Governor Cuomo Signs Hemp Law, Creates Regulatory Framework for New York State

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This week, Governor Andrew Cuomo ushered in a new era of hemp regulation in New York state. The bill he signed on Monday establishes a comprehensive regulatory framework and takes steps to support the state’s hemp industry.

On December 9, 2019, Governor Cuomo signed bill A7680-A / S6184-A, or what is colloquially being called 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.

As drafted, the hemp law notably addressed several important areas including: 1) licensure requirements; 2) cannabinoid permits; 3) labeling standards which may not be consistent with other Federal or State laws; 4) New York sales; and 5) 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 “cannabis products derived from hemp extract” in New York State to apply for one or several licenses with New York Department of Agriculture and Markets (the “Department”). 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. The Department is charged with drafting regulations governing the permitting process and scope of products covered by this requirement as well as the labeling and advertising thereof.

However, the hemp law was signed into law pursuant to a chapter agreement, which has not yet been released. As 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. The hemp bill also prohibited the sale of out-of-state hemp extract intended for human and animal consumption unless the product meets all New York standards and future Department regulations. However, 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’s regulations and the chapter agreement by which the law was passed, as well as future chapter amendments. The bill will take effect 90 days after it became law, or on March 8, 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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