New Jersey Regulates Intoxicating Hemp Products

By Nikolas Komyati and Vanessa Pinto

Businesses selling intoxicating hemp products in New Jersey without a cannabis license could soon face significant fines.

Governor Phil Murphy signed Senate Bill No. 3235 on Sept. 12, 2024, regulating intoxicating hemp products under the Cannabis Regulatory Commission (CRC).

The new law effectively closes a loophole that has allowed for the widespread sale of intoxicating hemp products in accessible places like convenience stores and gas stations. Now, only cannabis-licensed retailers may sell the?products, and they are prohibited from selling to anyone under 21.

After October 12, 2024, any business that continues selling intoxicating hemp products without a cannabis license will face the following penalties:

1. $100 for the first offense.
2. Not less than $1000 for the second offense.
3. Not less than $10,000 for the third offense.

The new law comes nearly six years after hemp products with less than 0.3% of delta-9 tetrahydrocannabinol (THC) were legalized under the “New Jersey Hemp Farming Act.” Since then, retailers began selling hemp products containing other forms of THC including delta-8 and delta-10 which contain intoxicating effects but are legal.

Under the law, “intoxicating hemp product” is defined as any product cultivated, derived, or manufactured from hemp regulated pursuant to the “Agricultural Improvement Act of 2018,” Pub.L.115-334 or the “New Jersey Hemp Farming Act,” P.L.2019, c.238 (N.J.S.A.4:28-6 28 et al.) that is sold in this State that has a concentration of total THC greater than 0.5 milligrams per serving or 2.5 milligrams per package. The Department of Agriculture will continue to regulate hemp products below this threshold.

“Total THC” means the total concentration of all tetrahydrocannabinols in a cannabis item, 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 CRC, in consultation with the Department of Agriculture and the Attorney General, as causing intoxication.

The new law also permits liquor stores regulated by the Division for Alcohol Beverage Control (ABC) to sell intoxicating hemp beverages.

In a statement, Governor Murphy acknowledged that alcohol licensees selling or distributing intoxicating hemp products are not explicitly subject to the same strict regulations that apply to cannabis businesses. He also raised concerns with the inclusion of the term “in this State” at the end of the definition for intoxicating hemp product. He cautioned that this term creates either a loophole for products made outside of New Jersey, defeating the purpose of the law, or implicates the Dormant Commerce Clause.

The CRC and the ABC have 12 months to adopt rules necessary to implement the provisions of this law including, for example, packaging, labeling, product testing and safety standards.

With the new law, New Jersey has joined California, Missouri, and Louisiana as the only states regulating intoxicating hemp products.

For more information, please contact Nikolas S. Komyati at 973.326.7104 or [email protected], or another member of Fox Rothschild’s Cannabis Law Practice Group.