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A08977 Summary:

BILL NOA08977
 
SAME ASSAME AS S06968
 
SPONSORLupardo
 
COSPNSRStirpe, Mosley, Crouch, Williams, Jacobson
 
MLTSPNSR
 
Rpld Arts 29 & 29-A, add Art 29 505 - 521, Ag & Mkts L (as proposed in S.6184-A & A.7680-A); add Art 33-B 3398 - 3398-u, amd 3302, Pub Health L
 
Relates to hemp, cannabinoid hemp, and hemp extract.
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A08977 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8977
 
                   IN ASSEMBLY
 
                                     January 7, 2020
                                       ___________
 
        Introduced  by M. of A. LUPARDO -- read once and referred to the Commit-
          tee on Agriculture
 
        AN ACT to amend the agriculture and markets law and  the  public  health
          law,  in  relation to hemp, cannabinoid hemp, and hemp extract; and to
          repeal certain provisions of the agriculture and markets law  relating
          thereto
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Articles 29 and 29-A of the agriculture  and  markets  law,
     2  article  29-A  as  added  by  a chapter of the laws of 2019 amending the
     3  agriculture and markets law relating to the growth  of  industrial  hemp
     4  and  the  regulation  of  hemp extract, as proposed in legislative bills
     5  numbers S.6184-A and A.7680-A, are REPEALED and  a  new  article  29  is
     6  added to read as follows:
     7                                 ARTICLE 29
     8                               GROWTH OF HEMP
     9  Section 505. Definitions.
    10          506. Growth,  sale,  distribution, transportation and processing
    11                 of hemp and products derived from such hemp permitted.
    12          507. Prohibitions.
    13          508. Regulations.
    14          509. Hemp grower's authorization, license; fees; requirements.
    15          510. Granting, suspending or revoking licenses.
    16          511. Proceedings to review.
    17          512. Transferability; change in ownership or control.
    18          513. Access to criminal history information through the division
    19                 of criminal justice services.
    20          514. Records.
    21          515. Aids to enforcement.
    22          516. Compliance action plan.
    23          517. Penalties.
    24          518. Remedies.
    25          519. Hemp economic development.
    26          520. Hemp data collection and best farming practices.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11646-11-0

        A. 8977                             2
 
     1          521. Severability.
     2    § 505. Definitions. As used in this article:
     3    1.  "Hemp"  means  the  plant  Cannabis sativa L. and any part of such
     4  plant, including the seeds thereof and all derivatives, extracts, canna-
     5  binoids, isomers, acids, salts, and salts of isomers, whether growing or
     6  not, with a delta-9 tetrahydrocannabinol concentration of not more  than
     7  three-tenths of a percent on a dry weight basis.
     8    2. "Institution of higher education" means:
     9    (a)  any  of  the  colleges  and universities described in subdivision
    10  three of section three hundred fifty-two of the education law;
    11    (b) a college established and operated pursuant to the  provisions  of
    12  article  one hundred twenty-six of the education law, and providing two-
    13  year or four-year  post-secondary  programs  in  general  and  technical
    14  educational subjects and receiving financial assistance from the state;
    15    (c)  the city university of New York, as defined in subdivision two of
    16  section sixty-two hundred two of the education law; and
    17    (d) a not-for-profit two or four-year university or college given  the
    18  power to confer associate, baccalaureate or higher degrees in this state
    19  by the legislature or by the regents under article five of the education
    20  law.
    21    3.  "License"  means a license, permit or registration issued pursuant
    22  to this article.
    23    4. "Processing of hemp in connection with its growing and cultivation"
    24  means the growing, cultivation,  cloning,  harvesting,  drying,  curing,
    25  grinding and trimming of hemp plants.
    26    § 506. Growth,  sale,  distribution,  transportation and processing of
    27  hemp and products derived from such hemp permitted.  1.  Notwithstanding
    28  any  provision  of  law  to the contrary, hemp and products derived from
    29  such hemp are agricultural products  which  may  be  grown,  cultivated,
    30  produced,  processed,  manufactured,  possessed  in the state, and sold,
    31  distributed, or transported in  the  state,  pursuant  to  authorization
    32  under   federal   law,   the   provisions   of   this  article,  article
    33  thirty-three-B of the public health law or any other state law.
    34    2. Notwithstanding any provision of law to  the  contrary  restricting
    35  the  growing  or  cultivating, processing, manufacturing, sale, distrib-
    36  ution or transportation of hemp and products derived from such hemp, and
    37  subject to authorization of the growth and  cultivation  of  hemp  under
    38  federal  law, the commissioner may: (a) authorize the growing, cultivat-
    39  ing, processing and manufacturing of hemp as part of agricultural  pilot
    40  programs  conducted by the department or an institution of higher educa-
    41  tion to study the growth and cultivation, sale, distribution,  transpor-
    42  tation,  processing  and manufacturing of such hemp and products derived
    43  from such hemp provided that the sites and programs used for growing  or
    44  cultivating hemp are authorized by, and registered with, the department;
    45  and  (b) license the growth and cultivation of hemp, including the proc-
    46  essing of hemp in connection with its growing and cultivation,  and  the
    47  sale of hemp plants or hemp seed.
    48    § 507. Prohibitions. 1. Except as authorized by federal and state law,
    49  and  rules  and  regulations  promulgated thereunder, the growth, culti-
    50  vation, sale, distribution or export of hemp is prohibited.
    51    2. Hemp produced outside the state and  sold  or  distributed  in  the
    52  state  shall  meet  all  standards established for hemp under state law,
    53  rules and regulations.
    54    § 508. Regulations. The commissioner is hereby  authorized  to  adopt,
    55  amend,  promulgate  and  issue rules and regulations consistent with the
    56  provisions of this article, including, but not limited to:

