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S06184 Summary:

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S06184 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6184--A
 
                               2019-2020 Regular Sessions
 
                    IN SENATE
 
                                      May 21, 2019
                                       ___________
 
        Introduced  by  Sens.  METZGER,  MAY,  SKOUFIS -- read twice and ordered
          printed, and when printed to be committed to the Committee on Agricul-
          ture -- committee  discharged,  bill  amended,  ordered  reprinted  as
          amended and recommitted to said committee
 
        AN  ACT  to  amend  the  agriculture and markets law, in relation to the
          growth of industrial hemp and the regulation of hemp extract;  and  to
          repeal certain provisions of such law relating thereto
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 1 of section 505 of the agriculture and markets
     2  law, as added by chapter 524 of the laws of 2014, is amended to read  as
     3  follows:
     4    1.  "Industrial  hemp" means the plant Cannabis sativa L. and any part
     5  of  such  plant,  including  the  seeds  thereof  and  all  derivatives,
     6  extracts,  cannabinoids,  isomers,  acids,  salts, and salts of isomers,
     7  whether growing or not,  with  a  delta-9  tetrahydrocannabinol  concen-
     8  tration of not more than 0.3 percent on a dry weight basis.
     9    §  2.  Section  506  of the agriculture and markets law, as amended by
    10  section 1 of part OO of chapter 58 of the laws of 2017,  is  amended  to
    11  read as follows:
    12    §  506.  Growth,  sale, distribution, transportation and processing of
    13  industrial hemp and products derived from such hemp permitted. [Notwith-
    14  standing any provision of law to the contrary, industrial] 1. Industrial
    15  hemp and products derived from such hemp are agricultural products which
    16  may be grown, produced [and],  possessed  [in  the  state,  and],  sold,
    17  distributed,  transported  [or] and/or processed [either] in [or out of]
    18  state [as part of agricultural pilot programs pursuant to  authorization
    19  under  federal  law  and  the  provisions  of  this article] pursuant to
    20  authorization under federal law and/or the provisions of  this  article.
    21  [Notwithstanding  any  provision  of law to the contrary restricting the
    22  growing or cultivating, sale, distribution, transportation or processing

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11646-10-9
        S. 6184--A                          2

     1  of industrial hemp and products derived from such hemp, and  subject  to
     2  authorization under federal law, the]
     3    2. The commissioner may authorize the growing or cultivating of indus-
     4  trial  hemp  as  part  of  agricultural  pilot programs conducted by the
     5  department and/or an institution of higher education to study the growth
     6  and cultivation, sale, distribution, transportation  and  processing  of
     7  such  hemp  and  products derived from such hemp provided that the sites
     8  and programs used for growing or cultivating industrial hemp are  certi-
     9  fied by, and registered with, the department.
    10    3.  The  industrial  hemp  used  for research pursuant to this section
    11  shall be sourced from authorized New York state industrial hemp  produc-
    12  ers.  The  research  partner  may  obtain an exemption for only grain or
    13  fiber from this requirement upon a satisfactory showing to  the  depart-
    14  ment that a suitable variety of industrial hemp for the research project
    15  is  not grown in New York and/or the use of New York sourced hemp is not
    16  practicable for the project.  Hemp for extracts can only be sourced from
    17  authorized New York state industrial hemp producers.
    18    4. Nothing in this section shall limit the jurisdiction of the depart-
    19  ment under any other article of this chapter.
    20    § 3. Section 507 of the agriculture and markets law is REPEALED and  a
    21  new section 507 is added to read as follows:
    22    §  507.  Licensing;  fees.  1. No person shall grow, process, produce,
    23  distribute and/or sell industrial hemp or products derived  from  indus-
    24  trial  hemp  in  the state unless (a) licensed biennially by the commis-
    25  sioner or (b) authorized by the commissioner as part of an  agricultural
    26  research pilot program established under this article.
    27    2.  Application  for  a  license to grow industrial hemp shall be made
    28  upon a form prescribed by the commissioner, accompanied  by  a  per-acre
    29  license  fee  and  a  non-refundable  application  fee  of  five hundred
    30  dollars.
    31    3. The applicant shall furnish evidence of his or her good  character,
    32  experience  and  competency, that the applicant has adequate facilities,
    33  equipment, process controls, testing capability  and  security  to  grow
    34  hemp.
    35    4.  Growers  who  intend  to  cultivate hemp for cannabinoids shall be
    36  required to obtain licensure from the  department  pursuant  to  article
    37  twenty-nine-A of this chapter.
    38    5.  A  renewal  application  shall be submitted to the commissioner at
    39  least sixty days prior to the commencement of the next license period.
    40    § 4. Section 508 of the agriculture and markets law is REPEALED and  a
    41  new section 508 is added to read as follows:
    42    §  508.  Compliance action plan. If the commissioner determines, after
    43  notice and an opportunity for hearing, that a licensee  has  negligently
    44  violated a provision of and/or a regulation promulgated pursuant to this
    45  article,  that  licensee  shall  be required to comply with a corrective
    46  action plan established by the commissioner to correct the violation  by
    47  a  reasonable  date  and to periodically report to the commissioner with
    48  respect to the licensee's compliance with this article for a  period  of
    49  no less than the next two calendar years following the commencement date
    50  of  the compliance action plan. The provisions of this section shall not
    51  be applicable to research partners conducting hemp research pursuant  to
    52  a research partner agreement, the terms of which shall control.
    53    §  5. Section 509 of the agriculture and markets law is REPEALED and a
    54  new section 509 is added to read as follows:
    55    § 509. Granting, suspending or revoking licenses.    The  commissioner
    56  may  decline to grant a new license, may decline to renew a license, may
        S. 6184--A                          3
 
