Daniel Shortt
by

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp-CBD”). Today we head to the home of Bruce Springsteen, Tony Soprano, Thomas Edison and marijuana-friendly presidential candidate Cory Booker: New Jersey.

New Jersey forever cemented itself in hemp history by becoming one of the first states to have a hemp plan approved by the USDA.

It shouldn’t surprise anyone who has been paying attention to New Jersey’s hemp program that the state was one of the first three approved. New Jersey has been reactive with the changing federal hemp programs. In November 2018, New Jersey’s governor signed “New Jersey Industrial Hemp Pilot Program” signed into law. The statute authorized the New Jersey Department of Agriculture (“NJDA”)  to promulgate rules regulating the cultivation of industrial hemp in New Jersey for research purposes under the 2014 Farm Bill. Shortly after, President Trump signed the 2018 Farm Bill. New Jersey didn’t miss a step, enacting  the “New Jersey Hemp Farming Act” in August 2019 to repeal and replace the New Jersey Industrial Hemp Pilot Program.

The New Jersey hemp plan, as approved by the USDA, (the “Plan”) follows the USDA interim hemp rules closely (more on the federal hemp rules here). The majority of the rules in the Plan match the  standards set by the USDA, including the NJDA’s maintenance of information, providing requisite information to USDA, a procedure for testing for total THC (delta-9 THC and THCa) disposal procedures, violation provisions, and annual inspections.

In some aspects, the Plan goes further than the USDA interim hemp rules. The following examples illustrate how the Plan is more restrictive than the interim hemp rules:

  • N.J.A.C. 2:25-2.2 requires a site modification fee any time a growing site is altered or added to an existing license so NJDA can submit accurate records to keep the USDA apprised of the status of all hemp producers and awards of all land being used to produce hemp.
  • N.J.A.C. 2:25-2.2 prohibits public access to hemp, such as hemp mazes or any other recreational activity.
  • N.J.A.C. 2:25-3.2 allows the Department to prohibit any hemp, seeds, plantlets or propagules for any reason. This allows NJDA to ban a particular strain or source for hemp if it is unreliable with regards to THC content.

In addition, the Plan issues handler and processor licenses. The interim rules don’t require that states issue licenses for these activities.  In addition, the Plan requires that “[a]ny person transporting hemp or hemp materials shall maintain, and provide upon request by law enforcement, proof of authorization to engage in the commercial sale of hemp[,] as well as a travel manifest that lists the origin, destination, product description, and date of transport. Third-party carriers are not required to be authorized hemp producers in order to transport hemp.” Again, the Plan is going beyond the interim rules with these transporation requirements.

New Jersey also requires that processors include labels that show the amount of oils or extract, the percentage of THC, and the percentage of CBD extract contained in a hemp product, including Hemp CBD. Labels must also distinguish between hemp extract, CBD, or hemp oil. The New Jersey Hemp Farming Act defines those terms as follows:

“CBD” or “cannabidiol” is a phytocannabinoid found in cannabis which does not produce psychoactive effects in users.

“Hemp Extract” means oil chemically extracted from hemp’s aerial plant part, such as seeds, stalks or flowers, using chemical processes, containing a natural blend of phytocannabinoids, and
includes cannabidiol, or “CBD” oil.

“Hemp Oil” means oil obtained by physically pressing hemp seeds with a 3:1 ratio of omega-6 to omega-3 essential fatty acids and does not include cannabidiol or CBD.

The Act also includes some interesting language on Hemp CBD products:

Notwithstanding any other law, or rule or regulation adopted pursuant thereto to the contrary, derivatives of hemp, including hemp-derived cannabidiol, may be added to cosmetics, personal care products, and products intended for human or animal consumption to the maximum extent permitted by federal law.

Retail sales of hemp products processed outside the State may be conducted in the State when the products and the hemp used in the products were processed and cultivated legally in another state or jurisdiction that has the same or substantially similar requirements for processing hemp products or cultivating hemp as provided [this Act].

Hemp products may be legally transported across State lines and exported to foreign countries in a manner that is consistent with federal law and the laws of respective foreign countries.

New Jersey seems to be saying that Hemp CBD products are allowed in the state, so long as that is legal under local, state, and federal law. That may mean that certain Hemp CBD products are not permitted under New Jersey law, considering that the FDA has repeatedly stated that Hemp CBD cannot be marketed as a drug or added to foods or dietary supplements.

This was one of our longer posts in the series, but it seems fitting considering that New Jersey is among the first states with an approved hemp plan. Keep an eye on our blog for further developments in the Garden State.

For previous coverage in this series, check out the links below:

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