A3602

An Act concerning the labeling, marketing, and sale of cannabidiol and products containing cannabidiol, supplementing Title 24 of the Revised Statutes, and amending P.L.2019, c.238.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) a. No later than one year after the date of the first meeting of the Cannabis Regulatory Commission created pursuant to section 31 of P.L.2019, c.153 (C.24:6I-24) or one year after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), whichever is later, the Cannabis Regulatory Commission shall, in consultation with the Department of Agriculture and the Department of Health, and pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations concerning the labeling, marketing, and sale of cannabidiol and products containing cannabidiol, including cannabidiol or cannabidiol products produced for ingestion, topical application, inhalation, or consumption in any form. The rules and regulations shall not apply to medical cannabis or medical cannabis products cultivated, manufactured, or dispensed by an alternative treatment center pursuant to the “Jake Honig Compassionate Use Medical Cannabis Act,” P.L.2009, c.307 (C.24:6I-1 et al.).

b. The rules and regulations adopted pursuant to subsection a. of this section shall include:

(1) health and safety standards for cannabidiol and products containing cannabidiol including, but not limited to:

(a) the permitted uses of cannabidiol for scientific and therapeutic purposes;

(b) standardized recommended amount for single use of cannabidiol;

(d) maximum single use amount and limits for the number of single use amounts of cannabidiol that may be sold as part of one product;

(2) labeling and packaging standards for cannabidiol and products containing cannabidiol, including:

(a) single use amount size, the total number of single use amounts in a package, and a statement regarding the total amount of cannabidiol contained in the product and in each single use amount;

(b) production date and expiration date of the product; and

(3) advertising requirements and limitations for cannabidiol and products containing cannabidiol including:

(a) prohibitions on advertising cannabidiol and products containing cannabidiol in a manner that appeals to minors, promotes illegal activity, or otherwise presents a risk to public health and safety; and

(b) limits on the health claims that may be advertised in conjunction with cannabidiol to those recognized by the commission pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. In addition to any State or federal law, any person who violates a rule or regulation adopted pursuant to this section shall be liable to a civil penalty of $1,000 for the first offense and up to $2,000 for the second and each subsequent offense, to be collected in a civil action commenced by the Cannabis Regulatory Commission. Any penalty imposed pursuant to this subsection may be collected in a summary proceeding under the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.). If the violation is of a continuing nature, each day during which it continues shall constitute an additional, separate and distinct offense. The Superior Court and the municipal court shall have jurisdiction to enforce the provisions of the “Penalty Enforcement Law of 1999” pursuant to this subsection.

2. (New section) The rules and regulations adopted pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be based upon the best available scientific data. Any regulation related to health, safety, dosage, or therapeutic uses of cannabidiol shall be valid if in the opinion of experts at the Department of Health:

a. the underlying information has been clearly demonstrated through scientifically valid testing according to generally accepted principles;

b. a body considered to be authoritative by the experts at the Department of Health has formally endorsed the regulation or underlying information; or

c. an agency of the State or federal government has formally required the regulation or endorsed the underlying information.

3. (New section) a. Except as authorized by the “Jake Honig Compassionate Use Medical Cannabis Act,” P.L.2009, c.307 (C.24:6I-1 et al.), no person shall sell, offer for sale, or distribute for commercial purpose at no cost or minimal cost, cannabidiol or a product containing cannabidiol to a person under 21 years of age.

b. Any person who violates subsection a. of this section shall be liable to a civil penalty of not less than $250 for the first violation; $500 for the second violation; and $1,000 for the third and each subsequent violation. The penalties imposed pursuant to this subsection shall be recovered in a summary proceeding pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.). The municipal court in the municipality where the violation occurred shall have jurisdiction to enforce the provisions of the “Penalty Enforcement Law of 1999” pursuant to this section. An official authorized by statute or ordinance to enforce the State or local health codes or a law enforcement officer having enforcement authority in that municipality may issue a summons for a violation of the provisions of subsection a. of this section, and may serve and execute all process with respect to the enforcement of this section consistent with the Rules of Court. A penalty recovered under the provisions of this subsection shall be recovered by and in the name of the State by the local health agency. The penalty shall be paid into the treasury of the municipality in which the violation occurred for the general uses of the municipality.