     1  suspend or revoke a license already granted after due notice and  oppor-
     2  tunity for hearing whenever he or she finds that:
     3    1.  any  statement  contained  in  an  application for an applicant or
     4  licensee is or was false or misleading;
     5    2. the applicant  or  licensee  does  not  have  good  character,  the
     6  required  experience  and/or competency, adequate facilities, equipment,
     7  process controls, testing capability and/or security to produce hemp  or
     8  products derived from hemp;
     9    3.  the  applicant  or  licensee  has failed or refused to produce any
    10  records or provide any information demanded by the commissioner  reason-
    11  ably related to the administration and enforcement of this article; or
    12    4. the applicant or licensee, or any officer, director, partner, hold-
    13  er  of  ten  percent of the voting stock, or any other person exercising
    14  any position of management or control has failed to comply with  any  of
    15  the  provisions  of  this  article  or rules and regulations promulgated
    16  pursuant thereto.
    17    § 6. Section 510 of the agriculture and markets law is REPEALED and  a
    18  new section 510 is added to read as follows:
    19    § 510. Regulations.  The commissioner may develop regulations consist-
    20  ent with the provisions of this article for the growing and cultivation,
    21  sale,  distribution,  and transportation of industrial hemp grown in the
    22  state, including:
    23    1. the authorization or licensing of any person who  may:  acquire  or
    24  possess  industrial  hemp  plants or seeds; grow or cultivate industrial
    25  hemp plants; and/or sell, purchase, distribute, or transport such indus-
    26  trial hemp plants, plant parts, or seeds;
    27    2. maintaining relevant information regarding land on which industrial
    28  hemp is produced within the state, including the  legal  description  of
    29  the land, for a period of not less than three calendar years;
    30    3.  the procedure for testing of industrial hemp produced in the state
    31  for delta-9-tetrahydrocannabinol levels, using a representative  non-de-
    32  carboxylated  sample of flowers and leaves from the whole plant or other
    33  similarly reliable methods;
    34    4. the procedure for effective disposal of industrial hemp  plants  or
    35  products  derived from hemp that are produced in violation of this arti-
    36  cle;
    37    5. a procedure for conducting at least a random sample  of  industrial
    38  hemp  producers to verify that hemp is not produced in violation of this
    39  article;
    40    6. any required security measures; and
    41    7. such other and further regulation as the commissioner deems  appro-
    42  priate or necessary.
    43    §  7. Section 511 of the agriculture and markets law is REPEALED and a
    44  new section 511 is added to read as follows:
    45    § 511. Prohibitions.  Except as authorized by  state  law,  and  regu-
    46  lations  promulgated  thereunder,  the  growth, cultivation, processing,
    47  sale, and/or distribution of industrial hemp is prohibited.
    48    § 8. Section 512 of the agriculture and markets law is REPEALED and  a
    49  new section 512 is added to read as follows:
    50    §  512.  Industrial  hemp  data collection and best farming practices.
    51  The commissioner shall have the power to collect and  publish  data  and
    52  research  concerning,  among  other  things,  the  growth,  cultivation,
    53  production and  processing  methods  of  industrial  hemp  and  products
    54  derived from industrial hemp and work with the New York state college of
    55  agriculture  and life science at Cornell pursuant to section fifty-seven
    56  hundred twelve of the education law and the Cornell  cooperative  exten-
        S. 6184--A                          4
 
     1  sion  pursuant  to  section two hundred twenty-four of the county law to
     2  promote best farming practices for industrial hemp which are  compatible
     3  with state water quality and other environmental objectives.
     4    §  9.  Sections  513  and  514  of the agriculture and markets law are
     5  REPEALED and two new sections 513 and 514 are added to read as follows:
     6    § 513. Access to criminal history information through the division  of
     7  criminal  justice  services.    In connection with the administration of
     8  this article, the commissioner is authorized  to  request,  receive  and
     9  review  criminal  history  information  through the division of criminal
    10  justice services (division) with respect to any person seeking a license
    11  or authorization to undertake a hemp pilot project. At  the  commission-
    12  er's request, each researcher, principal and/or officer of the applicant
    13  shall  submit to the department his or her fingerprints in such form and
    14  in such manner as specified by the division, for the purpose of conduct-
    15  ing a criminal history search and returning a report thereon in  accord-
    16  ance  with  the  procedures and requirements established by the division
    17  pursuant to the provisions of article thirty-five of the executive  law,
    18  which  shall  include  the payment of the prescribed processing fees for
    19  the cost of the division's full  search  and  retain  procedures  and  a
    20  national  criminal history record check. The commissioner, or his or her
    21  designee, shall submit such fingerprints and the processing fee  to  the
    22  division.   The division shall forward to the commissioner a report with
    23  respect to the applicant's previous  criminal  history,  if  any,  or  a
    24  statement  that the applicant has no previous criminal history according
    25  to its files. Fingerprints submitted to the division of criminal justice
    26  services pursuant to this section may also be submitted to  the  federal
    27  bureau of investigation for a national criminal history record check. If
    28  additional  copies  of  fingerprints  are  required, the applicant shall
    29  furnish them upon request.
    30    § 514. Aids to enforcement. 1. The commissioner shall have full access
    31  to all premises, buildings, factories,  farms,  vehicles,  cars,  boats,
    32  airplanes,  vessels,  containers,  packages, barrels, boxes, and/or cans
    33  for the purpose of enforcing the provisions of this article. The commis-
    34  sioner may, at such locations, examine industrial hemp and hemp products
    35  and may open any package and/or container reasonably believed to contain
    36  industrial hemp or hemp products, to determine whether  such  industrial
    37  hemp or hemp products follow applicable law or regulation.
    38    2.  A search warrant shall be issued by any court to which application
    39  is made therefor, whenever it shall be made to appear to such court that
    40  a licensee has: refused to permit any industrial hemp to be inspected or
    41  samples taken therefrom; refused to permit access to  any  premises,  or
    42  place  where  licensed  activities  are  conducted;  and/or  refused  or
    43  prevented access thereto by any inspector of  the  department  and  that
    44  such  inspector  has  reasonable grounds to believe that such person has
    45  any industrial hemp in his or  her  possession,  or  under  his  or  her
    46  control  and/or is in violation of the provisions or regulations of this
    47  article. In such a case, a warrant shall be issued in the  name  of  the
    48  people,  directed  to  a  police  officer, commanding him or her to: (a)
    49  search any place of business, factory, building, premises, or farm where
    50  licensed  activities  have  occurred  and  any  vehicle,  boat,  vessel,
    51  container,  package, barrel, box, tub or can, containing, or believed to
    52  contain industrial hemp in the possession or under the  control  of  any
    53  person  who  shall refuse to allow access to such hemp for inspection or
    54  sampling, (b) permit the inspection and sampling of any industrial  hemp
    55  found  in  the execution of the warrant, as the officer applying for the
    56  search warrant shall designate when the same is found, by  an  inspector
        S. 6184--A                          5
 
