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New York’s Long-Awaited Hemp Cannabinoid Rules May Create a Consumer-Friendly National Model

New York has released its long-awaited regulations governing the processing and retail sale of hemp-derived cannabinoid products. The 63-page rule, one of the most forward-looking sets of regulations for hemp-derived products yet created, promotes transparency and consumer protection. Hemp extractors, manufacturers and retailers now will be regulated by the New York State Department of Health (NYSDOH) and not the Department of Agriculture and Markets. These proposed rules do not apply to the hemp cultivators, which will continue to be licensed through the Department of Agriculture and Markets under the 2014 Farm Bill until September 30, 2021. 

Importantly, the comment period closes January 11, 2021. 

With an eye toward consumer safety, the NYSDOH will hold the hemp-derived products industry to stringent standards that mandate comprehensive licensing requirements and high licensing fees, as well as strict testing, packaging and labeling requirements. 

Hemp Processors

The rules split hemp processor licenses into two subclasses: extractors and manufacturers. Applicants must show proof of New York State Workers’ Compensation and Disability Insurance coverage, as well as adequate product liability insurance coverage. 

All hemp processors will be required to maintain a qualified third-party certification demonstrating that the processor has met applicable good manufacturing practice (GMP) standards in the extraction and manufacturing of cannabinoid hemp products. Licensed processors also will be required to keep records to prove the hemp or hemp extract used was grown, derived or extracted in accordance with the laws and rules of the source state. 

Importantly and in stark contrast with federal regulations, New York’s rules permit licensed processors to sell and transport non-final work-in-progress hemp extract to other licensed processors, provided that when such extract leaves the licensed premises it is accompanied by a certificate of analysis certifying that the extract is less than 3% THC. That is not a typo – New York will allow work-in-progress hemp extract well above the 0.3% concentration limit set in the U.S. Drug Enforcement Administration’s recent final interim rule that interprets how to handle hemp extract produced under the 2018 Farm Bill. 

Hemp Retailers

Joining only a handful of other states, New York will require retailers to obtain a hemp retail license in order to sell cannabinoid hemp products to consumers within the state. Gas stations, pharmacies, grocery stores and big-box retailers will be required to apply for and obtain a hemp retail license if they wish to continue selling cannabinoid hemp products to consumers. Cannabinoid hemp retail applicants who submit a completed application to the Department by April 1, 2021, will be permitted to sell cannabinoid hemp products to consumers before having their license approved or denied by the Department. 

Licensed hemp retailers will have an affirmative obligation to sell only cannabinoid hemp products that are manufactured, packaged, labeled and tested in accordance with New York’s rules. Hemp retailers also will have a duty to maintain records of where they purchased hemp products, including the name of the hemp processor and the wholesaler or permitted distributor. If retailers purchase hemp products from out of state, the retailer must keep the name, address, certificate of analysis and evidence that the product meets all requirements of New York’s rules. 

Cannabinoid Hemp Products

Cannabinoid hemp products will be subject to stringent testing, packaging and labeling requirements. All cannabinoids hemp products distributed or offered for retail sale in New York must contain no more than 0.3% total THC, accurately reflect testing results, and not contain less than 90% or more than 110% of the concentration of total cannabinoid content listed on the product label; not contain liquor, wine, beer or any other alcoholic beverage; and not contain tobacco or nicotine. 

Foods or beverages with cannabinoids will be permitted, but cannot contain more than 25 milligrams of total cannabinoids per product. However, dietary supplements infused with cannabinoids may contain up to 3,000 milligrams of total cannabinoids. If the hemp product contains multiple servings that are not individually wrapped, the product must include a measuring device with the product packaging. 

While hemp flower or pre-rolled hemp cigarettes will not be permitted, inhalable hemp products such as vape cartridges are expressly allowed so long as the product is a closed system with a pre-filled disposable cartridge that attaches to a rechargeable battery, or a single-use product that cannot be recharged. 

Cannabinoid hemp products must be packaged in tamper-evident packaging, minimizing oxygenated light exposure, and shall be accompanied by recommended dosing and clear instructions for use. The new rules also require an array of information on the product label or package, including: 

  • A nutritional or supplement fact panel that must be based on the number of servings within the container and include:

    • A list of all ingredients in descending order of predominance by weight in the product, including but not limited to total Δ9-Tetrahydrocannabinol concentration, CBD and any other cannabinoids over 0.05% and

    • The number of servings per package or container, including the amount of measurable cannabinoids in milligrams per serving and the total cannabinoid content of the package. If applicable, the amount of total Δ9-Tetrahydrocannabinol in milligrams per serving and milligrams per package shall be stated on the label

  • An expiration date

  • A lot or batch number

  • The name of the cannabinoid hemp processor or out-of-state manufacturer

  • A QR code linking to a certificate of analysis

  • The state of origin from which hemp used in the product was sourced

  • A means for reporting serious adverse events or side effects. 

In addition, all cannabinoid hemp products for retail sale must include a long list of warnings printed in at least an 8-point font. These warnings include:

  • Keep out of the reach of children.

  • This product is derived from hemp and may contain THC, which could result in the consumer failing a drug test for marijuana.

  • This product has not been evaluated by the Food and Drug Administration for safety or efficacy.

  • Those who are pregnant or nursing should consult their health care provider before use.

  • Smoking or vaporizing is hazardous to your health. (Included if the product is an inhalable cannabinoid hemp product.) 

Cannabinoid hemp retailers only are permitted to sell inhalable products to persons over 21 years of age. Neither retailers nor hemp processors may advertise hemp products with claims that the product can or is intended to diagnose, cure, mitigate, treat or prevent disease. 

© 2020 Wilson ElserNational Law Review, Volume X, Number 303
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About this Author

Neil Willner, Wilson Elser Law Firm, White Plains, Health Care and Cannabis Law Attorney
Associate

Neil Willner focuses his legal practice on medical malpractice, dental malpractice, nursing home liability and general liability centered on complex litigation. His clients include physicians, prominent New York hospitals and nursing homes, and national dental corporations as well as summer camps. Neil served as a paralegal and a member of trial team in a medical malpractice defense firm while attending law school at night, giving him insights into all facets of the practice. Neil was also a law clerk at a New York firm working on product liability and medical...

914-872-7615
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