Immediate Impact of the New Jersey Hemp Farming Act

With more than 750,000 acres in farmland, hemp has long been viewed as a viable crop for the Garden State as it would allow farmers to diversify their products and earn additional profits.

In the wake of the 2014 Farm Bill, New Jersey passed its Industrial Hemp Pilot Program, whereby certain individuals partnered with educational institutions to cultivate, process, research, test, and market safe and effective industrial hemp. The passage of the 2018 Farm Bill removed hemp from the Controlled Substances Act and it is now regulated as an agricultural commodity by the United States Department of Agriculture (USDOA).

Upon the passage of this bill, lawmakers sought to repeal the New Jersey Industrial Pilot Program and replace it with the New Jersey Hemp Farming Act, which would establish a program for cultivation, processing, transport, and sale of hemp to be administered by the New Jersey Department of Agriculture (NJDOA).

The New Jersey Hemp Farming Act (A5322), was passed by the Legislature on June 20, 2019, and will become law once Gov. Phil Murphy signs the bill or within 45 days if the governor elects not to act (whichever occurs first). The proposed law requires the NJDOA to submit a plan for approval by the USDOA before hemp cultivation and processing may begin in the State.

The bill also requires the NJDOA to create an approval process for hemp producers; establish a licensing, testing, and inspection program; establish an appeals process for alleged violations; and establish procedures for hemp transportation.
Because the bill would legalize the sale of products made from all parts of the hemp plant, not just the non-germinating seeds and stalks as is the case under present law — including the legalization of cannabinoids such as cannabidiol (CBD) — New Jersey can expect an increase in the sale of raw hemp and hemp products.

Moreover, because there will be an increased availability of hemp, the costs of manufacturing hemp products may decrease, convincing some concerned business owners and consumers to enter the hemp/CBD market. This is especially true given the purported health benefits of CBD and its potential to become a part of the pharmaceutical industry.

CBD craze aside, it is unclear how many individuals in New Jersey will apply to be hemp producers. In 2019, Kentucky received 1,115 applications to grow hemp of which 1,035 were approved. Kentucky is nearly 15 times larger than New Jersey when it comes to farmland. New Jersey can expect to receive well over 100 applications to produce hemp.

It should be noted that hemp producers must be authorized by the NJDOA in order to cultivate hemp. Therefore, the law does not create a blanket right for the public to begin to grow this plant. In fact, any person or entity that is not a hemp producer or an agent of a hemp producer, but who cultivates, handles, or processes living hemp plants or viable seeds, leaf materials, or floral materials derived from hemp, shall be subject to the same penalties as those related to marijuana.

In sum, A5322 represents a significant step forward for New Jersey, placing it among the dozens of other states with existing hemp-product businesses. Once the bill becomes law, hemp will become the next new agricultural commodity of New Jersey.