Second Reading of Industrial Hemp Bill, Bill # 10 Of 2022

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Hon. Zulfikar Mustapha, M.P., Minister of Agriculture

Mr. Speaker. It is my pleasure to introduce the second reading of the Industrial Hemp Bill, Bill #10 of 2022. Mr. Speaker, Guyana is projected to attain unprecedented growth rate which no other country in the world is currently projected to achieve in 2022, and in keeping with such growth, this government will continue to provide viable business opportunities to the people of this nation.

The tabling of this bill is a timely one as Guyana recently hosted an Agri-Investment Forum and Expo in collaboration with CARICOM with the aim to Investing in Vision 25 by 2025, to diversify our agriculture sector for the increase of trade opportunities.

Hemp is a high-value commodity with endless potential for development. This increased interest in the cultivation of industrial hemp as a potential source of diversifying our economy and providing new jobs in the agricultural and industrial sectors, as well as, to develop alternative sources of fibre. Our government is giving the agricultural and industrial sectors the opportunity to grow and exploit industrial hemp in a controlled manner. We are here today to align our laws to benefit from opportunities in the cultivation of this important product.

OTHER IMPORTANT FACTS:

  • Hemp grown for the production of biomass fuels can provide all of our gas, oil and coal energy needs and end dependency on fossil fuels – this can be a long-term goal for Guyana.

HEMP FOR PAPER:

  • U.S.D.A. bulletin #404 outlined a process for the production of paper using pulp and demonstrated that hemp could replace 40% to 70% of all tree pulp paper, including corrugated boxes, computer paper and paper bag.
  • An acre of hemp will produce as much pulp for paper as 4,1 acres of trees over a 20-year period.
  • Hemp paper is suitable for recycle use 7 to 8 times, compared with 3 times for wood pulp paper.

Agronomy

Mr. Speaker, Guyana, with its vast expanse of rich arable well-drained land, is ideally suitable for hemp production.

Industrial hemp can be successfully grown on a variety of soils, especially our soil, which fits well with crop rotation for crops such as, wheat, corn, and soybeans among others. With Guyana currently being a producer of corn and soya, and experimenting with wheat, the production of hemp could be collectively explored with a view to realizing optimum yields to satisfy local, regional, and international markets.

BENEFITS OF HEMP TO SOIL: (can relate to Sadhguru vision and Save Soil Actions)

  • Hemp is very easy on the soil and returns up to 60% of the nutrients it takes from the soil, when dried in the field.
  • A report from Kentucky states that hemp was grown on the same land for 14 consecutive years without soil depletion or reduction in yield.
  • Hemp is very economical crop to grow since it requires virtually no pesticide applications.
  • Hemp is also relatively drought-resistant and has been relied upon several times during drought-induced famine for its high protein seed.

Mr. Speaker, like I mentioned earlier hemp has multiple uses, such as clothing, construction material, paper, healthy food, medicinal value etc, which will create new opportunities for Guyanese.

Economic

Mr. Speaker, with this legislation, Guyana would be poised to tap into the global industrial hemp market.  The global industrial hemp market size was valued at $4.9 billion in 2019 and is projected to reach $10.6 billion by 2025 and $18.6 billion by 2027.

Apart from bringing in valuable foreign exchange to the economy, it will also create significant employment opportunities by catering to an increasingly growing and highly desired market demand while at the same time providing for a relatively higher profit margin compared to other traditional commodities. In a typical case taken in Australia for instance, total costs of cultivating 1 hectare of hemp (inclusive of all costs up to harvest plus harvesting and processing costs) amount to US$4,140 with gross returns of US$12,075 allowing for a gross profit of US$7,935.

As pointed out by His Excellency, the President Dr. Mohamed Irfaan Ali, the hemp industry is not only about hemp cultivation but about the processing and value-added facilities that can be established in Guyana which will create jobs anda generate high returns on investment.

New Industry

Mr. Speaker, to diversify our industrial sector we can start many new industries with the cultivation of this one crop. Hemp can be grown as a renewable source for raw materials that can be incorporated into thousands of products. The global market for hemp consists of more than 25,000 products in nine submarkets:

  1. agriculture,
  2. textiles,
  3. recycling,
  4. automotive,
  5. furniture,
  6. food and beverages,
  7. paper,
  8. construction materials, and
  9. personal care (including healthy food, organic body care, and other nutraceuticals)

Mr. Speaker, let’s examine one of these submarkets, paper. One of the first uses of hemp was paper. The market size of the global paper and pulp industry in 2020 was USD 349.18 Billion. Furthermore, the hemp paper market is expecting market growth at a rate of 36.9% in the forecast period of 2022 to 2029. In Guyana, this will be the birth of a whole new industry.

