Mandelbaum Barrett PC
Governor Phil Murphy’s signing of Senate Bill 3235 on September 12, 2024, represents a significant shift in the regulation of intoxicating hemp products in New Jersey. The original intention of the bill was to restrict sales to those under 21 years of age. However, lobbyists turned this simple exercise into a bill better reflecting Frankenstein’s monster.
This new legislation introduces stricter oversight for cannabinoids such as Delta-8 and Delta-10 THC, with the goal of enhancing public safety and addressing regulatory gaps. Key provisions include an immediate ban on sales of these products to minors, a requirement for all sellers to obtain licensing from the State Cannabis Regulatory Commission (“CRC”), and the development of new rules for intoxicating hemp beverages. These measures aim to enforce rigorous standards on hemp products, thereby mitigating associated risks.
Not surprisingly, the law was immediately challenged in a federal court proceeding on a number of bases; including that it interfered with the interstate transport of hemp and resulted in disparate treatment between hemp produced in-state and out-of-state. On October 11, 2024, the Court struck those provisions, leaving the restriction on sales to minors. The next day, reflecting its own concerns about the bill, the CRC issued statement advising that it would not enforce any other provision.
At signing, the Governor expressed concerns about several late amendments that may complicate the implementation of the law in a three-page statement — but signed it anyway. Among his concerns:
- Resources for the CRC: Governor Murphy questioned whether the CRC has the necessary resources to create a new regulatory program for alcohol licensees selling intoxicating hemp beverages. The law requires the CRC to establish and enforce these regulations, but it does not provide additional funding for the CRC to expand its oversight capabilities.
- Regulatory Discrepancies: Another concern is the disparity between the regulations governing cannabis businesses and those for alcohol licensees. Currently, alcohol licensees are not required to meet the same rigorous standards as cannabis retailers, such as employee training and compliance with local ordinances. Governor Murphy emphasized the need for additional legislation to ensure that all businesses selling intoxicating hemp products adhere to the same standards.
- Ambiguity in the Definition of Intoxicating Hemp Products: Governor Murphy also pointed out a significant ambiguity in the definition of Intoxicating Hemp Product,” specifically the added the phrase “in this State.” This phrase has created confusion about whether the law applies only to products cultivated or manufactured in New Jersey or if it applies to all intoxicating hemp products sold in the State, regardless of origin. Governor Murphy called for further legislative clarification to resolve this issue.