Following the enactment of New Jersey's new hemp law (L. 2024, c. 73; Senate Bill No. 3235) (the “Addictive Hemp Bill”), it amends the definition of “legal” hemp and provides for the production and sale of hemp. Affected cannabis producers, distributors, and stakeholders are subject to federal pre-emption rights and dormant commercial transactions that limit the use of cannabis products to licensed cannabis businesses and licensed liquor stores in states that are deemed to be “intoxicating.” filed a lawsuit in federal court challenging the new law based on its ambiguity.
Foreseeing the confusion and legal issues that would follow, Governor Murphy highlighted several problems with the hemp bill in his signing statement.
Lack of Resources: The bill requires the Cannabis Control Commission to regulate the sale of intoxicating hemp beverages by alcohol license holders without providing the necessary resources for enforcement. Uneven regulatory standards: Alcohol licensees that sell intoxicating hemp beverages are not held to the same regulatory standards as cannabis businesses, creating an uneven playing field and potential public safety concerns. Masu. Legal ambiguity: The inclusion of the phrase “in this state” creates confusion about whether out-of-state products are exempt from the law's limitations or whether only in-state products are regulated, creating the potential for dormant commerce. may lead to legal violations. clause.
To understand the implications of the Addictive Cannabis Bill, you need to start with the 2018 Farm Bill and the legal landscape of addictive cannabis derivatives.
federal hemp law
The Agriculture Improvement Act of 2018, commonly known as the 2018 Farm Bill, was a piece of important federal legislation that legalized hemp nationwide. Removes hemp (defined as the cannabis plant containing “all derivatives, extracts, cannabinoids, (and) isomers” with a delta-9 (THC) concentration of less than 0.3% on a dry weight basis) from the list of controlled substances. did. And it was distinguished from marijuana, which remains illegal under federal law. This bill opens the door to the production, sale, and transportation of hemp and its derivatives (CBD) across state lines, as long as the product meets the federal definition of hemp. Notably, the Farm Bill prohibited states from interfering with the “transportation or shipment of hemp or hemp products” (see note to USC 7 § 1639o), but otherwise prohibited states from interfering with the “transportation or shipment of hemp or hemp products” (see note at USC 7 § 1639o) It explicitly authorized the enactment of laws to more tightly regulate production (see USC 7 §). 1639p(a)(3)(A). Most states, including New Jersey (until the amendment) adopted the federal definition of hemp.
Therefore, under state and federal law, certain cannabis-derived products “with a delta-9 (THC) concentration of 3/30ths of one percent (0.3%) or less on a dry weight basis” are subject to USC 7. Please refer. § 1639o(1) — Does not fall within the definition of an illegal controlled substance and falls within the category of legal cannabis-derived products.
Case law to guide you
Courts have recognized that under both state and federal law, the key difference that distinguishes legal hemp from illegal marijuana and THC is the product's delta-9 THC concentration. See AK Futures LLC v. Boyd St. Distro, LLC, 35 F.4th 682, 690 (9th Cir. 2022) (“Delta The value is “9 THC concentration level''). In AK Futures, the Ninth Circuit held that addictive delta-8(1) hemp products are not subject to the 2019 Farm Bill as long as the products comply with the THC limit (less than 3% THC). The court ruled that it was legal. The Fourth Circuit recently held, similar to AK Futures, that hemp products containing intoxicating amounts of delta-8 or delta-10 THC must contain no more than 0.3% delta-9 THC in the dry state. Reaffirmed the conclusion that it is a legal hemp derivative unless it is. weight based. See Tonya Anderson v. Diamondback Investment Group, LLC, 661 F. Supp. 3d 415 (4th Cir. 2024).
Faced with unfettered consumer access to addictive cannabis products sold at gas stations, convenience stores, and liquor stores, various states have decided to restrict the manufacturing and/or sale of such addictive cannabis products. We have enacted laws and regulations aimed at prohibiting. By changing the definition of legal “hemp” to exclude products containing more than trace amounts of intoxicating cannabinoids such as delta-8, delta-10, and THCO, states can ensure that their businesses are not adversely affected by this law. is facing legal challenges from hemp producers. new law.
However, many courts that have considered this issue have held that state regulations restricting the production and sale of addictive cannabis products, including Delta-8 and Delta-10, are not preempted by the 2018 Farm Bill. The decision was made. See CY Wholesale, Inc. v. Holcomb, 965 F.3d 541 (D. Haw. 2022). Hemp Quarters 605 LLC v. Noem, 2024 U.S. District LEXIS 115011 (DSD June 29, 2024); see also N. Va. Hemp and Silver. LLC v. Virginia, 2023 U.S. Dist. LEXIS 195168, *24 (ED Va. October 2023) (holding that “hemp containing varying amounts of delta-8 THC or other THC variants manufactured and sold in Virginia Regarding the regulation of the production and sale of products, SB 903 does not conflict with the Farm Bill, even through the doctrine of impossibility of obstruction.'' In fact, the 2018 Farm Bill is “silent about whether states can ban the possession or sale of industrial hemp.” Duke's Inv, LLC v. Char, 2022 U.S. District LEXIS 211778, *9 (Dist, Haw. Nov. 2022) (citing CY Wholesale. Inc. v. Holcomb, 965 F.3d 541, 546 (7th Cir. 2020)) .
