Jersey got there first!

Leapfrogging over 16 other states with more established hemp programs, on December 27, 2019, the U.S. Department of Agriculture (“USDA”) approved New Jersey’s proposed hemp growing, processing and selling regulations, including Cannabidol (“CBD”), starting in 2020.

NJ Hemp Program’s Creation

Following Congress’ December 2018 passage of the Agriculture Improvement Act of 2018 (“2018 Farm Bill”), in August 2019 New Jersey enacted the Hemp Farming Act repealing and replacing its Industrial Hemp Pilot Program and authorizing hemp producers to grow and sell hemp for commercial purposes.

Following the USDA’s October 31, 2019 publishing of domestic hemp production interim final rules (“Interim Final Rules”) requiring states to obtain proposed hemp production plan approval (including sampling and testing, noncompliant hemp disposal, enforcement, and reporting and information sharing procedures), New Jersey’s Department of Agriculture (“NJDA”) promulgated its Hemp Farming Act Rules, N.J.A.C. 2:25-1 et seq..

The Hemp Farming Act Rules establish New Jersey’s Hemp Program (“Program”), whichNJDA’s Division of Plant Industry will administer, and regards hemp growing, processing, and handling licenses pursuant to the Hemp Farming Act, Farm Bill and Interim Final Rules.

The federal requirements include ensuring that grown and processed hemp maintains 0.3 percent delta-9 tetra hydro cannabinol (“THC”) concentration limit on a dry weight basis, report specified information to the USDA and comply with the 2018 Farm Bill enforcement provisions. Hemp with a THC concentration exceeding 0.3% on a dry weight basis will be consideredmarijuana, subject to the Controlled Substances Act and DEA regulations, and destroyed in accordance with reverse distributor regulations at 21 CFR 1317.15.

The Program establishes reporting requirements compelling NJDA to provide the USDA with information including: pre-planting, planting, pre-harvest, and one annual production report listing hemp crop acreage; monthly reports updating hemp producer’s license status and providing noncompliant hemp violations; and annual reports regarding total grown and disposed hemp acreage ensuring that accurate legal land descriptions and hemp quantities are maintained.

New Jersey’s Fee Schedule and Hemp Program Rules

The Program’s fee schedule is based upon whether producer is growing, processing, or handling hemp: growers pay annual $300 fee plus $15 per acre fee; handlers pay $450 per year; and processors’ annual fee stems for type of hemp component being processed (ex., $1450/year for those processing grain ($450) and CBD extract ($1,000)). Although permitted to process and handle own hemp without paying additional fees, once processing or handling hemp from a separate hemp producer, the grower must pay applicable processor and handler fees.

The Program also establishes hemp sampling and testing procedures in which fifteen (15) days prior to anticipated harvest date, an NJDA inspector or a DEA-registered third-party lab will collect hemp samples to test for compliance with the federally defined THC level. THC testing procedures must use postdecarboxylation or other similarly reliable methods and must measure total THC and test results must show the measurement of uncertainty being utilized and state if a given sample meets the 0.3 percent threshold based on the distribution range established by the measurement of uncertainty.

Hemp producers must also agree to grant entry to the NJDA onto premises where hemp is grown, processed, or handled for inspection and, in addition to individual sampling and testing requirements, the NJDA will also conduct annual inspections of a random sample from hemp producers.

Criminal Conviction Prohibition and “Negligent” Hemp Farming Act Rules Violations

Unless already participating in an industrial hemp pilot program prior to the 2018 Farm Bill’spassage, anyone with a controlled substances criminal conviction is disqualified from hemp program participation for a ten year period following the conviction and all key hemp production operation participants must undergo and pass a New Jersey State Police criminal background check.

Further, although not subject to adverse criminal law enforcement actions for negligent violations and, instead, must comply with a Corrective Action Plan tailored to prevent future violations, hemp farmers committing three (3) negligent violations within a five (5) year period are disqualified from working in the Program for a five (5) year period.

No CBD Prohibition

New Jersey joins Louisiana, Ohio and 3 American Indian tribes in receiving hemp growing, processing and selling regulations approval last week and its Hemp Farming Act Rules are effective through June of 2021.

The Hemp Farming Act Rules’ scope is limited to hemp production, sampling, testing and disposal, State another way, the Program does not address or encroach on the US Food and Drug Administration’s authority over CBD manufacturing and marketing (the advertising of which the Federal Trade Commission also retains authority) or hemp products transportation or shipment governed by the Interim Final Rules and 2018 Farm Bill.