Analysis on Cannabis Regulation and Taxation Act

To: Public Release

3/1/2019

 

Re: Proposed Cannabis Regulation and Taxation Act

 

Recently, Governor Cuomo released language that would regulate and tax adult use marijuana, overhaul the medical marijuana program, and change the way hemp is regulated. Central to the proposed regulations is the creation of the state Office of Cannabis Management (OCM), which will control the regulation of medical, recreational, and hemp cannabis. The Executive Director of this office will be empowered to build the regulatory structure for the New York these three markets. The primary role of the Executive Director of the OCM will be to control the issuance of licenses and permits. In the hemp cannabis market, these licenses include the ability to grow and extract hemp cannabis.

What are the changes to hemp?

The most significant change for New York’s hemp industry would be the separation between hemp cannabis and industrial hemp. The proposed regulation sets out a new definition for state-regulated hemp called “hemp cannabis.”

·       Hemp cannabis: delta-9 THC concentration would be set out and regulated by the OCM for cannabinoid production i.e. any female plants grown for CBD.

·       Industrial hemp: hemp regulated by agriculture and markets and grown for industrial uses including; grain, fiber and other products not used for cannabinoid products.

What would the licensing requirements for production intended for consumption be?

A.    Persons growing, processing, extracting, and/or manufacturing hemp cannabis or producing hemp cannabis products distributed, sold, or marketed for cannabinoid content and used or intended for human or animal consumption or use, shall be required to obtain licenses for growing and extraction.

B.    Grower’s licenses authorize the licensee’s acquisition, possession, cultivation, and sale of hemp cannabis grown or used for its cannabinoid content on the licensed premises of the grower.

a.     In addition to having a license, the regulations govern that pesticides used by rowers must be registered by the New York State department of environmental conservation or that specifically meet the U.S. Environmental Protection Agency registration exemption criterial for minimum risk.

C.    Extractor’s licenses authorize the licensee’s acquisition, possession, extraction and manufacture of hemp from a licensed cannabinoid grower for the processing of hemp or the production of hemp products marketed, distributed or sold for cannabinoid content and used or intended for human or animal consumption.

a.     In addition to having a license, all hemp cannabis products shall be extracted and manufactured in accordance with cGMP, pursuant to Part 111 of Title 21 of the Code of Federal Regulations.

What would the labeling requirements be?

The OCM will put in place rules and regulations governing the packaging and labeling of hemp cannabis products sold in New York State. These regulations will include, but not be limited to requiring labels to have:

·       the warnings of potential impact on human health resulting from consumption

·       serving sizes for cannabis products

·       active cannabinoid concentration per serving size

·       number of servings per container

·       nutrient fact panel incorporating data regarding serving sizes and potency

Note: use or integration of alcohol or nicotine in hemp cannabis products is strictly prohibited

 

We are encouraged and excited about the prospect of a regulated adult-use cannabis industry in New York State, especially as the State is looking to include small growers. We share concerns about moving hemp into the Office of Cannabis Management as we believe the protections that come with hemp being considered an agricultural crop is important. We have engaged with our legislators and Governor’s office to ensure that protections given under the Agricultural Districts Law are extended to hemp so that municipalities are not allowed to prevent farmers from growing hemp. This proposed legislation is a key step for New York to develop a thriving cannabis industry to help farmers, small businesses, and entrepreneurs across the state. Another concern we have shared is that product manufactures, using raw ingredients produced under cGMP, should only be required to adhere to regulations existing for their specific products. We implore all elected representatives to support the legislation and craft regulations that will pay specific attention to small businesses and farms.