A federal court partially blocked New Jersey’s new hemp law, finding it illegally restricts sales and transportation of federally legal hemp products and discriminates against businesses foreign.

Federal Judge Zahid Nisar Quraishi on Thursday handed a partial victory to hemp companies challenging the state’s new law on hemp intoxicants, but refused to repeal the law in its entirety, as first reported by the New Jersey Monitor.

A group of hemp companies has filed a lawsuit challenging amendments to the New Jersey Hemp Act (NJHAA), arguing that its stricter THC regulations violate federal law and the U.S. Constitution.

They claimed the law conflicted with the 2018 Farm Bill by criminalizing federally legal hemp products and unfairly favoring in-state companies over out-of-state competitors, thereby violating the pending commercial clause.

The judge expedited the ruling because companies would have until Oct. 12 to remove hemp-based intoxicating products from shelves. After that date, these products cannot be resold until the state agency establishes regulations.

The court sided with the plaintiffs, ruling that parts of the NJHAA were preempted by federal law and discriminatory against interstate commerce, but upheld certain provisions, such as the ban on sales to persons of under 21 years old.

However, the impact of the judge’s ruling on New Jersey’s hemp industry is still unclear.

The NJHAA, which took effect October 12, established new limits on what and how those products can be sold as hemp, including the amount of THC those products can contain. In September, New Jersey passed Senate Bill 3235 regulating intoxicating hemp products, prohibiting the sale of hemp products containing THC to minors and limiting sales to licensed cannabis businesses in the state. State. However, the same law allows the sale of hemp-based beverages in liquor stores when regulations are written.

In light of the new legal landscape created, the plaintiff hemp companies argued that the NJHAA violated the 2018 Farm Bill, which allows interstate commerce of hemp products containing no more than 0.3% THC . They further argued that the NJHAA was unconstitutional because of federal preemption and because it ran afoul of the dormant Commerce Clause’s ban on state laws discriminating against out-of-state businesses. to the state.

The State of New Jersey defended the NJHAA, saying it is a legitimate state regulation intended to protect public health and safety, with clear guidelines for compliance.

Judge Quraishi ruled in favor of the plaintiffs, determining that the NJHAA was partially preempted by the Farm Bill and violated the dormant Commerce Clause by favoring in-state producers over out-of-state producers. The law’s definition of THC, which includes “total THC,” imposes illegal restrictions on products that comply with federal regulations.

The court granted partial summary judgment, agreeing with the plaintiffs that the NJHAA’s restrictions on out-of-state hemp products, particularly its criminalization of products containing more than 0.3%, of total THC, were inconsistent with the express preemption clause of the Farm Bill. This clause prevents states from imposing limits on the transportation of hemp products that meet federal standards. The court also noted that the NJHAA’s provisions unfairly discriminated against foreign producers, protecting local hemp companies at their expense.

Although the judge did not completely strike down the NJHAA, he upheld some provisions, including the ban on selling THC products to people under 21.

The ruling emphasized that while New Jersey has the authority to regulate hemp production within the state, it cannot criminalize the sale or transportation of hemp products that meet federal law from other states.

New Jersey is the latest state to crack down on intoxicating hemp products.

Last month, California restricted the retail sale of food, beverages and health products containing intoxicating hemp. Hemp industry stakeholders are challenging California regulators, seeking a temporary restraining order to end the state’s new emergency ban on these products.

Recently, Missouri’s ban on intoxicating hemp products was suspended, allowing these products to remain on store shelves while the state focuses on identifying mislabeled items instead of imposing vast embargoes. Meanwhile, the state health department will send mislabeled products to the attorney general for enforcement, without stopping the sale of compliant products.

Hemp intoxicants like delta-8 THC have not been regulated at the federal level, creating a gray area in the law.

While some states prohibit their use, others have regulations in place.

Banning these products is at the center of several state-level legal battles, and hemp is under review for the next Farm Bill, with some lawmakers and marijuana stakeholders advocating for a ban on the extraction of intoxicating compounds hemp, which could result in significant economic losses for the hemp industry.