     1  or a department official authorized by the commissioner or by this chap-
     2  ter,  and/or  (c)  permit access to any place where access is refused or
     3  prevented, and to allow and  enable  a  department  inspector  or  other
     4  department  official  to  conduct  an  inspection  of  the  place.   The
     5  provisions of article six hundred ninety of the criminal  procedure  law
     6  shall apply to such warrant as far as applicable thereto. The officer to
     7  whom  the  warrant is delivered shall make a return in writing of his or
     8  her proceedings thereunto to the court which issued the same.
     9    3. The commissioner may quarantine industrial hemp when he or she  has
    10  reason to believe that such commodity does not meet the definition ther-
    11  eof,  set  forth in subdivision one of section five hundred five of this
    12  article, or is otherwise in violation of or does not meet a standard set
    13  forth in, applicable law or regulation. The quarantine may by the  issu-
    14  ance of an order directing the owner or custodian of industrial hemp not
    15  to  distribute,  dispose  of, or move that commodity without the written
    16  permission of the commissioner. The commissioner may also  quarantine  a
    17  product  by  placing a tag or other appropriate marking thereon or adja-
    18  cent thereto that provides and requires that such product  must  not  be
    19  distributed,  disposed  of,  or moved without his or her written permis-
    20  sion, or may quarantine a product by otherwise informing  the  owner  or
    21  custodian thereof that such condition must be complied with.
    22    4.  The  commissioner  may  seize  industrial  hemp by taking physical
    23  possession of industrial hemp when he or she has substantial evidence to
    24  believe that such commodity does not meet the  definition  thereof,  set
    25  forth  in  subdivision one of section five hundred five of this article,
    26  or is otherwise in violation of, or does not meet a standard  set  forth
    27  in, applicable law or regulation.
    28    5.  Subsequent  to quarantining or seizing industrial hemp, as author-
    29  ized in subdivisions three and four of this  section,  the  commissioner
    30  shall  promptly give the owner or custodian thereof an opportunity to be
    31  heard to show cause why such  industrial  hemp  should  not  be  ordered
    32  destroyed. The commissioner shall, thereafter, consider all the relevant
    33  evidence and information presented and shall make a determination wheth-
    34  er such industrial hemp should be ordered to be destroyed; that determi-
    35  nation  may  be reviewed as provided for in article seventy-eight of the
    36  civil practice law and rules.
    37    § 10. The agriculture and markets law is amended by adding a new arti-
    38  cle 29-A to read as follows:
    39                                ARTICLE 29-A
    40                         REGULATION OF HEMP EXTRACT
    41  Section 520. Definitions.
    42          521. Rulemaking authority.
    43          522. Cannabinoid related hemp extract licensing.
    44          523. Cannabinoid grower licenses.
    45          524. Cannabinoid manufacturer license.
    46          525. Cannabinoid extractor license.
    47          526. Cannabinoid license applications.
    48          527. Information to be requested in applications for licenses.
    49          528. Fees.
    50          529. Selection criteria.
    51          530. Limitations of licensure; duration.
    52          531. License renewal.
    53          532. Form of license.
    54          533. Amendments  to  license  and  duty  to  update  information
    55                 submitted for licensing.
    56          534. Record keeping and tracking.
        S. 6184--A                          6
 
