House panel backs compromise with Noem on allowing low-THC hemp in South Dakota

Capitol News Bureau

PIERRE, S.D. (KELO) — Gov. Kristi Noem and state lawmakers reached agreement Thursday on a proposal to allow industrial hemp in South Dakota, if its THC level isn’t above 0.3 of one percent.

The House Agriculture and Natural Resources Committee voted 11-0 to endorse a new version of HB 1008 that the governor’s office wrote with input from legislators and people in the industry.

She vetoed industrial-hemp legislation last year.

The latest bill meets three of the four conditions Noem set last month, according to one of the governor’s lawyers, Katie Hruska.

“To be clear, nothing in this bill will meet the fourth guardrail of adequate funding to ensure the lasting integrity of this program. The fourth guardrail needs to be addressed however during the budget process,” she testified.

The others are reliable enforcement, responsible regulation and documented transportation.

The estimated costs for start-up and first-year operations are about $3.6 million. It’s unclear how many growers and processors would be licensed.

The bill currently sets maximum license fees at $500 for growers and $2,000 for processors and gives authority to the state Department of Agriculture to determine the actual amounts.

Among the new provisions are an annual crime report from the state attorney general’s office and a criminal ban on smoking or inhaling industrial hemp in South Dakota.

The governor talked with news reporters about two hours after the committee’s vote.

“I didn’t put hemp funding in my budget. It was not included because, for me, it’s not a priority. I’ve been very clear that I still don’t think it’s a good idea,” Noem said.

Representative Oren Lesmeister, a Parade Democrat, was prime sponsor of the 2019 bill that Noem vetoed. He served on the study committee the Legislature set up after Noem’s veto. The panel drafted the original version of HB 1008 for this session.

Lesmeister thanked the state departments for their cooperation the past month.

“It’s been a very rewarding experience to be able to work with them the full session so far, compared to the past,” he said Thursday.

He added, “Maybe not the perfect bill, by no means, I don’t think there’s any such thing. But from where we were a few years ago? Ten thousand miles forward.”

The revised HB 1008 could be up for debate in the full House of Representatives as early as Monday afternoon.

If the legislation becomes state law, South Dakota would need approval from the U.S. Department of Agriculture. One of USDA’s requirements is that a program must have adequate financial support.

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