ASSEMBLY BUDGET COMMITTEE
STATEMENT TO
[Second Reprint]
ASSEMBLY, No. 4461
with committee amendments
STATE OF NEW JERSEY
DATED: JUNE 26, 2024
The Assembly Appropriations Committee reports favorably and
with committee amendments Assembly Bill No. 4461 (2R).
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, treating such products like cannabis items would
subject them to cannabis item product testing and labeling
requirements. 2
“Intoxicating hemp product” is defined as “any product
cultivated, derived, or manufactured in this State 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
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.
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. 3
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.”
SALE OF INTOXICATING HEMP BEVERAGES
As amended, the bill permits the commission to permit liquor
stores and wholesalers 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 a 4
fee to be charged by the commission to cover the reasonable costs
of administering the intoxicating hemp beverage provisions.
Under the amended bill, a holder of a valid and unrevoked
plenary wholesale license or plenary retail distribution license, as
those terms are defined in N.J.S.A.33:1-11 and N.J.S.A.33:1-12,
may apply to the 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 or wholesaler 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 or wholesaler 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 or wholesaler 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 wholesale license or 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) clarify that the provisions related to intoxicating hemp
beverages also apply to the holder of a plenary wholesale license;
(2) remove references to Executive Director of the commission;
and
(3) update the definition of “intoxicating hemp product” to clarify
that it is a product cultivated, derived, or manufactured in this State.
FISCAL IMPACT:
Fiscal information is unavailable at this time.