     1          535. Inspections and ongoing requirements.
     2          536. Packaging and labeling of hemp extract.
     3          537. Provisions   governing   the   growing,  manufacturing  and
     4                 extracting of hemp extract.
     5          538. Laboratory testing.
     6          539. Advertising.
     7          540. Research.
     8          541. Regulations.
     9          542. Cannabinoid permit.
    10          543. New York hemp product.
    11          544. Penalties and violations of this article.
    12          545. Hemp workgroup.
    13          546. Prohibitions.
    14          547. Severability.
    15    § 520. Definitions. Wherever used in  this  article  unless  otherwise
    16  expressly  stated  or  unless  the  context or subject matter requires a
    17  different meaning, the following terms  shall  have  the  representative
    18  meanings hereinafter set forth or indicated:
    19    1. "Applicant" means a for-profit entity or not-for-profit corporation
    20  and  includes board members who submit an application to become a licen-
    21  see.
    22    2. "Hemp extract" means any product made or  derived  from  industrial
    23  hemp, including the seeds thereof and all derivatives whether growing or
    24  not,  with a delta-9-tetrahydrocannabinol concentration of not more than
    25  an amount of the plant Cannabis sativa L. and any part  of  such  plant,
    26  including the seeds thereof and all derivatives, extracts, cannabinoids,
    27  isomers,  acids,  salts,  and  salts of isomers, whether growing or not,
    28  with a delta-9-tetrahydrocannabinol concentration of not  more  than  an
    29  amount  determined by the department in regulation, used or intended for
    30  human or animal consumption or  use  for  its  cannabinoid  content,  as
    31  determined  by  the  commissioner  in  regulation. Hemp extract excludes
    32  industrial hemp used or intended exclusively for an  industrial  purpose
    33  and  those food and/or food ingredients that are generally recognized as
    34  safe by the department, and shall not be regulated as hemp extract with-
    35  in the meaning of this article.
    36    3. "Cannabinoid grower" means a person licensed by the department, and
    37  in compliance with article twenty-nine  of  this  chapter,  to  acquire,
    38  possess, cultivate, and sell hemp extract for its cannabinoid content.
    39    4.  "Cannabinoid  manufacturer" means a person licensed by the depart-
    40  ment to acquire, possess, and manufacture  hemp  extract  from  licensed
    41  cannabinoid  growers  or  cannabinoid extractors for the manufacture and
    42  sale of hemp extract products marketed for cannabinoid content and  used
    43  or intended for human or animal consumption or use.
    44    5.  "Cannabinoid  extractor" means a person licensed by the department
    45  to acquire, possess, extract and manufacture hemp extract from  licensed
    46  cannabinoid  growers  for  the  manufacture  and  sale  of  hemp extract
    47  products marketed for cannabinoid content and used or intended for human
    48  or animal consumption or use.
    49    6. "License" means a license issued pursuant to this article.
    50    7. "Industrial hemp" means the plant Cannabis sativa L. and  any  part
    51  of  such  plant,  including  the  seeds  thereof  and  all  derivatives,
    52  extracts, cannabinoids, isomers, acids, salts,  and  salts  of  isomers,
    53  whether  growing  or  not,  with  a delta-9-tetrahydrocannabinol concen-
    54  tration of not more than 0.3 percent on a dry weight basis.
    55    § 521. Rulemaking authority. 1.  The  department  shall  perform  such
    56  acts,  prescribe  such  forms  and  propose  such rules, regulations and
        S. 6184--A                          7
 
     1  orders as it may deem  necessary  or  proper  to  fully  effectuate  the
     2  provisions of this article.
     3    2.  The  department  shall  have  the  power to promulgate any and all
     4  necessary rules and regulations governing  the  production,  processing,
     5  transportation,  distribution,  and  sale of hemp extract, including but
     6  not limited to the  licensing  of  cannabinoid  growers,  manufacturers,
     7  extractors and retailers, including, but not limited to:
     8    (a) prescribing forms and establishing application, reinstatement, and
     9  renewal fees;
    10    (b)  the  qualifications  and  selection  criteria  for  licensing, or
    11  permitting;
    12    (c) limitations on the number of licenses to be awarded;
    13    (d) the books and records to be created and maintained  by  licensees,
    14  and  permittees, including the reports to be made thereon to the depart-
    15  ment, and inspection of any and all books and records maintained by  any
    16  licensee,  or  permittee, and on the premises of any licensee or permit-
    17  tee;
    18    (e) methods of producing,  processing,  and  packaging  hemp  extract;
    19  conditions  of  sanitation,  and  standards of ingredients, quality, and
    20  identity of hemp extract products cultivated,  processed,  packaged,  or
    21  sold by licensees; and
    22    (f) hearing procedures and additional causes for cancellation, revoca-
    23  tion,  and/or  civil penalties against any person licensed, or permitted
    24  by the department.
    25    3. The department, in consultation with  the  department  of  environ-
    26  mental  conservation and the New York state energy research and develop-
    27  ment agency, shall promulgate necessary rules and regulations  governing
    28  the  safe production of hemp extract, including environmental and energy
    29  standards.
    30    § 522. Cannabinoid related hemp extract licensing.   1. Persons  grow-
    31  ing,  processing,  extracting,  and/or  manufacturing  hemp  extract  or
    32  producing hemp extract products distributed, sold or marketed for canna-
    33  binoid content and used or intended for human or animal  consumption  or
    34  use,  shall be required to obtain the following license or licenses from
    35  the department, depending upon the operation:
    36    (a) cannabinoid grower license;
    37    (b) cannabinoid manufacturer license;
    38    (c) cannabinoid extractor license.
    39    2. Notwithstanding subdivision one  of  this  section,  those  persons
    40  growing,  processing  or  manufacturing  food  or  food ingredients from
    41  industrial hemp pursuant to article twenty-nine of this  chapter,  which
    42  food  or  food  ingredients  are  generally recognized as safe, shall be
    43  subject to regulation and/or licensing by the department.
    44    § 523. Cannabinoid grower licenses. 1. A cannabinoid grower's  license
    45  authorizes  the  acquisition,  possession,  cultivation and sale of hemp
    46  extract grown or used for its cannabinoid content on the licensed  prem-
    47  ises of the grower.
    48    2. A person holding a cannabinoid grower's license shall not sell hemp
    49  extract  products  marketed,  distributed  or  sold  for its cannabinoid
    50  content and intended for human consumption or  use  without  also  being
    51  licensed  as  a  manufacturer  or  extractor pursuant to this article or
    52  otherwise permitted pursuant to section five hundred forty-two  of  this
    53  article.
    54    3.  Persons growing industrial hemp pursuant to article twenty-nine of
    55  this chapter are not authorized to and shall not sell hemp  extract  for
    56  human  or animal consumption or use, other than as food or a food ingre-
        S. 6184--A                          8
 
