ASSEMBLY APPROPRIATIONS COMMITTEE
STATEMENT TO
[First Reprint]
ASSEMBLY, No. 4461
With committee amendments
STATE OF NEW JERSEY
DATED: JUNE 24, 2024
The Assembly Appropriations Committee reports favorably with
committee amendments Assembly Bill No. 4461 (1R).
This bill regulates the production and sale of intoxicating hemp
products.
AGENCY RESPONSIBILITIES
Under current law, three entities within the State maintain
jurisdiction over the cannabis plant. The Cannabis Regulatory
Commission (commission) regulates adult-use and medical cannabis,
the Department of Agriculture (department) regulates hemp, and the
Attorney General (AG) enforces criminal penalties against illegal
marijuana and tetrahydrocannabinol (THC).
The bill synchronizes the definitions of hemp, hemp products, and
definitions involving total THC concentration in order to regulate the
sale of intoxicating hemp products as a form of cannabis item. By
means of updating definitions, and adding a definition of intoxicating
hemp products, the bill clarifies the role of each agency. The
commission would be responsible for regulating the sale of all legally
produced intoxicating cannabis items, whether hemp or cannabis; the
department would continue to regulate the cultivation and processing
of hemp as an agricultural commodity; and the AG 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.
LICENSING AND COMPLIANCE RELATED TO INTOXICATING HEMP
By amending the definition of “cannabis item” to include an
intoxicating hemp product, the commission is required, pursuant to
N.J.S.A.24:6I-35, to promulgate regulations related to the sale and
purchase of such intoxicating products as a form of cannabis item.
Further, pursuant to N.J.S.A.24:6I-42, an entity is required to be
licensed as a Class 5 Cannabis Retailer in order to operate a business
in which any intoxicating products are retailed, and would be limited
to selling products to persons 21 years of age or older. Additionally, 2
treating such products like cannabis items would subject them to
cannabis item product testing and labeling requirements.
“Intoxicating hemp product” is defined as “any product cultivated,
derived, or manufactured from hemp regulated pursuant to the
“Agricultural Improvement Act of 2018,” Pub.L.115-334 or the
“New Jersey Hemp Farming Act,” N.J.S.A.4:28-6 et al., that is sold
in this State that has a concentration of total THC greater than 0.5
milligrams per serving or 2.5 milligrams per package.” “Intoxicating
hemp product” does not include “a cannabinoid product that is not
derived from naturally occurring biologically active chemical
constituents and shall not include “hemp products” as defined under
amended definition contained within the “New Jersey Hemp Farming
Act.”
UNLICENSED SALE AND PENALTIES REGARDING INTOXICATING
PRODUCTS
Under the bill, a person would be prohibited from selling or
distributing an intoxicating hemp product unless the person is
licensed by the commission or is a liquor store approved by the
Executive Director of the commission to sell intoxicating hemp
beverages, and the product complies with the “Cannabis Regulatory,
Enforcement Assistance, and Marketplace Modernization Act”
(CREAMMA), N.J.S.A.24:6I-31 et al., and any commission
regulations. Further, it would be unlawful to sell or distribute a hemp
product or cannabis item that is not derived from naturally occurring
biologically active chemical constituents. The prohibition on the sale
of intoxicating hemp products also applies to any online retailer
selling an intoxicating hemp product in the State.
It would be unlawful, except as otherwise provided by law, to sell
or distribute a product that contains THC in any detectable amount
to any person under the age of 21 years.
The bill establishes that for the above prohibited or unlawful acts,
any civil penalties or fines adopted by the commission in accordance
with CREAMMA shall apply to commission-licensed business
committing any such prohibited or unlawful acts, in addition to any
other penalty provided by law.
Also, any person who sells, offers for sale, or distributes any
intoxicating hemp product, or hemp product or cannabis item not
derived from naturally occurring biologically active chemical
constituents, would be subject to the following penalties:
(1) for a first violation, a civil penalty of not less than $100;
(2) for a second violation, a civil penalty of not less than $1,000;
and
(3) for a third or subsequent penalty, a civil penalty of not less
than $10,000. 3
This penalty would be collected and enforced by summary
proceedings under the “Penalty Enforcement Law of 1999,”
N.J.S.A.2A:58-10 et seq..
