New Jersey’s just-enacted regulatory plan for the sale of intoxicating hemp products has drawn a legal challenge from companies selling beverages.
A measure called the Hemp Act Amendments, signed into law by Gov. Phil Murphy on Sept. 12, gives the state’s Cannabis Regulatory Commission jurisdiction to regulate the sale of intoxicating hemp beverages. The law allows licensed cannabis retailers and liquor stores to petition the CRC for the right to sell those drinks.
But companies that already produce and sell hemp beverages and other hemp products are protesting New Jersey’s enactment.
A suit by a half dozen companies claims New Jersey’s regulatory crackdown on hemp products is preempted by federal law, violates the dormant Commerce Clause of the U.S. Constitution, and is void for vagueness.
Ryan Magee, a partner in McCarter’s Cannabis group noted the conflict between federal and state law regarding the Cannabis industry. “We are looking at this constant friction between constitutional positions that are being taken that put federal law at odds with state law. At least in the cannabis context, we’re actually seeing things shake out in favor of the states, right? But this is a bit unique, because unlike cannabis, where you’re dealing with something that is illegal under federal law [and] has now been legalized by the states, you were actually addressing something that’s almost the inverse of that—it’s legal under federal law. And the argument of the lawsuit is that New Jersey’s new law is restrictive and it’s vague in a way that is inconsistent with that federal law.” He added that a similar lawsuit was filed by hemp companies recently in California, protesting a law similar to the one just passed in New Jersey. “So I think you might be seeing a concerted effort by the hemp industry at large, at a federal level, and it’s gonna be worth tracking,” he said.