Controversy Erupts Over Bill to Regulate Hemp Industry

New Bill on Governor Murphy’s Desk Could Transform New Jersey’s Hemp Market

Big changes may be on the horizon for New Jersey’s hemp market. A bill currently awaiting Governor Phil Murphy’s signature could bring intoxicating hemp products like delta-8 and CBD under the regulation of the state’s cannabis agency. This legislation aims to address concerns about children’s easy access to hemp products but has sparked debate among cannabis business supporters.

Legislation Overview of Hemp Industry

The bill intends to regulate intoxicating hemp products, including delta-8, delta-9, CBD, and other cannabinoids, which contain less THC than traditional cannabis products. This move follows complaints about the unregulated sale of hemp products, often packaged in ways that attract children, in places like bodegas and gas stations.

Cannabis Advocate Reactions

Leo Bridgewater, a prominent cannabis advocate, called the bill a “s*** show,” reflecting concerns within the industry. The legislation was part of a slew of bills advanced by lawmakers as they finalized the $56.6 billion state budget.

Current Hemp Market Challenges

Since Congress legalized hemp production in 2018, regulation, testing, and enforcement have been minimal. Products boasting high THC content are readily available, raising concerns about accessibility and safety. The new measure would require intoxicating hemp products to fall under the Cannabis Regulatory Commission’s jurisdiction, mandating licenses for sellers and imposing new packaging, testing, and safety standards.

Industry Concerns and Legal Implications

Critics argue that the bill could effectively ban hemp products by delaying their sale until new regulations are established. Attorney Beau Huch, representing hemp beverage companies, voiced support for regulation but highlighted concerns about the timeline and implementation by the Cannabis Regulatory Commission. He noted that the commission has historically faced delays in approving dispensaries and managing minor licensing issues.

“The bill doesn’t allow for hemp products to be sold again until cannabis officials implement the new rules,” Huch explained. “Definitely in favor of regulation, it’s just, who’s the regulator? What’s the timeline?”

Commerce Clause and Production Issues

The bill also stipulates that hemp products must be grown, cultivated, and produced within New Jersey, which Huch suggests could violate the commerce clause of the U.S. Constitution. He added that the high cost of land in New Jersey might reduce hemp production.

Liquor Store Sales and Industry Impact

The legislation would permit liquor license holders to sell hemp industry products if they obtain a license from the Cannabis Regulatory Commission. This provision has drawn criticism, with opponents arguing that it provides a backdoor for the liquor industry to enter the cannabis market, which has been challenging for many due to stringent state and municipal regulations.

Kevin Hagan, representing the New Jersey Liquor Store Alliance, defended the move, stating, “Liquor stores already keep alcohol out of the hands of minors, and they can do that with hemp, too.”

Regulatory Framework and Implementation

The bill requires the Cannabis Regulatory Commission and the Division of Alcohol Beverage Control to establish rules within 12 months, covering packaging, labeling, product testing, safety standards, THC levels, and sales limits. Bridgewater expressed concerns about the lack of social equity requirements for the hemp industry, unlike the cannabis sector.

Unresolved Issues and Future Considerations

There are numerous unanswered questions about the bill’s implications for existing retailers in towns that have banned cannabis dispensaries and whether a hemp tax will be imposed. Cannabis attorney Bill Caruso acknowledged the bill’s imperfections but emphasized its role in curbing the sale of unregulated, untaxed, and untested products to minors.

“This bill isn’t perfect, but it does the job of stopping unregulated, untaxed, untested products being marketed and sold to minors right now,” Caruso said. “I think there’s a long regulatory process to work out some of the details, and it’s always possible the Legislature may need to come back and either add, clarify, or subtract to fix this.”

As New Jersey awaits Governor Murphy’s decision on this transformative bill, the debate over its potential impact on the hemp and cannabis industries continues. While the bill aims to address significant concerns about unregulated hemp products, its implementation and regulatory framework will be crucial in shaping the future of New Jersey’s hemp market.