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  • Writer's pictureNJ Cannabis Trade Association

NJCTA Executive Director Todd Johnson's Testimony on S3235/A4461 - Regulating Production and Sale of Certain Intoxicating Hemp Products


Good afternoon Chair Sarlo and members of the Senate Budget & Appropriations Committee. 


My name is Todd Johnson and I serve as the Executive Director of the New Jersey Cannabis Trade Association.  The NJCTA is a comprised exclusively of licensed cannabis businesses operating in New Jersey and our membership represents an overwhelming majority of the production capacity and approximately 30% of the retail dispensaries in our state’s regulated cannabis market.  NJCTA members, collectively, have invested hundreds of millions of dollars into the REGULATED cannabis marketplace, all on the promise of a marketplace where safety and testing are prioritized, and one which is overseen, from seed to sale, by the New Jersey Cannabis Regulatory Commission to ensure safety for medicinal patients and adult consumers alike.  The NJCTA welcomes all licensed operators to join our membership as we strive to build a safe, fair, and equitable industry here in the Garden State.

 

The NJCTA applauds our NJ legislature, and Senator Ruiz and Assemblyman Conaway in particular, for tackling the proliferation of hemp derived intoxicating cannabinoids via bill S3235 in the Senate and A4461 in the Assembly.  Intoxicating cannabinoids have been a controversial topic in New Jersey ever since the Medicinal Marijuana Program was created back in 2010.  You all and your colleagues invested thousands of hours into thoughtful debate while developing the legislative and regulatory framework of the Jake Honig Compassionate Use Medical Cannabis Act and subsequently the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act before they were signed by Governor Murphy in 2019 and 2021, respectively.  These laws created the guardrails by which cannabis products would be safely produced, tested, and made available to medicinal cannabis patients and consumers over the age of 21 in our state.  These laws ultimately resulted in a unified regulatory system subject to the oversight of one regulatory body, the Cannabis Regulatory Commission.  We are proud to report that, by virtue of these laws and regulations, there have been zero cannabis product recalls since the adult use cannabis market was launched in 2022. This is the very same system that we are urging, logically, the legislature utilize to regulate all intoxicating hemp derived cannabinoid products produced, wholesaled, and distributed in New Jersey. It is puzzling why anyone would consider anything different, given all of the safety, accountability, and testing protocols that have been thoughtfully developed and by which a successful foundation has been built.

 

However, a loop hole in the 2018 Federal Farm Bill has put our state’s, and the nation’s, regulated cannabis marketplaces in jeopardy.  The Farm Bill was designed to authorize the production of hemp as an agricultural commodity, subject to the express limitation that the plants were low in THC.  THC is the psychoactive cannabinoid found in cannabis.  What has happened is that opportunistic manufacturers exploited this loop hole by which they could take extracted cannabinoids from low THC hemp plants and put them through a chemical process known as isomerization which alters their molecular structure and allows them to be made into intoxicating cannabinoids such as Delta-8, Delta-9, and Delta-10 THC.  These manufacturers then infused those chemically altered, hemp-derived intoxicating cannabinoids into products such as gummies and beverages and created an entire market of intoxicating hemp derived products whose strength far exceeded the legal limit specified in the Farm Bill.  This has resulted in what is best described by an analogy that Mike McQueeny, NJCTA’s General Counsel, came up with…to state that intoxicating products derived from hemp is legal is the same as stating that potatoes are a legal agricultural commodity, so I should be able to sell any vodka that I make from a lawfully purchased potato.

 

Which brings me to the next issue related to bills A4461 and S3235…we heard at the Senate Judiciary Committee hearing on S3235 in May that the alcohol industry was seeking an amendment, or carve out, so they are allowed produce, wholesale, and retail beverages that are infused with these exact intoxicating hemp derived cannabinoids.  For clarity, they have already been producing, wholesaling and retailing these products via the Farm Bill loophole for the past few years, thumbing their noses at and bypassing the laws of this state and the federal government.  The NJCTA is vehemently against these amendments or adopting a carve out that would allow intoxicating cannabinoids, of any kind, to be sold to consumers anywhere except a Cannabis Regulatory Commission approved and state licensed Class 5 retailer.  Every Class 5 retailer licensed by the CRC is required, and for good reason, to certify their employees are properly trained to educate adults on how intoxicating cannabinoids impact a person’s mind and body after consumption.  The alcohol industry has none of these training protocols.  Will they implement them every liquor store?  They don’t care now.  Why would they care in the future?  What about our New Jesey towns?  I ask the mayors and city councils of municipalities, “how do you feel about not getting the 2% tax that every Class 5 retailer charges on all sales of cannabis products in your municipality?”  Are liquor stores prepared to implement those processes for sales of hemp derived intoxicating cannabinoids?  To date, they most definitely are not and the finances of New Jersey’s cities and towns have suffered, unknowingly, as a result.  I ask the mayors and city council members of municipalities that have banned cannabis product sales in their town, “how do you feel about liquor stores making a mockery of home rule in your municipality?”  You banned cannabis sales.  But it is being sold to consumers in your town right now.  Home rule, which the cannabis industry has abided by and respected, is lost if these alcohol focused amendments are shoved into these two bills.

 

The last, but most important issue I’d like to highlight today is public safety and how these unregulated, hemp derived, chemically altered, intoxicating cannabinoids have impacted our communities, specifically our underage children.  Last year, on this same topic, both Assembly members as well as Senate members heard troubling testimony about the proliferation of these products, including, in at least one disastrous incident, where a 15-year old boy became dizzy after ingesting sour watermelon gummies with 600 milligrams of delta-8, and later passed out in a forest in the winter, prompting a police search which found him freezing and on the verge of hypothermia.  Federal officials attributed more than 2,000 accidental poisonings between January 2021 and February 2022 related to these hemp-derived intoxicating cannabinoids.  Moreover, data from Virginia hospitals noted a 21.5% decline in cannabis-related pediatric emergency department visits in the six-month period that coincided with the effective date of a new state law there that regulated the production, sale, and potency of intoxicating hemp-derived products.  We must make it harder for children to get their hands on these products.  They are not for kids.  Yet, the packaging of unregulated and untested products often resembles that of children’s favorite candies and chocolate bars.  This must stop!

 

In conclusion, the New Jersey Cannabis Trade Association strongly supports A4461 and S3235, as it is currently written.  This bill will close the Farm Bill loophole that has been exploited to the detriment of safe access to legal, tested and regulated cannabis throughout our state.  We believe that the regulation of hemp derived intoxicating cannabinoids via the Cannabis Regulatory Commission is the smartest and safest way to make these products available to consumers and patients in New Jersey.

 

Thank you.

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