ASSEMBLY AGRICULTURE AND NATURAL RESOURCES COMMITTEE

STATEMENT TO

ASSEMBLY, No. 5322

STATE OF NEW JERSEY

DATED:  MAY 16, 2019

      The Assembly Agriculture and Natural Resources Committee favorably reports Assembly Bill No. 5322.

      This bill would establish a program for the cultivation, handling, processing, transport, and sale of hemp and hemp products in the State in accordance with federal law.

      The bill would repeal New Jersey’s hemp pilot program, and replace it with a permanent program, administered by the Department of Agriculture (department), that complies with federal law.  The bill would define “hemp” as the plant Cannabis sativa L., any part of the plant, and all derivatives thereof with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent, consistent with federal law.  The bill would define hemp producer as a person or business entity authorized by the department to cultivate, handle, or process hemp in the State.  The bill would define “hemp product” as a finished product with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent that is derived from or made by processing a hemp plant or plant part and prepared in a form available for commercial sale, and would include cannabidiol. 

      The bill would make it lawful for a hemp producer to cultivate, handle, or process hemp or hemp products in the State, and for any person to possess, transport, sell, and purchase legally produced hemp products in the State.  Any person who is not a hemp producer or an agent of one and cultivates, handles, or processes living hemp would be subject to the same penalties as those related to marijuana.

      The bill would require the department to adopt regulations and submit a State plan for approval by the United States Department of Agriculture for the regulation of hemp consistent with federal requirements.  The regulations would include: maintaining information about hemp producers; an inspection, testing and disposal of noncompliant hemp program; provisions for enforcement of the bill; information sharing as required by federal law; and a certification that the department has the resources to implement the program.  If the United States Department of Agriculture disapproves the State plan, the department would be required to amend the State plan and resubmit it to gain federal approval.  The bill would not prevent any person from participating in a federally administered hemp program if the State does not have an approved State plan.

      Additionally, the department would be required to adopt rules and regulations to: establish requirements to be a hemp producer, establish an appeal process with retesting, to collect and share information about hemp producers pursuant to federal law, to define classes of hemp products that are eligible for sale, establishing a licensing fee structure, and establish procedures governing hemp shipment within the State.  The regulations would include a requirement that all shipments be accompanied by the originating hemp producer’s proof of authorization to engage in the commercial sale of hemp, and a travel manifest that lists the origin, destination, product description, and date of transport.  The department would be prohibited from requiring third-party carriers to be authorized hemp producers in order to transport hemp.

      If a hemp producer negligently violates the provisions in the bill or any rules or regulations adopted pursuant thereto, the producer would be subject to a corrective action plan designed to bring the producer into compliance with the hemp program.  Three negligent violations in a five year period would result in a five-year ban from participating in the hemp program.  Any intentional violations would be referred to the State Attorney General and the Attorney General of the United States.  The department would be required to adopt rules and regulations establishing a penalty fee structure for violations of the act. 

      The bill would establish a separate fund called the “New Jersey Hemp Farming Fund.”  All license fees, penalties collected by the department, monies made available to the department for the purposes of the bill including federal funds, and sums appropriated by the Legislature to implement the hemp program would be deposited into the fund. 

      The bill would provide that a person may possess, transport, buy, and sell hemp products in the State, including products containing cannabidiol derived from hemp, to the maximum extent permitted by federal law.  The Department of Agriculture, in consultation with the Department of Health, would be permitted to adopt rules and regulations to regulate the sale of hemp products that provide that hemp-derived cannabinoids, including cannabidiol, are not considered controlled substances or adulterants.  Hemp products processed outside of the State may be sold in the State if the products and the hemp used in the products were processed and cultivated legally in another state that has substantially similar requirements for the processing of hemp products or cultivating hemp as provided in the bill.

      The bill would also amend various sections of statutory law to replace references to the “New Jersey Industrial Hemp Pilot Program” with the New Jersey Hemp Farming Act.