     1  dient that has been generally recognized as safe in accordance with  the
     2  department  or  determined by the state to be safe for human consumption
     3  as food or a food ingredient without also being licensed as  a  manufac-
     4  turer  or  extractor  pursuant  to  this  article or otherwise permitted
     5  pursuant to section five hundred forty-two of this article.
     6    4. A person authorized under article twenty-nine of this chapter as an
     7  industrial hemp grower shall apply  for  a  cannabinoid  grower  license
     8  provided  it  can  demonstrate to the department that its cultivation of
     9  industrial hemp meets all the requirements for hemp  extract  cultivated
    10  under a cannabinoid grower license.
    11    § 524. Cannabinoid manufacturer license. 1. A cannabinoid manufacturer
    12  license  authorizes the licensee's acquisition, possession, and manufac-
    13  ture of hemp extract from a licensed cannabinoid grower  or  cannabinoid
    14  extractor  for  the processing of hemp extract or the production of hemp
    15  extract products marketed, distributed or sold for  cannabinoid  content
    16  and used or intended for human or animal consumption or use.
    17    2.  Notwithstanding  subdivision  one  of  this section, nothing shall
    18  prevent a cannabinoid manufacturer from  manufacturing  industrial  hemp
    19  products not used or intended for human or animal consumption or use.
    20    §  525.  Cannabinoid  extractor  license.   1. A cannabinoid extractor
    21  license authorizes the licensee's  acquisition,  possession,  extraction
    22  and  manufacture  of hemp extract from a licensed cannabinoid grower for
    23  the processing of  hemp  extract  or  the  production  of  hemp  extract
    24  products  marketed, distributed or sold for cannabinoid content and used
    25  or intended for human or animal consumption or use.
    26    2. No cannabinoid extractor licensee shall engage in any  other  busi-
    27  ness  on  the  licensed  premises; except that nothing contained in this
    28  article shall prevent a cannabinoid extractor licensee from  also  being
    29  licensed as a cannabinoid grower on the same premises.
    30    3.  Notwithstanding  subdivisions one and two of this section, nothing
    31  shall prevent a cannabinoid extractor from manufacturing industrial hemp
    32  products not used or intended for human or animal consumption or use.
    33    4. A person authorized under article twenty-nine of this chapter as an
    34  industrial hemp processor shall  qualify  for  a  cannabinoid  extractor
    35  license   provided  it  can  demonstrate  to  the  department  that  its
    36  extraction of industrial  hemp  meets  all  the  requirements  for  hemp
    37  extract under a cannabinoid extractor license.
    38    §  526. Cannabinoid license applications. 1. Persons shall apply for a
    39  cannabinoid grower license, cannabinoid manufacturer  license  and/or  a
    40  cannabinoid  extractor  license by submitting an application upon a form
    41  supplied by the department, providing  all  the  requested  information,
    42  verified  by the applicant or an authorized representative of the appli-
    43  cant.
    44    2. A separate license shall be required for  each  facility  at  which
    45  growing, manufacturing and/or extracting is conducted.
    46    3.  Each  applicant  shall remit with its application the fee for each
    47  requested license.
    48    § 527. Information to be requested in applications  for  licenses.  1.
    49  The department shall have the authority to prescribe the manner and form
    50  in  which  an application must be submitted to the department for licen-
    51  sure under this article.
    52    2. The commissioner is authorized to adopt regulations,  including  by
    53  emergency  rule,  establishing  information which must be included on an
    54  application for licensure  under  this  article.  Such  information  may
    55  include, but is not limited to:  information about the applicant's iden-
    56  tity, including racial and ethnic diversity; information about prior use
        S. 6184--A                          9
 
