By Daniel Axelrod
New York’s legislature recently passed a pioneering bill, putting the state in the lead nationally for regulating hemp extracts such as cannabidiol.
But participants in the state’s hemp industry worry the bill needs significant revisions to prevent killing the hemp extract industry, which is still in its infancy.
And it’s unclear whether Gov. Andrew Cuomo will sign the bill without requesting amendments, which could potentially delay it from taking effect until well into next year.
The landmark legislation creates strict licensing, labeling, testing and inspections for cultivating, processing, distributing and selling hemp extracts, including, most notably, CBD.
It was sponsored by Assemblywoman Donna Lupardo, D-Endwell, Broome County; and Sen. Jen Metzger, D-Rosendale, chairwomen of their chamber’s respective agricultural committees.
CBD comes from hemp or cannabis, the same plant as marijuana. But hemp is bred to contain 0.3 percent or less of tetrahydrocannabinol, or THC, pot’s high-producing chemical.
In some research, CBD has shown promise for treating pain, inflammation, psychiatric conditions and alcohol- and opiate-use disorders, among other maladies. But its effectiveness, effects, safety and dosing need more study.
Congress essentially legalized hemp for widespread growth and production in December, leaving the U.S. Agriculture Department and states to come up with hemp industry rules.
But when it comes to CBD, the U.S. Food and Drug administration still tightly regulates the compound as a medicine.
That means CBD products in New York, which have exploded in popularity over the last two years, exist in a federal legal gray area – from sublingual or vaporizable, over-the-counter CBD oil to CBD-infused foods and drinks.
Rather than waiting on the FDA, Metzger and Lupardo said they pushed for their legislation to give New York hemp farmers and CBD producers more regulatory certainty and a chance to capitalize on a CBD market expected to reach $1.3 billion in sales nationwide by 2022.
Lupardo said a New York regulatory framework also helps ensure consumers can have access to safe, state-regulated CBD.
“There are millions (of dollars) to be made by big pharma limiting consumer access to hemp extracts,” Lupardo said, including by pushing for tight FDA controls of CBD.
“If you don’t have all this in place (in state law) to protect the consumer market, it’s so easy to lose it,” Lupardo added. “We’re trying to circle the wagons around consumer access to hemp extracts.”
Lupardo said she expects Cuomo to sign the CBD bill, while also asking for “chapter amendments,” a bill that amends another bill before it becomes law.
But Lupardo said it’s unclear what changes the governor might request, and she and Metzger will have broad discretion for their own potential revisions.
Cuomo, whose staff did not respond to requests for comment, told reporters last month that he plans to review the bill before potentially signing it. Failure to sign it would result in a so-called “pocket veto,” killing the measure.
Lupardo said Cuomo has been “very supportive” of hemp legislation efforts. But she said Cuomo might wait so long to sign the hemp extract bill, which would take effect 90 days after his signature, that it doesn’t become law until between January and June. That’s when New York’s legislature is in session again.
The bill strives for New York’s Department of Agriculture and Markets to set a “gold standard” for CBD regulation, said Joy Beckerman, of Kingston, board president of the Hemp Industries Association, a trade group.
“Most of the nation is seeing this New York bill as heroic, as creating and protecting it (consumer access to CBD),” Beckerman said.
But Beckerman and other hemp and CBD industry participants say the bill has significant areas in need of improvement.
“I’m glad that something was passed for CBD, and there are some good things in the law, but there are some things that really need to be modified,” said George Sewitt, head of business development and operations for UrbanXtracts.
The New York City company, with an affiliated hemp farm in Warwick, has partnered with the Orange County Industrial Development Agency’s Accelerator business incubator on a $5 million project, due in January. It includes building and running a CBD processing and research operation at the former state prison site in Warwick.
Among other areas of improvement, hemp and CBD industry participants cite:
• potentially onerous labeling and licensing requirements, including for out-of-state companies, and unclear language regarding licensing for cultivating, producing and selling CBD;
• a lack of clarity over grandfathering those with licenses under a current experimental New York program into the bill’s new system to produce and research CBD;
• and strong protectionist measures that potentially limit the sourcing and sale of CBD to New York-made products, despite New York lacking enough of a hemp supply; plus measures that could strangle outside supplies, investment and commerce from other states’ farmers and companies.
The bill does address CBD beverages, but it leaves local municipalities to decide how to handle CBD-infused food. New York City recently banned such food and drinks.
“Limiting it (the CBD market) to only New York hemp (products and sourcing) is throwing the baby out with the bath water,” said Jonathan Miller, general counsel for the U.S. Hemp Roundtable, a trade group.
Metzger countered that, done right, protectionist measures are “an enormous opportunity for our New York businesses and farms.” But she’s open to revising the bill.
Metzger also defended holding other states’ CBD producers to strict New York standards as a way to protect against unsafe “snake oil” products.