New York Approves Cannabis Regulations for Advertising, Packaging and Labs | Ballard Spahr LLP

Summary

On June 1, 2022, the Cannabis Control Board of New York approved regulations for the advertising, packaging, and laboratory testing of legal adult-use cannabis for sale in the state. These regulations contain complex and detailed requirements, which will be subject to an upcoming 60-day public comment period.

The result

  • New York’s advertising regulations provide many specific requirements for cannabis advertisements in the state, including regulations related to content, location, and target audience.
  • Packaging and labeling requirements are also detailed, regulating types of packaging, label content and required warnings.
  • Laboratory regulations establish a comprehensive framework for cannabis testing in the state.
  • Significant penalties are provided for violations of these regulations, including license suspension, revocation or cancellation, as well as fines and costs.
  • The regulations will be published in the National Register. A 60-day public comment period will follow.

The essential

Cannabis companies seeking to enter the New York market, as well as media companies planning to run their advertisements, should familiarize themselves with the regulations and file comments during the public comment period.

On June 1, 2022, the Cannabis Control Board of New York (Control Board) approved regulations relating to advertising, packagingand laboratory tests of legal adult cannabis for sale in the state. The regulations will then be published in the National Registry, followed by a 60-day public comment period, before being finalized.

This is the second set of regulations the Board of Control has issued. In February he published regulations regarding conditional licenses for adult retail dispensaries. Along with these latest regulations, the Control Board has taken an important step in defining the parameters of the New York legal recreational cannabis market. Further regulations are expected in the coming months as the Control Commission prepares for the market to go live later this year or early next year.

The Advertising Regulations contain numerous requirements related to the content, location and target audience of cannabis advertisements. Although licensed cannabis companies are permitted to advertise, the “primary purpose” of such advertisements must be to “displace the illicit market and inform the consumer of the location of licensed retail dispensaries”, and they may “not compromise public health or safety, promote youth use, or attract those under the age of twenty-one. To this end, among many other requirements, the regulations require that specific disclaimers accompany each advertisement; requiring “reliable evidence that at least 90%” of the target audience is “reasonably expected to be twenty-one years of age or older”; prohibit advertising at certain events, including charity and sporting events, where target audience requirements are not met; and for licensees who advertise through a digital website or application, require that they have a “mechanism designed to prevent persons under the age of twenty-one from visiting the website or Digital Application”. The regulations also prohibit certain forms of advertisements, such as billboards, and prohibit certain content in advertisements, such as “colloquial marijuana references,” such as “stoner,” “weed,” and “pot.” The regulations further prohibit depictions of cannabis, cannabis-based products, smoking or vaping; use of the term “organic”, health claims that cannabis has curative or therapeutic effects; and the bashing of other cannabis companies.

Labeling and packaging regulations are also detailed. The minimum standards require that retail packaging be child-resistant, tamper-proof, completely enclose the cannabis product, and prevent toxic substances from entering the product. The packaging cannot, among other things, contain more than one logo and brand name, which must respect certain size restrictions; emitting an odor or sound; or “be made appealing” to persons under the age of twenty-one, through the use of cartoons, neon colors, or similarities to products typically marketed to such persons, such as candies, cookies, and cereals. Labels must display the THC content per serving and container; all the ingredients; a universal warning symbol; and various written warnings, depending on the type of cannabis product.

Finally, the lab regulations establish a comprehensive regulatory regime for testing cannabis in the state. Granular regulations address nearly every aspect of the testing process, including general laboratory requirements; unsatisfactory laboratory proficiency testing, test performance and audits; qualifications of laboratory personnel; and approval of methods developed in the laboratory.

Cannabis companies planning to participate in the New York market and media companies planning to run advertisements for them should carefully consider these complex regulations. With the public comment period due to open shortly, now is the time to raise any concerns with the Review Commission about how these regulations may work in practice. Once the regulations are final, it will require familiarity with any business operating in this industry, as the penalties for violating the regulations can be severe, including the suspension, cancellation or revocation of a license to operate in the state, as well as the imposition of fees and fines.

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