Alert
Cannabis Law Alert
10.29.2020

On October 27, 2020, New York State Department of Health (the “Department”) published proposed regulations regarding the manufacture, sale, and use of extracts from hemp, focusing in large part on the popular cannabinoid CBD. The regulations provide licensing avenues for (1) hemp processors and (2) hemp retailers. In addition, the regulations provide for quality control standards, testing, packaging and labeling requirements that applicants must meet. Pushing aside FDA guidance, the Department  will permit the sale of  CBD infused edible products in the form of food and beverages, but prohibits the addition of CBD in in products that contain alcohol or tobacco.

Required Licenses: Processors & Retailers

Gone are the days when hemp retailers could freely sell their hemp extract products in New York State. The Department will require any person or entity extracting, processing and/or  selling (both in brick and mortar and online) “cannabinoid hemp products” to obtain a license from the Department. The regulations define cannabinoid hemp product as “hemp or any product manufactured or derived from hemp, including hemp derived terpenes, in its final form, that are used for human consumption” but excludes cosmetics and synthetic cannabinoids.

Applications for processors must be accompanied by a non-refundable application fee of $1,000 for extracting and manufacturing and a $500 application fee for solely manufacturing. Once an application is approved, extraction and manufacturing applicants must pay an additional $4,500 licensing fee per location, while applicants solely manufacturing are required to remit a $2,000 licensing fee. Cannabinoid Hemp Retailers are required  to pay a $300 license fee  for each location where products are sold.

Cannabinoid Hemp Processor licenses shall be valid for 2 (two) years from date of issuance while retail licenses are valid of one (1) year, both of which must be renewed with the Department with applicable renewal fees.

Compliance

The  proposed regulations detail requirements for the testing of hemp product, GMP certifications, packaging and labeling and safety measures for inhalable hemp products. The Department reserves the authority to establish additional standards for certification, for issuance of penalties for non-compliance, and issuance of permits for distribution, delivery, and retail sale of out-of-state cannabinoid hemp products.

The department also clarified the controversy surrounding the infusion of CBD and other cannabinoids in food and beverage products providing that processors and manufacturers may add CBD to drinks, food (including chewing gum), dietary supplements, and salves.  New regulations also permit the vaping of CBD oil, but  draws a hard line by prohibiting the addition of CBD to alcohol and tobacco products. Shockingly, the Department has also prohibited the sale and distribution to sell any cannabinoid hemp product in the form of an injectable, transdermal patch, inhaler, suppository, flower product including cigarette, cigar, pre-roll or any other disallowed form as determined by the department.

Public Comment Period

While these regulations were  anticipated, the prohibition of smokeable hemp flower is sure to raise eyebrows amongst hemp retailers as well as small growers who have already expressed concern over the restrictions on direct sale of the hemp flower from farmers to consumers. Those with concerns over the proposed regulations will have an opportunity to comment during the 60-day comment period, which will end on January 11, 2021. For more information or assistance, please contact us.

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