New York Releases Updated Hemp Regulations
NYS updated the nation's most comprehensive set of regulations on hemp extract products. These proposed rules cover the entire marketplace from licensing retailers to what products can be sold.
New York State’s Department of Health (DOH) released revised Cannabinoid Hemp regulations late yesterday afternoon. DOH's assessment of public comments led to the substantial alteration of such proposed regulations, initially released in October of 2020, necessitating changes so significant as to warrant another public comment period which extends through July 19, 2021. Thus, these regulations are still in draft form, without a clear general effective date.
Substantive Changes
The state received and assessed hundreds of public comments from stakeholders throughout the industry making clear the need for revision of the originally proposed regulations. Public comments tended to focus on products permitted for sale at retail—particularly, Hemp Flower—however, such comments extended to a broad range topics. As a result of such intensive public participation, significant changes were made. Here are some of the highlights:
Hemp Flower Ban removed
Delta-8 and Delta-10 THC processing and retail sale prohibited under cannabinoid hemp licenses
Reduced licensing fees for Processors
Packaging and Labeling requirements refined
Convictions that qualify for expungement under Section 160.50 of the Criminal Procedure Law no longer grounds for denial of a license
Record retention requirement for Processors reduced from 5 years to 3 years
For Retailers
Under these new regulations, retailers can sell Hemp Flower, however, such flower cannot be in the form of a cigarette, cigar, or pre-roll. Additionally, products sold at licensed retailers can not contain any synthetic cannabinoids or those created through isomerization, such as Delta-8 THC and Delta-10 THC. Such ban on Delta-8 THC and Delta-10 THC products closes what has essentially been a legal and regulatory loophole effectively allowing the sale of isomeric THC products which have psychoactive properties similar to Delta-9 THC, the main psychoactive compound in marijuana.
During the licensing process, retail applicants will now have to describe in further detail their sources for products, expanding such reporting from “the name of the manufacturer or cannabinoid hemp processor, and state or country of manufacture” to “the name, and license number to the extent practicable, of the manufacturer, packer, distributor, or cannabinoid hemp processor, and state or country where the manufacturer, packer, or distributor is located."
The deadline to submit hemp retailer applications in this interim period before final regulations are effective has also been extended from April 1, 2021 to June 1, 2021 . Applicants who submit before such date may legally sell cannabinoid hemp products at retail locations before having their license approved or denied by the department.
License fees for retailers remain constant at $300 for each retail location.
For Processors
Licensure application fees for processors were significantly reduced—a result of public comments—from $4,500 to $3,500 for those engaging in extraction activities, and from $2,000 to $1,000 for those engaging solely in manufacturing. It is unclear whether or in what manner the balance of fees for those who have already submitted applications to the department will be refunded.
Processors holding cannabinoid hemp processor licenses will not be permitted to process Delta-8 and Delta-10 THC products under the new regulations.
Additionally, packaging and labeling requirements have been refined and relaxed in the updated regulations. If such regulations are adopted, the regulations clearly state that Section 1005.9 governing packaging and labelling will not be effective until November 1, 2021.
The record retention requirements for processors embedded in the regulations have also been reduced from five to three years.
What's next?
Due to the substantive nature of the revisions, these regulations are still in draft form, meaning they are not yet effective and are subject to another public comment period. As the deadline for comment on the updated regulations is now July 19, 2021, it is unlikely that we will see finalized regulations issued under the regular administrative process until late summer 2021—at best.