Hemp in New Jersey – It’s Legal!

Now removed from the 2018 Farm Bill’s federal controlled substances list, beginning this year (2020) hemp can be treated like any other agricultural commodity in New Jersey. The Garden State is one of the first three states to have its hemp program approved by the United States Department of Agriculture (USDA).  Now the New Jersey Department of Agriculture (NJDA) can start accepting applications.

Here is what you need to know:

1) There are two types of licenses:

a) Grower (Producer) = a business or person who is authorized by the NJDA to cultivate hemp

b) Processor/Handler

i) Processor = Includes, but is not limited to, entities acquiring raw hemp materials and processing them into products.

ii) Handler = Those who 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 pursuant to any federal and state law or rule adopted pursuant thereto. Examples of “handlers” include, but are not limited to, seed cleaners, analytical labs, traders, harvesting entities, brokers, and other service providers.

2) Fees:

The Program establishes a schedule of fees to be paid based upon whether the hemp producer will be growing, processing, or handling hemp. Growers will pay an annual $300 plus $15 per acre fee, handlers will pay a $450 annual fee, and processors will pay an annual fee for each type of hemp component they process. For example, a hemp producer who processes grain ($450) and CBD extract ($1,000) will pay a $1,450 annual fee. Growers are permitted to process and handle their own hemp without paying additional fees. However, once a grower processes or handles hemp from at least one (1) separate hemp producer, the grower must pay applicable processor and handler fees.

3) The NJDA has the following restrictions

a) N.J.A.C. 2:25-2.2 – requires a site modification fee any time a growing site is altered or added to an existing license. This is necessary, so that the Department can submit accurate records to the USDA, which must be kept apprised of the status of all hemp producers and have accurate legal descriptions of all land being used to produce hemp.

b) N.J.A.C. 2:25-2.2 – prohibits public access to hemp, such as hemp mazes or any other recreational activity. The Department deems these measures necessary to prevent members of the public from having unauthorized access to plants and seeds that could be used to cultivate hemp in violation of this chapter.

c) N.J.A.C. 2:25-3.2 – allows the Department to prohibit any hemp, seeds, plantlets, or propagules for any reason. If the Department determines that any particular strain or source for hemp is unreliable, it may be prohibited in order to protect the integrity of the program. Hemp farmers will suffer financial losses for every non-compliant field they must destroy, so it is more efficient to prevent non-compliant hemp from being planted to begin with. If non-compliant hemp is processed into foodstuffs, it could result in State or nationwide recalls.

4) The application must provide the geographical land area on which hemp is going to be cultivated, processed, or handled. The application is tied to a particular building for processing and includes buildings used for processing.

5) Unlike cannabis licenses, at this time the NJDA has not limited the number of licenses they will issue. However, make sure your application is done right as incomplete answers will remove your application from consideration.

6) Upon request by law enforcement, any person transporting hemp or hemp materials shall maintain and prove authorization to engage in the commercial sale of hemp under the NJ hemp program, along with a travel manifest that lists the origin, destination, product description, and date of transport. Third-party carriers are not required to be authorized hemp producers in order to transport hemp.

7) 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 under the Agriculture Improvement Act of 2018.

8) Provided the distribution is carried out in accordance with federal and state law, distribution of CBD extract outside of New Jersey is not prohibited if it was grown/processed in New Jersey.

If you are interested in learning more about the hemp application process or submitting an application in New Jersey, please contact me at smints@capehart.com or 856.840.4945.

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