New York has rolled out extensive draft regulations governing the processing, manufacturing and sale of hemp and hemp-derived products. The 63-page bill, released in late October, establishes a framework for applications and licensing and sets forth detailed requirements for manufacturing standards, packaging, labeling and testing. Shifting authority from the Department of Agriculture to the Department of Health, licenses will be required to process or sell hemp (including online retailers), and permits will be required to distribute and deliver cannabinoid hemp products to retailers and consumers, respectively. January 11, 2021, is the deadline for public comment.
Rooted in assuring consumer safety, the bill is largely welcomed by hemp product manufacturers, particularly processors currently licensed by the state of New York who have, for years, been held to higher processing standards than out-of-state processors with whom they compete for shelf space.
However, the bill also contains a series of controversial provisions and many industry firsts. Other states and, reportedly, the Food and Drug Administration, are looking to New York’s regulations to establish their own sensible hemp processing and sale regulations.
The proposed regulations cover “cannabinoid hemp products,” defined as hemp-derived products, including terpenes, intended for human consumption, expressly excluding cosmetics. Uniquely, the bill also will allow work-in-process-hemp-extract (WIPHE) — “intermediate” hemp extract, intended for further processing — containing up to 3% THC. This contrasts with a DEA interim final rule promulgated in late August, which purports to criminalize all WHIPE over 0.3% THC.
Unlike New York’s previous processing rules, the manufacturing of products intended for vaporization will be permitted. The sale of hemp flower products continues to be prohibited.
Some farmers (and retailers) view this ban as undercutting valuable revenue streams, while others engaged in the production of hemp biomass welcome this restriction as a means to control oversupply and limit harmful health effects of smoking. Notably, the sale of cannabinoid hemp products in the form of injectables, transdermal patches, inhalers and suppositories are similarly banned.
All cannabinoid hemp products sold in New York will need to be manufactured pursuant to current good manufacturing practices — an industry first. While this may be an expensive endeavor for processors, the requirement should inspire consumer confidence in products sold in New York and (hopefully) satisfy FDA concerns.
Joining an increasing number of states that have expressly allowed the manufacturing and sale of hemp extract products as nutritional supplements and/or hemp-infused food and beverage products, New York has provided a clear regulatory pathway for the sale of such products — notwithstanding that the FDA expressly prohibits the sale of CBD as a nutritional supplement and of CBD-infused food and beverage products. However, in New York, such food and beverage products cannot contain more than 25 milligrams of total cannabinoids per product, and supplement products cannot contain more than 3,000 milligrams total cannabinoids per product. Any THC contained therein must be stated in milligrams per serving and per package —a requirement some activists say could actually inspire overconsumption.
New York would also establish uniquely robust labeling requirements for all cannabinoid hemp products sold in-state, including a variety of warning statements: to keep products out of the hands of children; that the product contains THC and thus, could cause consumers to fail a drug test; that the product has not been evaluated by the FDA for safety or efficacy; for those who are pregnant or nursing to consult a physician prior to use; and if the product is intended for inhalation, that smoking or vaping is hazardous to one’s health. Warnings must be printed in 8-point font or larger. Concerns abound that typical packaging cannot accommodate this.
Joy Beckerman, principal consultant of Hemp Ace International and a renowned hemp expert, stated: “New York continues to earnestly engage in hemp extract stakeholder input and clearly has a strong command of the complexities and challenges facing this emerging industry. While no set of regulations meets every need, the Empire State is encouraging hemp cannabinoid processing and is positioning itself to lead the country in safety and quality assurance.”
Also unique to New York, cannabinoid hemp product labels would have to specify whether the product is “full spectrum,” “distillate” or “isolate.” While activists opine that the definitions are welcome, they deem unworkable the definition of “full spectrum,” currently proposed as: (a) derived from a hemp extract; (b) contains cannabinoids, aromatics, essential vitamins and minerals, fatty acids, protein, chlorophyll, flavonoids or terpenes; and (c) has not been reformulated or has not had cannabinoid isolates or distillates added to it. They seek to reconcile the definition of “full spectrum” with that established by the U.S. Hemp Authority, which is a hemp extract, where “none of the compounds have been intentionally and completely removed.” Indeed, most extraction methods would immediately disqualify any products from meeting New York’s proposed definition of “full spectrum.”
Compliance costs would be inevitably high, but given the size of New York’s market, so are the stakes.