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NYS proposes regulations for hemp-derived CBD products

An employee holds a CBD flower in a

An employee holds a CBD flower in a smoke shop in Brooklyn. A state proposal calls for an all-out ban on the sale of smokable flower, which some Long Isand growers fear could create a black market.  Credit: AP/Marshall Ritzel

While hemp farmers, business owners and CBD advocates on the Island say they're "generally pleased" with the state's proposed regulations for hemp-derived CBD products, many also are raising concerns over the ban of one product, the CBD hemp flower.

The long-awaited regulations, released nearly a year after Gov. Andrew M. Cuomo signed a bill establishing regulations for the production and sale of hemp and hemp extracts in New York, were posted on the Department of Health's website Wednesday.

The 63-page document — crafted in accordance with legislation passed earlier this year establishing a Cannabinoid Hemp Program — details "quality standards" for the sector, and greenlights the use of hemp-derived CBD in certain foods, drinks, topicals and dietary supplements.

It also prohibits processors from making claims that suggest products can prevent or treat disease and requires product labeling and laboratory testing, in an effort to protect the public from the potential consumption of harmful toxins.

The regulations ban the sale of smokable, hemp CBD flower — which refers to the bud of the plant.

Industry insiders on the Island and throughout the state are now calling for the removal of this provision, claiming that an all-out ban on the sale of smokable flower, sold alone or in pre-rolled joints, will negatively impact New York farmers.

"If not removed from the proposed rules, it may essentially push the small and craft farms out of the industry," Nicole Ricci, executive director of Cortland-based trade group the New York Cannabis Growers and Processors Association, said, adding that the regulation fails to capture the bill's intent of allowing for a "vibrant, prosperous industry" for consumers, growers and processors.

Bridgehampton farmer David Falkowski, owner of CBD business Open Minded Organics, agrees.

"Hemp flower is already out there, it's already being sold in a variety of places...cornerstore bodegas, nearly everywhere," he said.

"If anything, this will create a black market for it and shut, those of us who want to do things the right way, out."

Falkowski, a licensed hemp grower and processor who's been part of the state's industrial hemp pilot program since 2018, said he'd love the opportunity to sell hemp flower.

"There's great consumer demand for it and is one of the higher value crops a farmer can produce right now," he said.

"We were all hoping it'd be included and allowed in the regulations but right now, just by skimming through what's posted [on the Department of Health's website], my colleagues and I are asking ourselves...where's the opportunity for us? The small farmer. We just don't see it. We're being locked out of a premium market."

CBD flower commands a higher price point than whole hemp plant materials, also known as "biomass," because it has been cut and trimmed and is ready to sell, Falkowski said.

The regulations are subject to a 60-day public comment period, time in which advocates like Ricci of the Growers and Processors Association, say they will submit member comments and work with state lawmakers in hopes of procuring certain "tweaks" to the proposed rules.

"Overall, the proposed regulations are a win for the industry," she said. "But we're still in battle, the war [to achieve a level playing field for smaller growers] is not over."

In the U.S., CBD sales are expected to reach $1.8 billion by 2022, according to Germany-based market and consumer data firm, Statista.

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