Hemp Industry Development Act

32012 Hollin of ta a orace TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) JUL 10 P2:26 First Regular Session ) SENATE RECEIVED BY: 3'71 S. No. _ Introduced by Senator Robinhood Padilla AN ACT LEGALIZING THE CULTIVATION OF HEMP AND FORMULATING A COMPREHENSIVE DEVELOPMENT PLAN FOR THE HEMP INDUSTRY, INCLUDING RESEARCH AND DEVELOPMENT AND CAPACITY-BUILDING TO STRENGTHEN ITS COMPETENCE AND EFFICIENCY, AND PROVIDING FUNDS THEREFOR Industrial hemp has gained global popularity for its use in the manufacturing industry and has contributed to economic growth in other jurisdictions. In fact, the size of the global industrial hemp market has reached $9.47 billion in 2024 and is projected to grow to 47.82 billion by 2032.1 Industrial hemp in the form of fiber and oilseed hemp can be manufactured into various industrial and economic products such as textiles, clothing, home furnishings, cosmetics, food and even pharmaceuticals. The global expansion of the industrial hemp trade has forged partnerships and collaborations among various progressive countries that saw the opportunities the industry has to offer. An example would be the licensing agreement entered into between Israel-based cannabis growth company InterCure Lta., and United States- based cannabis company Binske. The terms of the agreement include exclusive marketing, distributing and manufacturing rights over Binske-branded products in Australia, United Kingdom, Israel and Germany. ' Industrial Hemp Market Size, Growth, Global Report, 2032. (n.d.). https://www.fortunebusinessinsights.com/industrial-hemp-market-102459

Hemp, being a niche crop that grows and thrives in temperate regions, creates an opportunity for the Philippines to maximize all possible gains that may be derived from the industry. That is why this measure mandates the State to adopt a policy that will promote the growth and development of agriculture as an industry and a source of livelihood to farmers. This is possible by providing them the opportunity to cultivate and grow hemp which would necessarily improve the agribusiness investment climate, thereby increasing the competence and efficiency of the sector as one of the primary backbones of the Philippine economy. This representation would like to emphasize that there is a substantial difference between hemp and marijuana, although both come from the same species, Cannabis sativa. The major difference lies in their tetrahydrocannabinol (THC) content. Hemp, according to numerous scientific journals, contains only a THC level of 0.3% or less given the use of modern technology. As such, hemp-derived products cannot create the "high" that is often related to marijuana. Being a new industry, an Industrial Hemp Research Center under the Department of Agriculture is hereby created which shall have the mandate to conduct the appropriate scientific studies and researches that would facilitate hemp production and development, and processing of its industrial-by products. Further, our state universities and colleges engaged in programs may grow or cultivate, or both, industrial hemp for purposes of research conducted under an agricultural pilot program subject to the guidelines provided in this measure. Pursuant to this measure, what is to be allowed is the cultivation and use of industrial hemp only on the following industries: (a) agriculture; (b) textile; (c) recycling; (d) automotive; (e) furniture; (f) cosmetics; (g) food; (h) paper; and (i) construction. The hemp industry is experiencing notable growth on a global scale. It is essential for regulatory agencies to clearly differentiate industrial hemp from medical Cannabis to enable the full realization of industrial hemp's economic potential as a sustainable source of value-added functional food ingredients and nutraceutical products.

The legalization and regulation of industrial hemp cultivation and use, as envisioned in this measure, present a strategic opportunity to bolster the Philippine economy by unlocking the crop's vast industrial and economic potential. By fostering innovation, research, and development in the hemp sector, this initiative aims to empower our farmers, attract local and international agribusiness investments, and strengthen various local industries. In consideration to the economic benefits stated, the passage of this measure is earnestly sought. ROBINHOOD PADILLA Senator

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) 25 JUL 10 P2:26 First Regular Session SENATE RECEIVE S. No. 3'71 Introduced by Senator Robinhood Padilla AN ACT LEGALIZING THE CULTIVATION OF HEMP AND FORMULATING A COMPREHENSIVE DEVELOPMENT PLAN FOR THE HEMP INDUSTRY, INCLUDING RESEARCH AND DEVELOPMENT AND CAPACITY-BUILDING TO STRENGTHEN ITS COMPETENCE AND EFFICIENCY, AND PROVIDING FUNDS THEREFOR Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. - This act shall be known as the "Hemp Industry

2 Development Act."

Sec. 2. Declaration of Policy, - It is the policy of the State to promote the

4 growth and development of agriculture as an industry and a source of livelihood to farmers by providing them with viable farming options which would necessarily improve the agribusiness investment climate, thereby increasing the competence and 7 efficiency of the sector as one of the primary backbones of the Philippine economy.