        A. 8977                             3
 
     1    1. The authorization or licensing of any person  who  may  acquire  or
     2  possess  hemp  plants or viable seeds, grow or cultivate hemp plants, or
     3  sell, purchase, distribute, or transport such plants,  plant  parts,  or
     4  seeds;
     5    2.  Reasonable  license fees and duration of licensure, which shall be
     6  at least three years;
     7    3. Maintaining relevant information regarding land on  which  hemp  is
     8  produced  within  the state, including the legal description of the land
     9  and its latitude and longitude, for a period  of  not  less  than  three
    10  calendar years;
    11    4. The procedure for testing of hemp produced in the state for delta-9
    12  tetrahydrocannabinol levels, using post decarboxylation, other similarly
    13  reliable  methods,  or  any other method authorized by the United States
    14  department of agriculture;
    15    5. Procedures for  effective  disposal  of  hemp  plants  or  products
    16  derived  from hemp that are produced in violation of this article or its
    17  rules and regulations;
    18    6. Procedures for conducting sampling of hemp to verify that  hemp  is
    19  not produced in violation of this article or its rules and regulations;
    20    7.  Such other matters that are necessary or appropriate for the state
    21  to obtain approval from the United States department of  agriculture  to
    22  assume  primary regulatory authority over the production of hemp, pursu-
    23  ant to federal law;
    24    8. Such other matters that are necessary or appropriate for the admin-
    25  istration of agricultural pilot programs of  the  department  or  insti-
    26  tutions of higher education or the regulation of program participants or
    27  their activities;
    28    9. Record keeping and any reporting requirements;
    29    10. Reasonably necessary security measures;
    30    11.  Standards,  practices or requirements for the growth, cultivation
    31  and the processing of hemp in connection with its cultivation, as neces-
    32  sary, depending upon the hemp's intended use; or
    33    12. Such other rules and regulations as the commissioner deems  appro-
    34  priate or necessary.
    35    § 509. Hemp grower's authorization, license; fees; requirements. 1. No
    36  person  shall: (a) grow, cultivate, process, produce, sell or distribute
    37  hemp in the state unless authorized by the commissioner as  part  of  an
    38  agricultural  research  pilot program established under this article; or
    39  (b) grow, cultivate and process hemp in connection with its growing  and
    40  cultivation  or  sell  hemp  plants  or hemp seed unless licensed by the
    41  commissioner. Mere transportation, such as by common carrier or  another
    42  entity  or individual, does not constitute activity subject to licensing
    43  under this article.
    44    2. A hemp grower license does not authorize the processing  or  retail
    45  sale  of  hemp for human consumption, as defined in section thirty-three
    46  hundred ninety-eight of the public health law, unless the licensee  also
    47  obtains  a cannabinoid hemp processor license, cannabinoid hemp retailer
    48  license,  or  any   other   license   required   pursuant   of   article
    49  thirty-three-B of the public health law.
    50    3.  Applications for licenses, authorizations or a modification there-
    51  of, as set out in regulation, shall be upon  a  form  specified  by  the
    52  commissioner, accompanied by a reasonable application fee for new appli-
    53  cations  or  significant modifications to an application, which shall be
    54  established by regulation and which may be made non-refundable by  regu-
    55  lation.

        A. 8977                             4
 
     1    4.  The  commissioner  may  also  assess a reasonable authorization or
     2  licensing fee established by regulation, scaled to cover the  estimated,
     3  or  if  known, actual costs of inspections, regulatory testing and other
     4  administrative expenses of the authorized or  licensed  activity,  which
     5  fee shall be paid prior to the issuance of the authorization or license.
     6    5. The applicant, if an individual, shall be asked to furnish together
     7  with the application evidence of his or her good moral character and, if
     8  an  entity,  the  applicant  shall be asked to furnish together with the
     9  application evidence of the good moral character of the individuals  who
    10  have or will have substantial responsibility for the licensed or author-
    11  ized  activity and those in control of the entity, including principals,
    12  officers, or others exercising such control. The names of such  individ-
    13  uals shall be set forth in the application.
    14    6.  The applicant shall furnish evidence of his, her or its experience
    15  and competency, and that the applicant has adequate  facilities,  equip-
    16  ment, process controls, testing capability and security, to grow, culti-
    17  vate  and process hemp in connection with its growing and cultivation or
    18  to sell hemp plants or hemp seed.
    19    7. The department shall provide an  application  for  renewal  of  any
    20  license issued under this article not less than ninety days prior to the
    21  expiration  of  the  current  license.  A  renewal  application shall be
    22  submitted to the commissioner at least thirty days prior to the  expira-
    23  tion of the authorization or license, on a form or forms provided by the
    24  commissioner for such purpose.
    25    § 510. Granting, suspending or revoking licenses. After due notice and
    26  opportunity  to  be  heard, as established by rules and regulations, the
    27  commissioner may decline to grant a new license,  impose  conditions  or
    28  limits  with  respect  to  the  grant  of  a license, modify an existing
    29  license or decline to renew a license, or suspend or  revoke  a  license
    30  already granted, whenever the commissioner finds that:
    31    1. A material statement contained in an application is or was false or
    32  misleading;
    33    2.  The applicant or licensee, or a person in a position of management
    34  and control thereof or of the licensed  activity,  does  not  have  good
    35  moral  character,  necessary  experience or competency, adequate facili-
    36  ties, equipment, process controls, testing capability  or  security,  to
    37  grow,  cultivate  and  process  hemp  in connection with its growing and
    38  cultivation or to sell hemp plants or hemp seed;
    39    3. After appropriate notice and opportunity, the applicant or licensee
    40  has failed to produce any records or provide any information required by
    41  this article, the rules and regulations promulgated pursuant thereto  or
    42  demanded  by  the commissioner, reasonably related to the administration
    43  and enforcement of this article;
    44    4. The applicant or licensee, or any officer,  director,  partner,  or
    45  other  person  exercising  any position of management or control thereof
    46  has willfully failed to comply with any of the provisions of this  arti-
    47  cle  or  rules and regulations promulgated pursuant thereto or other law
    48  of this state applicable to the licensed activity; or
    49    5. The licensee has failed to comply with its compliance  action  plan
    50  established under section five hundred sixteen of this article.
    51    § 511. Proceedings to review. The action of the commissioner in refus-
    52  ing to grant or renew a license, or in revoking or suspending a license,
    53  or in conditioning or limiting the granting or renewal of a license, may
    54  be reviewed in the manner provided by article seventy-eight of the civil
    55  practice  law  and  rules, and the decision of the commissioner shall be
    56  final unless within four months from the date of  service  thereof  upon

