New Jersey Passes Law to Regulate ‘Intoxicating Hemp Products’
By Sarah Grande, Andrea Golan, Shawn Hauser
Sep 23, 2024
As of September 12, 2024, New Jersey is the latest state to regulate “intoxicating hemp products” with the passage of Senate Bill 3235. The new law prohibits the sale of THC-containing hemp products to minors and only allows such products to be sold in state-licensed cannabis businesses. A provision in the law will allow hemp-derived beverages to be sold in liquor stores once the state adopts those regulations. While the new regulations will be effective within 30 days of the bill’s passage, the prohibition on the sale of products with any detectable amount of THC to individuals under 21 years of age is effective immediately. Learn more about the new law, including what is defined as an “intoxicating hemp product,” which businesses can sell these products and the timeline for implementing the law and finalizing rules.
What is the Definition of an “Intoxicating Hemp Product” in New Jersey?
In New Jersey, intoxicating hemp products are any products made from hemp grown legally under federal and state law that have a concentration of total THC greater than 0.5 milligrams per serving or 2.5 milligrams per package.
New Jersey SB 3235 states that intoxicating hemp is “any product cultivated, derived, or manufactured in this State,” leading to different interpretations of what “in this state” means (i.e., does this mean the new law only applies to hemp grown in New Jersey). In the bill, the governor invites the Legislature to work with his administration on clarifying legislation.
Who Can Sell “Intoxicating Hemp Products” in New Jersey?
Within 30 days from September 12, 2024, it will be temporarily unlawful for "intoxicating hemp products" to be sold or distributed in New Jersey by anyone other than cannabis businesses licensed and overseen by the New Jersey Cannabis Regulatory Commission (CRC). The businesses that are currently selling “intoxicating hemp products” won’t be licensed until the CRC adopts related regulations, and the timeline for that is uncertain.
Once the CRC creates the regulatory framework for intoxicating hemp beverages, these products will be permitted to be sold by holders of plenary retail distribution licenses for alcoholic beverages or plenary wholesale licenses, in addition to licensed cannabis businesses. Any intoxicating hemp beverage sold or offered for sale shall not be sold to any person under the age of 21 and shall be stored or displayed in a place that is not accessible to customers without the assistance of an employee of the establishment. The new law applies to both online and brick-and-mortar sales.
What is the Timeline for the New Law and Implementing Regulations?
New Jersey has up to 180 days (until March 11, 2025) to create emergency regulations to effectuate the ban on intoxicating hemp products. The CRC is required to create regulations (in consultation with the Division of Alcoholic Beverage Control) no later than 12 months from September 12, 2024. These regulations must include provisions related to packaging, labeling, product testing and safety standards, tetrahydrocannabinol amounts permitted in intoxicating hemp beverages, the number of intoxicating hemp beverages that may be sold to a customer at any given time, and a fee to be charged by the CRC to cover the reasonable costs of administering the provisions.
Relevant definitions include:
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Hemp Product is defined as a finished product with a total tetrahydrocannabinol concentration of not more than 0.3 percent, and not more than 0.5 milligrams of total THC per serving and 2.5 milligrams of total THC per package, that is derived from or made by processing a hemp plant or plant part and prepared in a form available for commercial sale. The term includes cosmetics, personal care products, food intended for human or animal consumption, cloth, cordage, fiber, fuel, paint, paper, particleboard, plastics, and any product containing one or more hemp-derived cannabinoids such as cannabidiol. Hemp products shall not be considered controlled substances due to the presence of hemp or hemp-derived cannabinoids.
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“Hemp product” shall not mean a cannabinoid product that is not derived from naturally occurring biologically active chemical constituents and shall not mean an intoxicating hemp product as defined in section 3 of P.L.2021, c.16 (C.24:6I-33).
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Total THC is defined as the total concentration of all tetrahydrocannabinols in hemp or a hemp product, including delta-8, delta-9, delta-10, tetrahydrocannabinolic acid and any other chemically similar compound, substance, derivative, or isomer of tetrahydrocannabinol, regardless of how derived or manufactured, and any other cannabinoid, other than cannabidiol, identified by the Cannabis Regulatory Commission, in consultation with the Department of Agriculture and the Attorney General, as causing intoxication.
Fines and Civil Penalties for Non-Compliance
Penalties for selling, offering for sale, or distributing any intoxicating hemp product or a hemp product or cannabis item that is not derived from naturally occurring biologically active chemical constituents, include being liable to a civil penalty of not less than $100 for the first violation, not less than $1,000 for the second violation, and not less than $10,000 for the third and each subsequent violation.
Stay Informed!
Keeping up with the latest state and federal regulations on products containing hemp-derived cannabinoids can be challenging as the hemp industry continues to evolve. The knowledgeable hemp team at Vicente LLP is always monitoring developments in hemp laws across the United States. If you have any questions about hemp-derived THC state regulations or hemp law in general, don’t hesitate to contact us today!
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