     1  of  farmland; ownership and investment information, including the corpo-
     2  rate  structure;  evidence  of  good  moral  character,  including   the
     3  submission  of fingerprints by the applicant to the division of criminal
     4  justice  services; information about the premises to be licensed; finan-
     5  cial statements; and any other information prescribed in regulation.
     6    3. All license applications shall be signed by the  applicant  (if  an
     7  individual), by a managing partner (if a limited liability corporation),
     8  by an officer (if a corporation), or by all partners (if a partnership).
     9  Each  person  signing such application shall verify it as true under the
    10  penalties of perjury.
    11    4. All license or permit applications shall be accompanied by a check,
    12  draft or other forms of payment as the department may require or author-
    13  ize in the amount required by this article for such license or permit.
    14    5. If there be any change, after the filing of the application or  the
    15  granting  of  a license, in any of the facts required to be set forth in
    16  such application, a supplemental statement giving notice of such change,
    17  cost and source of money involved in the change, duly verified, shall be
    18  filed with the department within ten days after such change. Failure  to
    19  do  so  shall, if willful and deliberate, be cause for revocation of the
    20  license.
    21    6. In giving any notice, or taking any action in reference to a licen-
    22  see of a licensed premises, the department may rely upon the information
    23  furnished  in  such  application  and  in  any  supplemental   statement
    24  connected therewith, and such information may be presumed to be correct,
    25  and shall be binding upon a licensee or licensed premises as if correct.
    26  All  information required to be furnished in such application or supple-
    27  mental statements shall be deemed material in any prosecution for perju-
    28  ry, any proceeding to revoke, cancel or suspend any license, and in  the
    29  department's determination to approve or deny the license.
    30    7.  The department may, in its discretion, waive the submission of any
    31  category of information described in this section for  any  category  of
    32  license  or permit, provided that it shall not be permitted to waive the
    33  requirement for submission of any such category  of  information  solely
    34  for an individual applicant or applicants.
    35    §  528. Fees. The department shall have the authority to charge licen-
    36  sees a biennial license fee. Such fee may be based on the amount of hemp
    37  extract to be grown, processed, manufactured or extracted by the  licen-
    38  see,  the gross annual receipts of the licensee for the previous license
    39  period, or any other factors deemed appropriate by the department.
    40    § 529. Selection criteria. 1. An applicant shall furnish evidence:
    41    (a) its ability to effectively maintain a delta-9-tetrahydrocannabinol
    42  concentration that does not exceed a percentage  of  delta-9-tetrahydro-
    43  cannabinol  cannabis  set  by the commissioner  on a dry weight basis of
    44  combined leaves and flowers of the plant of the genus cannabis,  or  per
    45  volume or weight of cannabis product;
    46    (b)  its  ability  to  comply with all applicable state laws and regu-
    47  lations;
    48    (c) that the applicant is ready, willing and able to properly carry on
    49  the activities for which a license is sought; and
    50    (d) that the applicant is in possession of or has  the  right  to  use
    51  land, buildings and equipment sufficient to properly carry on the activ-
    52  ity described in the application.
    53    2.  The department, in considering whether to grant the license appli-
    54  cation, shall consider whether:
        S. 6184--A                         10
 
     1    (a) it is in the public interest that such license be granted,  taking
     2  into  consideration  whether  the number of licenses will be adequate or
     3  excessive to reasonably serve demand;
     4    (b)  the applicant and its managing officers are of good moral charac-
     5  ter and do not  have  an  ownership  or  controlling  interest  in  more
     6  licenses or permits than allowed by this chapter;
     7    (c) preference shall be given to applicants that are currently farming
     8  in  the  state  and  are eligible or currently receiving an agricultural
     9  assessment pursuant to article twenty-five-AA of this chapter; and
    10    (d) the applicant satisfies any other conditions as determined by  the
    11  department.
    12    3.  If  the commissioner is not satisfied that the applicant should be
    13  issued a license, the commissioner shall notify the applicant in writing
    14  of the specific reason or reasons for denial.
    15    4. The commissioner shall have authority and sole discretion to deter-
    16  mine the number of licenses issued pursuant to this article.
    17    § 530. Limitations of licensure; duration. 1. No license  pursuant  to
    18  this article may be issued to a person under the age of eighteen years.
    19    2.  The department shall have the authority to limit, by canopy, plant
    20  count or other means, the amount of hemp extract allowed  to  be  culti-
    21  vated, processed, extracted or sold by a licensee.
    22    3.  All  licenses  under this article shall expire two years after the
    23  date of issue and be subject to any rules or limitations  prescribed  by
    24  the commissioner in regulation.
    25    § 531. License renewal. 1. Each license, issued pursuant to this arti-
    26  cle,  may  be  renewed upon application therefor by the licensee and the
    27  payment of the fee for such license as prescribed by this article.
    28    2. In the case  of  applications  for  renewals,  the  department  may
    29  dispense  with  the requirements of such statements as it deems unneces-
    30  sary in view of those contained in the application made for the original
    31  license, but in any event the submission of photographs of the  licensed
    32  premises  shall  be  dispensed  with,  provided  the  applicant for such
    33  renewal shall file a statement with the department to  the  effect  that
    34  there has been no alteration of such premises since the original license
    35  was issued.
    36    3.  The department may make such rules as may be necessary, not incon-
    37  sistent with  this  chapter,  regarding  applications  for  renewals  of
    38  licenses and permits and the time for making the same.
    39    4.  The  department  shall  provide  an  application  for renewal of a
    40  license issued under this article not less than ninety days prior to the
    41  expiration of the current license.
    42    5. The department may only issue a renewal license upon receipt of the
    43  prescribed renewal application and renewal fee from a  licensee  if,  in
    44  addition  to  the  criteria in section five hundred twenty-seven of this
    45  article, the licensee's license is not under suspension and has not been
    46  revoked.
    47    6. The department shall have the authority to  charge  applicants  for
    48  licensure  under this article a non-refundable application fee. Such fee
    49  may be based  on  the  type  of  licensure  sought,  cultivation  and/or
    50  production  volume, or any other factors deemed reasonable and appropri-
    51  ate by the department to achieve the policy and purpose of this chapter.
    52    § 532. Form of license. Licenses issued pursuant to this article shall
    53  specify:
    54    1. the name and address of the licensee;
    55    2. the activities permitted by the license;
        S. 6184--A                         11
 