        A. 8977                             5
 
     1  the  party  affected  thereby a court proceeding is instituted to review
     2  such action. The pleadings upon which such review proceeding  is  insti-
     3  tuted  shall be served in the manner specified in the civil practice law
     4  and  rules, unless a different manner of service is provided in an order
     5  to show cause granted by the supreme court.
     6    § 512. Transferability; change in ownership or  control.  1.  Licenses
     7  issued  under  this article are not transferable, absent written consent
     8  of the commissioner.
     9    2. A license shall become void by a change in  ownership,  substantial
    10  corporate  change  or  change of location or acreage grown without prior
    11  written approval of the commissioner. The  commissioner  may  promulgate
    12  rules and regulations allowing for certain types of changes in ownership
    13  without the need for prior written approval.
    14    § 513. Access  to criminal history information through the division of
    15  criminal justice services.   In connection with  the  administration  of
    16  this  article,  the  commissioner  is authorized to request, receive and
    17  review criminal history information through  the  division  of  criminal
    18  justice services, referred to as "the division" for the purposes of this
    19  section,  with  respect  to  any person seeking authorization under this
    20  article to undertake a hemp pilot project or a hemp license; and/or each
    21  individual who has substantial management responsibility for the author-
    22  ized or licensed activity or those in control of the  entity,  including
    23  principals,  officers,  or  other  such  persons. Those persons for whom
    24  criminal history information is sought  shall  promptly  submit  to  the
    25  division  his  or  her  fingerprints  in such form and in such manner as
    26  specified by the division, for the purpose of conducting a search  iden-
    27  tifying  criminal convictions and pending criminal charges and returning
    28  a report thereon in accordance  with  the  procedures  and  requirements
    29  established  by the division pursuant to the provisions of article thir-
    30  ty-five of the executive law, which shall include  the  payment  of  the
    31  specified processing fees for the cost of the division's full search and
    32  retain  procedures and a national criminal history record check for such
    33  information. The commissioner, or his or her designee, shall submit such
    34  fingerprints and the processing fee to the division. The division  shall
    35  forward to the commissioner a report with respect to the person's previ-
    36  ous  criminal  convictions  and  pending  criminal charges, if any, or a
    37  statement that the person has no such previous criminal history  accord-
    38  ing  to  its  files.  Fingerprints submitted to the division pursuant to
    39  this section may also be submitted to the  federal  bureau  of  investi-
    40  gation for a national criminal history record check as described in this
    41  section.  If  additional copies of fingerprints are required, the person
    42  to be fingerprinted shall furnish them upon request.
    43    § 514. Records. Every licensee shall keep, in such form as the commis-
    44  sioner may direct, such records as may be required pursuant to rules and
    45  regulations promulgated pursuant to this article.
    46    § 515. Aids to enforcement.   1. All licensees  shall  be  subject  to
    47  reasonable inspection by the department and a person who holds a license
    48  must make himself or herself, or an agent thereof, available and present
    49  for any inspection required by the department. The department shall make
    50  reasonable  accommodations so that ordinary business is not interrupted,
    51  and  safety  and  security  procedures  are  not  compromised   by   the
    52  inspection.
    53    2. The commissioner may promulgate rules and regulations to aid in the
    54  enforcement  of  this article, provided such enforcement tools, remedies
    55  and/or procedures are available to the commissioner for enforcement with