We (CARICOM) imported US$ 356 million in paper and pulp in 2021. We can tap into this market. More than this, there is the environmental side of this. It takes 10,000 acres of hemp to produce as much paper as 40,500 acres of forest. One acre of hemp (grown in a single season) yields as much paper as up to 4 acres of trees.  More than that, it reduces deforestation, and there are fewer chemicals in the manufacturing of paper.

Mr. Speaker, industrial hemp development is not new to the countries of the world, there are more than 30 countries that cultivate industrial hemp, China being among the countries with the highest production and exporter of textile products made of hemp and its seeds. The European Union (EU) also has an active industrial hemp market. Allow me to explore just one country that legalized its industry and its path to development.

In Canada, industrial hemp production was legalized in 1998. Back then there were many unknowns about hemp agronomy and limited market opportunities for hemp products. Today, Canada is a leader in hemp innovations, with a CAN $387 Million industry, exporting about 30% of that. With about 2,500 jobs in this industry.

Further, there are multiple economic significance of a new industry. Most of what I mentioned are direct or indirect economic contribution where the revenue or operating expenditure are from the industry operators or suppliers. More than that, there is the induced economic contribution which is associated with the spending of wages and salaries earned because of industrial hemp industry activities.

Looking out over the horizon, the possibilities exist when industry, government, and researchers share a common vision of an extraordinary opportunity. And Mr. Speaker, industrial hemp production will be an activity that is authorized by a license issued under this bill, subject to the terms of the license and to the regulations.

The government is providing the enabling legislation for the all to benefit and invest.

This promising industry is yet to emerge but imagine the possibilities it will bring to our economy and country.

Mr. Speaker, the popular demand for hemp both from a production and a consumption perspective is by no means insignificant. Hemp production in Guyana is a win-win situation for all the players involved. For the growers, it will be a good source of income generation and job creation, for consumers, it could have significant benefits, and for the broader economy, it will be a valuable source of foreign exchange, especially in the context of economic diversification.

Decriminalization of Industrial Hemp

As was promised, by His Excellency, Dr. Mohamed Irfaan Ali, Guyana is now moving to decriminalize hemp production while creating a viable alternative for commerce.  This new legislation will decriminalise the use of industrial hemp once the THC content remains less than 0.3%. So, while we are setting up this legislation, at the same time we are encouraging persons to deviate from crime.

Mr. Speaker, allow me to highlight some of the main areas of this Bill:

Section 2 of the bill defines industrial hemp to categorize and distinguish hemp from marijuana. As such, the bill would remove restrictions on the domestic cultivation of industrial hemp. This clearly shows that the government is committed to taking steps to transform the lives of its citizens.        

Governance and Administration

However, this new industry will require close monitoring and regulation. Part 11, Sections 3 and 4 of the Bill create a regulatory regime through the establishment of a corporate body, the Guyana Industrial Hemp Regulatory Authority, and the constitution of a governing board to oversee operations.

To ensure that consideration is given to public health, safety, agriculture, and commerce, various stakeholders will make up the Board including the Ministry of Agriculture, Ministry of Health, Ministry of Home Affairs, the Guyana Forensic Science Laboratory, and the Private Sector Commission. The Board will be chaired by a Minister of Agriculture nominee. This is set out in Section 4 (2).

Section 6 (1) of the Bill sets out the functions of the new authority inclusive of: –  

  1. Considering applications;
  2. Issuing, varying, suspending, or revoking licenses;
  3. Determining the number of licenses to be issued, considering any adverse impact;
  4. Prescribing quotas for the cultivation of industrial hemp;
  5. In collaboration with the Customs Anti-Narcotic Unit, monitor, supervise and control industrial hemp or related products;
  6. Ensuring there is compliance with this legislation;  
  7. Developing standards and codes of practice for licensees in collaboration with the Bureau of Standards;
  8. Collaborate with national, regional, and international organisations on matters related to industrial hemp;   
  9. Advising the Minister of Agriculture on matters relating to industrial hemp for medicinal, scientific, research, or any other purpose; and
  10. Establishing a hemp register.

Training will be provided for interested persons and to ensure the development of a viable hemp industry, the Board can enter into any agreement including cultivating, manufacturing, or training agreements (Section 33). This is indicative of the commitment by the government, to have persons trained in every aspect of Hemp cultivation and to ensure maximum productivity and long-term sustainability of the Industry.     

Licensing

As part of the regulatory regime, Part 111 of the Bill creates a licensing scheme whereby interested persons can apply to the Authority. Once a person is desirous of cultivating or manufacturing hemp commercially, all he/she has to do is apply once they are above 18 years of age, is of sound mind, and is not legally bankrupt. Subject to Section 13 of the Bill, in the case of an individual, he/she is habitually a resident of Guyana. In the case of a company, it must be incorporated or registered in accordance with the laws of Guyana.

