Governor Andrew Cuomo ushered in a new era of hemp regulation in New York state by signing a bill that establishes a comprehensive regulatory framework and takes steps to support New York state’s hemp industry.

On December 9, 2019, Governor Cuomo signed bill A7680-A / S6184-A, or what is colloquially referred to as the “hemp law.”  As detailed in a New York Law Journal article released this summer, the hemp law establishes one of the most comprehensive regulatory frameworks for hemp and hemp extracts in the country.  The hemp law was passed subject to a chapter amendment, the most recent draft of which significantly softens the provisions contained in the original bill and pushes most of the substance of the legislation to future regulations established by both the New York State Department of Health and Department of Agriculture and Markets.

The most recent draft chapter amendment notably addresses several important areas including: 1) licensure requirements including licenses related to the manufacture and distribution of cannabinoid for human consumption or use on or in connection with the human body; 2) labeling standards which may not be consistent with other Federal or State laws; 3) New York sales; and 4) the New York State Industrial Hemp and Hemp Extract Workgroup.

One of the most notable provisions of the hemp law requires all retailers, wholesalers, and manufacturers selling cannabinoid hemp “in final form to consumers” in New York State to apply for one or several licenses with the New York Department of Public Health.  This provision includes products containing the most popular hemp extract: cannabidiol, or “CBD,” requiring both small boutiques and national retailers across the state to obtain a permit in order to sell CBD products. Both the Department of Health and the Department of Agriculture and Markets are charged with drafting regulations governing the permitting process and scope of products covered by this requirement as well as the labeling and advertising thereof.

As initially drafted, the legislation gave preferential treatment to New York state hemp, permitting the sale of certain beverages containing CBD only if the hemp extract was grown, extracted and manufactured in New York. Any mention of CBD in beverages has been stricken from the chapter amendment, although the amendment does prohibit the sale of out-of-state hemp extract unless the product meets all New York standards. According to a press release issued by the Governor’s Office on the hemp legislation, the chapter agreement deferred decision making on hemp extracts as additives in food and beverages to a later date.

In addition to signing the hemp law, Governor Cuomo also announced that New York will host a hemp summit in January 2020 to further develop industry policies and priorities.

The breadth of these sections and others in the hemp law will largely depend on the content of the Department of Health and Department of Agriculture and Markets’ regulations and the final version of the chapter agreement by which the law was passed, as well as future chapter amendments. Certain provisions of the bill are expected to take effect 90 days after it became law, or on March 8, 2020, while others will be deferred to the spring of 2020 and early 2021.

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Melville, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.