Senate Bill S4340A

                                
 
BILL NUMBER: S4340

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the public health law, in relation to the sale of canna-
binoid hemp and hemp extract

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this legislation is to allow the direct sale of hemp
flower from producers to consumers.

 
SUMMARY OF PROVISIONS:

Section 1: Subdivision 2 of section 3398 of the public health law is
amended to allow for the sale of unprocessed cannabinoid hemp, and would
place it under the jurisdiction of the Department of Agriculture and
Markets.

Section 2: Section 3398-a of the public health law is amended to exempt
              

hemp flower from regulations involving processing, distribution, market-
ing, transportation and sale,

Section 3: Section 3398-b of the public health law is amended by adding
a new subdivision 7 which would exempt the sale of hemp flower.

Section 4: Effective date.

 
JUSTIFICATION:

in 2020, the Legislature passed A-8977-Lupardo/S-6968-Metzger, which the
Governor signed into law, called for the creation of a regulatory frame-
work for hemp and hemp extracts within the NYS Department of Health. In
the proposed DOH regulations, the sale of hemp flower to consumers with-
in the State would be prohibited.

While the hemp extracts legislation was making its way through the
legislative and regulatory process, an industry was already emerging
within the existing regulatory framework. Hemp flower was grown, pack-
aged, and sold to a large customer base; products that will be illegal
under the DOH framework.

Given the fact the Office of Cannabis Management (OCM) will oversee
cannabinoid hemp in the near future, it makes no sense to ban a product
that will be regulated along with all forms of smokable cannabis. Creat-
ing a huge market disruption now, when it will likely be legal under the
OCM makes little sense. The intent of the original legislation was to
establish a basic regulatory framework, to address current marketplace
practices, while waiting for the 0CM to be established. It's also worth
mentioning that it will be nearly impossible to prevent a robust under-
ground market for hemp flower in the interim.

 
PRIOR LEGISLATIVE HISTORY:

This is new legislation.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

This enactment of this legislation will result in increased sales tax
revenue for both state and local governments.

 
EFFECTIVE DATE:
This act shall take effect immediately.