Bill > S4509

Introduced Session

This bill makes various updates to P.L.2024, c.73 (Intoxicating Hemp Act) related to intoxicating hemp products sold in New Jersey. Several provisions in this bill address issues raised in the October 2024 holding by the U.S. District Court for the District of New Jersey in Loki Brands, LLC et al. v. Matthew Platkin et al., which held that provisions of P.L.2024, c.73, which regulates the production and sale of intoxicating hemp products, violate the Dormant Commerce Clause of the United States Constitution and are federally preempted. The court held that the enactment is thus unenforceable due to the variable treatment of out-of-state hemp producers and sellers versus in-State hemp producers and sellers. Definitions This bill amends various definitions in the "New Jersey Hemp Farming Act," P.L.2019, c.238 and the "Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act," P.L.2021, c.16 (CREAMMA). Specifically, the bill updates the New Jersey Hemp Farming Act to add the definition of "non-intoxicating total THC concentration" and "THC." Further, the bill clarifies in the New Jersey Hemp Farming Act, that "hemp product" does not mean: (1) a product that contains artificially or synthetically produced cannabinoids of any kind; (2) a cannabinoid produced using chemical synthesis, chemical modification, chemical conversion process, isomerization, or any other synthesis methodology as may be identified by the Cannabis Regulatory Commission (commission); or (3) an intoxicating hemp product. This bill also makes changes to the definitions in CREAMMA. Specifically, the bill clarifies that "intoxicating hemp product" is separate and distinct from a "cannabis item." Moreover, the bill adds the definition of "intoxicating hemp product establishment" and "intoxicating total THC concentration" to CREAMMA. The bill clarifies that a "license" and "licensee" also include a license issued by the commission or a license holder holding a valid license pursuant to the Intoxicating Hemp Act. The bill clarifies that under N.J.S.A.24:21-2, "drugs," "hashish," and "marijuana" do not include intoxicating hemp products, as that term is defined in the Intoxicating Hemp Act, that are produced, manufactured, or sold in accordance with the Intoxicating Hemp Act. Relatedly, the bill amends N.J.S.A.2C:35-2, the definitions section of the "Comprehensive Drug Reform Act of 1987," P.L.1987, c.106, to clarify that terms "drugs," "hashish," and "marijuana" also do not include intoxicating hemp products, as that term is defined in the Intoxicating Hemp Act, that are produced, manufactured, or sold in accordance with the Intoxicating Hemp Act. The bill also amends N.J.S.A.40:48I-1 to apply to licensed establishments, and removes reference to cannabis establishments. The bill defines "licensed establishment" as the holder of a license issued by the commission pursuant to CREAMMA or the Intoxicating Hemp Act. Licensing Intoxicating Hemp Product Establishments In addition to the licensing rules under the Intoxicating Hemp Act, this bill permits the commission to promulgate rules and regulations that: (1) establish a new license type related to intoxicating hemp products; (2) ensure that the intoxicating hemp product market in New Jersey is safe and effective; (3) streamline the application process for any person currently licensed under CREAMMA; and (4) permit out-of-state hemp entities to apply for licensure in this State, provided that standards for licensure in the out-of-state applicant's home state are substantially similar to those of New Jersey. The bill provides that any holder of a plenary wholesale or plenary retail distribution license issued by the Division of Alcoholic Beverage Control (ABC) that currently sells intoxicating hemp beverages may continue to do so until the Cannabis Regulatory Commission adopts rules and regulations related to such products. The bill further provides that such ABC licensees must be approved by the commission in accordance with the Intoxicating Hemp Act and this bill within 120 days of the adoption of the rules and regulations in order to continue to sell intoxicating hemp beverages. Prohibitions The bill also prohibits a retailer of an intoxicating hemp product, including an intoxicating hemp beverage, from dispensing or offering for sale a product from a vending machine. Moreover, the bill prohibits direct to consumer sales, including online sales, of intoxicating hemp products. Sales of such products are required to be conducted at the physical location of the licensed premises. Further, the bill prohibits selling or distributing products or samples of products in public spaces, such as sidewalks, public streets, or parks. The bill prohibits the knowing sale of an intoxicating hemp product that is not accompanied by a certificate of analysis issued within the previous six-month period by a laboratory in compliance with testing standards as established by the commission. Finally, the bill prohibits the holder of any valid and unrevoked plenary wholesale license or plenary distribution license from selling or distributing any product besides intoxicating hemp beverages. Any employees of such licensees are also required to participate in the education