New York Says CBD You Later to CBD-Infused Food and Beverage

July 22, 2019

Key Takeaways:

Cannabidiol (CBD) as a dietary supplement or infused ingredient is now illegal within the state of New York
This is a blow to companies that were looking to enter or had already entered this area of business
This may lead to further stagnation of the hemp business within New York state as the infused products market is now shut

Background

In February 2019, former FDA Commissioner Scott Gottlieb, MD, testified before Congress regarding CBD. The discussion focused on the FDA’s goal to create “an appropriately efficient and predictable regulatory framework for regulating CBD products.” This was good news for those in the hemp and cannabis market. However, the FDA still has not implemented any regulatory framework or issued guidance on the status of CBD products. This means that CBD-infused products are still illegal in the U.S.

CBD-infused products are located in almost every market where cannabis (medical or adult use) has been legalized. Carl’s Jr. sells a 420 Burger infused with CBD. Many thought the floodgates opened wider with the passage of the 2018 Farm Bill. It removed hemp from the DEA’s Schedule 1 list of controlled substances (THC, the narcotic fraction of the plant, is still on the list). That was a misreading of the legislation by many. On Dec. 20, 2018, Dr. Gottlieb issued a statement reiterating the FDA’s authority to regulate CBD as an ingredient. He also noted that according to the FDA, CBD is not a legal dietary ingredient.

Dr. Gottlieb reaffirmed this position on February 28, 2019. He stated it remained unlawful to introduce food or supplement products into interstate commerce that contained added CBD. “As such, for CBD to be legally marketed as an ingredient in a food or dietary supplement, the law requires that the FDA first would need to issue a regulation to permit such marketing,” he said.

At the State Level

Many people have heard about New York City starting to enforce its ban on CBD-infused edibles. However, there was no discussion about if such a ban would be applied or was being applied to the rest of the state. The state of New York provided its answer. On July 19, 2019, the New York State Department of Agriculture and Markets issued a statement clarifying its position on this issue, stating, “No food or beverage product may be made or sold in New York State if it contains cannabidiol (CBD) as a food, a food additive or an ingredient.”

“Food or beverage products that are found by Department inspectors, in either a processing facility or in the marketplace, to contain CBD are considered adulterated (FD&C Act, sec. 301(b) and AML, sec. 200).” The department stated that such products “are subject to enforcement actions taken by the Department or the U.S. Food and Drug Administration” possibly including:

Voluntary removal of products
Seizure and/or destruction of products
Issuance of a fine and/or a failing sanitary inspection

According to the New York State Department of Agriculture and Markets sections 200.1 and 200.2 of the Agriculture and Markets Law applied. The law reads as follows:

Food shall be deemed to be adulterated:

If it bears or contains any poisonous or deleterious substance which may render it injurious to health; but in case the substance is not an added substance such food shall not be considered adulterated under this subdivision if the quantity of such substance in such food does not ordinarily render it injurious to health.
If it bears or contains any added poisonous or added deleterious substance other than one which is (a) a pesticide chemical in or on a raw agricultural commodity, (b) a food additive, or (c) a color additive, which is unsafe within the meaning of section two hundred two, or if it is a raw agricultural commodity and it bears or contains a pesticide chemical which is unsafe within the meaning of section four hundred eight-a of the federal food, drug and cosmetic act, as amended, or if it is, or it bears or contains, any food additive which is unsafe within the meaning of section four hundred nine of such federal act, as amended; provided, that where a pesticide chemical has been used in or on a raw agricultural commodity in conformity with an exemption granted or a tolerance prescribed under section four hundred eight of such federal act, and such raw agricultural commodity has been subjected to processing such as canning, cooking, freezing, dehydrating or milling, the residue of such pesticide chemical remaining in or on such processed food shall not be deemed unsafe if such residue in or on the raw agricultural commodity has been removed to the extent possible in good manufacturing practice, and the concentration of such residue in the processed food, when ready to eat, is not greater than the tolerance prescribed for the raw agricultural commodity.

Conclusion

Cannabidiol (CBD) as a dietary supplement or as an infused ingredient (water/food) has been illegal if transported across state lines. We knew that New York City was starting to enforce its ban on such products. New York’s Department of Agriculture and Markets has now unequivocally stated it is also illegal throughout the entire state. This is a massive blow to an area of business many companies were looking to enter or had already entered. The demand and curiosity regarding CBD and its uses continues to grow. This may lead to further stagnation of the hemp business within New York state as the infused products market is now shut for the foreseeable future. The question will now turn on what steps New York state will take if the FDA provides guidance in the opposite direction of what New York just decreed.

For more information, contact: