissible, with no jurisdiction exceeding the amount of 1 per cent THC. I am advised that at this level there is no likelihood of a plant creating a psychoactive effect associated with the recreational drug. The best you could hope for, I am told, is a headache.

Victoria and Western Australia set an upper limit of 0.35 per cent in the leaves and flowering heads. The ACT, New South Wales, Queensland and Tasmania set two limits: leaves and flowering heads of a plant must have less than 1 per cent, and hemp seed may only be used if supplied on the basis that it would not produce hemp plants with a concentration of THC in its leaves and flowering heads of more than 0.5 per cent. This bill provides that leaves and flowering heads of a plant must have less than 1 per cent THC and certified hemp seed must not produce hemp plants with a concentration of THC in its leaves and flowering heads of more than 0.5 per cent. This is consistent with the ACT, New South Wales, Queensland and Tasmania legislation.

Under the provisions of this bill, a licence may be granted for the cultivation and supply of low THC hemp for the purposes of commercial production, use in manufacturing processes, food production, scientific research, instruction, analysis or study, or any other purpose approved by the chief executive. The maximum penalty for breach of that licence is $15,000 or imprisonment for 12 months or both. While the number and type of conditions vary slightly between jurisdictions, this is comparable in terms of penalties.

The bill also follows the pattern of provisions already set in place in South Australia around the poppy industry. For example, the bill requires the maintenance of an industrial hemp register. This provision, resulting from a government amendment to the bill, is consistent with the requirement under division 7 of the Controlled Substances Act 1984 to establish and maintain an alkaloid poppy register. Although there is no requirement under this bill for an applicant for an industrial hemp licence to have a contract in place prior to applying for a licence, there are benefits in maintaining a record of all licences, past and present, and all locations where hemp has been grown.

Another condition common to every regime is that the applicant, and in some cases their very close associates, be a suitable person and/or a person of good repute. The government has amended this bill in the other place to provide a framework for establishing that. The bill is also in accordance with a number of commonwealth statutes that impact the cultivation, production and use of cannabis and cannabis products, including the Therapeutic Goods Act, Narcotic Drugs Act and Customs Act.

The commonwealth Narcotic Drugs Act 1967 deals with a licensing and permit scheme to regulate the cultivation of cannabis plants and the production of cannabis and cannabis resin. Cultivation, production and related activities under the scheme are for medicinal purposes or for research relating to medicinal cannabis only. This bill is also in accordance with our international obligations. As I mentioned, minister Maher introduced a number of government amendments to the bill to ensure appropriate regulatory processes and consistency with the approach for poppy cultivation that is already part of our law. These amendments were supported in the other place.

They include the inclusion of a definition of 'criminal intelligence'. The original bill referred to criminal intelligence but did not define the term itself. Secondly, the definition of 'inspector' is amended to include a police officer. Given the potential for criminal activity, it is important that police officers have the rights of an investigator, should this be appropriate. Thirdly, a new clause 3A is inserted to define the meaning of 'an associate'. The government believes that it is important that not only the applicant but also the associates of the applicant are considered in the application process to determine whether the applicant is a fit and proper person.

The amendments include the insertion of a detailed fit and proper person test, consistent with the Controlled Substances Act 1984; the amendment of provisions relating to the suspension, cancellation or renewal of a licence; the inclusion of a requirement for the chief executive to issue a certificate to inspectors; and the insertion of a new clause relating to the interaction of the industrial hemp legislation with the commonwealth Narcotic Drugs Act 1967. Should there be any inconsistency between the industrial hemp legislation and the Narcotic Drugs Act 1967, the commonwealth act takes precedence. Lastly, the requirement for the chief executive to maintain an industrial hemp register is added.

With these amendments from minister Maher in the other place, the government supports this bill and the opening up of the new industry of industrial hemp production in South Australia. This bill will give growers and manufacturers the opportunity to explore any potential benefit for the industry in South Australia. With the appropriate rules and regulations in place, our primary producers will be able to consider whether they want to become involved in the hemp sector with the potential to further develop industries through the growth and manufacturing of these products.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (11:04): I rise to speak on the Industrial Hemp Bill 2016 and indicate that I am not the lead speaker but that in fact my learned colleague the member for Hammond who is well versed in the opportunities in the primary industries sector, will be outlining our party's position.

I want to thank the Hon. Tammy Franks of another place for her progressing of this matter. It follows similar legislation by the Liberal Party to take up the opportunity in respect of poppies and the commercialisation of that introduced by and passed by the state Liberals in respect of opium poppy growing on a commercial basis, which passed last year.

