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Photo: Stem of a hemp plant with female flowers. Photo: Overview of a field crop of industrial hemp. Photo: Flowering hemp plant displaying a dense grouping of female flowers.

Cooperative Extension Fact Sheet FS1302

Industrial Hemp Production in New Jersey: Frequently Asked Questions

  • William Bamka, County Agent II, Burlington County
  • Raul Cabrera, Extension Specialist in Nursery Crops Management
  • Stephen Komar, Agriculture and Natural Resources Agent, Sussex County
  • Brian Schilling, Extension Specialist in Agricultural Policy

What Is Industrial Hemp?

Industrial hemp is from the plant species Cannabis sativa and is used to produce a variety of industrial and consumer products. Hemp is a source of fiber and oilseed grown in countries worldwide. Many products, including fibers, textiles, paper, construction and insulation materials, cosmetic products, animal feed, food, and beverages can be produced from hemp. By definition, industrial hemp is low (less than 0.3%) in tetrahydrocannabinol (THC), the cannabis plant's primary psychoactive chemical.

Is Industrial Hemp the Same as Marijuana?

Industrial hemp and marijuana are different varieties of the same plant species, Cannabis sativa. While both are botanically the same species, different varieties or cultivars have been developed for distinct purposes and are grown with different cultural practices. Marijuana is cultivated for production of the psychoactive plant chemical tetrahydrocannabinol. Industrial hemp is typically cultivated for fiber, seed, and cannabidiol (CBD) oil. Federal and state law requires that the concentration of THC must be less than 0.3% in industrial hemp.

What Are Some of the Uses of Industrial Hemp?

There are over 25,000 reported uses for industrial hemp products globally according to a 2018 Congressional Research Service report. Industrial hemp is grown mainly for fiber production (fabrics, yarns, paper products, construction materials, etc.) or seed production (food products, culinary oils, soaps, lotions, cosmetics). Some varieties are suitable for dual-use production. Hemp is also grown for the production of cannabidiol oil extracted from resins produced largely in its flowers. CBD is used as a health supplement with purported health benefits including pain relief, inflammation, and others.

What Happens If an Industrial Hemp Crop Tests Higher Than the 0.3% THC Regulatory Limit?

By definition, the plants are no longer considered industrial hemp. Under current regulations, the crop would not be legal to harvest and must be destroyed. New Jersey forthcoming regulations will mandate the sampling and crop destruction protocols.

Is Hemp Oil the Same as CBD Oil?

Cannabidiol oil is sometimes called "hemp oil." CBD oil should not be confused with hemp seed oil. Cannabidiol is a naturally occurring compound largely found in and extracted from the resinous flowers of cannabis. CBD is one of more than a hundred phytocannabinoids, which are unique to cannabis. Seed oil is made from pressing the hemp seed, similar to the processing of oil from sunflower or canola seed.

How Does the 2018 Farm Bill Affect Hemp Production?

The 2018 Farm Bill recently signed by President Trump removes industrial hemp and its derivatives containing less than 0.3% THC from the Controlled Substances Act, thus legalizing the cultivation of industrial hemp and the hemp derivative CBD oil. The Farm Bill stands to significantly change hemp farming and product businesses. With legalization, growers can now move product across state lines and national borders. However, with that freedom potentially comes more competition; as more producers enter the market and production expands nationally.

The new law doesn't automatically allow a producer to start growing hemp immediately. Instead, Section 10113 of the 2018 Farm Bill describes the two situations under which a producer will be able to grow hemp in the future. In the first situation, the states will take charge of the regulation of hemp production within their respective jurisdictions. To do this, a state must submit a plan to the USDA through their state department of agriculture.

A state plan must include:

The second scenario is when a state chooses not to develop their own hemp production plan. A producer in a state that doesn't have a hemp plan could legally grow hemp by obtaining a USDA hemp license through the hemp regulations that the USDA will develop, unless the state has prohibited hemp cultivation. A state can outlaw hemp production within its boundaries or include additional restrictions and requirements in its state plan as long as the plan otherwise complies with the federal law.

Is It Legal to Grow Industrial Hemp in New Jersey?

In November 2018, New Jersey Governor Phil Murphy signed a bill to begin a pilot program for New Jersey farmers to produce industrial hemp. The pilot program calls for rules to ensure that growers are not subject to criminal penalties and meet federal guidelines and legal growing limits. In addition, the pilot program allows for collaboration with higher education institutions. The New Jersey Department of Agriculture is required to adopt rules and regulations to administer the pilot program. These include creating requirements for the licensing or contracting of growers participating in the program, prescribing hemp testing procedures to ensure compliance with federal law, creating a fee structure for the administration of the program, and certifying germinating seeds and hemp cultivars if necessary.

Currently, The New Jersey Department of Agriculture is in the process of developing regulations for the Industrial Hemp Pilot Program. Information about the application process to grow industrial hemp in New Jersey will be available once the pilot program regulations are finalized. It is anticipated that once the state pilot program is finalized, information will be submitted to USDA as the New Jersey Industrial Hemp Pilot Program under the 2018 Farm Bill.

Can Industrial Hemp Be Produced Organically?

Yes, like other commercial crops the opportunity exists to market industrial hemp to the organic consumer. According to USDA Organic Regulations (7 C.F.R. Part 205), only industrial hemp produced in accordance with the 2014 Farm Bill, as articulated in the Statement of Principles on Industrial Hemp issued on August 12, 2016 by USDA, and USDA organic regulations may be certified as organic. USDA accredited certifiers should direct questions regarding the guidance to their Accreditation Manager. These regulations will likely be amended to comply with the 2018 Farm Bill.

What Risks Might Be Encountered While Producing Industrial Hemp?

Just as producing any crop, there are risk factors associated with industrial hemp production. It is important that producers carefully evaluate the potential costs, market opportunities and technical feasibility of any production system before beginning any new crop. Factors to consider when evaluating the production of industrial hemp include:

Is Industrial Hemp Production Economically Viable for New Jersey?

As is the case with any emerging agricultural product, limited data exist to quantify the economic feasibility of industrial hemp production in New Jersey. The Hemp Industries Association (HIA) reported total United States sales of hemp products at nearly $800 million in 2017, with significant increases in the sale of hemp-based products, foods, and supplements as compared to 2016 estimates. Although industrial hemp production may provide an opportunity for New Jersey, it is crucial that producers carefully examine the market and accessibility of market channels as part of a marketing plan for their operation.


Photo credits: Top row l - r: Greg W. Roth, Department of Plant Science, Penn State University.

March 2019