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NJ Senate Committee Passes Bill for NJCRC to Regulate “Intoxicating Hemp”

The NJ Senate Judiciary Committee passed a bill to make the NJ Cannabis Regulatory Commission (NJCRC) regulate “intoxicating” hemp that includes Delta-8 THC products.

The bill defines “Intoxicating hemp product” as any product sold “that has a concentration of total THC greater than 0.5 milligrams per serving or 2.5 milligrams per 30 package.”

State Senate Majority Leader Teresa Ruiz (D-Essex-29) and Paul Moriarity (D-Gloucester-4) introduced the bill to regulate the prosperous industry S 3235.  

Regulating “Intoxicating Hemp” Sales

Liquor, convenience, CBD, and all other stores will be prohibited from selling “intoxicating hemp” unless they are a licensed dispensary.

The bill further says that “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.”

Thus, they want to impose low THC caps on hemp products.

Notably, the bill wants to regulate undiscovered cannabinoids that might get you high.

“Total THC” means the total concentration of all 21 tetrahydrocannabinols in a cannabis item, including delta-8, delta-9, delta-10, tetrahydrocannabinolic acid, and any other chemically similar compound, substance, derivative, or isomer of

tetrahydrocannabinol, regardless of how derived or manufactured, and any other cannabinoid, other than cannabidiol… causing intoxication.”

The bill adds “it is unlawful to sell or distribute a hemp product or cannabis item that is not derived from naturally occurring biologically active chemical constituents.”

The bill requires the NJCRC to work with the Division of Consumer Affairs and the Business Action Center in the Department of State to develop and implement a public 10 education program for businesses on the bill.

Delta-8 Hemp Regulation Favored

Notably, no one from the NJCRC spoke.

NJCBA President Scott Rudder testified in favor of the bill before the Senate Judiciary Committee.

“There is a phenomenal amount of um unregulated, untested cannabis on gas station shelves, convenience stores shelves. Teens have easy access,” he exclaimed.

Rudder they were curious how it would integrate into the NJCRC’s classes of licensed operators.

“We do want to see a little more clarity on classes of operators,” he said.

Confused and Angry Towns Support for Hemp Regulation

“We have had a lot of municipalities approach us,” NJCTA President Susana Short explained. She noted she was there in favor of the bill.

The NJ Cannabis Trade Association (NJCTA), which only represents legal dispensaries, especially large MSOs, has disliked hemp for a while.

Short noted pro-legal cannabis towns want the revenue from sales, and anti-cannabis towns want to ban sales of it. She liked that the bill gave them the power to do those things.

Other advocates have echoed similar concerns to the NJCBA and NJCTA.

Alcohol Industry Wants More Delta-8 THC $

Several lobbyists for the liquor industry whose members have been selling delta-8 hemp drinks want to maintain their revenue stream.

Lobbyist Eric Orlando represented the Brewer’s Guild. He explained their members want in on hemp drinks either through an addition to their licenses or being able to get CRC manufacturing licenses to do so.

“We think we should afford local manufacturers the ability to produce and sell these beverages,” Orlando argued.

He liked the Minnesota model, giving alcohol manufacturers access to the hemp market.

Big Liquor Hates on NJCRC

Cantrip CEO Adam Terry said they make Delta 8 hemp seltzers in Massachusetts that are sold in liquor stores. He is a Jersey native who moved there.

“Drinks offer a quicker onset and offset time in a diluted product they can slowly sip,” he argued.

Terry said that in the Massachusetts cannabis market, beverages are not a big part of the licensed market, where edibles are easier and cheaper to make. He didn’t want dispensaries taking it over.

Attorney John Williams said he is the chair of the NJ Bar Association (of lawyers) hemp subcommittee. He explained he has helped towns write tighter rules against the gray market and underground legacy operators.

Williams said other states tried to regulate hemp, which resulted in lawsuits.

He said he represents Mom and Pops and chain CBD stores.

“There are two markets developing,” Williams noted.

Some people only want CBD and similar medically beneficial hemp products that don’t get you that high, he argued.

Beer Wholesalers Association of NJ Executive Director Mike Halfacre opposed the bill. He wanted their members to be able to make money off it and didn’t like hemp products in dispensaries. Halfacre said 10 percent or more of their members’ sales are from delta hemp drinks already. He said that beverages make up a small part of the California cannabis market.

“They belong in a liquor store,” he argued.

Protecting A Class of Business

NJ Wine and Spirt Wholesalers Executive Director and lobbyist Jeff Warsh tried to promote their members as being worthy of being in the hemp drink market. Similarly, he wanted to continue his members’ cut of the market.

“Amazon is an enormous player in this. They don’t verify what goods they’re selling. Kids have access. Is Amazon going to take over this business the way it’s taken over so many others, and safety be damned?!” Warsh asked.

NJ Liquor Store Alliance lobbyist Kevin Hagan also wanted to protect the profits of his members. He noted he is talking to Ruiz about it.

Since he worked for former NJ Senate President Steve Sweeney, he probably is.

Legislative Process Progress

State Senator Vin Gopal (D-Monmouth) said the Senate Budget Committee needs to review it next and then the Assembly must pass it for it to become law.

“I support your amendments strongly,” he said to the liquor lobbyists.

Gopal thought Ruiz might create the carve-out they wanted.

“Many of you indicated and feel as though regulating this particular industry is a good idea. It’s just how that is going to be done,” Nellie Pou (D-Passaic) said. “We want to make sure we’re protecting children.”

The bill passed committee 6-2, with Republicans Kristen Corrado (R-Essex) and Jon Bramnick (R-Union) opposing it.

Corrado also wanted the liquor store carve-out.

The bill was introduced Monday, according to NJCBA. Thus, to hold a hearing on  Thursday is very quick. When the legislators want a bill to pass, they ignore the slow process most bills take.

No companion bill in the Assembly necessary for the bill to become law has been introduced yet.

Hemp Regulation Long Time Coming

Hemp was legalized in the 2018 Farm Bill signed into law by former President Donald Trump. At the time, Delta-9 THC was the only cannabis compound known to get you high. So the feds didn’t know enough to ban the similar but different Delta-8 THC, Delta-10 THC, hemp-derived Delta-9 THC, and others like THCA that have since emerged.

Previous efforts to ban or regulate hemp in New Jersey last year went nowhere. For example, a hemp sales ban bill was passed by the Law and Public Safety Committee in June 2023. But the full State Senate didn’t vote on it.

Since there were legislative elections last year and a new legislative session began in January 2024, all bills that were not passed had to be reintroduced.

Delta 8 hemp has served as a pathway for underground legacy to legal entrepreneurs.

It’s also something opportunistic convenience store owners have seized upon and added to their shelves for sale.

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