Capitol Notes

CBD drinks enter New York illegally, while most producers await state regs

The arrival of an out-of-state, hemp-infused seltzer on store shelves this week in New York has the state’s hemp industry calling foul.

Kaló, a 12-ounce drink with 20 milligrams of “naturally occurring CBD and other cannabinoids,” is being sold in violation of state law, according to a spokesperson for the Department of Health. But it’s not clear what the state is doing about the illegal product, which is produced in New Jersey, aside from referring the matter to the federal Food and Drug Administration for follow up. 

New York Cannabis Growers and Processors Association President Allan Gandelman said the situation underscores the need for the state to issue regulations governing the sale of CBD-infused food and drink products. Until those regulations are released only CBD products regulated under the state’s Industrial Hemp Pilot program can be sold legally in New York. Kaló has not been licensed under the pilot program.

A spokesperson for the state DOH said regulations would be produced “shortly.” They would then need to go through a public approval process that will likely take months.

Legislation directing the state to promulgate regulations for CBD-infused products was passed in 2019. “It has been over a year since the passage of that bill and the New York hemp industry has been sitting on the sidelines losing market share to out of state companies selling sub-par products in New York,” Gandelman said.

He accused the state of sidestepping the controversy surrounding Kaló, which is being sold as part of an agreement with Pepsi-Cola Bottling Co. of New York, and argued they’re not enforcing the same rules across the state.

“There have been multiple New York craft breweries that have been specifically targeted and shut down by the state when they tried doing the same exact thing that Kalo and Pepsi have now done,” Gandelman said. “The only solutions we see in this instance are either to pull Kalo off the market immediately or issue a statement to the New York craft breweries and beverage manufacturers that they can also immediately bring a beverage that contains hemp to market. ”

Representatives for Kaló did not respond to a request for comment.

In a press release announcing the sale of Kaló in stores across New York City, Long Island and Westchester County, the company said, “We know New York is ready for Kaló.”

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