        A. 8977                             6
 
     1  respect to similar licensed practices or prohibited conduct  under  this
     2  chapter, and/or the civil practice law and rules.
     3    § 516. Compliance  action  plan. If the commissioner determines, after
     4  notice and an opportunity to be heard, that a licensee  has  negligently
     5  violated  a  provision of this article or its rules or regulations, that
     6  licensee shall be required to  comply  with  a  corrective  action  plan
     7  established by the commissioner to correct the violation by a reasonable
     8  date  and to periodically report to the commissioner with respect to the
     9  licensee's compliance for a period of no less than the next two calendar
    10  years following the commencement date of  the  compliance  action  plan.
    11  Notwithstanding  the  above, this provision shall not be applicable to a
    12  research partner conducting hemp research pursuant to a research partner
    13  agreement, the terms of which shall control.
    14    § 517. Penalties. Notwithstanding the provisions of  any  law  to  the
    15  contrary, except section five hundred sixteen of this article, the fail-
    16  ure  to  comply with a requirement of this article, a rule or regulation
    17  promulgated thereunder, or the research agreements entered into by those
    18  conducting department authorized research may be punishable by  a  civil
    19  penalty of not more than one thousand dollars for a first violation; not
    20  more  than  five  thousand  dollars  for a second violation within three
    21  years; and not more than ten thousand dollars for a third violation  and
    22  each subsequent violation thereafter, within three years.
    23    § 518. Remedies.  The commissioner may institute such action at law or
    24  in equity as may be necessary to enforce compliance with  any  provision
    25  of  this  article  or  of  any  rule or regulation applicable thereto or
    26  promulgated thereunder in a manner consistent with this  chapter  and/or
    27  the civil practice law and rules.
    28    § 519. Hemp  economic  development.  To  the  extent  the commissioner
    29  believes it to be necessary, the commissioner shall consult and  cooper-
    30  ate  with  the New York state urban development corporation with respect
    31  to the funding and support of research concerning  hemp  and  businesses
    32  involved  in  growing, cultivating, and processing hemp for food, fiber,
    33  cannabinoid content, construction materials and other uses.
    34    § 520. Hemp data collection and best farming practices. 1. The commis-
    35  sioner shall have the power to collect and  publish  data  and  research
    36  concerning,  among other things, the growth, cultivation, production and
    37  processing methods of hemp and products derived from hemp and work  with
    38  the  New  York state college of agriculture and life sciences at Cornell
    39  pursuant to section fifty-seven hundred twelve of the education law  and
    40  Cornell  cooperative  extension  pursuant to section two hundred twenty-
    41  four of the county law to promote best farming practices for hemp  which
    42  are  compatible  with state water quality and other environmental objec-
    43  tives.
    44    2. The department, in conjunction with the department of environmental
    45  conservation, shall promulgate all necessary rules and  regulations,  as
    46  well  as  a process for approval, governing the safe production of hemp,
    47  including, but not limited to, environmental and  energy  standards  and
    48  restrictions on the use of pesticides.
    49    § 521. Severability.  If any provision of this article or the applica-
    50  tion thereof to any person or circumstances is held invalid, such  inva-
    51  lidity  shall not affect other provisions or applications of the article
    52  which can be given effect without the invalid provision or  application,
    53  and to this end the provisions of this article are declared to be sever-
    54  able.
    55    §  2. The public health law is amended by adding a new article 33-B to
    56  read as follows:

        A. 8977                             7
 
     1                                ARTICLE 33-B
     2               REGULATION OF CANNABINOID HEMP AND HEMP EXTRACT
     3  Section 3398.   Definitions.
     4          3398-a. Rulemaking authority.
     5          3398-b. Cannabinoid hemp processor license.
     6          3398-c. Cannabinoid hemp retailer license.
     7          3398-d. Cannabinoid license applications.
     8          3398-e. Information   to   be   requested  in  applications  for
     9                    licenses.
    10          3398-f. Fees.
    11          3398-g. Selection criteria.
    12          3398-h. License renewal.
    13          3398-i. Form of license.
    14          3398-j. Transferability; amendment to license; change in  owner-
    15                    ship or control.
    16          3398-k. Granting, suspending or revoking licenses.
    17          3398-l. Record keeping and tracking.
    18          3398-m. Packaging  and  labeling  of  cannabinoid  hemp and hemp
    19                    extract.
    20          3398-n. Processing of cannabinoid hemp and hemp extract.
    21          3398-o. Laboratory testing.
    22          3398-p. New York hemp product.
    23          3398-q. Penalties.
    24          3398-r. Hemp workgroup.
    25          3398-s. Prohibitions.
    26          3398-t. Special use permits.
    27          3398-u. Severability.
    28    § 3398.  Definitions. As used in this  article,  the  following  terms
    29  shall  have  the following meanings, unless the context clearly requires
    30  otherwise:
    31    1. "Cannabinoid" means the phytocannabinoids found in  hemp  and  does
    32  not  include  synthetic cannabinoids as that term is defined in subdivi-
    33  sion (g) of schedule I of section thirty-three hundred six of this chap-
    34  ter.
    35    2. "Cannabinoid hemp" means any hemp  and  any  product  processed  or
    36  derived from hemp, that is used for human consumption provided that when
    37  such  product  is  packaged or offered for retail sale to a consumer, it
    38  shall not have a concentration of more than three tenths  of  a  percent
    39  delta-9 tetrahydrocannabinol.
    40    3.  "Used for human consumption" means intended by the manufacturer or
    41  distributor to be: (a) used for human consumption  for  its  cannabinoid
    42  content;  or  (b)  used  in, on or by the human body for its cannabinoid
    43  content.
    44    4. "Hemp" means the plant Cannabis sativa L.  and  any  part  of  such
    45  plant, including the seeds thereof and all derivatives, extracts, canna-
    46  binoids, isomers, acids, salts, and salts of isomers, whether growing or
    47  not, with a delta-9 tetrahydrocannabinol concentration (THC) of not more
    48  than  three-tenths  of  a  percent  on  a dry weight basis. It shall not
    49  include "medical marihuana" as defined in subdivision eight  of  section
    50  thirty-three hundred sixty of this chapter.
    51    5. "Hemp extract" means all derivatives, extracts, cannabinoids, isom-
    52  ers,  acids,  salts,  and  salts  of  isomers derived from hemp, used or
    53  intended for human consumption, for  its  cannabinoid  content,  with  a
    54  delta-9  tetrahydrocannabinol  concentration  of not more than an amount
    55  determined by the department in regulation.  For  the  purpose  of  this
    56  article,  hemp  extract  excludes  (a) any food, food ingredient or food

