‘Clarity is a good thing…’ Proposed regs on CBD in New York hailed by food & bev brands as ‘pragmatic’ and ‘rational’

By Elaine Watson

- Last updated on GMT

Pictures courtesy of Recess, Vybes, and Mood33
Pictures courtesy of Recess, Vybes, and Mood33

Related tags Cbd Hemp

Proposed rules regulating the sale of ingestible products containing hemp-derived cannabinoids in New York have been hailed as “pragmatic” and “rational” by brands attempting to navigate the regulatory minefield in the absence of federal regulations.

In proposed amendments​ to Title 10 (Health) of the Official Compilation of Codes, Rules and Regulations of the State of New York governing the sale of ingestible ‘cannabinoid hemp products,’ New York State's Department of Health proposes that:

  • Brands must state the amount of cannabinoids in the product and the milligrams per serving. The maximum is 25mg cannabinoids “per product​” for foods and beverages and 3,000mg per product (which might contain multiple servings) for dietary supplements.
  • THC levels – which are capped at 0.3% - must be stated on the label in milligrams on a per serving and per package basis.  
  • Cannabinoid hemp products should be “displayed separately from other products.”
  • All products must have scannable codes linking to a certificate of analysis and are “prohibited from being attractive to consumers under 18 years old​.” Products must also make appropriate warnings (not intended for children, may cause users to fail a drug test, etc)
  • Cannabinoid hemp processors must have products tested to show they meet limits for cannabinoids, heavy metals, microbial impurities, mycotoxins, residual pesticides, residual solvents and processing chemicals.  
  • Hemp extract must be transported in a fully enclosed vehicle or container and accompanied by proof of origin and a certificate of analysis.
  • Anyone distributing cannabinoid hemp products manufactured out of state, to cannabinoid hemp retailers within the state, must be “permitted by the Department​.”
  • Cannabidiol or CBD means the naturally occurring phytocannabinoid cannabidiol found in hemp but does not​ include synthetic cannabidiol.
  • Any person extracting or manufacturing cannabinoid hemp in New York State is required to obtain a license from the Dept of Health to be renewed every two years. Applicants must submit evidence of a GMP audit and pay a license fee of $4,500 (for extracting) or $2,000 (for manufacturing). All solvents and methods used for extraction must be approved.
  • Any person selling cannabinoid hemp to consumers must obtain an annual license from the Department of Health ($300 for every retail location).

mood33 CEO: ‘We're absolutely thrilled’

So what do food and beverage brands make of the proposed rules?

Eric Schnell, co-founder and CEO at hemp-infused beverage brand mood33​ (it has 33mg CBD) – which is based in New York – told FoodNavigator-USA that he was “thrilled that this has happened so quickly and unexpectedly since FDA hasn’t weighed in yet as so many of us have hoped all year.”

He added: "If the FDA got their act together, as so many of us already operating in the industry had anticipated by now, we’d have a national set of guidelines in place to follow vs a state-by-state approach on how to label and market these products. 

Eric Schnell: 'This is a watershed moment...'

"I think what NY state has laid out is very fair in terms of dosage per serving, label claims around structure/function and of course supporting packaged goods so safety and efficacy can be much better controlled. 

"This is a watershed moment as a CBD-infused brand, and if FDA put out a similar policy nationally, I think the industry would rally around what has been proposed as a fine starting point to legally build the industry off of."

mood33... or mood22? 

But what about the 25mg upper limit of cannabinoids per product, given that the mood33 brand name reflects the fact his beverages contain 33mg?

"If this minor tweak to CBD content per serving stands to open up much larger distribution and retail opportunities for our brand, and is considered 'safe' by NY state endorsed standards, we are all so small in our infancy as CBD brands that I have no problem adapting to a lower mg per serving to win at shelf," ​said Schnell.

"We can easily switch our mg down to become mood22.  Being in the food and beverage industry for over 20 years, I have seen many a brand have to change their name and packaging in the early years in order to go on to great success."

