Update on NYS Cannabinoid Licensing, Manufacturing and Labeling

January 3, 2022 | Steven Shapiro | Compliance, Investigations & White Collar | Cannabis

The New York State Office of Cannabis Management (OCM) has announced regulations concerning the manufacturing and labeling of cannabinoid hemp products, and the availability of an online portal to facilitate required state licensure. Cannabinoid hemp products sold in the state must comply with the regulations by April 25, 2022. The OCM will be reaching out to retailers across the state to notify them of this requirement. Companies interested in the program can register immediately.

Cannabinoid hemp products include many cannabidiol (CBD) products available for purchase today, including tinctures, oils, topicals, pills, capsules and food or beverages intended for human consumption or application. These regulations and the current licensure program do not pertain to adult-use cannabis (marijuana). They are only for products derived from industrial hemp with less than 0.3% THC content. New York has also prohibited the sale of Delta-8 THC products and synthetic cannabinoids.

The U.S. Food and Drug Administration (FDA) continues to maintain that the marketing of most foods, dietary supplements, and drugs containing CBD that have not been approved by FDA are prohibited under federal law. Compliance with New York state requirements provides no assurance that any product is, or would be, compliant with applicable federal requirements.

This is a summary of some of the regulations’ highlights.  These requirements are also subject to change,  so please contact counsel for current and complete details.

1.            New York State Licensure

A.            Retail and Distributor Licenses

The Cannabinoid Hemp Retail License is valid for one year with an annual fee of $300.  Businesses must first obtain a Cannabinoid Hemp Retail License before selling CBD products to consumers (this includes businesses that are already selling these products).  Businesses with multiple locations selling CBD products must apply for a license for each location.

Entities selling online to consumers located in New York, whether or not the entities are located in New York, must also obtain a license.

OCM has provided an explanatory notice for retailers.

The announcement includes information for the online portal, which makes it easier to file and update permit applications — https://www.businessexpress.ny.gov/app/answers/cms/a_id/3813/kw/hemp

B.            Manufacturing and Processing Licenses

Businesses processing cannabinoid hemp or hemp extract for human consumption, whether in intermediate or final form, are required to obtain a cannabinoid hemp processor license from OCM. This includes both processors who remove hemp extract from the raw plant and those who purchase hemp extract in intermediary form to manufacture and/or formulate finished products.    The application can be found here — https://cannabis.ny.gov/processors.

The licensure requirement extends to manufacturers and distributors of CBD outside of New York State, if their products are intended for resale to licensed cannabinoid hemp retailers within New York State.   According to OCM, this will ensure that cannabinoid hemp products coming from out-of-state meet all the requirements of the cannabinoid hemp program.

2.            New York State Manufacturing and Labeling Regulations

The Cannabis Control Board announced that it had approved manufacturing and labeling regulations for the cannabinoid hemp program on November 3, 2021 — https://cannabis.ny.gov/news/cannabis-control-board-approves-regulations-cannabinoid-hemp-program (some of the regulations have since been amended during a December 16th meeting and could be amended further before the effective date).

The regulations, which include manufacturing, labeling and advertising requirements, are available here — https://cannabis.ny.gov/system/files/documents/2021/11/part_114_cannabinoid_hemp_regulation_11-10-21.pdf.

A.            Manufacturing / Processing Requirements

New York state is requiring that licensed manufacturers and processors comply with current federal GMP regulations — 21 CFR Part 111 (for dietary supplements), or 21 CFR Part 117 (for foods) — established by FDA. Regulated products cannot contain more than (0.3% total  Δ9-Tetrahydrocannabinol concentration. Companies must also implement testing to verify that their products contain not less than 80 percent or more than 120 percent of the concentration of total cannabinoid content as listed on the product label. There are also specified limits for various pesticides, residual solvents, heavy metals, and certain biological and mycotoxins. Here are some of the additional state requirements:

      • food or beverages cannot contain more than 25 mg of total cannabinoids per individually packaged product;
      • dietary supplements cannot contain more than 3,000 mg of total cannabinoids per product, with no more than 100 mg per individual serving (revised at the December 16 meeting from the original 75 mg);
      • for multiple-serving products which are not individually wrapped, premeasured, separated, or delineated, there must be a measuring device such as a measuring cap, cup or dropper with the product packaging. Hash marks on the package shall not qualify as a measuring device.

In addition to GMP compliance, OCM is going a step further than federal law by requiring that all manufacturers and processors obtain a GMP audit of their processing facilities from a state approved GMP auditor.

B.            Labeling Requirements

OCM labeling regulations include what is required under pertinent FDA regulations for foods and dietary supplements generally, with several additional requirements.  OCM has provided a convenient checklist of its labeling requirements —https://cannabis.ny.gov/system/files/documents/2021/11/cannabinoid_hemp_product_packaging_and_labeling_checklist_112321.pdf.

Some of the state-specific labeling requirements include:

      • disclosing the milligrams per serving and the milligrams per package of: (i) CBD; (ii) “Total THC” or “THC” which, for the purposes of product labeling, shall include detectable levels of total Δ9-Tetrahydrocannabinol, Δ8-Tetrahydrocannabinol and Δ10-Tetrahydrocannabinol; and (iii) any other marketed cannabinoid;
      • including an expiration or best-by date if applicable;
      • indicating the name of the cannabinoid hemp processor or out-of-state manufacturer, packer or distributor;
      • including a scannable bar code or QR code linked to a downloadable certificate of analysis, or linked to a website where the certificate of analysis can be downloaded;
      • including the country or state from which the hemp used in the product was sourced;
      • a prohibition on representations imitating candy labeling or the use of cartoons or other images to advertise to children or otherwise marketing to anyone under 18 years of age;
      • marketed in tamper-evident packaging that minimizes oxygen and light exposure to prevent degradation of the product and cannabinoids;
      • CBD products with claims to be “isolate,” “full spectrum,” “broad spectrum,” or “distillate” must comply with the applicable New York State definitions;
      • The following warnings are required on labels:
        1. keep out of the reach of children;
        2. state that the product is derived from hemp and may contain THC, which could result in a failed drug test. This warning may be omitted for cannabinoid hemp products that are topically applied; made exclusively using an “isolate;” or made from “broad spectrum” hemp extract derived entirely from hemp grown, extracted, and manufactured in New York State;
        3.  that the product has not been evaluated by the Food and Drug Administration for safety or efficacy;
        4. those who are pregnant or nursing should consult their healthcare provider before use.

C.            Advertising Requirements

Obviously, the OCM prohibits false or misleading claims and statements that a food or dietary supplement can, or is intended to, diagnose, cure, mitigate, treat, or prevent disease.

There are additional prohibitions against claims or representations that would cause a reasonable person to believe that a CBD product is cannabis, marijuana, medical cannabis, or medical marijuana, or that a licensee is authorized to sell or dispense cannabis, marijuana, medical cannabis, or medical marijuana.

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