A year after the 2018 Farm Bill legalized industrial hemp production nationwide, the United States Department of Agriculture has approved New Jersey’s proposed hemp growing, processing and selling regulations – including cannabidiol (CBD) – beginning in 2020.
New Jersey is among the first three states and three Native American tribes that the USDA approved hemp regulations for, along with Ohio and Louisiana; as well as Flandreau Santee Sioux, Santa Rosa Cahuilla and La Jolla Band of Luiseno Indian Tribes.
“New Jersey has an enormous head start to launch and profit from both oil-based and fibrous hemp,” said Steve Schain, senior attorney at Hoban Law Group in Cherry Hill, who added the state “leapfrogged” over 16 others with more established hemp programs due to how New Jersey’s policy was written.
“Issues exist regarding concurrent federal and state jurisdiction, and Jersey’s regulations do not address product marketing, allowable CBD content in consumables, and critical distinctions between CBD and broad and full spectrum oil-derived products,” Schain said. “While a more rigorous set of regulations challenging the Food and Drug Administration’s often murky authority would have been insightful, Jersey’s economic rules carry the day and give the Garden State a much needed head start.”
Following the USDA’s publishing of its interim final rules for domestic hemp production on Oct. 31, the New Jersey Department of Agriculture created its Hemp Farming Rules Act, which established the state’s industrial hemp program administered by NJDA’s Division of Plant Industry.
NJDA is required to provide pre-planting, planting and pre-harvest reports to the USDA, as well as one annual production report listing hemp crop acreage. NJDA is also required to provide the USDA with monthly reports updating hemp producers’ license status and providing non-compliant hemp violations; and annual reports regarding total grown and disposed hemp acreage to ensure that accurate legal land descriptions and hemp quantities are maintained.
Hemp farmers will pay NJDA $300 annually plus $15 per acre. Handlers pay $450 annually. Processors’ fees depend on what they process: $450 for those who process grain; $1,000 for those who process CBD; or $1450 for those who process both.
Farmers who handle and process their own hemp are able to do so sans additional fees, but are required to pay applicable fees when handling or processing someone else’s hemp. Additionally, hemp must be tested 15 days prior to harvest by an NJDA inspector or Drug Enforcement Agency-registered third-party lab.
Sowing the seeds
Now that the state’s hemp program is approved, NJDA’s next step is to release the licensing application and then award licenses.
“I think it’ll be a very quick process because they want New Jersey farmers to grow for the 2020 season,” said Ken VandreVrede, hemp farming hopeful and chief executive officer of CBD company HillviewMed. “We’re ready to go. As soon as the applications come out, I think they’re going to approve them very quickly.”
Hemp seeds usually go in the ground in June, though greenhouse growers “could start tomorrow” and then transplant to the field in June, he said.
VandeVrede is looking to build a co-op of New Jersey hemp farmers to offset the challenge of processing and selling the product.
“We would provide genetics and guidance, and we would buy the biomass back and process it for [Hillview] products that we already have in the market, our water-soluble CBD product and oil,” VandeVrede said.
Currently, Hillview products are made with hemp from Colorado. If he’s granted a hemp license in New Jersey, VandeVrede said he wants to source from New Jersey “as soon as possible within the first quarter” of 2020.
The same co-op model is used in produce, he explained.
“When you look at produce, say Driscolls, that’s the brand. These companies build a co-op of farmers growing the genetics of blueberries to build a brand and sell it in the supermarket. That model is going to translate very nicely over to hemp,” he said.
Despite hemp’s descheduling and that it’s no longer under the watch of the DEA, anyone with a controlled substances criminal conviction is disqualified from hemp program participation for a 10-year period following the conviction.
For others, program approval opens a window of opportunity.
“While many existing farmers are still wary of the markets yet to take hold, there is plenty of interest among part-time growers to make this an attractive opportunity for New Jersey agriculture,” said Ryck Suydam, president of the New Jersey Farm Bureau.
In 2020, though field production will cautious and located on small acreage farms, greenhouse production for CBD oil has a “significant upside,” Suydam projected.
“Moving expeditiously to launch and review applications, few barriers prevent Jersey hemp growers, processors, and handlers from enjoying a prosperous 2020 crop,” Schain said.