Section 12 (1) of the bill states that a person shall not cultivate or manufacture industrial hemp and hemp related products or conduct research on industrial hemp or any activity concerning or related to industrial hemp without a licence issued by the Authority under this Act. Section 12 (5) states that a person who contravenes subsection 1 commits an offence. That is, anyone caught cultivating, manufacturing, conducting research, or any other activity related to industrial hemp without a license would be liable to a fine of $500,000.00 and imprisonment for one year

Section 14 (2) provides for the facilitating of licenses – the Board will consider issues of public health, safety, agriculture, commerce and the orderly development of the sector.

Successful applicants would be issued with either a cultivation or manufacturing license or both. Section 14 (3) provides that an application will not be considered unless it is accompanied by a criminal background report

Procedure for Granting Cultivation License

Section 15 (1) sets out the procedure for persons or companies applying for a cultivation license. (a) In the case of an individual, is habitually a resident of Guyana while (b) in the case of a company, is incorporated or registered according to the laws of Guyana.

A licence can also be issued to a person who owns, leased, or have entered into a sharecropper agreement for the purpose of cultivating hemp, provide proof of financial capability and have an established seed or crop supply whether individually or jointly with others to undertake the terms and conditions of the licence to cultivate industrial hemp. As such, this legislation complements our local content legislation.  

Section 15 (2) of the bill provides conditions to ensure that persons getting into hemp cultivation are serious about production, interested persons would be required to submit an Industrial Hemp Planting, Propagation, and Harvesting Plan for approval to the Board. The Board will be tasked with monitoring the plan’s implementation.

Sampling and Testing before Cultivation

Section 15 (4) of the bill provides conditions that a person licenced to cultivate hemp shall not commence the planting of any seed or plant or harvest any plant unless a sample of the seed or plant is analysed to ascertain it confirms with the prescribed THC content allowed under this act. The Board will create guidelines for testing and sampling to be done. Section 31 of the bill sets out that the Guyana Forensic Science laboratory, an independent laboratory or any either designated body by the Minister, will carry out such testing and sampling.

Section 18 (2) of the bill provides that a cultivation license would be valid for three (3) years andwould include activities such as possession, planting, propagating, harvesting, transporting, distributing, and selling of industrial hemp. This licence is renewable.  

Manufacturing Licenses

Section 16 (2) of the bill provides that manufacturing licenses would be issued for fifteen years and shall be renewable for a further term of 15 years as determined by the board. A manufacturing license will include activities such as processing, manufacturing, possession, buying, selling, distributing, importing, and exporting industrial hemp, seed, and hemp related products except for the cultivation of hemp. This again is an ideal opportunity for the private sector to come on board.    

Refusal of Licences

Section 17(1) of the bill provide that the Board will be tasked with promptly reviewing all applications. As such, approval, renewal, or refusal of licenses shall be done within thirty (30) days of receiving the application.

In Section 21 of the Bill, it sets out that a license may be refused where the applicant does not comply with the provisions of the license, is in contravention of the legislation, the issuance of the license would be injurious to health, public safety, or commerce, the issuance of the license would impact negatively on agriculture and the cultivation of hemp is not done in a designated geographical area. Additionally, a license for renewal shall be refused where there is an outstanding payment or obligation on the lease, mortgage, or sharecropper agreement

However, Section 17(4) provides that a person who was refused a license may appeal to the Minister, who may confirm the refusal or issue directives for the Board to reconsider the application

Designated Geographical Area  

An important feature of this legislation is zoning. Section 23 of the bill sets out that there will be designated geographical areas for the cultivation and manufacturing of hemp. In designating such areas, consideration shall be given to the suitability of the area, the risk of diversion, the risk of contamination, economic decentralisation, and the proximity to educational institutions, public places, and residential areas frequented by children.

This is to ensure that any negative impact will be mitigated. As such, prospective locations have already been identified with significant amounts of acreages. Vulnerable communities with unemployment issues would be targeted.

Industrial Hemp Register of Licenses

Section 24 establishes and creates an industrial hemp register with all particulars of persons issued with licences and the type of license that was issued. This is important for the development and growth as well as proper monitoring of the industrial hemp sub-sector.   

Production of Industrial Hemp Seed Section 25 of the bill provides that the production and multiplication of industrial hemp seeds would be done through the Seeds Act. This will allow for diversification and improvement of agriculture produce in Guyana and in accordance with the current drive of the government.

Enforcement

Section 27 provides that an authorised person will be employed to enforce the provisions of this legislationSuch person will include person with powers from the Narcotic Drugs and Psychotropic Substances (Control) Act, the Plant Protection Act, the Police Act, the Crops and Livestock Registration Act, the Environmental Protection Act, and any other person the Board deems fit. Additionally, Section 28 (1) of the bill provide for special powers of testing, sampling, analysis entry, search, examination, intercept, and seizure will be given to those persons once a search warrant has been issued by a Magistrate.

