Hemp CBD Across State Lines: New York

26 Jan Hemp CBD Across State Lines: New York

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp CBD”). Today we’ll take a look at New York.

The New York Department of Agriculture and Markets (“NYDAM”) regulates hemp cultivation in New York. Like many other state agricultural departments, NYDAM allows cultivation pursuant to research agreements. NYDAM makes clear, however, that persons outside the research program are not currently able to process hemp into many kinds of Hemp-CBD products.  In July 2019, NYDAM posted a revised policy that prohibits the sale of Hemp CBD food and beverages in New York. New York thus takes a similar approach to California (my post on California is linked below), but is actually much more aggressive when it comes to enforcement.

NYDAM only allows companies to process and sell other Hemp CBD products processed under a Research Agreement with NYDAM if (1) the product is marketed as a dietary supplement; (2) meet the FDA’s good manufacturing practices (“GMPs”) imposed on dietary supplements; and (3) meet FDA’s labeling and testing requirements for dietary supplements.

NYDAM’s requirements for Hemp CBD products place Hemp CBD companies in a pretty tough position by forcing them to label their products as dietary supplements, because the FDA has repeatedly stated that it is unlawful to call Hemp CBD products dietary supplements. In other words, the state seems to be forcing Hemp CBD companies to violate the FDA’s policy. And the FDA has made clear that it will ignore the fact that NYDAM is allowing Hemp CBD products to be labeled as dietary supplements–in November 2019, months after NYDAM’s policy statement was released, the FDA sent a warning letter to a New York Hemp CBD company, threatening enforcement based in part on the fact that the products it sold were labeled as dietary supplements.

That all said, a new law in New York requires licenses processors and retailers, and gives the state authority to require permits for retailers, distributors, and wholesalers. Regulations are likely to follow in 2020. The law also imposes testing, labeling, and good manufacturing practices requirement on processors. And notably, the law states that Hemp-CBD products produced outside of New York can’t be sold in New York unless they meet the standards of New York law.

One more note. NYDAM’s policy document linked above does not clearly mention vapes. Previous NYDAM documents had stated that Hemp-CBD could not be used in vapes. The new New York law that regulates hemp provides that in future regulations, the state can regulate inhalables. So it’s just too early to tell what will happen with vapes.

Basically, for Hemp CBD companies in New York, the state hasn’t been a tremendous help just yet. Hopefully the coming months will see some changes in the way NYDAM regulates Hemp CBD products, or maybe we’ll finally get those FDA regulations everyone’s been talking about. I wouldn’t hold my breath on either of these things happening, but stay tuned to the Canna Law Blog for any update.