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New York tries to restore order to CBD market, clears way for hemp-infused drinks

Assemblywoman Donna Lupardo remains optimistic, and says the issues surrounding the rising industry ‘happens when you try something new.’ pressconnects.com

New regulations proposed in New York will assure consumers that CBD products manufactured and sold in the state meet minimum potency and safety standards while also clearing the way for hemp-infused beverages and food.

The long-awaited rules were largely hailed by industry, but included one glaring omission that raised objections from growers and processors who are trying to reinvigorate a business stuck in neutral following once grand growth projections.

Among the prohibitions contained in the 63 pages of recently released rules is a ban on the sale of flower from the non-psychoactive form of the cannabis plant. The smokable form is among the most popular items in the fledgling CBD market, and the prohibition cuts off a potential lucrative avenue for growers.

“By banning it you’re really screwing over farmers,” said Kaelen Castetter of CSG Hemp, a Binghamton producer of CBD products.

Cannabinoids, the byproduct from the low-THC derivative of the cannabis plant, have been touted for their potential in relieving several maladies including anxiety and chronic pain, among other afflictions, though the science to back up the claims remains elusive.

But based on anecdotal evidence, some CBD-laced products have found a loyal following among consumers.

“These (regulations) are fantastic guardrails for safety and quality assurance because they mandate compliance with good manufacturing practices,” said Joy Beckerman, owner and founder of Hemp Ace International, an expert witness and legal consulting firm.

Consumer protections

A hemp plant in Cornell’s Horticultural Sciences Greenhouse in Geneva. (Photo: Zachary J. Krahmer, Special Contributor to USA TODAY Network)

New York’s regulations attempt to restore order to a marketplace where product standards are wanting, and consumers have few assurances the product on shelf adheres to information on the label.

The rules finally provide the industry a more definitive path toward commercialization of industrial hemp.

“A lot consumers didn’t know what they weren’t being sold,” said Assemblywoman Donna Lupardo, D-Endwell, who heads the Assembly Agriculture Committee and has been spearheading the effort to develop the hemp industry in New York for the past six years.

Under the rules now being considered all aspects of the hemp supply chain would be licensed and regulated under the auspices of the state Department of Health and the Department of Agriculture and Markets.

Merchandise on the shelf would be covered by strict labeling codes that will provide the ability to trace the product’s provenance from field to store.

CBD producers are optimistic but guarded in their assessments.

The new regulations are “a great start” for the local hemp industry, said Ed McCauley. He and former flower farmer Adam Kurtz run Fusion Holding Group in Oregon and New York’s Orange County.

Opened in 2016, it makes the already popular Fusion CBD brand.

“There’s definitely going to be better quality products on the shelves in New York,” said Michael Geraci, co-owner of the Orange County-based Hemp Farms of New York, another early local hemp grower and CBD maker.

New regs strive for quality control

Co-Owner of Hemp Farms of New York walks through processed bio mass at Hemp Farms of New York in New Windsor, NY on Thursday, October 29th, 2020. The nutrient rich bio mass, which is the end product of hemp that has been processed for CBD oil is sold and given to area farms to be used as cow feed. KELLY MARSH/FOR THE TIMES HERALD-RECORD (Photo: KELLY MARSH/FOR THE TIMES HERALD-RECORD)

The state regulations note there has been a “rapid increase” in the use of cannabinoid hemp products and notes the federal government has not implemented its own regulatory system.

“In this absence, unscrupulous actors have entered the market and sold cannabinoid hemp products that do not meet the quality control standards common in the established supplement, food and cannabis industries,” the regulations read.

“Reports of cannabinoid hemp products that do not contain any cannabinoids at all or are contaminated with harmful toxins and pesticides are common.”

Random testing at all stages of production by Health Department inspectors would be allowed under the proposed New York regulations.

Permission to produce food and beverages infused with CBD, within certain limits, was roundly applauded by the industry.

The move will allow the production of water, seltzer, gummies, chocolates, teas, juices and even items such as granola and bread infused with hemp extract.