Sec. 3. Definition of Terms. - For purposes of this Act, the following terms are

defined as follows: a. Industrial hemp (Cannabis sativa L.) refers to the plant belonging to the class of Cannabis sativa, grown specifically for industrial and consumable use; it means a cannabis plant - or any part of that plant - in which the concentration of THC (delta-9-tetrahydrocannabinol) is 0.3% w/w or less in the flowering heads and leaves.

b. Hemp Cultivation refers to the act of planting and gathering of raw industrial hemp. c. Hemp Propagation refers to the production of industrial hemp by propagating it for the purpose of developing a new variety. d. Hemp Processing refers to the act of converting raw industrial hemp into by-products. This shall not include the processing of industrial hemp for purposes that will constitute a violation of the Dangerous Drugs Act of 2002. e. Research Center refers to the Industrial Hemp Research Center which will be established under this Act. f. Registration Center refers to the Industrial Hemp Licensing and Registration Center which will be established under the Act. g. Grain refers to the achene of industrial hemp that is not represented, sold or used to grow a plant. h. Seed refers to the achene of industrial hemp that is represented, sold or used to grow a plant. i. Cannabinoids refers to every chemical substance, regardless of structure or origin, that joins the cannabinoid receptors of the body and brain and that have similar effects to those produced by the Cannabis Sativa plant. j. Cannabidiol or CBD refers to the second most prevalent active ingredient in cannabis (marijuana) that is derived directly from the hemp plant, a cousin of marijuana, or manufactured in a laboratory.

Sec. 4. Applicability. - The cultivation, propagation, processing and research

relating to hemp shall only be limited to male hemp plants which do not yield buds that produce cannabis with no more than 0.3% concentration (on a dry weight basis) of the psychoactive compound delta-9-tetrahydrocannabinol (THC).

Sec. 5. Industrial Hemp Research Center. - There shall be established an

Industrial Hemp Research Center under the Department of Agriculture (DA) which shall conduct the appropriate scientific studies and research that would facilitate hemp production and development, and processing of its industrial-by products. The result of the research shall be made publicly available and accessible to farmers by the Research Center. Under the supervision of the Research Center, state universities and colleges (SUCs) engaged in agricultural programs may grow or cultivate, or both, industrial hemp for purposes of research conducted under an agricultural pilot program, or other agricultural or academic research project provided the following are present: a. A recognized project for scientific research; b. More than three (3) professionals engaged in scientific research cultivation; c. THC testing equipment and personnel; d. Safe storage facilities for industrial hemp seeds, and e. Management systems for testing, storage, and records. SUCs that transport industrial hemp as part of a research project authorized under this Act shall include, along with a shipment of industrial hemp, a certificate of authority coming from the Department of Agriculture and a letter using the university 61 or college's letterhead that provides notice that the shipment includes industrial hemp authorized under this Act.

Sec. 6. Capacity Building for Farmers. - The Research Center shall support the

development and strengthen the capacities of local farmers or any person, partnership, corporation, association or institution who will be authorized to cultivate and grow hemp by conducting training on modern techniques to enhance production efficiency.

The Research Center shall likewise teach the local farmers the modern marketing needs and techniques, so that they will gain insights into the possibilities of selling their crop and hemp-based products to the global market.

Sec. 7. Industrial Hemp Licensing and Registration Center. - There shall be

established an Industrial Hemp Licensing and Registration Center which shall register and issue licenses in favor of any person, partnership, corporation, association or institution that intends to grow an industrial hemp, and export seed or grain thereof.

Sec. 8. Application to Grow Industrial Hemp and its Contents, - An individual

or juridical entity applying for registration and license shall submit a form containing the following details: a. Applicant's full name, birth date, mailing address, telephone number, and electronic mail address; if the applicant is not an individual, the registered name, business address, and the full name of each officer and director, partner, member, or owner owning more than 10% of equity or stock, including their birth date, title, and valid electronic mail address; b. The proposed acreage and greenhouse or other indoor square footage to be planted; c. The exact address or location for each field, greenhouse, building, or other site where industrial hemp will be grown, handled, or stored; and d. The registration and license issued under this Act shall be valid for one (1) year from the date of issuance subject to renewal thereof.

