Industrial Hemp Farming Poised for Growth Under New NJ Hemp Law

Gov. Murphy Signs New Jersey Industrial Hemp Bill Into Law

While cannabis advocates may still be waiting for the state to legalize recreational marijuana, Gov. Phil Murphy recently signed an important cannabis bill clearing the way for growers to cultivate its less controversial “cousin.” Under Assembly Bill 1330, which was signed into law by Governor Murphy last week, license holders will be able to plant, grow, harvest, possess, process, distribute, buy, or sell industrial hemp within the state. The new law does not mean that growers can immediately start producing industrial hemp. Rather, it directs the New Jersey Department of Agriculture to establish an industrial hemp agricultural pilot program that would research the cultivation of hemp crops to the maximum extent permitted by federal law. Nonetheless, New Jersey’s latest cannabis law does pave the way for the state capitalize on the growing demand for industrial hemp. “It’s time for New Jersey to put its finger on the pulse of the hemp industry,” Sen. Declan O’Scanlon, the bill’s primary sponsor, said in a prepared statement. “This pilot program is a win for local farmers who need a diversity of opportunities to compete in the global agriculture market. Hemp is growing in value as a cash crop, and I am sure the New Jersey economy and our farmers will benefit from this pilot program.

Industrial Hemp Under Federal Law

Under the Controlled Substances Act (CSA), all forms of cannabis, including industrial hemp, are considered Schedule I controlled substances. However, marijuana and hemp are quite different, each having distinct chemical makeups and applications. Marijuana plants contain high levels of tetrahydrocannabinol (THC); meanwhile, hemp contains miniscule amounts of the psychoactive chemical. As a result, marijuana is consumed for recreational and medical purposes, while hemp is used in industrial applications, such as dietary supplements, skin products, clothing, and accessories. While marijuana remains illegal under federal law, the 2014 farm bill authorizes limited hemp production under certain circumstances. Most notably, hemp must be grown and cultivated “in accordance with an agricultural pilot program … established by a State department of agriculture or State agency … in a State where the production of industrial hemp is otherwise legal under State law.” New Jersey will now join 38 other states that have already established industrial hemp programs.

Assembly Bill 1330

The new law directs the Department of Agriculture (Department) to establish an agricultural pilot program to study and promote the cultivation of industrial hemp to the maximum extent permitted by federal law. It further provides that the Department may partner with any institution of higher education in the State to administer the agricultural pilot program.  The new law defines industrial hemp as an agricultural product that is any variety of Cannabis sativa L with a delta-9-tetrahydrocannabinol concentration of 0.3% or less on a dry weight basis. Under the bill, the Department is required to adopt rules and regulations to administer the pilot program. The regulations must address, at minimum, the following areas:

• Conducting the agricultural pilot program; 
• Licensing or contracting with persons who wish to participate in the agricultural pilot program; 
• Prescribing requirements for institutions of higher education to participate in, or to be affiliated with, the agricultural pilot program;
• Prescribing sampling and testing procedures to ensure that industrial hemp cultivated pursuant to this act complies with federal law;
• Establishing a schedule of fees to be paid by licensees, contracted growers, or participating institutions of higher education to the department to cover the costs of administering and implementing the agricultural pilot program;
• Certifying seed cultivars that comply with federal law or licensing distributors of hemp seed capable of germination, if the department determines certification or licensure is necessary; and  
• Regulating the purchase, sale, and marketing of industrial hemp.

As proponents of the legislation highlighted, the ability to grow hemp on an industrial scale would allow farmers to diversify their products by adding a lucrative cash crop. In addition, researching cultivation methods of industrial hemp would greatly aid farmers seeking to grow hemp for the first time.

2018 Farm Bill

New Jersey’s pilot program may only be the beginning. Industrial hemp could soon be legal across the United States. While Congress has yet to reach a consensus on the 2018 farm bill, a provision in the Senate version would amend the CSA to exclude “industrial hemp” from the statutory definition of marijuana. Industrial hemp would be defined based on its THC content and set at a threshold of 0.3% Following the midterm elections, Senate Majority Leader Mitch McConnell stated that the Farm Bill was one of his top legislative priorities for the remainder of 2018. He also confirmed the importance of the hemp legalization provision. According to McConnell, “If there’s a farm bill it will be in there, I guarantee you that.”

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• New Jersey ATCs Can Now Post Medical Marijuana Prices
• Ten Things to Know About Industrial Hemp in New Jersey
• 12 Key Takeaways From Latest Cannabis Legalization Bill