New Jersey Cannabis Laws
In 2019, New Jersey passed the New Jersey Hemp Farming Act, which mirrors the definition of hemp in federal law. On September 12, 2024, Governor Murphy signed the Addictive Marijuana Bill into law. The bill seeks to regulate intoxicating cannabis through a stricter definition of “hemp,” creating a new category of products considered “intoxicating cannabis,” and criminalizing possession and production. or the sale of products containing tetrahydrocannabinol, other than those that meet the definition of “hemp” or are regulated as cannabis by the Cannabis Control Commission.
The definition of “hemp” was amended to include “a total tetrahydrocannabinol concentration of 0.3 percent or less on a dry weight basis” rather than just a delta-9 tetrahydrocannabinol concentration. The definition of “hemp product” has been revised to include a finished product with “a total tetrahydrocannabinol concentration of 0.3 percent or less on a dry weight basis, 0.5 milligrams or less of total THC per serving, and 2.5 milligrams or less of total THC per package.” It was done. Additionally, “cannabinoid products that are not derived from natural biologically active chemical components” and “intoxicating hemp products” are excluded from the definition of “hemp product.” The new term “total THC” refers to “delta-8, delta-9, delta-10, tetrahydrocannabinolic acid, and other chemically similar compounds, substances, derivatives or isomers of tetrahydrocannabinol (derived from or (regardless of the method of production), and other cannabinoids other than cannabidiol (CBD).'' The new term “intoxicating cannabis product'' is defined as “(2018 Farm Bill) or other cannabinoids other than cannabidiol (CBD)'' or regulated pursuant to the New Jersey Hemp Farm Act. “Any product grown, derived, or manufactured in this state and sold in this state.” have a total THC concentration of more than 0.5 milligrams per serving or 2.5 milligrams per package,” but does not include “hemp products.” Makes it illegal to sell or distribute intoxicating hemp products unless you are licensed by the Cannabis Control Commission or are an approved liquor store or wholesaler. Intoxicating hemp products produced outside of New Jersey are regulated as dangerous goods and prohibited from sale or distribution within the state.
Recent lawsuits have challenged the validity and constitutionality of the new law and asserted the drug bill.
Violating Federal Preemptive Action: Lawsuit alleges New Jersey's redefinition of hemp, including restrictions on delta-8 and other tetrahydrocannabinol isomers, was a 2018 redefinition of hemp based solely on delta-9 THC concentrations. They argue that it is inconsistent with the Farm Bill. Infringement on interstate commerce: Plaintiffs also argue that the law discriminates against out-of-state hemp products and prohibits the sale or transportation of hemp products that would be considered “intoxicating” if manufactured outside New Jersey. They argue that the law violates the Dormant Commerce Clause because it effectively prohibits The lawsuit alleges that the new law prioritizes economic interests within the state over those who grow, extract, manufacture, or sell federally legal intoxicating cannabis products outside of New Jersey, thereby creating a substantial burden on interstate commerce. They argue that the new law violates the Dormant Commerce Clause. Unacceptably Vague: The lawsuit further states that the new cannabis law is unconstitutionally vague, making it difficult for businesses and individuals to understand the legal boundaries, especially regarding the limits of what constitutes legal and illegal products. It is claimed that there is. The intoxicating hemp bill appears to make it a crime to possess hemp products produced or sold outside of New Jersey in excess of the total THC levels allowed by state law, but the exact outline of that prohibition remains unclear. It is unknown. The proposed amendment would criminalize all “addictive” hemp products while also allowing licensed entities to sell “addictive” hemp products manufactured in New Jersey. This seems to be leading to the absurd result of regulating the Additionally, the new law imposes civil penalties for selling or distributing any hemp product that is addictive or that is not derived from “naturally occurring biologically active chemical components.” I am. For example, some forms of THC, such as delta-8 THC, occur naturally in the cannabis plant, but it can also be converted from other “natural” cannabinoids, such as CBD. Therefore, the general public does not know whether delta-8 THC is a “naturally occurring biologically active chemical component.”
It remains to be seen whether the district court will grant a preliminary injunction to prevent the new cannabis law from taking effect or find certain parts of the law unenforceable, but cleanup bill discussions are already underway in Trenton. It is being done. . Federal policymakers have also taken note, recently enacting the Cannabinoid Safety and Regulation Act (CSRA) to protect public health and safety and establish national standards to keep cannabis products out of the reach of children. Introduced. Visit www.wyden.senate.gov. The CSRA aims to introduce age restrictions nationwide and prevent individuals under the age of 21 from purchasing hemp-derived cannabis products. Additionally, the law requires rigorous safety testing for all hemp-derived products and requires them to be manufactured using clean and safe processes. To increase transparency, CSRA emphasizes truth in labeling while giving the Food and Drug Administration (FDA) the authority to recall or ban products found to contain harmful chemicals or additives. Masu.
For now, the state of New Jersey's cannabis issue remains fluid, with stakeholders closely monitoring the case and looking to lawmakers to provide clarity and guidance. Hemp businesses and owners considering entering the hemp industry should consult with an attorney. At Stark & Stark, we have extensive experience in cannabis regulation and business, helping clients understand how to navigate the complexities and nuances of federal and state laws that impact the manufacturing, licensing, production, sale, and distribution of cannabis. often gives advice. \
(1) Delta-8 is a naturally occurring cannabinoid found in both hemp and marijuana that has similar addictive properties to delta-9 THC.