REGULATION OF HEMP AND NON-INTOXICATING HEMP PRODUCTS,
AND MANUFACTURED THC
The bill amends the “New Jersey Hemp Farming Act,”
N.J.S.A.4:28-6 et al., 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. “Total THC” is defined as “the total concentration of
all tetrahydrocannabinols in hemp or a hemp product, 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, identified by the
commission, in consultation with the Department and the AG, as
causing intoxication.” This definitional change clarifies the
department’s role in the regulation of hemp, and limits it to hemp or
hemp products that meet the limitations established in the bill.
The bill also clarifies the definition of THC in the Schedule I
controlled dangerous substance statute, N.J.S.A.24:21-5, to ensure
THC produced by way of manufacture, and which is not produced or
sold in accordance with the “New Jersey Hemp Farming Act” P, or
CREAMMA is included on the Schedule I list. N.J.S.A.24:21-2
defines “manufacture” to mean “the production, preparation,
propagation, compounding, conversion, or processing of a controlled
dangerous substance, either directly or by extraction from substances
of natural origin, or independently by means of chemical synthesis,
or by a combination of extraction and chemical synthesis, and
includes any packaging or repackaging of the substance or labeling
or relabeling of its container, except that this term does not include
the preparation or compounding of a controlled dangerous substance
by an individual for the individual's own use or the preparation,
compounding, packaging, or labeling of a controlled dangerous
substance: (1) by a practitioner as an incident to the practitioner's
administering or dispensing of a controlled dangerous substance in
the course of the practitioner's professional practice, or (2) by a
practitioner, or under the practitioner's supervision, for the purpose
of, or as an incident to, research, teaching, or chemical analysis and
not for sale.”
4
SALE OF INTOXICATING HEMP BEVERAGES
As amended, the bill permits the Executive Director of the
commission to permit liquor stores to sell intoxicating hemp
beverages.
Under the amended bill, the commission is required to promulgate
rules and regulations related to packaging, labeling, product testing
and safety standards, THC amounts permitted in intoxicating hemp
beverages, the number of intoxicating hemp beverages that may be
sold to a customer at any given time, and any fees associated with
obtaining approval from the Executive Director of the commission.
Under the amended bill, a holder of a valid and unrevoked plenary
retail distribution license, as defined pursuant to N.J.S.A.33:1-12,
may apply to the Executive Director commission for approval to sell
intoxicating hemp beverages after the commission has promulgated
rules and regulations related to the beverages. “Intoxicating hemp
beverage” is defined as a beverage that is an intoxicating hemp product
as that term is defined above.
A liquor store which currently sells intoxicating hemp products is
required to stop the sale of the such products upon the effective date
of the bill. Once approval is received, the liquor store may resume
the sale of intoxicating hemp beverages. The prohibition against
selling intoxicating hemp products to persons under the age of 21 also
applies to the sale of intoxicating hemp beverages. Further, a store
that sells intoxicating hemp beverages is required to store or display
the items in a place that a customer must receive employee assistance
to access the product.
Finally, the amended bill requires that any sale of an intoxicating
hemp beverage by a holder of a plenary retail distribution license is
subject to: (1) the sales tax imposed on cannabis; and (2) the same
local cannabis transfer and user tax imposed on cannabis by a
municipality. All taxes, fees, penalties, and revenues collected
pursuant to under the bill upon the sale of an intoxicating hemp
beverage are deposited in the CREAMM Fund, established pursuant
to N.J.S.A.24:6I-50.
ENFORCEMENT AND EDUCATION
Finally, the bill requires the commission, in consultation with the
Division of Consumer Affairs in the Department of Law and Public
Safety and the Business Action Center in the Department of State, to
develop and implement a public education program for businesses
across the State regarding the provisions of the bill.
COMMITTEE AMENDMENTS :
The committee amended the bill to:
(1) require commission to adopt rules and regulations related to the
sale of intoxicating hemp beverages and permit Executive Director of 5
commission to approve liquor stores, upon application, to sell
intoxicating hemp beverages; and
(2) define intoxicating hemp beverage as a beverage that is an
intoxicating hemp product as that term is defined under the bill.
FISCAL IMPACT:
Fiscal information for this bill is currently unavailable.