        A. 8977                             8
 
     1  additive that is generally recognized as safe pursuant to  federal  law;
     2  or  (b)  any  hemp  extract that is not used for human consumption. Such
     3  excluded substances shall not be regulated pursuant to the provisions of
     4  this  article  but  are  subject to other provisions of applicable state
     5  law, rules and regulations.
     6    6. "License" means a license issued pursuant to this article.
     7    7. "Cannabinoid hemp processor license" means a license granted by the
     8  department to process, extract, pack or manufacture cannabinoid hemp  or
     9  hemp  extract into products, whether in intermediate or final form, used
    10  for human consumption.
    11    8. "Processing"  means  extracting,  preparing,  treating,  modifying,
    12  compounding, manufacturing or otherwise manipulating cannabinoid hemp to
    13  concentrate or extract its cannabinoids, or creating product, whether in
    14  intermediate  or final form, used for human consumption. For purposes of
    15  this article, processing does not  include:  (a)  growing,  cultivation,
    16  cloning,  harvesting,  drying, curing, grinding or trimming when author-
    17  ized pursuant to article twenty-nine of the agriculture and markets law;
    18  or
    19    (b) mere transportation, such as by common carrier or  another  entity
    20  or individual.
    21    § 3398-a. Rulemaking  authority. The commissioner may make regulations
    22  pursuant to this article for the  processing,  distribution,  marketing,
    23  transportation  and  sale of cannabinoid hemp and hemp extracts used for
    24  human consumption, which may include, but not be limited to:
    25    1. Specifying forms,  establishing  application,  reasonable  adminis-
    26  tration and renewal fees, or license duration;
    27    2.  Establishing  the  qualifications  and  criteria for licensing, as
    28  authorized by law;
    29    3. The books and records to be created and maintained by licensees and
    30  lawful procedures for their inspection;
    31    4. Any reporting requirements;
    32    5. Methods  and  standards  of  processing,  labeling,  packaging  and
    33  marketing  of cannabinoid hemp, hemp extract and products derived there-
    34  from;
    35    6. Procedures for how cannabinoid hemp, hemp extract  or  ingredients,
    36  additives, or products derived therefrom can be deemed as acceptable for
    37  sale in the state;
    38    7. Provisions governing the modes and forms of administration, includ-
    39  ing inhalation;
    40    8.  Procedures  for determining whether cannabinoid hemp, hemp extract
    41  or  ingredients,  additives,  or  products  derived  therefrom  produced
    42  outside  the  state  or within the state meet the standards and require-
    43  ments of this article and can therefore be sold within the state;
    44    9. Procedures for the granting, cancellation, revocation or suspension
    45  of licenses, consistent with the state administrative procedures act;
    46    10. Restrictions governing the advertising and marketing  of  cannabi-
    47  noid hemp, hemp extract and products derived therefrom; and
    48    11. Any other regulations necessary to implement this article.
    49    § 3398-b. Cannabinoid  hemp  processor  license. 1. Persons processing
    50  cannabinoid hemp or hemp extract used for human consumption, whether  in
    51  intermediate  or  final  form, shall be required to obtain a cannabinoid
    52  hemp processor license from the department.
    53    2. A cannabinoid hemp processor license authorizes one or more specif-
    54  ic activities  related  to  the  processing  of  cannabinoid  hemp  into
    55  products  used  for  human consumption, whether in intermediate or final
    56  form, and the distribution or sale thereof by  the  licensee.    Nothing