Section 28 (5) expresses that once an investigation is being conducted, an authorised officer shall furnish a written report to the Board. The Board will then inform and guide the Minister on the results and recommendations of any investigation.  

Section 30 (4) of the Act highlights that the Minister may, by notification in the Gazette, designate any duly qualitied person as an Analyst for the purposes of conducting testing and analysis of any hemp crop, seed, product or any other derivative of industrial hemp.

Section 31 (1) outlines that the Guyana Forensic Science Laboratory, an independent Laboratory, or and other body designate by the Minister shall, for purpose of verification, test        industrial hemp, seed, hemp related products before it is planted, propagated, harvested, processed, manufactured, distributed, imported or exported.

Section 35 of the bill sets out that the Minister may by regulations, regulate and control the advertising and labelling of industrial hemp or hemp related products, including the form and content of advertisements and labels which shall not include the use of Industrial Hemp as a psychotropic substance.  

Offences

Section 37 of the bill sets out that individuals, corporate bodies, their directors, managers, secretary or officers, once proven to have committed an offence with the consent can be liable for breaches under this legislation. Penalties under this legislation will range between $200,000.00 and $500,000.00 and to imprisonment for one (1) year.

Submission of Annual Status Report and Returns

To ensure that government keeps up to date with the development of the hemp industry, all licensees would be required to submit an annual status report of activities. Annual returns are also to be submitted by the 31st March of the following year. Failure to submit will result in a fine of two hundred thousand dollars ($200,000.00). 

Regulations It is expected that as the hemp industry develops, there will be a need to regulate areas related to hemp. As such, to give effect to any provisions under this new legislation and according to Section 38, the Minister may make regulations, inclusive of the minimum and maximum acreage to be used in hemp production, form, and manner to cultivate, manufacture, buy, sell, import, and export industrial hemp, regulating designated areas, prescribe fees, regulate the use of premises, vehicles, and equipment associated with industrial hemp and regulate the sale, storage, supply and transportation and the disposal or destruction of industrial hemp.

Mr. Speaker, through this legislation, the Government of Guyana is once again responding to the needs of large section of prospective farmers who would now be gainfully employed. Additionally, it is expected that this legislation will develop industries that would further boost Guyana’s economy.

Mr. Speaker, presently, we have already started the diversification and the promotion of our agriculture sector. We have commenced the production crops that will help us to reduce our food import bill and save much needed foreign exchange which in turn will be spent for the benefit of the people of the country. For example, we will be moving from 125 acres of corn and soya in 2021 to approximately 4000 acres in 2022. We have already started the production of high value crops for young people where we have seen a number young graduates involved in the production of these high value crops. This is as a result of a visionary government and President. Today, the entire Caribbean Community is looking towards Guyana for leadership and guidance in reducing the food import bill to achieve Vision 25 by 2025. 

Mr. Speaker, under this visionary government we will continue to bring new industries and technology to our beautiful country, Guyana. We have the expertise within the Government and the people of our country to produce new crops. Guyana is well known for being innovative when promoting new crops and new plants. This is a good opportunity for the entire country.

The growing of industrial hemp is a genuine agricultural alternative for farmers, particularly those with small landholdings, as the returns can be quite large. Also, hemp is a genuine way of replacing some of the logging of forests that is currently taking place, as it would enable us to maintain some of the forest bases which is in keeping with our Low Carbon Development Strategy (LCDS).

I must say that I am quite enthusiastic and excited about the opportunities that will be presented to the industry through this Bill. It offers some further diversity to our existing agricultural base and will create further industries and opportunities for wealth.

Mr. Speaker, I wish to state that this bill, which will create the legal framework for the cultivation of hemp, is yet another necessary intervention by the government to provide economic opportunities for Guyanese. With an enviable track record of advancing the lives of our people by creating enabling environments, the PPP/C – led government has been in overdrive since August 2020 to develop our country on all fronts. Agriculture was not placed on the back burner, as a matter of fact, since taking office in 2020, agriculture regained its prominence ensuring conditions for farmers are improved despite global challenges. For many years, agriculture has been the backbone of our country’s economy. It was cast aside by the APNU/AFC government thereby demoralizing our hardworking farmers. The PPP/C government’s investments in agriculture show its commitment to and importance of this sector. When agriculture grows, the economy grows. When the economy grows, the lives of our people are improved. The cultivation of hemp will create employment which creates opportunities for advancement. That is what is important – the welfare of our people. That is what our government is about – people and this bill further demonstrate our commitment to the people.

Mr. Speaker. With this, I commend this Bill for its second reading.

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