Hemp industry in regulatory limbo after court decision

New Jersey’s hemp industry is at a regulatory standstill after the state announced that “at this time” it won’t enforce a new law temporarily banning hemp sales, four days after a federal judge upheld most aspects of the law as constitutional.

John Williams,  a cannabis and hemp attorney with Porzio Compliance Services, said the state has failed to provide sufficient guidance to business owners, hemp farmers, manufacturers, and retailers. Some feel as though they’re in limbo, unclear about what they can and can’t do, he said.

“Some people have removed the product off the shelves. Some are selling it very judiciously. Everybody’s looking for more clarification, because they’re getting 180 degrees in terms of differing opinions,” Williams said.

The state’s hemp law went into effect Saturday, but the only provision state officials said they will enforce is prohibiting sales to people under the age of 21. According to the law, people selling intoxicating hemp products without a license could face a fine of at least $100 for the first offense, $1,000 for the second offense, and at least $10,000 for each subsequent violation.

Joshua Bauchner, a cannabis attorney at law firm Mandelbaum Barrett, doesn’t have the same concerns about municipalities stepping in. He said he doesn’t believe that any town’s attempt to shut down local smoke shops would stand up in court.

He said it was “very smart” of the cannabis agency to take the position it did. The original intent of the legislation was to stop minors from buying sketchy products with synthetic cannabinoids, and the commission’s decision to enforce only the age requirement for now does just that, he said. “If things had stood, arguably, people’s shelves and warehouses were filled with contraband. No one wants that — the uncertainty of whether you are now engaging in a criminal enterprise keeping you up at night,” he said.

Under the law, New Jersey will count “total THC” in products, which will hold derived hemp to a higher standard than the federal law that legalized hemp. Products with more than 0.5 milligrams of THC per serving or 2.5 milligrams per package would be under the purview of the cannabis agency. Hemp farmers feel like it’s nearly impossible to keep that limit so low, Williams said, leaving them concerned about whether they can grow anything under New Jersey’s limit. Most of these workers are local growers on family farms, he added.

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