
Daniel T. McKillop
Partner
201-896-7115 dmckillop@sh-law.comFirm Insights
Author: Daniel T. McKillop
Date: October 25, 2024

Partner
201-896-7115 dmckillop@sh-law.com
Newly proposed federal legislation seeks to increase oversight over the growing (and largely unregulated) market for hemp-derived cannabis products. Like New Jersey’s recently enacted hemp law, the Cannabinoid Safety and Regulation Act (CSRA) would establish health and safety standards, as well as restrict access by minors.
“Just like the tobacco industry marketing cigarettes to young people, nobody should be slapping fun cartoons and glitzy candy wrapper packaging on cannabis products meant for adults,” co-sponsor Senator Ron Wyden (D-Ore.) said in a statement. “A federal floor for regulation of hemp products is non-negotiable to ensure that consumers aren’t put at risk by untested products of unknown origin. My legislation will ensure that adult consumers know what they’re getting, and that hemp products are never sold or marketed to children.”
The 2018 Farm Bill cleared the way for a new and growing segment of the cannabis industry. Under the law, cannabis plants and derivatives that contain no more than 0.3% THC on a dry-weight basis are no longer controlled substances under the Controlled Substances Act (CSA). The 2018 Farm Bill also removed restrictions on the sale, transport, or possession of hemp-derived products, provided that such products are produced in accordance with the law.
Because they are derived from hemp rather than cannabis, intoxicating hemp-derived cannabinoids (IHDCs), a new type of psychoactive cannabis product, are technically legal under federal law. IHDCs, which include hexahydrocannabinol (HHC) and delta-8 THC, are currently infused into edibles, beverages, and other consumable hemp products and sold by convenience stores, liquor stores, and online retailers.
Several states, including New Jersey, have taken steps to regulate the influx of intoxicating hemp products. As discussed in greater detail here, New Jersey recently enacted a new law that brings “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, under the oversight of the New Jersey Cannabis Regulatory Commission (CRC).
California also recently enacted emergency regulations to curb the sale of intoxicating hemp products. The new rules ban all hemp products unless they contain no “detectable levels of THC.” Hemp products that don’t contain THC are limited to five servings per package and may only be sold to adults 21 and older.
Members of the hemp industry have filed suit, challenging the need for sweeping emergency regulations when the state has regulated hemp since 2021. “Whatever the merits of the general issues addressed by these emergency regulations, the Department has acted entirely outside the boundaries of California’s applicable law to adopt and issue them,” the suit argues. “Plaintiffs and their members will suffer losses in the millions of dollars over existing products, pending manufacturing, and future sales of hemp and hemp products that legally contained THC, as per existing California and federal law, but have now been banned overnight by the emergency regulations.”
The Cannabinoid Safety and Regulation Act would regulate the manufacturing, packaging, labeling, testing, and sale of hemp-derived cannabinoids and products that contain them. The legislation defines a “cannabinoid product” as a natural (non-synthetic) product (including an inhalable, food, beverage or dietary supplement) made or derived from hemp, that contains some form, type or amount of cannabinoid(s) and/or tetrahydrocannabinol (THC), that is intended for ingestion by, or use in or on the body of, human or animal.
The CSRA would expressly ban any product made with or from synthetically or artificially derived cannabinoids, including THC. Below are several other key provisions of the proposed federal hemp legislation:
So far, the hemp legislation has been endorsed by the U.S. Hemp Roundtable, the National Cannabis Industry Association, National Industrial Hemp Council, and hemp industry associations from California, Colorado, Arizona, Michigan, Illinois, Kentucky, Missouri, South Dakota, Virginia, and Texas.
The CSRA is in its early stages, and its likelihood of passage is uncertain. Nevertheless, oversight over intoxicating hemp products continues to evolve, with developments at both the state and federal level.
Given the significant impact on the hemp, cannabis, and liquor industries, these legal developments warrant close monitoring. For guidance on how potential cannabis regulatory changes may impact your business, we encourage you to contact a member of Scarinci Hollenbeck’s Cannabis Law Group.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: George McGowan

Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Author: George McGowan

Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
Author: George McGowan

Key provisions in your contracts, including those relating to indemnification, insurance, and defense, are essential to contract risk management. While sometimes considered “boilerplate,” these provisions play a pivotal role when determining which party is responsible for certain costs and liabilities. They must always be negotiated and drafted carefully. Indemnification Clauses Businesses should never overlook the […]
Author: George McGowan

Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Author: Marc J. Comer

For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
Author: Marc J. Comer
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!