        A. 8977                             9
 
     1  herein  shall  prevent  a  cannabinoid  hemp  processor from processing,
     2  extracting and processing  hemp  products  not  to  be  used  for  human
     3  consumption.
     4    3.  Persons authorized to grow hemp pursuant to article twenty-nine of
     5  the agriculture and markets law are not authorized to engage in process-
     6  ing of cannabinoid hemp or hemp extract without first being licensed  as
     7  a cannabinoid hemp processor under this article.
     8    4.  This  article  shall  not  apply  to  hemp, cannabinoid hemp, hemp
     9  extracts or products derived therefrom  that  are  not  used  for  human
    10  consumption.  This  article  also  shall  not apply to hemp, cannabinoid
    11  hemp, hemp extracts or products derived therefrom that have been  deemed
    12  generally recognized as safe pursuant to federal law.
    13    5.  The  commissioner  shall have the authority to set reasonable fees
    14  for such license, to limit the activities permitted by such license,  to
    15  establish  the  period  during  which  such license is authorized, which
    16  shall be two years or more, and to make rules and regulations  necessary
    17  to implement this section.
    18    6.  Any  person  holding an active research partnership agreement with
    19  the department of agriculture and markets, authorizing  that  person  to
    20  process cannabinoid hemp, shall be awarded licensure under this section,
    21  provided  that  the  research  partner  is  actively performing research
    22  pursuant to such agreement and is able to  demonstrate  compliance  with
    23  this  article,  as  determined  by  the  department, after notice and an
    24  opportunity to be heard.
    25    § 3398-c. Cannabinoid hemp  retailer  license.  1.  Retailers  selling
    26  cannabinoid  hemp, in final form to consumers within the state, shall be
    27  required to obtain a cannabinoid hemp retailer license from the  depart-
    28  ment.
    29    2.  The  commissioner  shall have the authority to set reasonable fees
    30  for such license, to establish the period during which such  license  is
    31  authorized, which shall be one year or more, and to make rules and regu-
    32  lations necessary to implement this section.
    33    § 3398-d. Cannabinoid license applications. 1. Persons shall apply for
    34  a  license  under  this article by submitting an application upon a form
    35  supplied by the department, providing all the relevant requested  infor-
    36  mation, verified by the applicant or an authorized representative of the
    37  applicant.
    38    2.  A  separate  license  shall be required for each facility at which
    39  processing or retail sales are  conducted;  however,  an  applicant  may
    40  submit one application for separate licensure at multiple locations.
    41    3.  Each  applicant  shall remit with its application the fee for each
    42  requested license, which shall be a reasonable fee.
    43    § 3398-e. Information to be requested in applications for licenses. 1.
    44  The commissioner may specify the manner and form in which an application
    45  shall be submitted to the department for licensure under this article.
    46    2. The commissioner may adopt regulations establishing  what  relevant
    47  information shall be included on an application for licensure under this
    48  article.  Such  information may include, but is not limited to: informa-
    49  tion about the applicant's identity; ownership and  investment  informa-
    50  tion,  including the corporate structure; evidence of good moral charac-
    51  ter;  financial  statements;  information  about  the  premises  to   be
    52  licensed; information about the activities to be licensed; and any other
    53  relevant information specified in regulation.
    54    3.  All  license  applications  shall be signed by the applicant if an
    55  individual, by a managing partner if a limited liability company, by  an
    56  officer  if  a  corporation,  or  by all partners if a partnership. Each

        A. 8977                            10
 
     1  person signing such application shall verify it as true under the penal-
     2  ties of perjury.
     3    4.  All license applications shall be accompanied by a check, draft or
     4  other forms of payment as the department may require or authorize in the
     5  reasonable amount required by this article for such license.
     6    5. If there be any change, after the filing of the application or  the
     7  granting,  modification  or renewal of a license, in any of the material
     8  facts required to be set  forth  in  such  application,  a  supplemental
     9  statement  giving  notice  of such change, duly verified, shall be filed
    10  with the department within ten days after such change. Failure to do so,
    11  if willful and deliberate, may be grounds for revocation of the license.
    12    § 3398-f. Fees. The  department  may  charge  licensees  a  reasonable
    13  license  fee.  Such  fee may be based on the activities permitted by the
    14  license, the amount of cannabinoid hemp or hemp extract to be  processed
    15  or  extracted by the licensee, the gross annual receipts of the licensee
    16  for the previous license period, or any other factors reasonably  deemed
    17  appropriate by the department.
    18    § 3398-g. Selection  criteria.  1.  The applicant, if an individual or
    19  individuals, shall furnish evidence of the individual's good moral char-
    20  acter, and if an entity, the applicant shall  furnish  evidence  of  the
    21  good  moral  character of the individuals who have or will have substan-
    22  tial responsibility for the licensed or authorized activity and those in
    23  control of the entity, including principals, officers,  or  others  with
    24  such control.
    25    2.  The applicant shall furnish evidence of the applicant's experience
    26  and competency, and that the applicant has or will have adequate facili-
    27  ties, equipment, process  controls,  and  security  to  undertake  those
    28  activities for which licensure is sought.
    29    3.  The applicant shall furnish evidence of his, her or its ability to
    30  comply with all applicable state and local laws, rules and regulations.
    31    4. If the commissioner is not satisfied that the applicant  should  be
    32  issued a license, the commissioner shall notify the applicant in writing
    33  of the specific reason or reasons for denial.
    34    5.  No license pursuant to this article may be issued to an individual
    35  under the age of eighteen years.
    36    § 3398-h. License renewal. 1. Each license, issued  pursuant  to  this
    37  article,  may  be  renewed upon application therefor by the licensee and
    38  the payment of the reasonable fee for such license as specified by  this
    39  article.
    40    2.  In  the  case  of  applications  for  renewals, the department may
    41  dispense with the requirements of such statements as it  deems  unneces-
    42  sary in view of those contained in the application made for the original
    43  license.
    44    3.  The  department  shall  provide  an application for renewal of any
    45  license issued under this article not less than ninety days prior to the
    46  expiration of the current license.
    47    4. The department may only issue a renewal license upon receipt of the
    48  specified renewal application and renewal fee from  a  licensee  if,  in
    49  addition  to  the  selection  criteria  set  out  in  this  article, the
    50  licensee's license is not under suspension and has not been revoked.
    51    § 3398-i. Form of license. Licenses issued pursuant  to  this  article
    52  shall specify:
    53    1. The name and address of the licensee;
    54    2. The activities permitted by the license;
    55    3.  The  land,  buildings  and  facilities  that  may  be used for the
    56  licensed activities of the licensee;