I think everyone agrees that there is some urgency for the advance of legislation to deal with the structure under which hemp is grown in South Australia. One only has to read the newspaper about those who are in the plight of wanting to use a cannabis product, including cannabis oil, for medicinal purposes to appreciate there being some resolution of these matters. Only last week, someone was prosecuted for the manufacture and distribution of cannabis oil, and so there is a general view across the board that if we are going to have hemp, which is to be defined as a plant or any part, including the seed of a plant, of the genus Cannabis, then we need to make some amendments to our laws.

I fully support that, and in doing so I say that it is absolutely critical when we are dealing with drugs, alcohol and dynamite that we have a registration and licensing model of protection. We have obligations for people to reach a threshold as a fit and proper person to undertake responsibility. Whether they are going to grow it, manufacture it, distribute it or prescribe it, we have to have responsible people in charge of it. Ms Franks' bill advances the regime under which there would be a regulation of the cultivation of industrial hemp in this bill and it will have my support.

The matter I wish to bring to the attention of the parliament is that, in progressing amendments to the Controlled Substances Act in South Australia to facilitate a new regime, there is a question about whether it will offend in some way or fall short of being valid as a result of there being existing national legislation to cover some of these matters. The remedy to ensure that there is no failing of the introduction of this regime is outlined in clause 7 of the bill, entitled 'Interaction with Commonwealth law'. In particular, it prescribes:

(1) A provision of this Act—

which is the South Australian legislation—

has no effect to the extent of any inconsistency with the Commonwealth Act (and this Act is not to be taken to authorise the performance of a function or the exercise of a power under this Act that would result in operational inconsistency of this Act with the Commonwealth Act).

That is because, as members well know, there is an inconsistency clause in our national constitution so that, when there is conflict between a state and federal law, the federal law prevails. This clause in the bill is to reaffirm what is already there.

I think that is important because at the moment we have national laws which deal with hemp seed and this bill before us is also to deal with all genera of Cannabis including seed. It really is going to be a delicate dance around which act is to apply at this stage. It should not hold the bill up but, in short, I am advised—and I thank Ms Franks for making available Mr Lou Jansen, from the South Australian Department of State Development, to confirm this position. I am only naming him so that, if we end up in the High Court at some stage, he will take the blame.

However, it is to really identify that, if there is an inconsistency, the federal law prevails. If the use is for a scientific purpose and for medicinal purposes, then the commonwealth narcotics legislation will be activated and that will be the ruling law to deal with that, but if it is done for food, then there is use of the Industrial Hemp Bill. These are the complications that come about when we advance things or when a product is both a food and a drug for a medicinal purpose.

I fully support the bill. I have raised this issue and I hope that it does not fall foul. It will require some consultation at the next meeting of ministers, which I am told is later this month here in Adelaide, and the minister for primary industries will attend that event. They need to sort these issues out because there need to be very clear guidelines which act is to apply so that we do not have a failing in respect of that. When our farmers line up to seek an opportunity to be licensed to undertake this cultivation work, we do not want them to be met with myriad legislative inconsistencies or to fall foul of it. With those few words, I commend the bill.

Mr PEDERICK (Hammond) (11:11): I rise to speak to the Industrial Hemp Bill. I am the lead speaker with regard to the bill. I note that the Hon. Tammy Franks first put this bill in the other place and that there were quite a few contributions made there, including from the Hon. David Ridgway.

This bill aims to legalise the cultivation of industrial hemp in South Australia. It seeks to amend the Controlled Substances Act 1984 to authorise and regulate the cultivation of industrial hemp. Currently, South Australia is the only state in which it is illegal to cultivate industrial hemp. Various state legislation has one key difference, being the tetrahydrocannabinol (THC) limit permitted. THC is the psychoactive compound found in hemp and marijuana.

In Victoria and Western Australia, the THC maximum limit is 0.35 per cent in the leaves and flowering heads of a hemp plant. In the ACT, New South Wales, Queensland and Tasmania, there are there two THC limits: the leaves and flowering heads of a hemp plant must have less than 1 per cent, while hemp seed may only be used if supplied on the basis that it will not produce hemp plants with THC in its leaves and flowering heads of more than 0.5 per cent. This bill adopts the latter limits prescribed in the respective ACT, New South Wales, Queensland and Tasmania legislative frameworks and adopts the Tasmanian model.

Hemp has a relatively low concentration of THC (under 1 per cent) and, by way of contrast, the average marijuana plant, from what I have been informed, could have between 15 per cent to 20 per cent. The legislative framework in this bill is similar to the opium poppy legislation which was introduced by the Hon. David Ridgway in the other place and which passed last year.

In order to cultivate hemp, a farmer must obtain a licence and approval from the Chief Executive of PIRSA. There are a number of checks and balances in place to screen potential applicants, including powers for the chief executive to require documentation so that a report can be produced and provided to the Commissioner of Police for review. Licences are limited to a maximum five-year period and may be suspended or cancelled by the chief executive if a farmer breaches conditions.