Sec. 9. Disqualification. - The following are disqualified to apply for a license

to cultivate hemp: a. Individuals who are less than 18 years of age; b. Individuals or entities with at least one director, partner or member that has been convicted of any drug related offenses; and

c. Individuals or entities with prior violations of this Act.

Sec. 10. Denial of Application; Grounds. - The application to grow industrial

hemp shall be denied if the application is incomplete, or if any of the following apply: a. The applicant has not demonstrated a willingness to comply with the rules, or the provisions of this Act; b. The applicant fails to pay the applicable fee/s; c. The applicant has made false statements or representations in his application.

Sec. 11. Export Permit. - Any person, partnership, corporation, association or

institution who intends to export seed or grain must hold an export permit for each shipment that is exported. The export permit must set out the following information: a. Name and mailing address of the holder of the permit; b. Permit number and the number of license that authorizes the exportation; C. Name of the importer and his address in the country of import; d. Whether seed or grain is being exported and the quantity, in kilograms, of each form exported; e. The variety of industrial hemp from which the seed or grain was harvested; f. The contraction of THC, expressed as a percentage w/w, in the flowering heads and leaves of the variety of industrial hemp from which the seed or grain was harvested; g. The dates of the effectivity and expiration of the permit; h. Other conditions that may be deemed appropriate by the government.

Sec. 12. Authorized Industries. - The cultivation and use of industrial hemp

may only be limited to the following industries:

a. Agriculture; b. Textile; c. Recycling; d. Automotive; e. Furniture; f. Cosmetics; g. Food; h. Paper; and i. Construction.

Sec. 13. Industrial Hemp Cultivation and Hemp Processing. - No person,

partnership, corporation, association or institution may engage in the cultivation and processing of industrial hemp, unless registered and issued a license by the Registration Center. The Registration Center, in coordination with the Philippine Drug Enforcement Agency (PDEA), shall establish an enforcement and monitoring unit which shall strictly monitor persons, partnerships, associations and institutions engaged in industrial hemp cultivation and processing. As far as practicable, only agricultural lands not utilized for the production of rice, corn, sugar and other critical agricultural products may be used for the cultivation of industrial hemp.

Sec. 14. Industrial Hemp Marketing and Promotion. - The center, in

coordination with the Department of Trade and Industry (DTI) shall engage in the marketing and promotion of industrial hemp and its by-products. The center, DA and DTI shall ensure the availability of market linkage for industrial hemp and its by- products.

Sec. 15. Liability Under Republic Act No. 9165. - Nothing in the law shall be

construed to allow any person, partnership, corporation or institution to cultivate and process industrial hemp other than those allowed by the center nor shall it be allowed under this law to cultivate any plant or process any substance which are prohibited under Republic Act No. 9165, otherwise known as the "Comprehensive Dangerous Drugs Act of 2002' and its amendments. The commission of any of the prohibited acts in this law shall be prosecuted in accordance with the provisions of Republic Act No. 9165. If the violation or offense is committed by a corporation, partnership, association or other juridical entities, the penalty shall be imposed upon the directors, officers, employees or other officials or persons therein responsible for the offense.

Sec. 16. Appropriations. - The amount necessary to carry out the provisions of

this Act shall be included in the budgets of the implementing departments/agencies in the annual General Appropriations Act.

Sec. 17. Implementing Rules and Regulations. - Within ninety days upon the

effectivity of this Act, the DA, DTI, CHED and PDEA shall promulgate the necessary rules and regulations for the effective implementation of this Act

Sec. 18. Separability Clause. - If any provisions of this Act are declared invalid

or unconstitutional, other provisions not affected thereby shall continue to be in full force and effect

Sec. 19. Repealing Clause. - All laws, decrees, executive orders, administrative

orders or parts thereof inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.

Sec. 20. Effectivity Clause. - This Act shall take effect fifteen (15) days following

its complete publication in the Official Gazette or in at least two (2) newspapers of general circulation. Adopted,