Hemp extract products have received the nation's most comprehensive set of regulations in New York State. They cover the entire marketplace including what products are able to be sold as well as regulations for licensing retailers.
We at The Omnium Group have been following these procedures from the very beginning.
The Omnium Group Co-Founders Paul Lepore and Howard Hoffman in their partnered farm in Upstate New York.
The Effect of These Regulations
The new regulations have resulted from the Hemp Extract Law (a897/s6968) passed in 2019 to address the need to protect New York consumers from mislabeled or otherwise dangerous products and to regulate the rapidly growing marketplace of CBD products. A framework for the regulations was laid out in the bill which was further refined by the Governor’s Office.
The Hemp Extract Law broadly defined hemp extract products to include all cannabinoids found in hemp. Regulatory authority shifted to the Department of Health (DOH), formerly assigned to the Department of Agriculture and Markets (DAM) under the Hemp Pilot Program.
These regulations are set to take effect once a public comment period ends on January 11th, 2021. Afterward, every company that extracts, manufactures, distributes, or sells retail hemp extract products will be required to be licensed. This is inclusive of any out of state companies that sell to consumers located in New York. Online sales are likely to be impacted.
Here are the proposed licensure fees:
|Application Fee||License Fee|
|Hemp Retailer||N/A||$300 per location|
The Hemp Products Affected
The proposed rules affect only New York State. Currently, the federal government has not clearly defined regulations regarding hemp extracts.
|What Is Allowed||What Is Not Allowed|
|Dietary supplements less than or equal to 3000mg per product||Inhalers|
|Food and beverage products less than or equal to 25 mg per unit||Pre-rolls|
|Cosmetics as defined by federal statute||Suppositories|
|Injectables (It is unclear what is exactly meant by this)|
It’s worth noting that vaping products are permitted so long as they follow strict quality standards. Last year, with a spike of respiratory illnesses linked to vaping, Governor Cuomo was quick to take legislative action. It is likely the DOH decided that safely regulated products are preferred to what consumers could find on the black market.
The allowance of food and beverage products is certainly a great step forward for the industry. However, it is likely that the exclusion of hemp flower will face backlash. Market indicators demonstrate that hemp flower is one of the most stable and rapidly growing segments of the market.
Legitimizing dietary supplements can also be touted as a win. The FDA currently uses “discretionary enforcement” regarding cannabinoid dietary supplements. Officially cannabinoids are not allowed as supplements.
The Importance of Quality Products
The goal of the Hemp Extract Law and the resulting regulations is to protect the health of the public. It has been reported by the FDA that many extract products tested were either contaminated or did not contain the advertised content of cannabinoids. Currently, extract products are not regulated by the FDA, resulting in many CBD companies to sell bad products. This has led to a drop in consumer confidence in hemp extract products, and hesitance from distributors to carry them.
The FDA has a strict set of regulations called GMPs. GMPs regulate the manufacturing of food, beverages, pharmaceuticals, and supplements. Currently, these regulations are not enforced for hemp extracts, even though they are widely regarded as necessary for the consistency and quality of products. The recent DOH regulations demonstrate the need to conform to GMP. Manufacturers now need to comply with a 3rd party audit, and all products sold need to meet these new standards.
The hemp extract products sold in the state of New York will need to conform to a new set of labeling guidelines, including the manufacturer name, a batch number, a link to the test results, and the origin of where the hemp used was grown.
Mr. Lepore formulating in their facility in Long Island, NY.
What Happens Next?
Everything will be finalized after the public comment period ends on January 11th, 2021. There may still be minor changes to these rules until that time based on submitted comments. The Governor’s proposed budget will also be released around this time. Likely, this will include the legalization of cannabis for adult-use and place hemp regulatory authority into a newly created Office of Cannabis Management.
In the meantime, businesses should begin to prepare their operations and products to conform to these regulations.
The full regulations can be found here in the link below: