Pyrrhic Victory And Major Setbacks In Hemp Industry: New Jersey And California Rulings Stir Uncertainty For Stakeholders

Hemp regulation is among the most important regulation battles underway in the cannabis space at the moment. This ongoing conflict, which involves multiple stakeholders, has recently experienced various developments. Let’s review them.

In early October, hemp stakeholders faced significant challenges in both California and New Jersey as court rulings largely upheld strict regulations on intoxicating hemp products.

A federal judge in California ruled against hemp producers, affirming the state’s right to enforce emergency regulations that restrict the sale of intoxicating hemp substances, including synthetic products like delta-8 THC and HHC.

Meanwhile, in New Jersey, hemp businesses gained a partial victory when a judge found parts of the state's new law violated federal commerce regulations, but most of the law remains intact.

California's Regulatory Win Puts Hemp On Notice

California's hemp industry suffered a major defeat when Judge Stephen I. Goorvitch ruled in favor of the state's emergency regulations aimed at controlling intoxicating hemp products.

The restrictions, enacted to protect young consumers, include bans on the sale of THC-containing products to those under 21 and limits on servings per package. Non-intoxicating CBD products, however, remain available for purchase.

The U.S. Hemp Roundtable which led the legal challenge, argued that the regulations would harm medicinal CBD users by limiting product availability. The court dismissed these concerns, with Goorvitch noting that THC-free CBD products can still be sold at retail stores, while products containing THC can only be sold in licensed dispensaries.

In an official statement, Attorney General Rob Bonta praised the decision.

"In California, we have established strict prohibitions against intoxicating cannabinoids in hemp products, regardless of whether they are naturally sourced or synthetic. The California Department of Justice remains steadfast in its commitment to safeguarding the interests of legitimate businesses that operate with integrity in this industry. I take immense pride in our Cannabis Control Section and the tireless dedication they have shown in ensuring the success of this initiative," Bonta said.

Read Also: California Judge Rules Gov. Newsom’s Hemp Ban Stands Despite Industry Pushback 

A Pyrrhic Victory For Hemp Industry In New Jersey

Meanwhile, in a mixed decision, U.S. District Court Judge Zahid N. Quraishi upheld much of New Jersey’s stringent law regulating intoxicating hemp products. The law places intoxicating hemp under the same restrictions as cannabis, requiring businesses to halt sales until licensed by the state's Cannabis Regulatory Commission (CRC).

While Quraishi upheld the bulk of the law, he sided with plaintiffs on certain points, agreeing that parts of the law violate the dormant commerce clause of the U.S. Constitution.

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Specifically, he ruled that New Jersey cannot unfairly burden out-of-state hemp businesses by subjecting them to civil and criminal penalties, reported New Jersey Monitor.

"The New Jersey Legislature can continue to otherwise regulate the production of hemp as stringently as it would like so long as it does not prohibit the transportation or shipment of hemp or hemp products," Quraishi wrote in his decision.

Read Also: Gov. Newsom’s Hemp Ban Goes Into Effect: Consequences For Industry, Investors, Patients

Other States Join The Regulatory Battle: Tennessee And Utah

New Jersey and California are not alone in their crackdown on psychoactive hemp. Tennessee and Utah are also moving forward with stricter regulations, reported Hemp Today.

In Tennessee, new rules set to take effect on December 26, 2024 change how THC levels in products are measured, which could effectively ban hemp flower and other popular products.

Businesses have pushed back, with the Tennessee Growers Coalition filing a lawsuit arguing that the regulations overstep state law and conflict with the 2018 U.S. Farm Bill.

Meanwhile, Utah is in the final stages of its legislative push to ban hemp products. The state's Department of Agriculture and Food has opened a public comment period, which ends October 15, before finalizing the regulations.

• Read Next: Synthetic Cannabinoids Could Be Federally Banned Under New Senate Bill To Regulate Hemp-Derived Products

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