CBD Rules Out, Cannabis to be Legal in 2021

PUFF, PUFF, PASS! CUOMO HIGH ON LEGAL CANNABIS FOR 2021
Publishes New Rules and Regs for CBD 

It is the winter of our discontent. Discontent? How about Fury, Outrage and Disgust?! That’s more like it.  We have been jerked around, used as political pawns and given nothing tangible by our Dearly Elected to get us through the winter. It’s beyond reprehensible, but we are hospitality people and we always look on the bright side of life right? So let’s consider legal cannabis for a moment as the movement is a bright spot on a dark canvas and it’s picking up steam.  And, like we have always said, it’s the hospitality people that will be bringing cannabis to the people once it’s legal. Oh, and it’s a motherf’in pandemic proof product.

Here is the current state of affairs and it’s looking good.  Our friends over in Jersey are mere days away from legalizing cannabis as they head to the polls to vote “righteous” and pass the referendum.  You know that Cuomo, and all New Yorkers for that matter, do not like when Jersey beats us at anything.  So, he is sparking up the cannabis engine here and we are very bullish that we will have a legal recreational cannabis law pass this Spring. 

New York also just passed rules and regs for CBD consumption and Joey Regs is here to tell us all about it….

Joey Regs says….

It seems that finally, NYS is ready to acknowledge a few really important things: 1) that it’s about damn time that we legalize adult-use, recreational cannabis here; and 2) that it’s time to issue some real guidelines on CBD.  Both of these realizations come in at around two years too late, but well take it!

CBD RULES

Let’s tackle the CBD aspect first, as this could provide a more immediate impact for your existing businesses.  A little history.  While the Farm Bill of 2018 declared that hemp-derived CBD, containing less than .3% THC is per se legal, it did not codify how the product or any of its derivatives were to be regulated.  And the FDA, who is historically in no rush to do their job, have neglected their responsibilities with respect to providing any type of regulatory framework over the last few years.  So, where does that leave us?  In a state of utter confusion of course. 

Every State, county, city and municipality has essentially been left to their own devices to develop a plan for how they will regulate CBD products. The results are all over the map.  Generally speaking, jurisdictions that have taken a position, indicated that their position will be temporary, and can stand until the FDA provides some legitimate guidance.  And we’re still waiting.  The [quasi] official guidance from the FDA up to this point has been that CBD cannot be considered as a viable dietary supplement nor a food or beverage ingredient.  And that’s kinda it.  The New York State Health Department had previously opted out of doing any real work on the matter, and just punted the issue by saying that they adopt the position of the FDA.  NYC government has followed suit, by saying that they follow what the State Health Department says.  And around the waste of time wheel we go.

Well, it appears that FINALLY the New York State Health Department is developing a backbone here, and actually taking a stand on the issue.  Maybe it’s because the FDA is starting to move in the right direction (The Hemp and Hemp-derived CBD Consumer Protection and Market Stabilization Act of 2020 is currently in Committee and has bipartisan support), or maybe it’s because State government is finally realizing that it would be INSANE to recreationalize full cannabis use, but yet also stand by the position that it would be illegal to sell CBD products.  Either way, we actually don’t care. Regs are here.

What we do care about, is that you, restaurant and bar people, may now finally get a few other ingredients to play with…sort of.  As with anything these days it seems, we have a “good news: bad news” situation. 

GOOD NEWS: New York State has finally released their official rules for manufacturing and selling CBD consumables. 

BAD NEWS: They are just about the most strict set of CBD guidelines in the entire country.  Sure, they’re not ideal, but this is a first step, and that is what is actually most important.  Now there is clarity in the space, and everyone (including the regulators) expects things to relax over time from here.

GOOD NEWS:Food and drink infused with CBD and other hemp extractsCAN now legally be sold at retail, so long as that food or drink product contains less than .3% THC (the thing that gets you high), and the product adheres to certain guidelines (such as 25 milligram cap per serving).

BAD NEWS:  You, as a retailer, can still not infuse your own food and/or drink items for sale; all compliant products must come pre-packaged [and thus pre-infused] by the manufacturer.  You also cannot sell CBD concentrate or oil with a food or drink purchase for end-users to do their own on-site infusions.