c. The establishment of the following shall constitute a defense to a violation of the provisions of subsection a. of this section:

(1) the purchaser of the cannabidiol or product containing cannabidiol falsely represented that the person was of legal age to make the purchase, by producing either a United States passport, a driver’s license or non-driver identification card issued by the New Jersey Motor Vehicle Commission, a driver’s license issued pursuant to the laws of another state, or any other identification card issued by a state or the United States that bears a picture of the person, the name of the person, the person’s date of birth, and a physical description of the person;

(2) the appearance of the purchaser of the cannabidiol or the product containing cannabidiol was such that an ordinary prudent person would believe the purchaser to be of legal age to make the purchase; and

(3) the sale or distribution was made in good faith, relying upon the production of identification that conforms to the standards enumerated in paragraph (1) of this subsection and the reasonable belief that the purchaser or recipient was actually of legal age to make the purchase.

d. It shall be unlawful for a person under the age of 21 to present or offer any written or oral evidence of age or other personal identifying information that is false, fraudulent, or not actually the person’s own, including the use of a driver’s license or other government-issued form of identification in violation of section 1 of P.L.1983, c.565 (C.2C:21-2.1), N.J.S.2C:21-17, section 5 of P.L.2003, c.184 (C.2C:21-17.2), or section 6 of P.L.1968, c.313 (C.33:1-81.7), for the purpose of purchasing, attempting to purchase, or otherwise procuring or attempting to procure cannabidiol or a product containing cannabidiol.

e. The prohibitions of this section do not apply to a person under the legal age for purchasing cannabidiol who is acting under the direction of the commission or under the direction of a State or local law enforcement agency for the purpose of investigating possible violations of the laws prohibiting the sale of cannabidiol to persons who are under the legal age for purchasing cannabidiol.

4. (New section) Nothing in P.L. , c. (C. ) (pending before the Legislature as this bill) shall be construed to limit any privileges or rights of a registered qualifying patient, designated caregiver, institutional caregiver, or alternative treatment center as provided in the “Jake Honig Compassionate Use Medical Cannabis Act,” P.L.2009, c.307 (C.24:6I-1 et al.) and P.L.2015, c.158 (C.18A:40-12.22 et al.) concerning the medical use of cannabis.

5. (New section) The provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not apply to:

a. a product containing cannabidiol that is approved or licensed by the federal Food and Drug Administration under the “Federal Food, Drug, and Cosmetic Act,” 21 U.S.C. s.301 et seq. and used in an approved manner; or

b. a product that is generally recognized as safe and effective pursuant to conditions established by the federal Food and Drug Administration and any applicable regulations.

6. Section 9 of P.L.2019, c.238 (C.24:5-23) is amended to read as follows:

9. a. A State agency may not prohibit a person or business entity that processes or manufactures a product regulated by the agency from applying for or obtaining a permit or other authorization to process or manufacture the product solely on the basis that the person or business entity intends to process or manufacture the product with hemp.

b. Hemp, hemp products, and hemp derivatives, including hemp-derived cannabidiol, produced in accordance with P.L.2019, c.238 (C.4:28-6 et al.) and any rules or regulations adopted pursuant thereto, shall not be considered controlled substances or additives [and hemp,] . Hemp, hemp products, or hemp derivatives, including hemp-derived cannabidiol , may be added as an ingredient to cosmetics, personal care products, or products intended for human or animal consumption pursuant to P.L.2019, c.238 (C.4:28-6 et al.) and P.L. , c. (C. ) (pending before the Legislature as this bill) .

c. The provisions of P.L.2019, c.238 (C.4:28-6 et al.) applicable to hemp producers shall not apply to the possession, handling, transport, or sale of hemp products, including those containing one or more hemp-derived cannabinoids, including cannabidiol. Notwithstanding any other law, a person or business entity may possess, transport, sell, and purchase legally produced hemp products in this State pursuant to P.L.2019, c.238 (C.4:28-6 et al.) and P.L. , c. (C. ) (pending before the Legislature as this bill) . As part of the rules and regulations adopted pursuant to P.L.2019, c.238 (C.4:28-6 et al.) and section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) , the Department of Agriculture or the Cannabis Regulatory Commission created pursuant to section 31 of P.L.2019, c.153 (C.24:6I-24), as applicable, shall provide to a retailer of hemp products notice of a potential violation concerning hemp products sold by the retailer and shall provide an opportunity to cure a violation committed unintentionally or negligently.

