CBD Oil Crisis Hits New York City

New York City Crackdown On CBD Oil Threatens To Derail Booming Industry

Conflicting regulations has left purveyors of CBD-infused products in New York frazzled. Vendors, retailers and everyone else along the supply chain are doing what they can to stay on the right side of the law after mixed messaging from various authorities with regulatory responsibility for the sector.

New York state officials told food growers and processors in mid-December that they had the state blessing to produce and sell tea and chocolates infused with CBD.

However, the trouble then started when New York City health inspectors decided to seize thousands of dollars worth of CBD-infused food and drinks at the Fat Cat Kitchen and other local cafes and restaurants, and warned owners to stop selling them or face penalties.

This added to the confusion as just weeks before federal law explicitly made CBD legal across the country.

Bewildered Business Owners

The seeming inconsistent application of rules by federal, state and local bodies is bewildering sellers of CBD edibles in the city.

“Im trying to be compliant with the law, but no one seems to be fully aware of what the law is and isnt,” C.J. Holm, the owner of the Fat Cat Kitchen (CBD-infused coffee and cookies), told Reuters.

Different States Legal Positions On Medical & Recreational Cannabis

33 states across the US have varying legal positions on medical and recreational cannabis while an outright ban is still in place by the federal government.

In 2018, U.S. consumers spent an estimated $300 million on CBD food and drinks, according to a report by Cowen Washington Research Group. The Coca-Cola Company and other food giants have expressed interest in the CBD sector.

The 2018 Farm Bill

The 2018 Farm Bill, enacted in December, was intended in part to clear up the legal status of CBD by legalizing cannabis extracts derived from strains of the plant, known as hemp, that contain very low concentrations of THC, the main psychoactive compound in marijuana.

But the law also created new confusion for businesses wanting to sell CBD food or drink. For some, it is impossible to follow one set of regulations without being in breach of another.

CBD Confusion In New York City

In New York, officials at the state Department of Agriculture issued guidance in December saying it was legal to sell “CBD tea,” “chocolates with CBD drizzle” and other CBD edibles, so long as the products are made and marketed as dietary supplements, which are governed by more stringent standards than ordinary food.

But the department also warns that doing this will run afoul of rules issued by the U.S. Food and Drug Administration, which said it was unlawful to add CBD to food or to market it as a dietary supplement. That is because the agency, for the first time last year, had approved a drug that contained CBD as the active ingredient.

NBC New York recently reported on the crack down of CBD in New York City. You can watch the report which begins at the 1:00 minute mark below.

Inspectors Hardline Approach To CBD

On the ground health inspectors have opted to interpret a hardline. At the Fat Cat Kitchen and four other firms, this played out as an impounding of the store CBD powder, honey, snacks and raw cookie dough in February.

It is unclear whether the city Health Department will allow cafes and restaurants to sell CBD edibles even as a dietary supplement, despite New York state officials saying such products are legal.

When asked, Michael Lanza, a Health Department spokesman, repeated the department position that it is following the FDA ban on CBD food and drink in any form.

The FDA has said it may make an exception for CBD, allowing it as a food additive or dietary supplement even though it is now a listed drug. It will hold a public forum on the issue in Maryland on May 31.

What Now For New York City Business Owners?

For now, business owners are continuing to retail their products while devising their own strategies that they feel are at least a gesture toward compliance.

Igor Yakovlev, who stirs CBD into honey on New York Staten Island, prints a disclaimer on each Beezy Beez Honey jar stating that the FDA has not “evaluated or approved” his product.

READ MORE: Why Is Michigan State Saying CBD Oil Is Illegal?

Holm, in consultation with a lawyer, noted that the FDA bans CBD being added to food for “interstate commerce,” and reasons she is fine to sell CBD coffee so long as the extract is produced and processed in New York.

“It is so confusing because you can ask three different attorneys and get three different answers,” said Allan Gandelman, a farmer in Cortland who founded the New York Cannabis Growers and Processors Association earlier this year. “So you decide youre going to blaze a path forward, and produce a product that customers really want, and go for it until the government gets its act together.”