The chief executive also has powers, which mirror those in the opium poppy legislation, to order inspections in which the inspector may seize material and take samples. The state government has provided a number of amendments, which were all passed in the other place. The amendments aim to ensure there are appropriate regulatory and security requirements. The majority of those amendments bring the legislative framework in line with the existing opium poppy legislative framework.

As I indicated, the Liberal Party initiated legalising the cultivation of opium poppies. They are soon to be cultivated in the state's South-East. That does encompass a very strict regulatory framework. It is anticipated that a similarly stringent regulatory framework will be developed and released for consultation following the passage of the bill. I note that poppy cultivation—and I have witnessed where they do it in Tasmania—is very heavily regulated. There are signs on fences around the farmer's land and strict regulatory licence arrangements are made with companies for growing opium poppies, obviously for the legal pharmaceutical drug trade.

Opium poppy growing is very heavily regulated, and so it should be. Obviously, there will be some similar arrangements in the regulatory framework around growing industrial hemp. This bill is limited to the cultivation of hemp, does not seek to amend any other legislation that may affect its uses and does not touch on medical cannabis. Legalising the cultivation of hemp will enable South Australian farmers to access another crop, which is currently being farmed around Australia.

The Hon. David Ridgway represented our party at the government's industrial hemp and medical cannabis round table held this year by the Hon. Kyam Maher. A broad range of stakeholders were in attendance, including various government departments and government representatives, a number of hemp and medical cannabis associations and medical professionals, amongst others. With respect to what we are talking about here today—cultivating industrial hemp—this component had the overwhelming support of the stakeholders at the round table.

The opposition is supporting the bill that has come down from the other place. We are the only state in which it is illegal to cultivate industrial hemp. As I indicated earlier, it will give South Australian farmers more opportunities to access another crop, just like poppies. It is currently being farmed elsewhere around Australia for a range of products that can be made out of industrial hemp.

I want to note that the state Liberal Party will always support initiatives that benefit our regions and primary producers. Farmers are the ones who are going to have to make the decisions, and if they have the right land, the right rainfall, the right conditions, I believe, from conversations I have had, that hemp does not need the same amount of water that poppies may need, so there is probably a broader range of places where it can be cultivated. If farmers decide that it is commercially viable to farm a particular crop, then cultivating industrial hemp could represent a great opportunity for some primary producers to do so.

The legislative framework, as I have indicated, is quite similar to that of the opium poppy legislation the Hon. David Ridgway introduced in the other place. In regard to the THC levels contained in hemp, they are well below the levels found in marijuana. A strict regulatory framework must be in place. We on this side believe that the bill before parliament has adequate safeguards to regulate and prevent the possible improper use of industrial hemp.

I want to identify a couple of people who have been involved in promoting the use of industrial hemp over time, and one is a person who, prior to the mid-nineties, lived not far from me at Coomandook. Caroline Graham was quite a pioneer in her day. I remember her coming to Agricultural Bureau events promoting the growing of industrial hemp. I think she was involved in trials on Yorke Peninsula when she went back to the home properties of the Graham family at Arthurton. Dianah Mieglich has been involved and promoted this use for regional development and for our agricultural sector to take on board.

From a personal point of view, anything that gives our farmers more agricultural options to pursue is a good thing, as long as the regulatory framework is correct, policed properly, regulated properly and the licences are managed properly so that a successful business can operate in this state. With those few words, the Liberal Party supports the legislation and hopes for its speedy progress through the house.

Ms HILDYARD (Reynell) (11:21): I rise to speak to the Industrial Hemp Bill 2017 and to offer my support for this legislation. In doing so, I also congratulate minister Maher from the other place and assistant minister Picton on bringing this matter forward. I also pay tribute to and thank the many people in our community who have campaigned and been active for a very long time around the introduction of this industry into our community for their courage and the tenacity they have shown in pushing this industry forward.

I also say thank you to the many people who participated in quite extensive community consultation, as part of round tables and in a number of other forums, for their efforts and for their voice. By removing legal barriers to the cultivation of industrial hemp, we are giving growers and manufacturers the opportunity to explore the significant economic potential for this industry in South Australia, including the potential for significant job creation and growth—a goal that our government is deeply committed to advancing.

With the appropriate rules and regulations in place, our farmers will be able to become actively involved in the hemp sector, with the potential to further develop industries through the growth and manufacture of this material. South Australia and the Northern Territory remain the only jurisdictions that do not yet permit the commercial cultivation of industrial hemp. By establishing a regulatory framework, South Australia will be on equal terms with other states and we will be able to advance our interests in the sector—an important issue in the context of fully realising the economic and jobs growth potential that can come through this work.

