The Hemp Beverage Alliance joined with New York retailer One Stop Brew Shop, New York distributor Sarene Craft Beer, and hemp beverage maker Cycling Frog to file an order to stop the New York Office of Cannabis Management (OCM) from implementing or enforcing recently enacted “emergency regulations” that would devastate the hemp industry in the Empire State.
“Cycling Frog wants to work with OCM to develop a regulatory framework for hemp beverages that is safe, transparent, and provides New York customers with the products they want. However, this simply cannot be done under the emergency regulation,” said Dylan Summers, Vice President of Government Affairs, Cycling Frog. “We hope this action will allow OCM, retailers, distributors, and beverage makers to come together to create a regulatory framework that works for everyone.”
The Economic Impact of the Emergency Regulations
Emergency regulations passed by OCM in July will have a catastrophic impact on the state’s burgeoning hemp industry. Besides requiring seemingly arbitrary limits for the amount of cannabinoids in products, the regulations fail to consider the economic impact on the more than 8,000 hemp license holders in the state.
“Small businesses like ours, in order to survive, rely on diversification in order to keep employees, provide health benefits, and a quality workplace,” said James Hilbert, Co-Owner of One Stop Brew Shop in Rochester, NY. “Hemp-infused beverages provide One Stop with another stream of revenue that has brought in new customers and helps us navigate difficult economies. These regulations will have a devastating effect on my business.”
The Impact on Consumers
In addition to neglecting the economic impact, OCM failed to recognize the consumer impact of having hemp beverages removed from store shelves.
“We are proud to carry hemp beverages that follow strict guidelines for production, testing, labeling, and marketing,” said Joe Grabowski, Chief Operating Officer, Sarene Craft Beer. “As beverage wholesalers who already carry alcohol products, we understand the importance of regulation and welcome it, but these emergency regulations seem to cause more harm than good. The regulations essentially ban hemp beverages completely and consumers will now be forced to either purchase them legally in neighboring states such as Connecticut or New Jersey or buy them on the unregulated market where they may contain contaminants or be unsafely manufactured.”
Hemp and hemp-derived cannabinoids were federally legalized under the 2018 Farm Bill. However, the US Food and Drug Administration has ignored the pleas of the industry, government leaders, and consumers to properly regulate these products. As a result, individual states have created a patchwork of regulations.
Looking to Other States for Exemplary Legislation
Some states, like Minnesota, have created a thriving marketplace for low-dose, hemp-derived beverages. These products are properly and consistently labeled, age restricted to adults, and can have no more than five milligrams of hemp-derived THC per serving.
“We encourage OCM to look to the state of Minnesota for exemplary legislation,” said Christopher Lackner, Executive Director, Hemp Beverage Alliance. “Hemp beverages should be regulated like alcohol, age-restricted like alcohol, taxed like alcohol, and available in places where people buy alcohol. We look forward to working with OCM to develop a marketplace where adult consumers have access, children are kept away from these products, and the entire state benefits from new sales taxes.”
Cycling Frog is the lead plaintiff in the Article 78 special proceeding, which was filed in Albany County on Friday, August 4 as part of the order to show cause. In addition to OCM, the New York State Cannabis Control Board (CCB), CCB Chairwoman Tremaine Wright and OCM Executive Director Chris Alexander are listed as respondents.
