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August 20, 2020

No State Hemp Plan for New York: Next Steps for NYS Hemp Businesses

In a surprising turn, the NYS Department of Agriculture and Markets just announced its intent to not submit a NYS hemp plan to the US Department of Agriculture (USDA).

Since 2016, New York State has implemented its industrial hemp pilot research program as authorized under the federal Agricultural Act of 2014 (2014 Farm Bill). Since that time, the number of authorized growers and processors in New York State has grown to well over 500 licensees.

We previously reported on the USDA’s publication of an interim final rule that implements the provisions of the later-passed federal 2018 Farm Bill, which legalized the production of hemp as an agricultural commodity and removed it from the federal list of controlled substances. The department’s decision apparently comes as result of its view that the licensing requirements of the interim final rule are unreasonably burdensome and unrealistic. Despite the department expressing its concerns to the USDA, the rule wasn’t revised.

The National Association of State Departments of Agriculture and the National Industrial Hemp Council are calling on Congress to pass legislation to extend hemp pilot programs. Both groups argue that many states will be unable to bring their programs into compliance by October 31 due to COVID-19. A one-year extension of the hemp pilot program was included in the recently passed House agriculture appropriations bill. However, it’s uncertain whether the funding bill will be enacted before the October 31 deadline.

Where This Leaves NYS Cultivators and Processors

Unfortunately, all growing licenses issued under New York State’s program will end in October. Should any grower wish to continue cultivation of hemp, they must individually apply to the USDA to cultivate in the 2021 growing season. Growers should be aware that there are certain requirements under the federal licensing program that aren’t common to New York State’s retiring program, such as the need for a Federal Bureau of Investigation (FBI) identity history summary for the USDA license application.

Similarly, the research pilot program licenses for hemp processors will also end on November 1, with any existing, permitted processing operations being transferred to the purview of the NYS Department of Health (NYSDOH). Many processor licensees who were unable to get operations started in 2020 have had their licenses terminated. If you don’t currently have a valid license, it will be necessary to reapply to the NYSDOH for a processing license.

Fortunately, Barclay Damon’s Cannabis Service Team has experience dealing with both the USDA and the NYSDOH and is ready to assist you in transitioning to the appropriate hemp program.

If you have any questions regarding the content of this alert, please contact Aleece Burgio, Cannabis Team leader, at aburgio@barclaydamon.com; Mary Volcko, project specialist, at mvolcko@barclaydamon.com; or another member of the firm’s Cannabis Team.

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