Cannabis Law 2024: Key Changes and Impacts Across New Jersey

Cannabis Law 2024: Key Changes and Impacts Across New Jersey

New Jersey’s cannabis industry continues to face a rapidly evolving legal landscape. Key cannabis law 2024 updates include the Biden Administration’s plan to reschedule cannabis and efforts to regulate the expanding market for intoxicating hemp products. Because cannabis businesses still face ongoing challenges related to licensing, accessing capital, and tax deductions, partnering with an experienced cannabis business attorney is essential to grow your business and minimize legal risks.

Cannabis Law 2024  – New Jersey Updates

New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) allows for the sale, consumption, and possession of cannabis and cannabis products for individuals aged 21 and older. Although New Jersey legalized adult-use recreational cannabis more than three years ago, the industry was slow to get off the ground. In many ways, 2024 appears to be the year that the industry has finally hit its stride. New Jersey now has more than 100 cannabis dispensaries, and recreational cannabis market sales for the first quarter of 2024 totaled more than $201 million — a 38 percent increase compared to the same period last year. 

Further expansion is also on the horizon. The New Jersey Cannabis Regulatory Commission (NJ-CRC) is currently accepting applications for personal-use (recreational) businesses in all six classes (Class 1 Cultivator; Class 2 Manufacturer; Class 3 Wholesaler; Class 4 Distributor; Class 5 Retailer; and Class 6 Delivery Service) and testing laboratories. Applications are being accepted on a rolling basis, and there is no set cap on how many licenses will be granted.

Despite these opportunities, navigating New Jersey’s licensing regulations continues to pose challenges. New Jersey cannabis businesses must also contend with municipal ordinances, which can dictate when and where cannabis businesses may operate (among other requirements).

New Jersey’s regulatory framework is also still evolving. In January, the CRC approved rules for cannabis consumption areas. The New Jersey Legislature is also considering cannabis legislation that would increase oversight over “intoxicating” hemp products like gummies, beverages, and lotions. Under Senate Bill 3235, so-called “intoxicating hemp products,” defined as those with a concentration of total THC greater than 0.5 milligrams per serving or 2.5 milligrams per package, would be regulated by the Cannabis Regulatory Commission (CRC), while lower total concentration hemp products would remain under the regulation of the Department of Agriculture. You can find a more detailed discussion of the legislation here.

New Jersey is also exploring the legalization of psychedelics like psilocybin. A new bill currently under consideration by the New Jersey Legislature would decriminalize psilocybin for therapeutic use. Senate Bill 2283 would task the New Jersey Department of Health (DOH) with licensing and regulating the manufacture, testing, transport, delivery, sale, and purchase of psilocybin. It would also establish five different licenses: manufacturer, service center operator, testing laboratory, facilitator, and psilocybin worker.

Cannabis Law 2024  – Federal Updates

Federal regulation of cannabis is also evolving, albeit extremely slowly. On May 16, 2024, the Department of Justice (DOJ) proposed to reclassify cannabis from a Schedule I controlled substance to a Schedule III controlled substance. While rescheduling cannabis does not legalize it under federal law or authorize the sale of cannabis across state lines, it eliminates the significant tax burden imposed by IRS Code Section 280E, which has stymied the growth of the industry.

The required 60-day public comment period regarding DOJ’s proposal ended on July 22 and  generated 42,925 comments, the vast of majority of which were in favor of rescheduling., DOJ will now review and respond to these comments, and a potential administrative hearing will likely be conducted by the U.S. Drug Enforcement Agency (DEA) as well. The rescheduling process will therefore be lengthy, and during that process and until a final rule is published cannabis remains a Schedule I controlled substance.

The 2024 Farm Bill reauthorization could also shake up the legal landscape, particularly with respect to intoxicating hemp products. The House of Representative’s draft 2024 Farm Bill makes a distinction between “industrial hemp” and “hemp grown for cannabinoid extraction.” In doing so, the bill seeks to address what some see as a regulatory loophole for the sale of products containing potentially intoxicating cannabinoids other than delta-9 THC, such as delta-8 THC and tetrahydrocannabinolic acid (THCA).

Some members of Congress believe the House discussion draft does not go far enough to address intoxicating hemp products. On May 22, 2024, U.S. Rep. Mary Miller filed a proposed amendment to the House 2024 Farm Bill that would effectively close the loophole by excluding products with detectable amounts of THC as well as any cannabinoid “synthesized or manufactured outside of the plant.” Under the proposed amendment, most products containing delta-8 THC and other hemp-derived cannabinoids would again be illegal under federal law.

The House Appropriations Committee notably included a similar provision in a 2025 spending bill covering Agriculture, Rural Development, Food, and Drug Administration, which was approved on  July 10, 2024. Like the 2025 Farm Bill Amendment, cannabinoids that are “synthesized or manufactured outside of the plant” would be excluded from the definition of legal hemp. In a report accompanying the spending bill, the committee also called on the U.S. Food and Drug Administration to “assert a stronger commitment to identifying lawful federal regulatory parameters” for hemp products, which would create a pathway for cannabinoid products.  

Congress is also considering additional legislation that could impact the cannabis industry, although most bills face an uphill battle. Notable examples include the reintroduction of the Cannabis Administration and Opportunity Act (CAOA), which would fully legalize cannabis under federal law, and the Secure and Fair Enforcement Regulation (SAFER) Banking Act, which aims to provide the cannabis industry with access to banking and financial services.

Partner With an Experienced Cannabis Business Attorney

Cannabis law in 2024 will continue to be a rollercoaster ride for cannabis businesses. While the industry looks poised for growth, significant compliance hurdles remain. To position your cannabis business for success in these uncertain times, we strongly encourage partnering with an experienced cannabis business attorney.

Scarinci Hollenbeck’s Cannabis Law Group provides comprehensive legal guidance to businesses in the cannabis, hemp, and cannabidiol industries. As one of the first New Jersey law firms to form a dedicated cannabis law practice area, we are committed to the success of the industry and take pride in helping our clients successfully navigate its complexities.