New Jersey Leads Nation in Hemp Program Approval and Launch

Jersey got there first!

Leapfrogging over 16 other states with more established hemp programs, on December 27, 2019, the U.S. Department of Agriculture (“USDA”) approved New Jersey’s proposed hemp growing, processing and selling regulations, including Cannabidol (“CBD”), starting in 2020.

NJ Hemp Program’s Creation

Following Congress’ December 2018 passage of the Agriculture Improvement Act of 2018 (“2018 Farm Bill”), in August 2019 New Jersey enacted the Hemp Farming Act repealing and replacing its Industrial Hemp Pilot Program and authorizing hemp producers to grow and sell hemp for commercial purposes.

Following the USDA’s October 31, 2019 publishing of domestic hemp production interim final rules (“Interim Final Rules”) requiring states to obtain proposed hemp production plan approval (including sampling and testing, noncompliant hemp disposal, enforcement, and reporting and information sharing procedures), New Jersey’s Department of Agriculture (“NJDA”) promulgated its Hemp Farming Act Rules, N.J.A.C. 2:25-1 et seq..

The Hemp Farming Act Rules establish New Jersey’s Hemp Program (“Program”), whichNJDA’s Division of Plant Industry will administer, and regards hemp growing, processing, and handling licenses pursuant to the Hemp Farming Act, Farm Bill and Interim Final Rules.

The federal requirements include ensuring that grown and processed hemp maintains 0.3 percent delta-9 tetra hydro cannabinol (“THC”) concentration limit on a dry weight basis, report specified information to the USDA and comply with the 2018 Farm Bill enforcement provisions. Hemp with a THC concentration exceeding 0.3% on a dry weight basis will be consideredmarijuana, subject to the Controlled Substances Act and DEA regulations, and destroyed in accordance with reverse distributor regulations at 21 CFR 1317.15.

The Program establishes reporting requirements compelling NJDA to provide the USDA with information including: pre-planting, planting, pre-harvest, and one annual production report listing hemp crop acreage; monthly reports updating hemp producer’s license status and providing noncompliant hemp violations; and annual reports regarding total grown and disposed hemp acreage ensuring that accurate legal land descriptions and hemp quantities are maintained.

New Jersey’s Fee Schedule and Hemp Program Rules

The Program’s fee schedule is based upon whether producer is growing, processing, or handling hemp: growers pay annual $300 fee plus $15 per acre fee; handlers pay $450 per year; and processors’ annual fee stems for type of hemp component being processed (ex., $1450/year for those processing grain ($450) and CBD extract ($1,000)). Although permitted to process and handle own hemp without paying additional fees, once processing or handling hemp from a separate hemp producer, the grower must pay applicable processor and handler fees.