The New Jersey Legislature is currently debating 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.
Federal Hemp Regulations
While marijuana remains a Schedule I substance under the Controlled Substances Act (CSA), hemp is also now legal under federal law. Pursuant to the 2018 Farm Bill, cannabis plants and derivatives that contain no more than 0.3% THC on a dry-weight basis are no longer controlled substances under the CSA. The 2018 Farm Bill also does place any limitations on the sale, transport, or possession of hemp-derived products, provided that such products are produced in accordance with the law.
In the wake of the Farm Bill, intoxicating hemp-derived cannabinoids (IHDCs), a new type of psychoactive cannabis product, have flooded the market. IHDCs, including hexahydrocannabinol (HHC) and delta-8 THC, are psychoactive compounds. However, because they are extracted from hemp rather than cannabis, they legal under federal law.
New Jersey Hemp Regulations
Under the 2018 Farm Bill, states that want to have primary regulatory authority over the production of hemp within their borders must submit a plan to the USDA that details how they plan to regulate hemp production. The USDA must approve the plan prior to implementation. In August 2019, New Jersey enacted the Hemp Farming Act (Act), which complies with the 2018 Farm Bill. The Act, along with the implementing rules established by the New Jersey Department of Agriculture, establish the New Jersey Hemp Program (Program).
New Jersey’s Proposed “Intoxicating” Hemp Legislation
New Jersey’s latest cannabis reform, Senate Bill 3235, makes several significant changes to New Jersey’s regulatory scheme for hemp products, including the roles of several state agencies. Under the bill, the Cannabis Regulatory Commission (CRC) would be responsible for regulating the sale of all legally produced intoxicating cannabis items, whether hemp or cannabis, while the Department of Agriculture would continue to regulate the cultivation and processing of hemp as an agricultural commodity. The Office of the Attorney General would maintain the jurisdiction over illegally produced marijuana and THC, including any businesses or individuals who fail to sell cannabis items through a licensed retailer.
Under the proposed legislation, a person would be prohibited from selling or distributing an intoxicating hemp product unless the person is licensed by the commission and the product complies with the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA). The CRC is tasked with enacting regulations related to the sale and purchase of such intoxicating products. Under such regulations, entities would be required to be licensed as a Class 5 Cannabis Retailer in order to operate a business in which any intoxicating products are sold. Retailers would also be limited to selling products to persons 21 years of age or older.
The bill amends the New Jersey Hemp Farming Act to set limits on the amount of THC that can be sold in hemp or (non-intoxicating) hemp products. This limit is set at a total THC concentration of not more than 0.3 percent on a dry weight basis and additionally, for a hemp product, not more than 0.5 milligrams of total THC per serving, and 2.5 milligrams of total THC per package.
Debate Over Changes to New Jersey Hemp Oversight
While there is a general consensus on the need for further regulation of hemp products, the devil is in the details. During recent testimony before the Senate Judiciary Committee, critics of the bill argue that the limits on how much THC can be sold in hemp products is too law, subjecting too many products to more onerous CRC oversight. Manufacturers of hemp products, such as low-dose cannabis-infused beverages, have also questioned whether cannabis retailers are equipped to sell their products, noting that it may make more sense for them to be sold in liquor stores under the oversight of the Division of Alcoholic Beverage Control.
The Senate Judiciary Committee ultimately advanced Senate Bill 3235 by a 6–2 vote. The legislation is now pending before the Senate Budget and Appropriations Committee. We will continue to track its status and provide updates.
Navigating the Hemp Industry Requires an Experienced Cannabis Attorney
The hemp industry currently involves numerous legal grey areas, which makes it challenging to for businesses to pursue new opportunities. Scarinci Hollenbeck’s Cannabis Law Group has been at the forefront of the industry since its inception and remains dedicated to helping our clients navigate the ever-evolving regulatory landscape, with an eye towards growing their businesses while also minimizing the legal risks.
Crypto Investor Protection: SEC and CFTC Enforcement Trends
Crypto investor protection continues to evolve, with the SEC and CFTC investing resources and coordinating more closely to uphold regulatory standards. Whether you’re a retail investor, an institutional trader, or part of a crypto startup, understanding enforcement trends is essential for navigating this dynamic and high-stakes regulatory environment. Crypto Is No Longer the Wild West […]
New Jersey’s Next Manufacturing Tax Credit: Stability Secured, Timing Matters
A Settled Regulatory Environment Enables Confident Capital Planning New Jersey’s new manufacturing incentive program, Next New Jersey Manufacturing Program, enters 2026 with something uncommon in economic development these days: policy stability. The statute is enacted, New Jersey Economic Development Authority’s (“NJEDA”) rules are adopted, and the application portal is open. With the election outcome settled, […]
When done successfully, industry roll-up acquisitions can dramatically grow and strengthen your business. In this post, we break down what an industry roll-up is, why companies pursue it, and what makes it an effective (and sometimes risky) business strategy. What Is an Industry Roll-Up Acquisition? In an industry roll-up acquisition of companies, a buyer acquires multiple companies […]
Genesis Mission: How the U.S. Government’s New AI Platform Will Reshape Corporate Innovation, Risk, and Competition
The federal government has launched one of the most ambitious scientific initiatives in decades, and it will redefine how companies develop technology, manage risk, and compete. The Genesis Mission, created by Executive Order and driven by the Department of Energy (“DOE”), is intended to accelerate scientific discovery through a national AI platform that links supercomputers, […]
Stablecoins and the GENIUS Act: How New Global Rules Are Reshaping Compliance
Stablecoins Leave the Grey Zone Stablecoins were supposed to be the “boring” part of crypto: digital dollars that just work. Yet for years they have lived in a regulatory no-man’s-land, classified one day as securities, the next as commodities, and sometimes as something regulators had not even named yet. That uncertainty is finally starting to […]
Don’t Overlook the Importance of Business License Management
If you operate a business without the proper license, you risk fines, insurance issues, reputational harm, and even business closure. Even innocent mistakes, like forgetting to renew a license, can have significant consequences, such as losing your lawsuit for payment of services that are unlicensed, which makes it imperative to have business license management procedures […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
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!
