New Jersey Launches A Hemp Program In Accord With The Federal Hemp Farming Act Of 2018

Posted on February 21st, 2020

New Jersey recently launched a hemp program in accord with the federal Hemp Farming Act of 2018  which removed hemp (generally defined as cannabis with less than 0.3% THC) from Schedule I of the  Controlled Substances Act instead treating it as an ordinary agricultural commodity. Its provisions were incorporated into the 2018 United States Farm bill that became law on December 20, 2018.

New Jersey State Senate President Steve Sweeney spoke at the State Agricultural Convention this month expressing his hopes for the emerging industrial hemp industry in the State, calling hemp the “next major cash crop for New Jersey.”  New Jersey Secretary of Agriculture Doug Fisher also praised this emerging industry:

Last year at the State Agricultural Convention he stated his commitment to preserving farmland throughout the state and this year Senator Sweeney expressed his support and excitement for the future of our hemp industry and the positive impact it will have on the state. His confidence in this new industry and his knowledge of agriculture, along with his track record of getting things done makes us all excited for this new crop to expand the sector in the coming years.

Unlike cannabis licenses, hemp licenses are far easier to procure and, with the tremendous and growing interest in CBD derived from hemp, present just as compelling a business opportunity.

Here is a primer on what prospective applicants need to know to secure a hemp license:

  • There are two types of licenses:  A Grower license and Processor/Handler license.  The annual license fees vary for the latter, with (i) processors of grain and fiber facing $450 annual fees, (ii) processors of floral, hemp oil and CBD extracts facing $1,000 annual fees, and (iii) handlers facing $450 annual fees.  Note, however, that hemp growers who process or handle their own hemp are not required to pay additional processor or handling license fees.
  • The “Handler” designation is different from the “Processor” designation.  To “Handle” under the program means to possess or store a hemp plant on premises owned, operated, or controlled by a hemp producer for any period of time or in a vehicle for any period of time other than during the actual transport of the plant between premises owned, operated, or controlled by hemp producers or persons or entities authorized to produce hemp under federal and state law or rules/regulations adopted pursuant thereto.  Examples of “handlers” include, but are not limited to, seed cleaners, analytical labs, traders, harvesting entities, brokers and other service providers.  “Handle” does not mean possession or storage of finished hemp products.
  • At this time, again unlike with cannabis licenses, the New Jersey Department of Agriculture has not limited the number of licenses to be issued.
  • The application must provide the geospatial location of the proposed Licensed Area, which is defined as a land area licensed by the Department of Agriculture on which a hemp producer plans to cultivate, process, or handle hemp.  Additionally, the application is tied to a particular building for processing and thus the Licensed Area includes buildings that are used for processing.
  • Any person transporting hemp or hemp materials shall maintain, and provide upon request of law enforcement, proof of authorization to engage in the commercial sale of hemp under the New Jersey hemp program, as well as a travel manifest that lists the origin, destination, product description, and date of transport.  Third-party carriers are not required to be hemp producers in order to transport hemp.
  • Under the Agriculture Improvement Act of 2018, hemp products may be transported across state lines and exported to foreign countries in a manner that is consistent with federal law and the laws of respective foreign countries.
  • There is no prohibition on distribution of CBD extract outside of New Jersey if it was grown/processed in New Jersey, provided the distribution is undertaken in accordance with federal and state law.  By way of example, CBD oil cannot be distributed if such products include CBD as a food additive, are sold as a dietary supplement, or are sold with health claims relating to products which are not approved by the U.S. Food and Drug Administration (FDA).

For more information about the application process or for assistance with your application, please click here to email Joshua Bauchner, head of Ansell Grimm & Aaron’s Cannabis Practice Group, or call him at 973-247- 9000, ext 418.