New JerseyS3235220th Legislature (2024-2025)SenateWALLET

Regulates production and sale of certain intoxicating hemp products.

Sponsored By: Conaway, Herb, Cody D. Miller (Democratic), Paul D. Moriarty (Democratic), M. Teresa Ruiz (Democratic), William B. Sampson IV (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 2 benefits, 1 costs, 5 mixed.

Illegal hemp sellers face escalating penalties

Beginning October 12, 2024, illegal sales, offers for sale, or distribution trigger minimum civil penalties. The minimum is $100 for a first violation, $1,000 for a second, and $10,000 for each later violation. Authorized officials can issue summonses and confiscate products. A business becomes a public nuisance after more than two violations, or a third or later violation at one location within a year. Municipalities can restrict its operations or close it.

Hemp revenues help fund youth prevention

Beginning October 12, 2024, specified hemp drink revenues go into the state's cannabis regulatory and marketplace fund. These include retail taxes from plenary retail distribution license holders and beverage-sale approval fees from plenary wholesale license holders. Fifteen percent of fund deposits goes to its Underage Deterrence and Prevention Account. The law gives no total dollar amount for these deposits.

News outlets protected for hemp ads

Beginning October 12, 2024, news media face no liability under this law just for accepting or publishing covered ads. The protection applies to ads for products or services covered by the law.

THC sales restricted to adults

Sellers cannot sell or distribute products for human consumption with any detectable THC to people under 21, unless another law allows it. Intoxicating hemp drinks cannot be sold to anyone under 21. Stores must keep those drinks where customers need an employee's help to reach them.

Legal hemp sales require natural ingredients

Businesses cannot sell or distribute hemp products or cannabis items unless they come from naturally occurring, biologically active chemicals. The law excludes THC in hemp and hemp products from New Jersey's Schedule I controlled-substance list when handled under state hemp law. The same exclusion covers cannabis and cannabis items grown, made, or sold under state cannabis law. Products and activities that break those laws do not qualify for this exclusion.

THC limits set hemp product rules

Finished hemp products must contain no more than 0.3% total THC by dry weight. They also face caps of 0.5 milligrams per serving and 2.5 milligrams per package. Covered hemp products made and sold in New Jersey above either milligram cap count as intoxicating hemp and cannabis items. Total THC includes delta-8, delta-9, delta-10, THCA, and related compounds, regardless of how they are made. It also includes other cannabinoids, except CBD, identified as intoxicating by the Cannabis Regulatory Commission after consulting state agriculture officials and the Attorney General.

Hemp sellers need licenses and approvals

Selling or distributing intoxicating hemp requires a Cannabis Regulatory Commission license, except for the approved liquor-license route for drinks. Valid, unrevoked plenary wholesale and plenary retail distribution license holders need commission approval and cannot sell before beverage rules are adopted. Approved wholesalers can supply licensed alcohol retailers and wholesalers; approved retailers can sell original containers for off-site use. The commission must charge an administration fee, but the law sets no amount. Beginning October 12, 2024, the commission must provide statewide business education with consumer affairs, business assistance, and alcohol regulators.

Hemp drink taxes and wholesale exemptions

Covered hemp drink sales by plenary wholesale and plenary retail distribution license holders face the state sales tax imposed on cannabis. Beginning October 12, 2024, municipalities can adopt a local transfer tax of up to 2% of receipts on these sales. An adopting town must also impose an equal-rate user tax on qualifying transfers or use by businesses holding concurrent licenses. Qualifying nonretail transactions are exempt from state Sales and Use Tax; retail sales remain taxable.

Sponsors & Cosponsors

Cosponsors

Linda S. Carter
Democratic • House
Angela V. McKnight
Democratic • Senate
Annette Quijano
Democratic • House
Shanique Speight
Democratic • House
Shirley K. Turner
Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 99 • No: 11

House vote • 6/28/2024

3RDG FINAL PASSAGE

Yes: 65 • No: 6

Senate vote • 6/28/2024