While marijuana legalization continues to be a hot topic in the New Year, it is noteworthy that the state hemp industry continues to develop across the country. New York, one of the most important markets in the country, is now one of the states with a fully regulated hemp growing, processing and retailing program. The New York Cannabis Control Board (CCB) approved additional rules for the state’s Cannabinoid Hemp Program (CHP) at its December 16, 2021 meeting. These additional regulations extend the regulations finalized at the meeting of the CCB on November 3, 2021, which the CHP officially launched and expanded the medical cannabis program. Board member Jen Metzger stated, “The proposed rules, which we are releasing for public comment today, will allow our hemp growers to grow their business by processing their own flowers, and will also provide a clear definition of ‘craft’ for labeling and marketing purposes that will empower consumers to make informed choices while supporting sustainable small businesses. ”Additionally, regulations continue the trend for states to regulate hemp and CBD products in the face of the failure of the FDA.
Hemp under the Farm Bill
Under the Agriculture Improvement Act of 2018 (Farm Bill 2018), cannabis with a THC concentration of 0.3% or less, commonly known as “hemp”, has been removed from the Controlled Substances Act (CSA). “The 2018 Farm Bill allows states and tribes to come up with a plan and apply for a primary regulator for hemp production in their state or tribal area,” putting regulation of this emerging market at the state’s discretion. Currently, over 40 states have passed laws to set up hemp production programs or enable hemp cultivation research. The USDA’s own overarching regulations for this state hemp production program were finalized in 2021. Originally, the states’ hemp programs were primarily concerned with growing hemp. However, more and more government regulations are addressing content, packaging, and labeling requirements for the hemp and CBD products themselves. This has created a patchwork of rules for retail products, and since hemp and CBD products are federally legal and across state borders can be sold across the board, manufacturers must keep pace with regulatory requirements in each market.
New York’s regulatory changes for hemp
In March 2021, New York passed the Marihuana Regulation and Taxation Act (MRTA). The MRTA created and commissioned the Office of Cannabis Management (OCM) and the CCB with “regulat”[ing] medical cannabis, adult cannabis, cannabinoid hemp and hemp extracts. “The OCM cannabinoid hemp program is designed to educate the public about cannabinoid products, conduct enforcement actions against substandard or banned cannabinoid hemp products, and establish consumer protection and quality control standards for manufacturing Create, packaging, labeling and laboratory testing of cannabinoid products.
The OCM licenses hemp retailers, which are companies that sell cannabinoid hemp products online or in person, and distributors who sell or distribute CBD products to retailers. CBD products manufactured outside of New York may not be distributed to retailers in New York unless they are shipped by an OCM licensed dealer. In addition, the OCM oversees two types of hemp processing licenses: “Extraction and Manufacturing Licenses,” which allow the licensee to extract or isolate cannabinoids from hemp and manufacture CBD end-products, and “Manufacturing Only Licenses,” which allow licensees to purchase crude oil , Distillate, isolate or any other intermediate form of hemp that is to be processed into an end product. Cannabis growers are separately licensed by the New York Department of Agriculture and Markets.
“Hemp” means the cannabis plant and all parts of the plant with a delta-9-THC concentration of 0.3% or less, and “cannabinoid hemp products” means “hemp or any product made from or derived from hemp, including terpenes derived from hemp, used in its final form for human consumption. ”Cannabinoid hemp products do not include cosmetics within the meaning of the Federal Food, Drugs and Cosmetics Act. In New York, no one is allowed to sell cannabinoid hemp products (in person or online) without an OCM-issued cannabinoid hemp dealer license. Hemp extracts are not allowed to be sold directly to consumers – they must be processed into a cannabinoid hemp product before being retailed. Existing regulations prohibit the sale of smokable hemp flowers (but not disposable cartridges pre-filled with hemp extract) and the addition of Delta-8-THC and Delta-10-THC to cannabinoid hemp products.
The changes to the regulation of December 2021 include the addition of a “Cannabinoid Hemp Farm Processor” license, which is reserved for cannabinoid hemp processors who have a license to grow hemp and to manufacture cannabinoid hemp flower products. These licensees are not allowed to produce more than 1,000 pounds of dried hemp per year and they are not allowed to buy or sell any hemp or hemp extract other than that made from hemp grown on their own farm. Processors of cannabinoid hemp farms are not allowed to perform hemp extraction and are exempt from the obligation to submit a company audit for good manufacturing practice of a third party with their license application.
In addition, the changes to the hemp regulation:
- Require that labels indicate the state or country of origin from which the hemp used in the product was obtained;
- Add a definition for “artisanal” cannabinoid hemp products, which are products made from hemp grown by a licensed hemp grower who grows and trims less than 1,000 pounds of dried hemp annually, by hand, hanging and, if it is a flower product, hand-packs the product;
- Delete the previous requirement that the information in the supplement or nutritional table be in a larger font size than other information on the product label;
- Removing the requirement for cannabinoid hemp products to be shelf stable, allowing certain types of foods and beverages to be fortified with cannabinoids;
- Change the milligram (mg) upper limit per serving for cannabinoid hemp supplement products from 75 mg to 100 mg total cannabinoids per serving; and
- Increase the acceptable THC concentration of the intermediate hemp extract from 3% THC to 5% THC, according to practice in other states.
The CCB will accept comments on the proposed changes until March 7, 2022. Comments can be emailed to Regulations@oc.ny.gov. Applications for cannabinoid hemp processors, retailers and distributors are currently being accepted. Further information on applications can be found at https://cannabis.ny.gov/cannabinoid-hemp. For more information on how to obtain a cannabis grower license, please visit https://agriculture.ny.gov/hemp.