NY moves to regulate hemp extract products to protect consumers

ALBANY – New York is on a course to lead the nation in regulating hemp extract products, which state lawmakers say the industry needs to protect consumers and expand the growing market.

The State Legislature last week passed the measure, which is aimed at the growing trade in products infused with hemp extract — the most common of which is CBD — such as Kickback coffee, which promises a “functional chill,” Recess soda, gummy bears and lotions and oils that supporters say have calming qualities.

It would mandate content standards and consumer protections for the industry for its sales in the state. This would include making sure the amount of CBD promised on labels matches the amount in the product — academic tests have shown there has often been less CBD than advertised — and to establish serving sizes so consumers can control dosages. Regulations would include caution labels and licensing and criminal background checks for farmers and sellers of products infused with extracts such as CBD.

The legislation also seeks to help small growers within the state, calling for a preference for manufacturers and sellers to use New York-grown hemp extracts.

Gov. Andrew M. Cuomo said he is reviewing the measure.

The legislation almost didn't happen. The issue was long tied to an ill-fated proposal to legalize marijuana and appeared to die with that measure in the closing days of the legislative session. But its sponsors worked out a new bill, although without prior agreement from Cuomo.

The industry “has already taken off in a way that was unexpected,” said Assembly Agriculture Committee Chairwoman Donna Lupardo (D-Binghamton), who co-sponsored the bill. “In the absence of federal regulation, we have to protect our consumers and our farmers."

The measure comes at a time of regulatory uncertainty for hemp products, despite an explosive growth in sales. While the federal government legalized hemp as an agriculture product earlier this year, the FDA, which regulates interstate sales, said it is evaluating whether to approve the products for sale or even if they work.

The state law would provide legal protection sought by growers, manufacturers and sellers, which is expected to lead to an expansion of their operations and more products on the shelves. Sellers who would want to tap into New York’s large market would have to meet the state’s standards. That would make New York’s standards the minimum for companies selling products nationwide, state and industry officials said.

“It will bring investment and growers and processors of hemp food including CBD into the marketplace which are going to produce quality products under very strict guidelines and standards,” said Geoffrey W.  Whaling, chairman of the National Hemp Association, based in Washington. “This is an opportunity that is here for the long haul, not just a passing fad.”

But while state regulation could require more truth in advertising for products and help weed out unscrupulous competitors, it could have a down side, according to Dave Falkowski, who with his wife,  Ashley, owns the Open Minded Organics farm store in Bridgehampton.

“With these regulations, as much as it’s good for the growers, this is where big business operates because they have larger compliance offices than our whole company,” Falkowski said. “It’s not necessarily good for the small guy.”

The legislation is expected to further encourage companies such as Coca-Cola and Ben & Jerry’s, which have said they are exploring the idea of expanding into CBD products. Meanwhile, the law is expected to boost the availability of established products such as gels, quick-hit bottles for sips of CDB-infused shots; drops to be placed under the tongue; oils; and Calm, Cool, Collected soft drinks. Hemp for pups is also growing as a leading anti-seizure treatment for dogs.

Health, government and industry officials say hemp extracts aren’t addictive and don’t get people high as with marijuana. The hemp extracts lack the key ingredient in weed, known as tetrahydrocannabinol or THC, in anything but a trace level, officials said.

A user of CDB just gets very calm, and anxiety can slip away without hindering a person’s ability to function even at high levels, the officials said. There is no minimum age for consuming products legally containing cannabidiol, and they are becoming very popular. The industry estimates sales were $330 million last year nationwide and will grow to as much as $3 billion by 2025.

“The industry really needed the regulations, they need to know what’s coming,” said Senate Agriculture Committee Chairwoman Jen Metzger (D-Rosendale), a co-sponsor of the bill. “And not just for the industry, but it’s incredibly important to consumers. You can buy these  CBD products at the gas station, but what are you buying? We need product standards … and New York can be the national leader.”

She noted Gov. Andrew M. Cuomo’s pilot program begun in 2015 to test the potential market has already resulted in thousands of acres devoted to hemp and a couple dozen licensed processors.

Cornell University also did a statewide study of the places to grow hemp; the state University of New York at Morrisville College studied the best fertilizers; and the University of Binghamton studied medical uses of CBD, Lupardo said.

One processing and testing facility is in a former prison in her district, and farmers have banded together to grow hemp elsewhere in her district. She said hemp’s future will include not just chewable gummy candies, but pharmaceuticals and building material called hempcrete than can be made with less carbon emissions than concrete.

“New York State has the opportunity to be an early adopter, to really benefit the economy through these regulations,” said Aaron Smith, executive director of the National Cannabis Association.

State regulations could also add teeth to a federal foray into regulating hemp extract products.

Some of the products make claims of curing cancer, Alzheimer’s disease, fibromyalgia and neuropsychiatric disorders among other diseases. Those unsubstantiated claims prompted the Federal Trade Commission in April to join the Food and Drug Administration in writing warning letters to three companies marketing hemp extract products. The federal agencies ordered the companies to correct claims to make sure claims are “supported by competent and reliable scientific evidence.”

The FDA approves only of a prescription-level CBD product to treat two kinds of epilepsy. The Mayo Clinic consumer services says CBD “can cause side effects, such as dry mouth, diarrhea, reduced appetite, drowsiness and fatigue. CBD can also interact with other medications you're taking, such as blood thinners.”

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.