New Jersey cannabis regulator begins crackdown to rein in intoxicating hemp products

The New Jersey Cannabis Regulatory Commission (CRC) announced it will begin enforcing strict regulations on the sale of intoxicating hemp products, following a recent federal court decision that limited the full implementation of the law.

Originally passed in September, the law prohibits unlicensed sales of hemp-derived intoxicants containing “high”-inducing synthetic cannabinoids or THC not derived from naturally occurring compounds.

The rules, which officially took effect on Oct. 12, faced immediate legal challenges that temporarily stalled the enforcement of several key provisions. However, as of Friday, Nov. 8 the CRC confirmed it would proceed with enforcement.

21 and older

The new regulations in New Jersey place hemp-derived intoxicants under the same guidelines as state-licensed marijuana products. That means they must meet safety, testing, and packaging standards, and may be sold only to those 21 and older.

The new law imposes strict penalties on businesses that violate its provisions: sellers of prohibited products may incur fines starting at $100 for a first offense, escalating to $10,000 for repeated violations. Under the current framework, anyone selling these products without a license faces penalties, though the CRC has five months to finalize its licensing procedures for qualifying businesses.

“They’re sending a message, which will obviously have an intended chilling effect on bad actors. It also says they’re still paying attention,” Beau Huch, a cannabis and hemp attorney with Porzio Governmental Affairs, told New Jersey Monitor.

Unregulated competition

Signed by Gov. Phil Murphy on Sept. 12, the legislation responds to growing concerns about the accessibility of intoxicating hemp products to minors and the lack of oversight of the products, widely available in many U.S. states in convenience stores, hemp shops and other retail outlets.

By treating hemp products with high THC content similarly to marijuana, the CRC aims to curb unregulated competition and ensure that all intoxicating substances are held to stringent safety and labeling standards. CRC is initially expected to target synthetic cannabinoids such as delta-8 THC, delta-10 THC and THC-O, which have raised safety concerns and are considered potentially harmful to consumers.

The law’s enforcement was delayed by a lawsuit brought by hemp businesses, who argued that the restrictions impose an undue burden on interstate commerce. In Loki Brands LLC et al. v. Platkin et al., a federal judge upheld some parts of the law but ruled that certain provisions could not be enforced, citing constitutional concerns. However, the ruling left intact several key enforcement aspects of the law.

Lawmakers are drafting amendments to address the judge’s concerns, and the CRC is moving forward with enforcement of the law’s core provisions while awaiting a final resolution.

Farm Bill loophole

The push for regulation in New Jersey reflects the state’s concern over the rise of hemp-derived products with psychoactive effects similar to marijuana. The 2018 U.S. Farm Bill, which legalized industrial hemp, inadvertently allowed for the production of synthetic THC variants derived from hemp CBD, creating a loophole that left these products largely unregulated.

Many states have since introduced laws to close this loophole and clear the market of the products, which often mimic popular food and candy packaging and are marketed in ways that could appeal to minors. Unlike state-regulated marijuana, which is subject to rigorous safety standards, synthetic cannabinoids derived from hemp have largely escaped such oversight.

In addition to meeting the same safety protocols as marijuana, including strict limits on THC content, child-resistant packaging, and clear labeling, New Jersey’s new law stipulates that all retailers dealing in intoxicating hemp products must hold a CRC-issued license.

Sales now halted

Until the new licensing system is fully operational, the sale of intoxicating hemp products is paused, and the CRC has indicated it will pursue action against unlicensed retailers who fail to comply.

Licensed cannabis operators have largely supported the crackdown, viewing the regulation as a necessary measure to level the playing field. Licensed marijuana businesses in New Jersey are subject to stringent testing and costly regulatory compliance, which many hemp-derived intoxicant producers have historically been able to avoid. Medical and recreational marijuana interests argue that the crackdown on hemp-derived intoxicants addresses an unfair advantage for unregulated products while enhancing consumer safety.

The law’s rollout reflects New Jersey’s commitment to public health and market fairness but also highlights the ongoing complexities as states try to manage an industry that operates in a regulatory gray area. New Jersey’s approach may serve as a model for other states tackling similar issues, particularly as intoxicating hemp products remain popular and widely available in other regions of the country. Other states have also put intoxicating hemp under marijuana laws while some have banned them altogether.

Evolving landscape

The CRC is now focused on implementing a comprehensive framework for the safe distribution of hemp-derived intoxicants. In line with its broader mission, the New Jersey Department of Agriculture (NJDA) will continue overseeing non-intoxicating hemp products intended for fiber and grain, leaving the CRC to manage intoxicating substances.

As New Jersey presses forward, the state’s new regulatory approach underscores an evolving cannabis landscape where public safety, fair competition, and the need to regulate emerging intoxicants converge. For New Jersey businesses in the hemp and cannabis sectors, the law brings a challenging set of requirements but also opens the door to clearer guidelines for navigating the state’s legal framework.