BILL NUMBER: S8575
SPONSOR: COONEY
 
TITLE OF BILL:
An act to amend the cannabis law, in relation to the prohibition on the
sale of intoxicating cannabinoid hemp products; to amend the tax law, in
relation to directing the office of cannabis management to enforce
against noncompliance; to amend the state finance law, in relation to
the New York state cannabis revenue fund; and to amend the tax law, in
relation to sales and compensating use taxes on hemp and hemp derived
beverages
 
PURPOSE:
The purpose of this bill is to establish a comprehensive regulatory
framework for the production, distribution, sale, and taxation of canna-
binoid hemp beverages for human consumption.
 
SUMMARY OF PROVISIONS:
Section 1 establishes the short title, "hemp beverage and taxation act".
Section 2 establishes the definition of "cannabinoid hemp beverage" as
any hemp-derived beverage containing no more than 0.55;5 delta-9 THC by
weight.
Section 3 amends § 91 of the cannabis law by adding a new subdivision 11
ensuring beverages are sold only to individuals 21 years and older and
sets a maximum THC concentration of 5mg per container. Grants the Canna-
bis Control Board authority to regulate processing, distribution,
marketing, transportation, and sale of cannabinoid hemp beverages.
Section 4 amends cannabis law by adding new section 93.a requiring
licenses for retailers selling cannabinoid hemp beverages, and restricts
sales to licensed premises, with rules on signage, product display,
recordkeeping and inspections.
Section 5 amends the cannabis law by adding § 93.b allowing licenses for
sale of hemp beverages from distributors to licensed retailers.
Section 6 amends cannabis law by adding new section 103.a setting
specific requirements for labeling, including but not limited to THC
content, ingredients, warnings, etc. Prohibits marketing that appeals to
minors or makes unhealthy claims, mandates tamper-evident packaging.
Section 7 amends § 107 of the cannabis law establishing penalties for
noncompliance, allowing license suspension or revocation for willful or
repeated violations.
Section 8 amends § 109 of the cannabis law prohibiting transfers of
licenses, testing requirements, processing, sale, and distribution of
hemp beverages.
Section 9 amends cannabis law by adding new section 109-a to the canna-
bis law prohibiting sale to individuals under 21 or visibly intoxicated
person.
Section 10 and 11 amends cannabis law by adding new sections 109-b and
109-c to the cannabis law establishing penalties for underage purchase
attempts and misrepresentation of age.
Section 12 amends § 110 allowing the use of temporary permits to sell
these beverages.
Section 13 amends § 111 of the cannabis law to be renumber as § 112 and
a new section 111 is added prohibiting misleading advertisements, health
claims, and targeting minors. Ensures consumers are not confused about
the product being adult-use cannabis or medical cannabis.
Section 14 amends the tax law by adding new article 20-E creating the
taxation of cannabinoid hemp beverages by imposing a 10% tax on sales
from distributors to licensed retailers. Establishes registration,
reporting, payment, recordkeeping, penalties, and enforcement proce-
dures.
Section 15 amends Subdivision 2 of section 99-11 of the state finance
law, as added by chapter 92 of the laws of 2021, by adding new subdivi-
sion 2-b allocating taxes collected to the New York State Cannabis
Revenue Fund and allocating funds to support conditional licensees,
dispensaries, cultivators, and processors
Section 16 amends § 1115 of the tax law to include hemp beverages as a
nonexempt item for sales and uses tax.
Section 17 is the effective date.
 
JUSTIFICATION:
Cannabinoid hemp beverages are currently available in New York without a
clear regulatory framework, which poses significant risks to public
health and safety. Unregulated products may contain inconsistent levels
of THC or other cannabinoids, inaccurate labeling, unsafe ingredients,
and packaging that is attractive to minors. Without licensing, over-
sight, or standardized testing, consumers are exposed to potential
health risks, including accidental over consumption or ingestion by
underage individuals. This bill establishes clear standards for
production, labeling, distribution, and retail sales, ensuring that only
licensed processors and retailers may offer cannabinoid hemp beverages.
By setting age restrictions, labeling requirements, and marketing guide-
lines, the legislation protects consumers while providing transparency
and accountability in the marketplace. Furthermore, regulating and
taxing these products generates revenue that can be reinvested into the
cannabis industry and public health initiatives, supporting a safe,
responsible, and economically beneficial framework for the sale of
cannabinoid hemp beverages in New York.
 
LEGISLATIVE HISTORY:
New Bill.
 
FISCAL IMPLICATIONS:
This bill will have no fiscal impact on the State or local governments,
the proposal will provide a new tax, creating an estimated $50+ million
in new revenue to the State.
 
EFFECTIVE DATE:
This act shall take effect on the one hundred and twentieth day this
chapter becomes law.

Statutes affected:
S8575: 90 cannabis law, 91 cannabis law, 107 cannabis law, 109 cannabis law, 110 cannabis law, 99-ii state finance law, 99-ii(2) state finance law, 1115 tax law, 1115(a) tax law