        A. 8977                            11
 
     1    4. A unique license number issued by the department to  the  licensee;
     2  and
     3    5.  Such other information as the commissioner shall deem necessary to
     4  assure compliance with this chapter.
     5    § 3398-j. Transferability; amendment to license; change  in  ownership
     6  or  control. 1. Licenses issued under this article are not transferable,
     7  absent written consent of the commissioner.
     8    2. Upon application of a licensee, a license may be amended to add  or
     9  delete permitted activities.
    10    3.  A  license shall become void by a change in ownership, substantial
    11  corporate change or change of location without prior written approval of
    12  the commissioner. The commissioner may  make  regulations  allowing  for
    13  certain types of changes in ownership without the need for prior written
    14  approval.
    15    § 3398-k. Granting,  suspending or revoking licenses. After due notice
    16  and an opportunity to be heard, established by  rules  and  regulations,
    17  the  commissioner  may decline to grant a new license, impose conditions
    18  or limits with respect to the grant of a  license,  modify  an  existing
    19  license  or  decline  to  renew  a  license, and may suspend or revoke a
    20  license already granted after due notice and an opportunity to be heard,
    21  as established by rules and regulations, whenever the commissioner finds
    22  that:
    23    1. A material statement contained in an application is or was false or
    24  misleading;
    25    2. The applicant or licensee, or a person in a position of  management
    26  and  control  thereof  or  of  the licensed activity, does not have good
    27  moral character, necessary experience or  competency,  adequate  facili-
    28  ties,  equipment,  process controls, or security to process, distribute,
    29  transport or sell cannabinoid hemp, hemp  extract  or  products  derived
    30  therefrom;
    31    3. After appropriate notice and opportunity, the applicant or licensee
    32  has  failed or refused to produce any records or provide any information
    33  required by this article or the regulations promulgated pursuant  there-
    34  to;
    35    4.  The  licensee has conducted activities outside of those activities
    36  permitted on its license; or
    37    5. The applicant or licensee, or any officer,  director,  partner,  or
    38  any other person exercising any position of management or control there-
    39  of  or  of the licensed activity has willfully failed to comply with any
    40  of the provisions of this article or regulations under it and other laws
    41  of this state applicable to the licensed activity.
    42    § 3398-l. Record keeping and tracking. Every licensee shall  keep,  in
    43  such  form  as the commissioner may direct, such relevant records as may
    44  be required pursuant to regulations under this article.
    45    § 3398-m. Packaging and labeling of cannabinoid hemp and hemp extract.
    46  1. Cannabinoid hemp processors shall be required to provide  appropriate
    47  label  warning to consumers, and restricted from making unapproved label
    48  claims, as determined by the department, concerning the potential impact
    49  on or benefit to human health resulting  from  the  use  of  cannabinoid
    50  hemp, hemp extract and products derived therefrom for human consumption,
    51  which  labels  shall be affixed to those products when sold, pursuant to
    52  rules and regulations that the department may adopt.
    53    2. The department may, by rules and regulations, require processors to
    54  establish a code, including, but not limited to QR code, for labels  and
    55  establish  methods  and  procedures for determining, among other things,
    56  serving sizes or dosages for cannabinoid hemp, hemp extract and products

        A. 8977                            12
 
     1  derived therefrom, active cannabinoid concentration  per  serving  size,
     2  number of servings per container, and the growing region, state or coun-
     3  try  of origin if not from the United States. Such rules and regulations
     4  may  require  an appropriate fact panel that incorporates data regarding
     5  serving sizes and potency thereof.
     6    3. The packaging, sale, or possession of products derived from  canna-
     7  binoid  hemp  or  hemp extract used for human consumption not labeled or
     8  offered in conformity with  regulations  under  this  section  shall  be
     9  grounds  for the seizure or quarantine of the product, the imposition of
    10  a civil penalty against a processor or  retailer,  and  the  suspension,
    11  revocation  or  cancellation of a license, in accordance with this arti-
    12  cle.
    13    § 3398-n. Processing of cannabinoid  hemp  and  hemp  extract.  1.  No
    14  processor shall sell or agree to sell or deliver in the state any canna-
    15  binoid  hemp,  hemp extract or product derived therefrom, used for human
    16  consumption,  except  in  sealed  containers  containing  quantities  in
    17  accordance  with size standards pursuant to rules adopted by the commis-
    18  sioner. Such containers shall have affixed thereto such labels as may be
    19  required by the rules of the department.
    20    2. Processors shall take such  steps  necessary  to  ensure  that  the
    21  cannabinoid  hemp or hemp extract used in their processing operation has
    22  only been grown with pesticides that are registered by the department of
    23  environmental conservation or that specifically meet the  United  States
    24  environmental  protection  agency  registration  exemption  criteria for
    25  minimum risk, used in compliance with rules, regulations, standards  and
    26  guidelines  issued  by  the department of environmental conservation for
    27  pesticides.
    28    3. All cannabinoid hemp, hemp extract and products  derived  therefrom
    29  used  for  human consumption shall be extracted and processed in accord-
    30  ance with good manufacturing processes pursuant to Part 117 or Part  111
    31  of title 21 of the code of federal regulations, as may be defined, modi-
    32  fied and decided upon by the commissioner in rules or regulations.
    33    4. As necessary to protect human health, the department shall have the
    34  authority to: (a) regulate and prohibit specific ingredients, excipients
    35  or  methods  used  in  processing  cannabinoid  hemp,  hemp  extract and
    36  products derived  therefrom;  and  (b)  prohibit,  or  expressly  allow,
    37  certain  products  or  product  classes derived from cannabinoid hemp or
    38  hemp extract, to be processed.
    39    § 3398-o. Laboratory testing. Every cannabinoid hemp  processor  shall
    40  contract  with  an  independent  commercial  laboratory to test the hemp
    41  extract and products produced by the licensed processor. The commission-
    42  er  shall  establish  the  necessary  qualifications  or  certifications
    43  required  for  such  laboratories used by licensees. The commissioner is
    44  authorized to issue rules and regulations consistent with  this  article
    45  establishing  the testing required, the reporting of testing results and
    46  the form for reporting such laboratory testing results.  The  department
    47  has  authority to require licensees to submit any cannabinoid hemp, hemp
    48  extract or product derived therefrom,  processed  or  offered  for  sale
    49  within  the state, for testing by the department. This section shall not
    50  obligate the department, in any way, to perform  any  testing  on  hemp,
    51  cannabinoid hemp, hemp extract or product derived therefrom.
    52    § 3398-p. New  York  hemp  product. The commissioner may establish and
    53  adopt official grades and standards for cannabinoid hemp,  hemp  extract
    54  and  products  derived therefrom, as he or she may deem advisable, which
    55  are produced for sale in this state and, from time to time, may amend or
    56  modify such grades and standards.