program developed and implemented by the Cannabis Regulatory Commission. Federal Law The bill provides that nothing in this bill, nor the Intoxicating Hemp Act, prohibit the transportation or shipment of hemp or hemp products through the State which is authorized by subtitle G of the Agricultural Marketing Act of 1945, in accordance with 7 U.S.C. s.1639o et seq. Taxes and Excise Fee The bill subjects the sale of intoxicating hemp products to the Sales and Use Tax in the State. The bill directs that tax revenue will be split evenly: (1) 50 percent of the all revenue generated from such tax is deposited into the "Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Fund," established under N.J.S.A.24:6I-50; and (2) 50 percent of the revenue generated from such tax is deposited into a special nonlapsing account in the State General Fund. The bill, based upon the definitional changes to the New Jersey Hemp Farming Act and CREAMMA, amends N.J.S.A.40:48I-1 to clarify that a municipality may adopt an ordinance imposing a transfer tax on the sale of cannabis, cannabis items, or intoxicating hemp products. The bill imposes a $30 excise fee on the transfer of intoxicating hemp products, not including intoxicating hemp beverages, from a manufacturer to a retailer of such products. The bill imposes an excise tax in the amount of $5.50 per gallon on the sale of intoxicating hemp beverages. Such tax is levied and imposed on the sale of any intoxicating hemp beverage made within this State or upon any delivery of intoxicating hemp beverages made within or into this State. The per-gallon tax and $30 excise fee imposed on intoxicating hemp products is intended to fund social equity programs. Background Checks The bill permits the commission to require any person who seeks a license under the Intoxicating Hemp Act to undergo a background check. This includes any person involved in the intoxicating hemp product establishment's operations, including any owner, director, officer, or employee. Prior to conducting a criminal history background check, an individual must consent to such check being conducted. If a person refuses to consent to, or cooperate in, the securing of a background check, the commission is prohibited from considering such person for licensure to conduct activities related to the manufacture, distribution, or sale of intoxicating hemp products. The commission is prohibited from disqualifying an applicant for licensure based on certain past convictions, including for those cannabis-related or controlled dangerous substance offenses set forth under CREAMMA. However, convictions for indictable offenses involving fraud, deceit, or embezzlement, or the use of minors in a drug scheme may be deemed to be disqualifying, if the offense occurred within the last five years. The commission is required to provide written notification to an applicant if the licensure to conduct intoxicating hemp activities is denied. If the denial is based on a prior conviction, the commission is required to provide written notification to the applicant indicating the conviction. The bill requires the Division of State Police to notify the commission if any person who was subject to a criminal history background check commits an offense subsequent to the time that the background check for application for licensure was completed. Employer Rights The bill clarifies that nothing in the bill: (1) requires an employer to amend or repeal, or affect, restrict, or preempt, the rights and obligations of employers to maintain a drug- and alcohol-free workplace or require an employer to permit or accommodate the use, consumption, being under the influence, possession, transfer, display, transportation, or sale of intoxicating hemp products, including intoxicating hemp beverages in the workplace, or to affect the ability of the employers to have policies prohibiting the use of intoxicating hemp products or intoxication by employees during work hours. (2) is intended to allow driving under the influence of intoxicating hemp products, or driving while impaired by intoxicating hemp products or to supersede laws related to driving under the influence of intoxicating hemp products or driving while impaired by intoxicating hemp products; or (3) is intended to permit the transfer of intoxicating hemp products, with or without remuneration, to a person under 21 years of age or to allow a person under 21 years of age to purchase, possess, use, transport, or consume intoxicating hemp products; provided, however, that a person who is under 21 years of age, but at least 18 years of age, and an employee of intoxicating hemp product manufacturer or distributor, or delivery service acting in the person's employment capacity, may possess or transport intoxicating hemp products. Effective Date This bill amends the Intoxicating Hemp Act effective date to delay certain provisions of the Intoxicating Hemp Act to not take effect until 120 days after the commission adopts rules and regulations pursuant to the Intoxicating Hemp Act and this bill.

Committee Categories

Teresa Ruiz (D)*,  Nick Scutari (D)*, 

Senate Judiciary Hearing (10:00:00 5/29/2025 Committee Room 4, 1st Floor, State House Annex, Trenton, NJ) (on 05/29/2025)

Official Document