Vybes CEO: ‘I hope other states see what New York is doing and follow its lead’

Jonathan Eppers, founder and CEO of VYBES​​​, a beverage brand infused with 25mg of water soluble CBD isolate, also welcomed the news: “As an industry, we've been dreaming of the day when states like New York would clarify their positions on CBD and give us, the industry, a pathway to legally market and sell our products.

“I applaud New York because they have taken a very pragmatic, rational position on CBD, one which acknowledges that this market already exists, that CBD is safe and that consumers are already buying CBD products in the state.

Jonathan Eppers: "New York is very influential, and I hope other states see what it's doing and follow its lead."

“Instead of taking a restrictive approach as some other states have, creating a black market, New York instead chose to develop sensible regulations which protects consumers. New York is very influential, and I hope other states see what they're doing and follow their lead."

‘A win win for everyone’

Asked about the section requiring cannabinoid hemp products to be “displayed separately from other products,” ​Eppers said: “I'm not fully versed in what this part means, but if what they mean is that CBD products within a store must be clearly labeled so a consumer knows that what they're buying has CBD in it, then I'm very much in favor of this.

“Most brands have had to dance around how they label their products, because states like New York haven't told us what's permissible and required. Now that it's clear that in New York, our CBD products can and must be labeled as CBD, consumers won't have to guess what they're buying and consuming.

"Retailers can finally carry CBD products, consumers will know what they're buying and brands will able to market what they're selling. That's a win win for everyone.”

CBD 2 © Getty Images  Aleksandr_Kravtsov

“With the increased production and use of cannabinoid hemp products, New York State could not wait for the federal government to act to institute basic consumer protections to protect the health and safety of New Yorkers​." Dr. Howard Zucker, commissioner, New York State Department of Health

Recess CEO: ‘Incredibly positive development’

Ben Witte, founder and CEO of hemp-infused beverage brand Recess​​​, said this was an “incredibly positive development​” for the category that he hoped would serve as a framework for other states, which right now have a patchwork of rules (or no rules), making life challenging for brands trying to build a nationwide presence.

“It’s absurd that there’s a large category of products out there on the market that is effectively unregulated.”

Attorney​: Positive step forward to tackle irresponsible players

Greg Kaufman, partner at law firm Eversheds Sutherland, said regulatory clarity was “a positive step towards removing ‘bad’ ​[adulterated or mislabeled] products from shelves,” ​and that he was “pleased to see a clear statement that these regulations apply to physical and online retailers.”

As for the 25mg limit for foods and beverages, he said, “People can argue about whether 25mg ​[for foods & beverages] is too high or too low but at least there is a standard to argue about.” 

‘Maybethese regulations will be a helpful influence on the FDA’

Greg Kaufman Eversheds
Greg Kaufman: "I'm pleased to see a clear statement that these regulations apply to physical and online retailers.”

At the end of the day, he added, food and beverage brands “need clear rules and the removal of the taint of federal illegality in order to responsibly enter the market. Maybe… may be a big maybe… regulations like those proposed by New York, and the experience New York will gain in administering these regulations, will be a helpful influence on the FDA. 

“Obviously, the FDA has the drug exclusion rule to deal with and New York is not burdening itself by confronting this rule concerning cannabinoid hemp products sold into its state.”

More clarity needed on how rules apply to out-of-state manufacturers

Asked if any aspects of the proposed regulations were unclear or overly onerous, he said: “I think the proposed regulations could benefit from additional clarity as to their application to out-of-state food product manufacturers.

“One potential onerous aspect of the proposed regulations is the requirement that where cannabinoid hemp products are purchased from out-of-state manufacturers, retailers have to maintain evidence that the products meet all of the requirement of the regulations.

“Is a certification from the manufacturer enough evidence or do retailers need to do more?  Retailers should have a clearer understanding of what is expected of them.”

No CBD added at point of sale

Finally, the fact that these regulations do not allow for the addition of hemp-derived cannabinoids to foods or beverages at the point of sale is not good news for coffee and juice shops who have been adding CBD or other cannabinoids to lattes or smoothies as they serve them, he said. 

Related topics Regulation Botanicals CBD / Hemp

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