Gov. Murphy signs controversial bill restricting sales of hemp products

The new law bars businesses from selling hemp products unless they have a cannabis license, a response to concerns the children are easily buying products with delta-8 THC. (Photo by Rebecca Rivas)

New Jersey businesses are temporarily banned from selling hemp products without a cannabis license under a controversial bill Gov. Phil Murphy signed into law Thursday, a response to years of complaints about legal loopholes that allow minors to buy sketchy hemp products .

The measure will put hemp products, which are federally legal, under the purview of the state’s Cannabis Regulatory Commission, the agency that oversees New Jersey’s recreational and medicinal marijuana markets.

In a signing statement , Murphy called the bill flawed, but said in the two-and-a-half months since the bill landed on his desk, he’s held discussions with supporters and critics that convinced him it’s “very unlikely that revisions to the bill would have the broad support necessary to move through the Legislature quickly.”

“Unlike many issues, the status quo poses an immediate risk to health and safety, as these unregulated intoxicating hemp products are widely available to minors. Because the bill would address this present danger, I have concluded that the wiser course is to sign the bill now and commit to working with the Legislature to address the technical issues and other challenges in separate legislation,” he said in the statement.

Congress legalized hemp in 2018, but with little regulation, testing, or enforcement, intoxicating products have been spotted on shelves of corner stores and gas stations. Lawmakers moved to pass the bill amid concerns that children are buying products advertised with thousands of milligrams of THC.

Hemp products have a lower form of THC than cannabis, and they do not get users high in the same way marijuana products with delta-9 THC (the kind someone would buy at a cannabis dispensary).

Under the new law, it’s illegal to sell products with any detectable amount of THC to a person under 21 years of age. And within 30 days, businesses will have to pull any hemp products off their shelves until the cannabis commission establishes new rules regarding sales.

The bill — amended with last-minute changes — elicited “significant concerns” from the cannabis and hemp industries, Murphy noted. Wording in the bill has created confusion, specifically the definition of hemp product as “any product cultivated, derived, or manufactured in this state from hemp,” Murphy said.

That language could either allow businesses to sell hemp products made outside of New Jersey without violating the law, or limit sales to those products made exclusively in New Jersey, Murphy said, noting the former would largely defeat the purpose of the bill by creating “an enormous loophole,” while the latter could violate the Constitution’s dormant commerce clause.

The bill’s supporters applauded the long-awaited signing.

“Licensed cannabis businesses in New Jersey have responsibly overseen the legal marketplace since its inception. We applaud the Legislature for extending these rigorous standards to hemp-derived products, ensuring the same consumer protection,” said Todd Johnson, executive director of the New Jersey Cannabis Trade Association.

With rules and regulations in the hands of the state’s cannabis commission, critics expect the process to drag out . Consumers and lawmakers have lamented how long it takes for the agency to act. Rules establishing cannabis smoking lounges were first announced in December 2022, but they were not approved until January 2024.

A spokesperson for the commission did not respond to a request for comment.

Beau Huch, a lobbyist representing hemp beverage companies, said the hemp industry has long wanted to limit minors’ access to these products. Lawmakers could have taken this opportunity to use hemp tax revenue to fund cannabis programs with the state Economic Development Agency, and “give much needed support to that struggling sister industry,” he said.

“Instead, this new law is excessive, at times unworkable, and fails to provide any real benefit to the cannabis industry. There are no winners here,” he said in a statement.

Scott Rudder, president of the New Jersey CannaBusiness Association, supports the goal of the law, but said the governor is “right to have hesitations.”

The law allows businesses with liquor licenses to sell hemp beverages — once they receive a cannabis license — without facing the same strict standards as cannabis stores, he said.

“Allowing liquor stores to sell these products could have serious consequences if not done right. We have a vigorous regulatory process for a reason,” Rudder said. “Just like any other business that’s licensed to sell cannabis products, the New Jersey Cannabis Regulatory Commission must ensure these stores go through the same process.”

About two-thirds of New Jersey municipalities have banned cannabis businesses, and towns can choose to set caps on the number of cannabis shops within their borders. Cannabis businesses are also subject to security requirements, like having a guard at the door checking IDs, and strict zoning and site approval plans. It’s unclear whether these municipalities that banned cannabis will allow intoxicating hemp products to be sold in their town.

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