     1    3. the land, buildings  and  facilities  that  may  be  used  for  the
     2  licensed activities of the licensee;
     3    4.  a  unique license number issued by the department to the licensee;
     4  and
     5    5. such other information as the commissioner shall deem necessary  to
     6  assure compliance with this chapter.
     7    §  533. Amendments to license and duty to update information submitted
     8  for licensing. 1. Upon application of a licensee to  the  department,  a
     9  license  may  be  amended  to  allow the licensee to relocate within the
    10  state, to add or delete licensed activities or facilities, or  to  amend
    11  the  ownership  or  organizational  structure  of the entity that is the
    12  licensee. The fee for such amendment shall be two hundred fifty dollars.
    13    2. In the event that any of the information provided by the  applicant
    14  changes  either while the application is pending or after the license is
    15  granted, within ten days of any such change, the applicant  or  licensee
    16  shall  submit  to  the department a verified statement setting forth the
    17  change in circumstances of facts set forth in the  application.  Failure
    18  to  do  so  shall, if willful and deliberate, be cause for revocation of
    19  the license.
    20    3. A license shall become void by a change in  ownership,  substantial
    21  corporate  change  or  location  without  prior  written approval of the
    22  commissioner.  The commissioner may promulgate regulations allowing  for
    23  certain types of changes in ownership without the need for prior written
    24  approval.
    25    4.  For purposes of this section, "substantial corporate change" shall
    26  mean:
    27    (a) for a corporation, a change of eighty percent or more of the offi-
    28  cers and/or directors, or a transfer of eighty percent or more of  stock
    29  of such corporation, or an existing stockholder obtaining eighty percent
    30  or more of the stock of such corporation; and
    31    (b)  for  a  limited  liability company, a change of eighty percent or
    32  more of the managing members of the company, or  a  transfer  of  eighty
    33  percent  or  more  of ownership interest in said company, or an existing
    34  member obtaining a cumulative of eighty percent or more of the ownership
    35  interest in said company.
    36    § 534. Record keeping and tracking.  1.  The  commissioner  shall,  by
    37  regulation,  require each licensee pursuant to this article to adopt and
    38  maintain  security,  tracking,  record  keeping,  record  retention  and
    39  surveillance  systems,  relating  to  all hemp extract at every stage of
    40  acquiring, possession, manufacture, transport,  sale,  or  delivery,  or
    41  distribution  by the licensee, subject to regulations of the commission-
    42  er.
    43    2. Every licensee shall keep and maintain upon the licensed  premises,
    44  adequate  books  and  records of all transactions involving the licensee
    45  and sale of its products, which shall include all  information  required
    46  by rules promulgated by the department.
    47    3. Each sale shall be recorded separately on a numbered invoice, which
    48  shall  have  printed  thereon  the number, the name of the licensee, the
    49  address of the licensed premises, and the current license number.
    50    4. Such books, records and invoices shall be kept for a period of five
    51  years and shall be available for inspection by any authorized  represen-
    52  tative of the department.
    53    §  535.  Inspections  and ongoing requirements. All licensees shall be
    54  subject to reasonable inspection by the department, in consultation with
    55  the department of health, and a person who holds  a  license  must  make
    56  himself  or  herself, or an agent thereof, available and present for any
        S. 6184--A                         12
 
     1  inspection required by the department. The department shall make reason-
     2  able accommodations so that ordinary business  is  not  interrupted  and
     3  safety and security procedures are not compromised by the inspection.
     4    §  536.  Packaging and labeling of hemp extract. 1. The department, in
     5  consultation with the department of  health,  is  hereby  authorized  to
     6  promulgate rules and regulations governing the packaging and labeling of
     7  hemp extract products, sold or possessed for sale in New York state.
     8    2.  Such  regulations  shall include, but not be limited to, requiring
     9  labels warning consumers of any potential impact on human health result-
    10  ing from the consumption of hemp extract products that shall be  affixed
    11  to  those products when sold, if such labels are deemed warranted by the
    12  department. No label may state that hemp  extract  can  treat,  cure  or
    13  prevent any disease without approval pursuant to federal law.
    14    3.  Such  rules and regulations shall establish a QR code which may be
    15  used in conjunction with similar technology  for  labels  and  establish
    16  methods  and  procedures  for  determining,  among other things, serving
    17  sizes for hemp extract products, active  cannabinoid  concentration  per
    18  serving  size, number of servings per container, and the growing region,
    19  state or country of origin if not from the  United  States.  Such  regu-
    20  lations  shall  also  require  a supplement fact panel that incorporates
    21  data regarding serving sizes and potency thereof.
    22    4. The packaging, sale, or possession by  any  licensee  of  any  hemp
    23  product  intended  for human or animal consumption or use not labeled or
    24  offered in conformity with rules and regulations promulgated in  accord-
    25  ance  with  this  section shall be grounds for the imposition of a fine,
    26  and/or the suspension, revocation or cancellation of a license.
    27    § 537. Provisions governing the growing, manufacturing and  extracting
    28  of  hemp  extract.  1.  No  licensed cannabinoid grower, manufacturer or
    29  extractor shall sell, or agree to sell or deliver in the state any  hemp
    30  extract  products,  as  the  case  may  be,  except in sealed containers
    31  containing quantities in accordance  with  size  standards  pursuant  to
    32  rules  adopted  by  the  department.  Such containers shall have affixed
    33  thereto such labels as may be required by the rules of the department.
    34    2. Licensed cannabinoid growers shall be prohibited from using  pesti-
    35  cides.
    36    3.  All  hemp  extract products shall be extracted and manufactured in
    37  accordance with good manufacturing processes, pursuant to  Part  111  or
    38  117  of  Title  21 of the Code of Federal Regulations as may be modified
    39  and decided upon by the commissioner in regulation.
    40    4. Within thirty days of the  effective  date  of  this  article,  the
    41  department  shall  approve  the  manufacture,  distribution, and sale of
    42  beverages containing no more than twenty milligrams of  cannabidiol  per
    43  twelve  ounce beverage. The hemp extract used in such beverages shall be
    44  grown, extracted and manufactured in the state of New York. The  depart-
    45  ment  shall  issue  guidance  on  the label, warning, point of sale, and
    46  advertising for such beverages.
    47    5. Terpenes derived from the hemp plant are  generally  recognized  as
    48  safe.
    49    §  538.  Laboratory  testing.  1.  Every  cannabinoid manufacturer and
    50  cannabinoid extractor shall contract with an independent  laboratory  to
    51  test  the hemp extract products produced by the licensed manufacturer or
    52  extractor. The commissioner, in consultation with  the  commissioner  of
    53  health,  shall  approve  the  laboratory and require that the laboratory
    54  report testing results in a manner determined by the  commissioner.  The
    55  commissioner is authorized to issue regulations requiring the laboratory
    56  to perform certain tests and services.
        S. 6184--A                         13