“That’s huge for the industry,” Castetter said.

No alcohol products or transdermal patches will be allowed.

New York setting the standard

A CBD hemp field at Cornell University’s New York Agricultural Experiment Station in Geneva. (Photo: Jeff Platsky/Binghamton Press & Sun-Bulletin)

By establishing strict regulations, New York hopes to set the standard going forward, Lupardo said, establishing the state as a leader in the hemp industry, allowing merchandise by home-grown producers to be considered among the best on the market.

Lupardo said extensive rules issued by the health department should give the industry a much needed boost, encouraging a host of start-ups to gear up, generating a new source of jobs across upstate New York.

“You’re going to see a stabilization of the marketplace and then you’re going to see growth,” Lupardo predicted.

The assemblywoman also said the rules could jump start Canopy Growth’s $9 million investment in an industrial hemp hub outside of Binghamton. Though announced more than a year ago, the progress on the effort has been slow.

After being burned by over-producing hemp last year, it’ll likely take at least two years for the new state regulations to begin paying off for many farmers, said Maire Ullrich, the Cornell Cooperative Extension’s agriculture program leader for Orange County.

Hudson Valley farmers planted upwards of 1,500 acres of hemp last year, including up to 700 acres in Orange County alone, Ullrich estimated in 2019. Statewide nearly 20,000 acres were planted last year, up from 3,500 acres in 2018, according to state estimates.

Plus, all that New York hemp production last year led the price per percentage point of CBD per pound of hemp to plummet to less than $1 in early 2020 compared with a high of $4 as recently as summer 2019, Ullrich said.

Some growers need between $4 and $10 per pound for it to even be worth growing hemp for CBD, McCauley said.

Any retailer seeking to sell CBD products will be required to pay $300 for a state license.

“It’s going to be a shockwave for some operators,” Castetter said of the extensive regulations.

Flower ban draws criticism

Conforming with federal rules, New York will require all products contain less than 0.3% THC, the substance responsible for the sense of euphoria after using marijuana or other cannabis infused products.

Industry representatives were left searching for a rationale behind the flower ban, saying it seemed counter-intuitive given New York’s expected to move toward the adoption of adult-use marijuana next year.

In the adult-use market, flower products are among the most popular products.

“I share in the frustration of our members and the hundreds of growers throughout the state who have spent significant resources in harvesting their crop this year that hemp flower will not be allowed for sale,” said Allan Gandelman, president of the New York Cannabis Growers & Processors Association.

The federal government removed the non-psychoactive variant from the controlled substance list in late 2018 as part of the updated Farm Bill. New York has allowed industrial hemp cultivation under an experimental program since 2015.

Comments on the new regulations will be accepted by the Health Department from Nov. 10, 2020, through Jan. 11, 2021 — meaning they could take effect as soon as early next year, following time for revisions and more public notification.

Lupardo said she expects a few tweaks to the proposal based on the discussion and have final rules in next year’s first quarter.

To comment on the new state regulations for hemp, email [email protected], call 518-473-7488 or write to NY DOH Bureau of Program Counsel, Regulatory Affairs Unit, Corning Tower, Empire State Plaza, Rm. 2438, Albany, New York 12237-0031.

Jeff Platsky covers transportation and the economy for the USA TODAY Network New York. He can be reached at [email protected] and followed on Twitter: @JeffPlatsky. To get unlimited access to the latest news, please subscribe or activate your digital account today.

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New York's rules provide the industry a more definitive path toward commercialization of industrial hemp.

Is CBD oil legal in New York?

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Contents

  1. What is CBD?
  2. Why is CBD sometimes illegal?
  3. New York CBD laws
  4. Where to buy CBD in New York
  5. How to read CBD labels and packaging

CBD derived from hemp is available in New York, but is subject to strict regulations. The New York Department of Agriculture and Markets does not allow the addition of CBD to foods or beverages. CBD is, however, allowed to be manufactured and sold as a dietary supplement provided it makes no therapeutic claims. Hemp-derived CBD is also in New York legal when sold as a lotion, salve, or balm.