Changes to our South Australian law will allow only for the regulated cultivation and manufacture of hemp for industrial purposes. Using the criminal intelligence principles contained within the opiate poppy regulatory scheme, the regulatory framework will ensure compliance with Australia's international treaty obligations and address the risk of using hemp cultivation as a cover for growing illicit cannabis.

On 1 December 2016, the Hon. Tammy Franks from the other place introduced a private member's bill, the Industrial Hemp Bill 2016, which sought to authorise and regulate the cultivation of industrial hemp in South Australia. The Franks bill was also raised during the recent industry round table I have just spoken about and held by minister Maher. Our government made minor amendments to the bill in the Legislative Council, including the following:

that the legislation will commence upon proclamation;

alterations to the process for the renewal of a licence;

consideration of penalties to ensure they are consistent with other state legislation;

allowing police officers to be defined as inspectors under the legislation, in addition to inspectors appointed by the chief executive of the relevant department;

the inclusion of clear guidelines on what constitutes a 'fit and proper person';

the inclusion of a definition of criminal intelligence provisions; and

a process to allow for the rectification of any breach of a licence.

Our government is continuing to support innovative solutions like this, and many others, to the challenges and opportunities that face South Australia and South Australians.

We will continue to create job opportunities that support working people, and their families, and we will continue to invest in economic growth through opening new industries like this one. With proper protections in place, I deeply support the hemp industry in South Australia and the many benefits that it has the potential to bring to our state.

Mr VAN HOLST PELLEKAAN (Stuart) (11:25): I also rise to support this bill. I think most people here would know that I am a reasonably cautious person who tries to look at things thoroughly before making a move, but I have to say that I have never had any hesitation about supporting this issue in principle.

This is nothing to do with drugs: this is to do with industry and agriculture and cultivation. The plants that would be used for industrial hemp are not the plants that would be used for drug making or drug taking; they are totally different. In fact, this is a potentially tremendous opportunity for many who operate in agriculture throughout South Australia. Many people in my electorate welcome the potential to grow this crop for these completely aboveboard and constructive purposes.

I would like to give credit to the Hon. Tammy Franks for bringing this issue forward, and I also give credit to all MPs in this parliament because we have reached a bipartisan position on this issue, and I think that is important to recognise. I would also like to acknowledge Dianah Mieglich and Teresa McDowell, particularly Teresa McDowell whom I met and who, by coincidence, is a former Port Augusta resident and very active in this space.

It was terrific to have a couple of opportunities to sit with her as a person who is deeply involved and whose business involves the use of hemp products. She was able to explain to me, in the sort of detail that often MPs can only get from outside Parliament House, how useful this product is. I know that many MPs received briefings from many places and many people, including one that was organised for all of us in Parliament House, but Teresa McDowell's one-on-one information for me on a couple of occasions was a very big help.

The member for Hammond mentioned Tasmania and the poppy industry there. I lived in Tassie for four years a very long time ago, but I still get back there every now and again. The growing of poppies in Tasmania is completely uncontroversial because, again, it is the growing of poppies for a well-regulated purpose. It is not about making opium for home use, or recreational use or any unregulated use whatsoever.

If you drive around rural areas of Tasmania, you see the regular fence that you would see around any cropping or grazing paddock anywhere else in Australia; the only difference is that it has a sign that says, 'This is a poppy crop and you cannot enter,' and everybody understands. If you happened to jump the fence, for whatever reason, and be found, you would have some very serious questions to answer. Guess what? Nobody does it. It is just a crop. I am sure that if we can progress to growing hemp for industrial purposes in parts of South Australia that is exactly how it would eventuate here.

Regulation will be very important. It very important that this is nothing about drugs and it is very important that it seems that this legislation is being supported in a multipartisan way in our parliament, and I certainly personally support it.

Ms COOK (Fisher) (11:29): I rise to support the Industrial Hemp Bill. To start, I would like to acknowledge some of the community people who have advocated so strongly on behalf of this industry and on behalf of the people who will benefit from it, including Dianah Mieglich and Teresa McDowell and other advocacy groups we have met with in Parliament House. I thank them for their work.

Unfortunately, South Australia and the Northern Territory remain the only jurisdictions in Australia where commercial cultivation of industrial hemp currently is not permitted. The commercial cultivation and production of hemp have a long history around the world and has produced a range of products, including paper, paint, fuels and medicine. South Australia has always been a state of innovation, and we should encourage individuals and business to explore new industries and opportunities.

Currently the Controlled Substances Act 1984 is the barrier to the development of this particular industry, which has such enormous potential to generate jobs and wealth in South Australia. I seek leave to continue my remarks.

Leave granted; debate adjourned.