American writer O. Henry once wrote about New York City, “it’ll be a great place if they ever finish it.” As 2021 winds down, I share a similar guarded optimism regarding New York’s pending adult-use cannabis licensing regulations. Here’s to 2022 being a productive year on that front!
In the meantime, New York cannabinoid hemp (CBD) and hemp extracts Part 114 regulations are in place, and will go into effect on April 25, 2022 “to allow time for cannabinoid hemp licensees to come into compliance with the regulations” (as noted here). Also, this December the Cannabis Control Board (CCB) approved several additional (and welcomed!) cannabinoid hemp regulations, which are now open for public comment. Among other things, these new CBD regulations will increase the per serving milligram cap for dietary supplement CBD products from 75 mg to 100 mg and increase the acceptable THC concentration of intermediary hemp extract from 3% THC to 5% THC. (I’ll do a deep dive into the CBD regulations in a separate post.)
As background, New York’s new Cannabis Law (MRTA) consolidated (1) adult-use cannabis, (2) medical cannabis, and (3) cannabinoid hemp and hemp extracts (CBD) under one new cannabis regulatory regime: the CCB and Office of Cannabis Management (OCM). Let’s look at the third category: the Cannabinoid Hemp Program and its licensing requirements.
What are Cannabinoid Hemp and Hemp Extracts?
Quick answer: CBD hemp products that do not “produce a feeling of being high.” More technically, Article 5 of the Cannabis Law defines both terms:
- Cannabinoid hemp: any hemp and any product processed or derived from hemp, that is used for human consumption provided that when such product is packaged or offered for retail sale to a consumer, it shall not have more than three tenths of one percent delta-9 tetrahydrocannabinol (THC). MRTA § 90.2.
- Hemp extract: all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers derived from hemp, used or intended for human consumption, for its cannabinoid content, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than an amount determined by the board in regulation. Excluded from this definition are any food, food ingredient or additive that is generally recognized as safe under federal law, and any hemp extract not used for human consumption.) MRTA § 90.5.
A recent OCM press release notes that cannabinoid hemp products include many CBD products available for purchase today, including tinctures, oils, topicals, pills, capsules and food or beverages that are intended for human consumption or application.
Conveniently, Article 5 of MRTA defines the licenses that can be obtained to process or sell CBD.
- Cannabinoid hemp processor license is “a license granted to process, extract, pack or manufacture cannabinoid hemp or hemp extract into produces, whether in intermediate or final form, used for human consumption.” MRTA § 90.7.
- Cannabinoid hemp retailer license is a license for selling cannabinoid hemp, in final form to consumers within NY. MRTA § 93.1.
But Didn’t New York Already Offer CBD Licenses Before MRTA?
Yes. Previously the NY Dept. of Health issued retail licenses and distributor permits (for selling out-of-state CBD products to NY retailers), but now OCM is in charge of CBD regulation. (Side note: a hemp grower license is different, and is regulated by NY Dept of Agriculture and Markets, not OCM.)
Can I Apply to the New Office of Cannabis Management for a CBD Processor or CBD Retailer License in New York?
Yes! Under OCM’s Cannabinoid Hemp Program you can now apply for a CBD processor or retailer license. Here are the different types:
1. Cannabinoid Hemp Processor License: required for any processor of CBD products, it comes in three flavors:
- Extracting & Manufacturing - allows a processor to extract CBD from raw hemp to create crude oil, distillate, isolate or other intermediary product to be further refined or manufactured into a final CBD product AND permits the manufacturing of final CBD products. $1,000 non-refundable application fee, $3,500 license fee, valid for 2 years
- Manufacturing Only – allows a processor to buy intermediate product and manufacture final CBD products. $500 non-refundable application fee, $1,000 license fee, valid for 2 years.
- Hemp Farm-Processor License – this new addition to the list will allow hemp growers to bring their minimally processed flower to market. $100 application fee and $300 license fee, valid for two years.
CBD Processor License application requirements, which you can find here, include submission of a business plan, extraction methods (if any), proof of liability insurance, a certificate of occupancy, and a GMP audit (though Hemp Farm-Processor licensees will be exempt from GMP audit requirement).
2. Cannabinoid Hemp Retail License: required for selling CBD products to consumers in New York. The license is valid for one year and has a $300 annual fee (for each retail location and online).
3. Cannabinoid Hemp Distributor Permit – required for distributing CBD products manufactured outside New York to NY retailers. This license is valid for one year and has a $300 annual fee.
Applications and requirements for CBD retail and distributor permits can be found here.
For general information on NY’s Cannabinoid Hemp Program, visit here.
If you are a company operating in the CBD industry in New York, it's important to have a law firm that understands the legal complexities and nuances specific to this field. By choosing to work with a New York law firm that specializes in representing companies in the CBD industry, you can benefit from our in-depth knowledge and experience in navigating the various regulations, compliance issues, and legal challenges that may arise. This can ultimately help your company to stay in compliance with state and federal laws, mitigate risks, and operate with confidence. By calling the Green Light Law Firm, you can ensure that you have a trusted legal partner who is dedicated to helping your business succeed in the rapidly evolving CBD industry.