        A. 8977                            13
 
     1    § 3398-q. Penalties. Notwithstanding the provision of any law  to  the
     2  contrary, the failure to comply with a requirement of this article, or a
     3  regulation  thereunder, may be punishable by a civil penalty of not more
     4  than one thousand dollars for a first  violation;  not  more  than  five
     5  thousand dollars for a second violation within three years; and not more
     6  than  ten  thousand  dollars  for  a third violation and each subsequent
     7  violation thereafter, within three years.
     8    § 3398-r. Hemp workgroup. The commissioner, in consultation  with  the
     9  commissioner of the department of agriculture and markets, may appoint a
    10  New  York  state  hemp  and hemp extract workgroup, composed of growers,
    11  researchers, producers,  processors,  manufacturers  and  trade  associ-
    12  ations,  to make recommendations for the industrial hemp and cannabinoid
    13  hemp programs, state and federal policies and  policy  initiatives,  and
    14  opportunities  for  the  promotion and marketing of cannabinoid hemp and
    15  hemp extract as consistent with federal and state laws, rules and  regu-
    16  lations.
    17    § 3398-s. Prohibitions.  1.  Except as authorized by the United States
    18  food and drug administration, the processing of cannabinoid hemp or hemp
    19  extract used for human consumption is prohibited within the state unless
    20  the processor is licensed under this article.
    21    2. Cannabinoid hemp and hemp extracts used for human  consumption  and
    22  grown or processed outside the state shall not be distributed or sold at
    23  retail  within the state, unless they meet all standards established for
    24  cannabinoid hemp under state law and regulations.
    25    3. The retail sale of cannabinoid hemp is  prohibited  in  this  state
    26  unless the retailer is licensed under this article.
    27    § 3398-t. Special use permits. The commissioner shall have the author-
    28  ity  to  issue temporary permits for carrying on any activity related to
    29  cannabinoid hemp, hemp extract and products derived therefrom,  licensed
    30  under  this  article.  The commissioner may set reasonable fees for such
    31  permits, to establish the periods during which such permits  are  valid,
    32  and to make rules and regulations to implement this section.
    33    § 3398-u. Severability. If any provision of this article or the appli-
    34  cation  thereof  to  any  person  or circumstances is held invalid, such
    35  invalidity shall not affect other provisions  or  applications  of  this
    36  article  which  can  be  given  effect  without the invalid provision or
    37  application, and to this end the provisions of this article are declared
    38  to be severable.
    39    § 3. Subdivision 21 of section 3302 of the public health law, as added
    40  by chapter 878 of the laws of 1972 and as renumbered by chapter  537  of
    41  the laws of 1998, is amended to read as follows:
    42    21.  "Marihuana"  means  all parts of the plant of the genus Cannabis,
    43  whether growing or not; the seeds thereof; the resin extracted from  any
    44  part  of  the  plant; and every compound, manufacture, salt, derivative,
    45  mixture, or preparation of the plant, its seeds or resin. [It  does  not
    46  include] The term "marihuana" shall not include:
    47    (a)  the  mature  stalks of the plant, fiber produced from the stalks,
    48  oil or cake made from the seeds of the plant, any other compound,  manu-
    49  facture,  salt, derivative, mixture, or preparation of the mature stalks
    50  (except the resin extracted therefrom), fiber,  oil,  or  cake,  or  the
    51  sterilized seed of the plant which is incapable of germination[.];
    52    (b)  hemp,  as defined in subdivision one of section five hundred five
    53  of the agriculture and markets law;
    54    (c) cannabinoid hemp as defined in subdivision two of section  thirty-
    55  three hundred ninety-eight of this chapter; or

        A. 8977                            14
 
     1    (d)  hemp  extract  as  defined in subdivision five of section thirty-
     2  three hundred ninety-eight of this chapter.
     3    §  4.  This  act  shall  take  effect on the same date and in the same
     4  manner as a chapter of the laws of 2019  amending  the  agriculture  and
     5  markets law relating to the growth of industrial hemp and the regulation
     6  of  hemp  extract, as proposed in legislative bills numbers S.6184-A and
     7  A.7680-A, takes effect; provided, however, that section two of this  act
     8  shall  take  effect  May  1,  2020;  and provided further, however, that
     9  sections 3398-b, 3398-c and 3398-s of article 33-B of the public  health
    10  law  as  added  by  section two of this act shall take effect January 1,
    11  2021.
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