A new rule proposed by the Department of Health last week aims to help the state’s medical marijuana and hemp research programs work together.
Currently, medical marijuana organizations are only allowed to produce products using marijuana they’ve grown themselves, or purchase it from other organizations in the program. The new law would allow organizations to purchase hemp from licensed growers in the State’s hemp research program which is regulated by the Department of Agriculture.
This would allow medical marijuana registrants to focus their production on THC and allow farmers in the state’s hemp program to provide hemp as a source of CBD which could potentially help lower costs.
Brief History of Relevant Rules
From the inception of the medical marijuana program in 2014 until December 2016, the State required vertical integration for medical marijuana organizations. This meant that each company was responsible for growing, processing, and manufacturing their own products. After problems with supply due to product shortages and crop failures, the state decided to allow the organizations to apply to buy and sell products wholesale from other registrants. The state also lifted a limitation on the number of distinct brands an organization could sell (5). The state still requires that every organization carry at least one brand with a 1:1 ratio of THC:CBD and one with a low THC high CBD ratio.
There is an oversupply of hemp in New York State this year. Hemp can be difficult to store as it is susceptible to moisture which can breed mold and other diseases that damage the crop. The proposal may aim to help rescue farmers that are dealing with a surplus of hemp that will go bad if unused.
The market for hemp in NY is primarily for CBD which is used in a number of consumer-packaged goods. Markets for hemp fiber are developing but remain in their infancy.
Hemp is usually grown outdoors whereas marijuana grown by registered organizations must be grown indoors or in a greenhouse. Will outdoor hemp be an approved source for CBD used in medical marijuana products?