A comprehensive regulatory framework surrounding the licensing, manufacturing, sale and use of hemp and CBD was approved by the New York State Legislature in June 2019 and is currently awaiting signing from Governor Andrew Cuomo.

Only individuals who hold a valid New York State Medical Marijuana Program card can legally access CBD derived from cannabis. Medical cannabis has been legal in New York since 2014. Cannabis remains illegal for adult use in New York, although marijuana possession was decriminalized to an extent in August 2019. Penalties for possession of small amounts of marijuana have been reduced, and those with existing possession convictions may have their convictions expunged.

What is CBD?

CBD stands for cannabidiol, a non-intoxicating substance found in cannabis. CBD is the second-most prominent cannabinoid in cannabis after THC, which has an intoxicating or psychoactive effect. CBD can be sourced from marijuana or hemp plants and has a wide range of purported therapeutic benefits, such as reducing pain, inflammation, and anxiety, and suppressing seizures. Since the cannabinoid has gained considerable attention for its therapeutic properties, more high CBD strains have recently been cultivated.

CBD stands for cannabidiol, a non-intoxicating substance found in cannabis. Photo by: Gina Coleman/Weedmaps

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Why is CBD sometimes illegal?

All types of cannabis, including hemp strains that don’t produce enough THC to cause intoxication, were considered illegal under the Federal Controlled Substances Act of 1970. The law categorized all cannabis as Schedule 1, which defined the plant as a highly addictive substance with a high potential for abuse and no accepted medical use.

The 2018 Farm Bill re-classified hemp as an agricultural commodity and made its cultivation federally legal. Further, the act removed some forms of cannabis from Schedule 1 status by creating a legal distinction between hemp and marijuana. Hemp is cannabis with less than 0.3% THC, and marijuana refers to cannabis with more than 0.3% THC. This distinction in federal law effectively legalized CBD that is derived from cannabis with less than 0.3% THC, as long as it has been cultivated according to federal and state regulations.

The 2018 Farm Bill legislation does not mean that CBD derived from hemp is universally legal throughout the United States. According to the Farm Bill, the Food and Drug Administration (FDA) has the power to regulate CBD product labeling, including therapeutic claims and the use of CBD as a food additive. The FDA has already maintained that even hemp-derived CBD may not legally be added to food and beverages, or marketed as a dietary supplement. Although the organization has begun to re-evaluate some of these stances on legal CBD products, the FDA has not revised its regulations. The agency also has been strict in its position against any labeling that could be perceived as a medical claim about CBD.

In addition to federal regulation of CBD, the Farm Bill also gave states the option to regulate and prohibit the cultivation and commerce of CBD. States may also regulate CBD in food, beverages, dietary supplements, and cosmetic products independently, even before the FDA finalizes its policies. New York is an example of a state that has devised its own regulatory framework for CBD, embracing some FDA directives while eschewing others.

New York CBD laws

In June 2019, the New York State Senate passed legislation which provides a comprehensive regulatory framework for hemp and CBD. Bill S6184A, also known as the Hemp Bill, will become enacted in thirty days once it has been signed by Governor Andrew Cuomo. Some more controversial aspects of the bill may be contested, however, which could delay its enactment.

Notable amendments in the June 2019 Hemp Bill include:

  • The New York State Department of Agriculture and Markets are granted authority to regulate the production, processing, packaging, and labeling of hemp extract products sold in New York State.
  • Retailers, wholesalers, and manufacturers selling cannabis products derived from hemp must apply for a cannabinoid permit.
  • The sale of beverages containing 20 milligrams of CBD per 12 ounces is permitted, but only if the hemp extract was grown, extracted, and manufactured in the state of New York.
  • The sale of out-of-state hemp extract intended for human and animal consumption is prohibited, unless it meets New York standards and regulations, which will be promulgated in the future.
  • All hemp extracts must be packaged and labeled according to New York Department of Agriculture and Markets standards and display a Supplement Fact panel where applicable, along with a QR code setting forth other relevant information. No product may advertise any therapeutic claims.