     1    2.  Cannabinoid  manufacturers  and  cannabinoid extractors shall make
     2  laboratory test reports  available  to  persons  holding  a  cannabinoid
     3  permit  pursuant  to  section five hundred forty-two of this article for
     4  all cannabis products manufactured by the licensee.
     5    3.  On-site  laboratory  testing by licensees is permissible; however,
     6  such testing shall not be certified  by  the  department  and  does  not
     7  exempt  the  licensee from the requirements of quality assurance testing
     8  at a testing laboratory pursuant to this section.
     9    § 539. Advertising. The department shall promulgate  rules  and  regu-
    10  lations  governing the advertising of hemp extract and any other related
    11  products or services as determined by the commissioner.
    12    § 540. Research. 1. The department shall promote research and develop-
    13  ment through public-private partnerships to bring new hemp  extract  and
    14  industrial hemp derived products to market within the state.
    15    2.  The commissioner may develop and carry out research programs which
    16  may include programs at the New York state college  of  agriculture  and
    17  life  sciences,  pursuant  to  section fifty-seven hundred twelve of the
    18  education law and/or New York  state  university  research  institutions
    19  relating to industrial hemp and hemp extract.
    20    §  541. Regulations. The commissioner shall make regulations to imple-
    21  ment this article.
    22    § 542. Cannabinoid permit. The  department  is  hereby  authorized  to
    23  issue  cannabinoid  permits  to retailers, wholesalers, and distributors
    24  authorizing them to sell cannabis products derived  from  hemp  extract.
    25  The  commissioner  shall have the authority to set fees for such permit,
    26  to establish the period during which such permit is authorized,  and  to
    27  make  rules  and regulations, including emergency regulations, to imple-
    28  ment this section.
    29    § 543. New York hemp product. The commissioner may establish and adopt
    30  official grades and standards for hemp extract and hemp extract products
    31  as he or she may deem advisable, which are produced  for  sale  in  this
    32  state and, from time to time, may amend or modify such grades and stand-
    33  ards.
    34    §  544. Penalties and violations of this article.  Notwithstanding the
    35  provision of any law to the contrary, the failure  to  comply  with  the
    36  requirements  of  this  article,  the  rules and regulations promulgated
    37  thereunder, may be punishable by a fine of not more  than  one  thousand
    38  dollars for a first violation; not more than five thousand dollars for a
    39  second  violation;  and  not  more than ten thousand dollars for a third
    40  violation and each subsequent violation thereafter.
    41    § 545. Hemp workgroup. The commissioner shall appoint a New York state
    42  industrial hemp and hemp extract  workgroup,  composed  of  researchers,
    43  producers,  processors,  manufacturers  and  trade associations, to make
    44  recommendations for the industrial hemp and hemp extract programs, state
    45  and federal policies and policy initiatives, and opportunities  for  the
    46  promotion  and marketing of industrial hemp and hemp extract as consist-
    47  ent with federal and state laws, rules and regulations, which  workgroup
    48  shall continue for such time as the commissioner deems appropriate.
    49    §  546.  Prohibitions. Except as authorized in this article, the manu-
    50  facturing of hemp extract  for  human  or  animal  consumption  and  the
    51  distribution  and/or sale thereof is prohibited in this state unless the
    52  manufacturer is licensed under this article. Hemp extract  and  products
    53  derived  therefrom for human and animal consumption produced outside the
    54  state shall not be distributed or sold in this state  unless  they  meet
    55  all standards and requirements established for such product manufactured
        S. 6184--A                         14
 
     1  in  the state under this article and its rules and regulations as deter-
     2  mined by the department.
     3    §  547. Severability. If any provision of this article or the applica-
     4  tion thereof to any person or circumstances is held invalid, such  inva-
     5  lidity  shall not affect other provisions or applications of the article
     6  which can be given effect without the invalid provision or  application,
     7  and to this end the provisions of this article are declared to be sever-
     8  able.
     9    §  11.  This act shall take effect on the ninetieth day after it shall
    10  have become a law.