Bill > A5068

Introduced Session

This bill establishes a licensing scheme for the regulation of hemp-derived consumable products by the Department of Agriculture (department) and hemp-derived beverages by the New Jersey Division of Alcoholic Beverage Control (ABC). Licensing Businesses or entities involved in the manufacturing, distribution, or sale of hemp-derived consumable products (products) are required to obtain a license from the department prior to beginning operations or within 30 days after the department has adopted rules and regulations for the application and licensing of businesses. Entities holding certain existing licenses related to alcoholic beverages are permitted to sell or manufacture hemp-derived products by paying an annual fee and maintaining registration with the ABC. This includes the holders of the following ABC licenses: (1) plenary retail consumption license; (2) seasonal retail consumption license; (3) plenary retail distribution license; (4) plenary retail transit license; (5) club license; (6) sporting facility license; (7) plenary brewery license; (8) limited brewery license; (9) restricted brewery license; and (10) plenary wholesale license. See N.J.S.A.33:1-10 through N.J.S.A.33:1-12 for definitions of these license holders. Both new and existing licensees are subject to inspections, product sampling, and background checks in accordance with this bill and the rules and regulations adopted by the department. The various monies from licensing fees or penalties would be placed in the "New Jersey Hemp Farming Fund" established by N.J.S.A.4:28-13. The bill prohibits a license from being granted to any business that is attempting to operate and sell products within 1,000 feet of any elementary or secondary school, or any municipal or county playground. This does not apply to any business which was selling products before the effective date of the bill or where a school or playground is established within 1,000 feet subsequent to the bills enactment. Regulatory Authority The bill grants the department the authority to adopt rules and regulations to implement the provisions of the bill that concerns hemp-derived consumable products. The regulations will cover: (1) packaging and labeling requirements, including child-resistant packaging and consumer warnings; (2) product testing and safety standards; (3) advertising standards; (4) business operation standards; (5) the imposition of penalties for violations of the bill or the rules and regulations adopted by the department; and (6) standards and restrictions for non-liquid ingestible products, liquid ingestible products, and inhalable products. Restrictions on Sale of Products The bill prohibits selling products to individuals under 21 years of age, distributing samples of products in public spaces, operating without a license, selling products which contain a concentration of delta-9 tetrahydrocannabinol (THC) that is more than 0.3% on a dry weight basis, and selling a product without proper packaging. Further, the bill requires that any retail sale of a product complies with the regulations adopted by the department, including placing products behind a counter and ensuring certification that the product was properly tested. Violations of these restrictions can result in various civil penalties, including increasing fines for repeat offenders, and suspension or revocation of licenses. Products with a concentration of delta-9 THC that is more than 0.3% on a dry weight basis and are retailed may be seized by the department. A person who sells a product without a valid license twice in violation of this bill would be guilty of a disorderly persons offense. If a person commits this offense a third or subsequent time, the person is guilty of a fourth degree crime. A disorderly persons offense is punishable by up to six months imprisonment, a fine of up to $1,000, or both. A fourth degree crime is punishable by up to 18 months imprisonment, a fine of up to $10,000, or both. Restrictions on Producers Producers of hemp that is intended for use in products are restricted to selling or transferring the products only to licensed manufacturers. Violations of this provision would result in penalties ranging from $500, for a first offense, to $2,000 for subsequent offenses within three years of the first violation. A producer may avoid suspension or revocation of its license by paying a $3,000 penalty. If payment-in-lieu-of-revocation is accepted by the department, the department is prohibited from revoking the license, though the department reserves the right to still suspend the license. Repeat offenders may face criminal charges, with a second violation of these restrictions resulting in a disorderly persons offense, and a third or subsequent offense potentially resulting in a fourth degree crime. A disorderly persons offense is punishable by up to six months imprisonment, a fine of up to $1,000, or both. A fourth degree crime is punishable by up to 18 months imprisonment, a fine of up to $10,000, or both. Manufacture and Distributor Restrictions The bill prohibits a manufacturer or distributor from distributing samples in public spaces, operating without a valid license issued by the department, and manufacturing or distributing a product that has a concentration of delta-9 THC that is more than 0.3% on a dry weight basis. A knowing violation of these restrictions would result in a disorderly persons offense. A disorderly persons offense is punishable by up to six months imprisonment, a fine of up to $1,000, or both. Further, the bill provides for civil penalties for a violation of these provisions, including license suspension or revocation, limitations on business hours, and increasing fines for repeat violations. Manufacturers and distributors may avoid suspension or revocation by paying a penalty of $8,000. If payment-in-lieu-of-suspension or revocation is