GOOD NEWS: Allowable forms of consumption now include food and drink items; vape cartridges; dietary supplement pills/gummies.

BAD NEWS:  CBD cannot be combined with any alcohol or tobacco product.  To purchase CBD inhalables, you must be 21 years of age or older.

BAD NEWS: In order to sell CBD products at retail, you would have to apply for a retail permit to do so.

GOOD NEWS: This will function more as a “registration” than an application process, per se.  What I’m hearing from my friends in Albany who literally wrote the code, is that we’re looking at a one or two page registration form.  And upon filing, you can begin selling immediately – no need to wait for your permit to arrive.  The State just wants to know who’s selling the stuff.  They’re not interested in micromanaging how you do it, inspecting your premise, etc.

All things considered, not so bad.  The bulk of the annoying restrictions actually fall on the manufacturer side here.  For those of you interested in getting involved there, you can contact me separately about that.  But for the majority of the folks reading this newsletter, that are thinking about the retail angle, this is a pretty positive thing.  Would it have been great if we could infuse our own food and drink items? Of course.  Hopefully that’s next.

Next question is timing.  Yes, the rules just officially came out.  Does that mean you can start retailing CBD products effective immediately?  Not quite.  There is a 60-day public comment period.  And then based on what those comments are and whether material edits need to be made, it can take another few weeks [or more] thereafter.  So this is more of a primer, to get you ready for what’s coming, as opposed to a “how to” manual starting tomorrow.  We do know that there is a degree in urgency in Albany to get these rules rolled out ASAP though.  And I know that the Governor’s office is actively exploring ways to expedite things – perhaps an emergency order, putting preliminary rules into effect while the proper legislative process takes its course, etc.  Stay tuned.

Legalization of the Good Stuff

Adult-use cannabis legalization will finally happen in New York in 2021.  That’s it, period, end of story.  We, as a State, are pretty damn broke (our budget deficit almost doubled since COVID began).  And we are in dire need of revenue-generating initiatives.  Just so happens, there is a whole industry out there that can come to our rescue, so let’s go already!  Cuomo, his top aides, Schumer and many other electeds are now all falling into line and singing the same song finally.  They know it’s imminent.  And the fact that every state around us is making a push should suffice to get us over the finish line.

It will be Public Question #1 on all New Jersey ballots next week (and will be represented on 4 other additional State ballots as well).  And polls are showing that New Jersey residents are in favor of legalization at a clip of greater than 2-1. There is already conversation amongst NJ elected officials, that there could even be a temporary program installed within the month!  Yep, you read that right.  They are proposing to have a way to legally purchase cannabis in New Jersey inside of November 2020, should this item pass next week.  You don’t think Cuomo is literally counting the dollars that will be spent by New Yorkers crossing the border between now and when we legalize?

Pennsylvania’s Governor has also taken a very strong position on cannabis recently.  He has essentially been making monthly appearances, for the last three months running, calling for legalization.  He’s even gone so far as to call out some of his conservative colleagues in the Senate for obstructing progress within the State.  And considers legalization to be a cornerstone of the State’s recovery [from COVID] program.

Now, we, in New York, are not a referendum state.  So, the item doesn’t have to appear as a ballot question in order for our legislature to act.  The fastest, and most efficient path forward would be if legalization is part of the Governor’s upcoming budget proposal [again].  If it appears in the budget proposal and our elected officials approve it, then BOOM!  We have legalization April 1, 2021.  Of course you can’t just go out and buy cannabis or start a cannabis business that day – there’s plenty of infrastructure that the government needs to get straight before commerce can begin.  But everybody is motivated now, and things could move quickly.  The fact that this item has appeared in the Governor’s budget proposals for the last two years running is significant.  They’ve had more than enough time to tinker with every aspect of this code now.  And they have a good idea of what the path forward looks like.

I have heard from a higher ranking Albany official, that depending on how the election goes next week, there is potentially an outside chance that there is a mechanism to get New York online [albeit in a modified form] by as early as January.  That is 100% hearsay though, and I don’t want to get ahead of myself.

Stay tuned here for any and all state Cannabis updates. We’ll break them to you, as we get them. And you can always reach out with any questions.

Joey Regs Out

As Jerry and the boys said “We can have high times if you’ll abide”