d. The Department of Agriculture, in consultation with the Department of Health and the Cannabis Regulatory Commission created pursuant to section 31 of P.L.2019, c.153 (C.24:6I-24) , may adopt rules and regulations only to regulate the sale of hemp products that do not conflict with the rules and regulations adopted pursuant section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) and that provide that:

(1) hemp-derived cannabinoids, including cannabidiol, are not considered controlled substances or adulterants; and

(2) products containing one or more hemp-derived cannabinoids, such as cannabidiol, intended for ingestion are to be considered foods, not controlled substances or adulterated products to the maximum extent permitted by federal law.

e. Retail sales of hemp products processed outside the State may be conducted in the State when the products and the hemp used in the products were processed and cultivated legally in another state or jurisdiction that has the same or substantially similar requirements for processing hemp products or cultivating hemp as provided by P.L.2019, c.238 (C.4:28-6 et al.) and, if applicable, the requirements for packaging, labeling, advertising, and approved uses of cannabidiol and products containing cannabidiol established pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) .

f. Hemp products may be legally 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.

(cf: P.L.2019, c.238, s.9)

7. This act shall take effect immediately.

STATEMENT

This bill would direct the Cannabis Regulatory Commission to adopt regulations concerning labeling, marketing, and sale of cannabidiol and products containing cannabidiol, and would prohibit the sale of cannabidiol to minors.

The bill would require the Cannabis Regulatory Commission, in consultation with the Department of Agriculture and the Department of Health, to adopt rules and regulations concerning the labeling, marketing, and sale of cannabidiol and products containing cannabidiol, including products intended to be ingested, applied topically, inhaled, or consumed in any form. The rules and regulations would include (1) health and safety standards for cannabidiol and products containing cannabidiol including permitted uses of cannabidiol, standardized single use amounts for cannabidiol, limits on potency, and maximum single use amount; (2) labeling and packaging standards for cannabidiol and products containing cannabidiol including single use amount, the total number of single use amounts in a package, and a statement regarding the total amount of cannabidiol contained in the product and in each serving; and (3) advertising requirements for cannabidiol and products containing cannabidiol, including a prohibition on the advertising products to minors or in ways that may risk health and safety, and limits on the health claims that may be advertised in conjunction with cannabidiol to allow only those recognized by the commission.

Any rule or regulation adopted by the commission would be based upon the best available scientific data. Any regulation related to health, safety, dosage, or therapeutic claims would be valid if: (1) the underlying information has been clearly demonstrated through scientifically valid testing according to generally accepted principles;

(2) a body considered to be authoritative by the Department of Health has formally endorsed the regulation or underlying information; or (3) an agency of the State or federal government has formally required the regulation or endorsed the underlying information.

The bill would prohibit the sale of cannabidiol and products containing cannabidiol to minors, and would establish a penalty of $250 for the first violation; $500 for the second violation; and $1,000 for the third and each subsequent violation. Any violations of the rules and regulations established by the Cannabis Regulatory Commission concerning the labeling, marketing, and sale of cannabidiol and products containing cannabidiol would be subject to a civil penalty of $1,000 for the first offense and up to $2,000 for the second and each subsequent offense.

The bill would not limit any privileges or rights of a registered qualifying patient, designated caregiver, institutional caregiver, or alternative treatment center as provided in the “Jake Honig Compassionate Use Medical Cannabis Act.” The bill would also not apply to a product containing cannabidiol that is licensed or approved by the federal Food and Drug Administration under the “Federal Food, Drug, and Cosmetic Act,” and used in an approved manner.

The bill would amend the “New Jersey Hemp Farming Act,” P.L.2019, c.238 (4:28-6 et al.) to ensure that the rules and regulations adopted by the Cannabis Regulatory Commission would not conflict with the rules and regulations adopted by the Department of Agriculture to regulate the cultivation, handling, processing, transport, and sale of hemp and hemp products.