There is currently a lack of concrete regulations in New York while the Hemp Bill is awaiting approval from Governor Andrew Cuomo. At present, the New York State Departments of Health and Agriculture are implementing a catch-all enforcement strategy to prevent unlawful CBD products from being sold.

There is currently a lack of concrete regulations in New York while the Hemp Bill is awaiting approval from Governor Andrew Cuomo. Photo by: Gina Coleman/Weedmaps

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CBD-infused food and beverages are prohibited in New York. Penalties for the sale of CBD-infused food and beverages include voluntary removal, seizure, or destruction of the product, a fine, and failing a health inspection. CBD-laced oils, lotions, salves, and other topical applications are legal for all. CBD oils and tinctures are also legal, but products cannot make therapeutic claims.

Licensing requirements for CBD

Presently, the only legitimate way to grow hemp in New York is by participating in the New York Industrial Hemp Agricultural Research Pilot Program. Those interested must apply to the New York Department of Agriculture and Markets, which costs $500. Approved applicants receive a Research Partner Agreement.

Licensing for hemp growers, manufacturers, extractors, and retailers will change under the 2019 Hemp Bill. The bill is yet to be enacted, but provides specific guidelines for growers, manufacturers, and extractors of industrial hemp. All applicants will have background checks performed to confirm they are of good moral character, and possess sufficient experience and competence to farm hemp.

Applicants must first obtain a license through the New York Department of Agriculture and Markets. The license for cannabinoid extractors is the most comprehensive. Licenses will be renewed biannually, and licensed premises will be subject to random inspections.

Manufacturers and growers must contract with an independent laboratory approved by the commissioner for routine testing. The reports from testing must be made available to the Department.

New York CBD possession limits

There are currently no possession limits for hemp-derived CBD products in New York.

There are currently no possession limits for hemp-derived CBD products in New York. Photo by: Gina Coleman/Weedmaps

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Medical marijuana patients can legally possess a thirty-day supply of non-smokeable, non-edible, cannabis-derived CBD products.

Although cannabis was decriminalized to an extent in New York in August 2019, those who are found in possession of cannabis-derived CBD products may be subject to penalties.

Where to buy CBD in New York

CBD balms, salves, lotions, and tinctures can be purchased from small pharmacists, specialty stores, CBD storefronts, and vape stores. Food and beverage retailers may offer CBD products, but they are not legal.

CBD derived from marijuana is only available from a licensed dispensary.

Shopping online for CBD represents another option for purchase. Consumers can buy from a wide variety of online outlets for CBD products, read consumer reviews, and ship purchases to their homes.

Online shopping also offers the ability to gather detailed information about each product, compare different products and product types, and comparison shop for the best price. CBD brands often also have their own e-commerce shop, allowing you to purchase your desired CBD products straight from the source. Find out more about where to purchase CBD.

How to read CBD labels and packaging

The 2018 Farm Bill shifted the oversight of hemp and hemp-derived products from the U.S. Department of Justice (DOJ) to the U.S. Food and Drug Administration (FDA). The FDA currently does not presently allow CBD-infused food, drinks, or dietary supplements to be sold, and hasn’t yet provided regulations for hemp-derived CBD products.

Still, the agency warns that regulations in flux still require companies to make legitimate claims on their labels. Buyers should nonetheless approach CBD products with caution. Most reputable CBD producers typically include the following information on their CBD product labels:

  • Amount of active CBD per serving.
  • Supplement Fact panel, including other ingredients.
  • Net weight.
  • Manufacturer or distributor name.
  • Suggested use.
  • Full-spectrum, broad-spectrum, or isolate.
  • Batch or date code.

Is CBD oil legal in New York? Copy article link to clipboard. Link copied to clipboard. Contents What is CBD? Why is CBD sometimes illegal? New York CBD laws Where to