After a 2-year journey, the toughest consumer protection rules for CBD products in the US is becoming a reality in New York State. These rules were passed in the NY state legislature, 2 years ago, in June of 2019. It took Governor Cuomo until December 2019 to sign the legislation, 10 more months for the Department of Health (DOH) to issue interim rules with a 2-month comment period, and then until May 19th, 2021, for the DOH to release the final rules, which take effect 45 days later, which squarely points to July 3rd. Let’s call this an Independence Day for NY state consumers who will begin to benefit from a weeding out of the many CBD products which do not contain CBD, or contain less than advertised, or contain harmful amounts of toxins.
If you are a store in NY state selling CBD products, or if you are an out-of-state merchant shipping CBD products to NY state, you have some decisions which should be (or should have been) made over by July 3rd, 2021.
What should you do if you are a store located in NY state?
At High Falls Hemp, we have been patiently waiting for the DOH to release the final rules, with whom we have had numerous conversations about these rules along the path to the release of these rules, as these rules have changed along the way. Some of the requirements listed in the interim rules released in October 2020 have been appropriately removed, as they were onerous and impractical. At this point in time, as we approach the effective date for these rules, we at High Falls Hemp have made peace with the new rules and feel they are all reasonable from a compliance perspective.
Our recommendation is that each merchant apply for the retailer’s license and pay the $300 per location. In discussing the fact that such a fee might be a burden for smaller merchants with the DOH, we are of the belief that the DOH will adjust the licensing fee, based on the volume of products sold upon renewal, but nothing will be done to lower the fee for the initial licensing requirement this year (2021). We were hopeful that the DOH would come up with an equitable licensing fee plan based on volume, but that is not going to happen prior to the rules effective date.
What does a store need to do to register with NY state and remain compliant with these rules?
- You must register with the NY state Dept of Health as a merchant selling CBD products. The cost of doing so is $300 per retail store location, and
- The CBD products you are selling must be compliant with NY state requirements, which means:
- The CBD products must be produced to certain standards
- They must be manufactured at facilities which meet the requirements of Good Manufacturing Practices
- The products must be lab tested to ensure compliance with safety standards, as shown on a 3rd party lab report, conducted by a lab certified as ISO 17025, with full panel lab reports showing that these categories are within safe readings for:
- Heavy metals
- Residual Solvents
- Biologic contaminants
- The products must have within 20% (higher or lower) the amount of CBD and any other cannabinoid listed on the label
- The product must have no more than 0.3% THC in it (as measured on a dry weight basis)
- That tincture products have a calibrated dropper so the consumer can measure out with accuracy, the amount of the CBD they are taking
- That the CBD products must observe certain labeling requirements. These labeling requirements take effect on November 1, 2021
- They must show the amount of CBD in the package, and the contents of any other cannabinoid in sufficient quantity (CBG, CBN, CBC, etc.…)
- The label must show the amount of THC per serving, if the product is a full spectrum product with trace amounts of THC
- The package must list the manufacturer (in case there is a reason to report any adverse results from taking the CBD)
- The package must have a QR code linking to an online source where the lab reports can be accessed
- The labeling must show the type of CBD used, be it full-spectrum, broad-spectrum or isolate
- The retail merchant must maintain records of the CBD products they are selling.
The second significant component which each merchant needs to do to be observant of the new rules is to evaluate the products which they sell in their store, as selling non-compliant CBD products is violating the rules, whether or not the merchant applies for the retailer’s license. This is where High Falls Hemp might be the perfect solution for your store, as our products have been made according to these standards since our inception, with a QR code, linking to full panel lab reports for the last 2 years. Every lot or batch of products High Falls Hemp produces undergoes this rigorous testing to ensure our products are effective and safe.
Applying for the Retailers License
This must be done online via the NY state business express portal at:
- At this link, you will click to apply for the “Cannabinoid Hemp Retail License” which will prompt you login with your New York State Business Express Login credentials.
- Upon logging in, you will first fill out or review your “Business Profile” which includes information such as any business-related addresses or contact information.
- Following that, you will move onto the “Cannabinoid Hemp Retailer License Application” where it will again ask you to confirm your contact information and any business addresses, however, this section will also ask you to upload your Certificate of Authority regarding Sales Tax Registration in New York State.
- Then you will be asked to provide a list of all the types of CBD product’s you intend to sell (tinctures, edibles, vapes, etc.), and
- Lastly, you must provide a list of the manufacturers or the companies you source your products from.
At High Falls Hemp, we welcome these rules. As much as a burden as they might appear to be, these rules are the first step towards creating an honest industry in an otherwise Wild West environment. We are here to assist you as it pertains to remaining compliant.