New York Publishes Comprehensive Hemp Regulations

The New York Department of Health (DOH) recently filed its much-anticipated proposed regulations to regulate cannabinoid hemp products...

On October 28, 2020, the New York Department of Health (DOH) filed its much-anticipated proposed regulations to regulate cannabinoid hemp products. The newly-established Cannabinoid Hemp Program will license both cannabinoid hemp processors and retailers and set quality control standards that all cannabinoid hemp products must meet. 

“These regulations are the next step toward regulating the growing hemp industry in New York in a way that protects consumers and helps ensure the industry’s long-term viability,” Gov. Andrew Cuomo said in a press statement. “Establishing the State’s Cannabinoid Hemp Program to regulate production and sale of hemp and hemp extract will help protect both consumers and farmers.”

Key Definitions for Hemp Industry

While the 2018 Farm Bill legalized industrial hemp, federal regulations governing the processing and manufacturing of cannabinoid hemp products have not yet been established. New York’s proposed regulations define a number of key terms, including “cannabinoid hemp product,” “cannabinoid hemp processor,” “cannabinoid hemp retailer,” “hemp extract,” and “used for human consumption.” Notably, the DOH broadly defines the term “cannabinoid” as: 

any phytocannabinoid found in hemp, including but not limited to, Tetrahydrocannabinol (THC), tetrahydrocannabinolic acid (THCA), cannabidiol (CBD), cannabidiolic acid (CBDA), cannabinol (CBN), cannabigerol (CBG), cannabichromene (CBC), cannabicyclol (CBL), cannabivarin (CBV), tetrahydrocannabivarin (THCV), cannabidivarin (CBDV), cannabichromevarin (CBCV), cannabigerovarin (CBGV), cannabigerol monomethyl ether (CBGM), cannabielsoin (CBE), cannabicitran (CBT).

Hemp Processing Licenses

Under the regulations, any person extracting or manufacturing cannabinoid hemp in New York State is required to obtain a license from the DOH. Among other requirements, cannabinoid hemp processor applications must be accompanied by a summary and description of the products the applicant intends to make, proof of product liability insurance, evidence of good manufacturing practices, and copies of the organizational documents of the applicant. Cannabinoid hemp processor applications must be submitted with a $1,000 application fee or a $500 application fee for applicants seeking only to manufacture, and not extract cannabinoid hemp.

If an applicant is approved as a cannabinoid hemp processor, the applicant must submit the following before receiving the final license: a copy of the certificate of occupancy for the facility, a copy of the applicant’s evidence of a Good Manufacturing Practices (GMP) audit, and the license fee of $4,500 for extracting or $2,000 for manufacturing only.

Hemp Retailer Licenses

The proposed regulations require any person selling cannabinoid hemp to consumers to obtain a license from the Department. Among other requirements, cannabinoid hemp retail applications must be accompanied by a summary and description of the type of cannabinoid hemp products the retailer intends to sell, the name and state or country of origin of any manufacturers the retailer intends to source from, an attestation that the applicant will not sell inhalable cannabinoid hemp products to consumers under 21 years old, and proof of a certificate of authority from the Department of Taxation and Finance. All applications must be submitted with a $300 license fee for each retail location to be licensed by the Department.

Additional Regulatory Requirements

The DOH regulations also establish basic manufacturing, packaging and labeling and laboratory testing standards. Below are a few highlights:

• Cannabinoid Concentration Limits: All cannabinoid hemp products offered for retail sale must have a concentration of no more than 0.3% total Δ9-Tetrahydrocannabinol. If sold as a food or beverage, products may not have more than 25mg of cannabinoids per product.
• Hemp Extract: Intermediate sales of hemp extract containing up to 3.0% THC are authorized, provided that the sale is between licensed processors in New York State and the proper documents accompany the extract during transport.
• Product Requirements: Products may not contain tobacco or alcohol and may not be in the form of an injectable, transdermal patch, inhaler, suppository, flower product including cigarette, cigar or pre-roll, or any other disallowed form as determined by the DOH.
• Labeling and Packaging Requirements: All cannabinoid hemp products must include a label that contains the total amount of cannabinoids in the product, number of cannabinoids per serving, a nutritional or supplement fact panel, information about whether the product contains THC and appropriate warnings stating the product is not intended for children, its use may cause the failure of a drug test, the product has not been evaluated by the FDA and if pregnant or nursing, to consult a healthcare provider before use.
• Laboratory Testing: Cannabinoid hemp products must be laboratory-tested before entering the market, with testing for their cannabinoid profile, heavy metals, microbial impurities, mycotoxins, pesticides and residual solvents. This information is required to be retrievable by the consumer in the form of a QR code or corresponding link on the product label. 
• Marketing: Among other marketing/advertising restrictions, processors are prohibited from making claims suggesting the product will diagnose, cure, mitigate, treat or prevent disease.

Key Takeaways

The DOH’s hemp regulations establish a comprehensive regulatory framework for CBD and other hemp products, addressing many issues that have previously been left unaddressed by state and federal agencies. Businesses interested in entering New York’s hemp industry should review the regulations thoroughly. According to the DOH, applications for cannabinoid hemp processing and retailing licenses are under development and should be available in early 2021.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• New Jersey’s Proposed Recreational Cannabis Licensing Framework
• NJ Voters Approve Adult-Use Cannabis: The Path Forward
• Medical Marijuana May Now Be Prescribed Via Telemedicine in New Jersey

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.