accepted by the department, the department is prohibited from suspending or revoking the license. If the violation is related to a product that has a concentration of delta-9 THC that is more than 0.3% on a dry weight basis, the license holder is required to cover additional testing costs. For such a violation, the bill permits a license holder to avoid the additional penalties if the batch is recalled and the license holder proves compliance through an independent testing laboratory. The department is authorized to seize products that exceed the delta-9 THC threshold. General Restrictions The bill makes it illegal to provide a product to anyone under 21 years of age, and for individuals under 21 years of age to posses or attempt to purchase products. Further, the bill prohibits the fraudulent use of an identification, whether a fake identification or using someone else's identification, to buy product. Under the bill, violations of these provisions, relating to attempting to buy a product while under 21 years of age or the use of a fake identification card, are petty disorderly persons offenses. Providing a product to a person under 21 years of age or permitting the fraudulent use of another person's identification is a disorderly persons offense. A petty disorderly persons offense is punishable by up to 30 days imprisonment, a fine of up to $500, or both. A disorderly persons offense is punishable by up to six months imprisonment, a fine of up to $1,000, or both. The bill clarifies that individuals under 21 years of age are allowed to handle these products if doing so is part of lawful employment. Testing Requirements The bill requires that licensed manufacturers of products have the products tested for compliance with the bill and the rules and regulations adopted by the department prior to distributing the product to distributors, retailers, or sellers. Distributors are required to test the product if: the product is not packaged in a manner that may be sold to the consumer of the product when delivered to the distributor; or the distributor opens a product package that is packaged in a manner that may be sold to the consumer. The department is required to develop an application process for independent testing laboratories to qualify as designated laboratories for testing purposes. After approving such applications, the department is required to maintain a website of those laboratories and designate qualified independent testing laboratories for manufacturers and distributors to use. If testing is not completed in accordance with the bill, the department can impose penalties, including license suspension or revocation, or increasing fines for repeated violations. Manufacturers and distributors may avoid suspension or revocation by paying a penalty of $8,000. If payment-in-lieu-of revocation is accepted by the department, the department is prohibited from revoking the license, though the department reserves the right to still suspend the license. Taxes The bill imposes a 6% tax on the retail sale of products in New Jersey, with 1% of the tax revenue designated for social equity programs such as legal services and workforce development. Further, the bill requires retailers to pay the tax monthly, register with the New Jersey Division of Revenue and Enterprise Services, and file returns electronically. Finally, the bill directs that tax revenue will be split evenly between the Department of Treasury and the Department of Agriculture to regulate products. The bill permits municipalities to impose a local excise tax of up to 2% on the retail sales of products. Exemptions from Regulation Certain hemp products and facilities are exempted from regulation of the bill. These include any "safe harbor hemp product" or "safe harbor manufacture or storage facility." Under the bill, a "safe harbor hemp product" is a hemp-derived product or cannabinoid that is permitted to be processed and distributed within New Jersey for export but is not allowed to be sold or distributed within the State. A "safe harbor manufacturer or storage facility" is a facility involved in the production, packaging, or transport of such products, but only for export purposes. Limitations of Act The bill does not permit or legalize certain actions related to the products. Specifically, it does not: (1) allow performing tasks under the influence of products that would be considered negligent or malpractice if performed while impaired; (2) permit operating vehicles or machinery while impaired; (3) require employers to accommodate workplace use or tolerate impairment; (4) require retailers or sellers to permit access to a premises by a person under the influence; (5) exempt people from criminal prosecution for intoxication; (6) prohibit employers from maintaining drug-free policies; or (7) permit the possession or sale of controlled substances prohibited by New Jersey law. Schools The bill requires the New Jersey Department of Education to implement a policy banning the use of the products in school buildings and facilities, on school transportation, and at school-sponsored events involving students and staff. The bill does provide an exception for instructional or research activities which are supervised by faculty and which do not involve ingestion of any products. The bill permits school governing bodies to establish more stringent requirements than established under the bill regarding the use of the products. Repealer The bill repeals the recent enactment of P.L.2024, c.73 related to intoxicating hemp products. Specifically, the bill repeals N.J.S.A.24:6I-48.1; N.J.S.A.24:6I-48.2; N.J.S.A.24:6I-48.3; andN.J.S.A.24:6I-48.4.

Committee Categories

Robert Karabinchak (D)*,  Bill Spearman (D)*, 

Assembly Commerce, Economic Development and Agriculture Hearing (14:00:00 5/15/2025 Committee Room 16, 4th Floor, State House Annex, Trenton, NJ) (on 05/15/2025)

Official Document