State grain-protection requirements apply if low-THC hemp becomes legal in South Dakota

Capitol News Bureau

PIERRE, S.D. (KELO) — Industrial hemp would be covered by state grain-warehouse and grain-buyer laws if it becomes legal in South Dakota, a state Public Utilities Commission spokeswoman said Friday.

The Legislature’s Industrial Hemp Study Committee plans to introduce a bill in January that would permit the growth, production, transportation and processing of industrial hemp and its derivatives in South Dakota by licensed farmers, haulers and processors. The hemp would need to be at THC levels of three-tenths of one percent or less to be legal.

Lawmakers on the Executive Board gave their blessing Tuesday to accepting the committee’s report. The final draft of the proposed legislation is on pages 23-28.

Lawmakers passed a somewhat similar measure last winter but the Senate wasn’t able to assemble a two-thirds majority to override Governor Kristi Noem’s veto.

Industrial hemp became the topic legislators most wanted studied for 2020.

House Republican leader Lee Qualm of Platte delivered the committee’s report Tuesday. “We feel very comfortable where we’re at with the legislation,” Qualm told the board.

One of the unresolved questions from the committee’s final meeting Monday was what authority the Public Utilities Commission’s grain-warehouse division would have.

Commission spokeswoman Leah Mohr said the utility regulators would have some jurisdiction because industrial hemp would be classed a grain.

“Legalized industrial hemp would be regulated by the PUC just as other grain is, such as corn, for example,” Mohr said.

She continued, “The PUC would have regulatory authority over grain buyers of industrial hemp and grain warehouses that store industrial hemp. In summary, industrial hemp grain buyers and grain warehouses would need to become licensed by the PUC, comply with licensing requirements, comply with the bonding requirement, be subject to inspections, and provide financial and warehouse reports.”

The commission however doesn’t regulate the planting of grain, the producer of grain, the transportation of grain, or the content of grain, Mohr said. She added that the commission doesn’t regulate the buying or storage of leaves, stalks, oils or fiber of the plant.

Missing from the final draft of the 2020 legislation is a sentence the committee had agreed to add: that industrial hemp would be treated like any other legal crop, aside from the special provisions in the bill.

That suggestion came from Representative Randy Gross, an Elkton Republican. He said Thursday the Legislative Research Council was checking whether the sentence was necessary. It could be added later.

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