Proposed legislation in New Jersey would enable license holders to plant, grow, harvest, possess, process, distribute, buy, or sell industrial hemp within the state.

Hemp vs Marijuana

While hemp and marijuana are both a part of the cannabis family, marijuana contains high levels of the psychoactive ingredient tetrahydrocannabinol (THC), while hemp contains minuscule amounts. Despite the fact that hemp does not produce the “high” that marijuana does, hemp is still classified with marijuana as a Schedule I drug under the federal Controlled Substances Act. Accordingly, cultivation of hemp is illegal in the United States. Nonetheless, hemp is legally grown in more than 30 countries and may be imported into the United States. According to the Hemp Industry Association, approximately $500 million worth of hemp product is imported into the country every year, where it is used in industrial applications such as dietary supplements, skin products, clothing, and accessories. 

Assembly Bill 1330

The New Jersey Assembly Agriculture and Natural Resources Committee recently approved Assembly Bill 1330. The proposed bill 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 legislation, hemp growers must apply to the Secretary of Agriculture for a license. Among other requirements, applicants must submit to fingerprinting and criminal background checks. The application must include the name and address of the applicant, and documentation and a legal description of the land to be used for the growing and production of industrial hemp, AB 1330 also requires any person distributing or selling industrial hemp to:

notify the Secretary of Agriculture and the Attorney General of any sale or distribution of industrial hemp by the person and the name and address of each person to whom the industrial hemp was sold or distributed during each calendar year.

As an agricultural product, the production of industrial hemp would be subject to the protections of the Right to Farm Act. In addition, the land used for its production could be eligible for valuation and taxation pursuant to the Farmland Assessment Act of 1964.

The New Jersey Farmland Assessment Act of 1964 permits farmland and woodland acres that are actively devoted to an agricultural or horticultural use to be assessed at their productivity value, which is often less than the normal property tax assessment value. Entities seeking to rely on the property tax exemption must meet a number of requirements; for instance, gross sales of products from the land must average at least $1,000 per year for the first five5 acres, plus an average of $5 per each additional acre

"Giving New Jersey farmers the right to compete this industry -- which is worth about half a billion dollars in the United States -- starts with this common-sense legislation. New Jersey has lagged behind on providing economic opportunity to our robust farming industry," said sponsor Assemblyman Reed Gusciora. "The growth of hemp will ignite manufacturing opportunity of numerous products within our state, providing well-paying jobs and new opportunities for businesses to expand and develop."

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:

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