Legal Alert

New York Approves Cannabis Regulations for Advertising, Packaging, and Laboratories

June 3, 2022

Summary

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

The Upshot

  • New York’s advertising regulations provide numerous and specific requirements for cannabis advertisements in the state, including regulations related to the content, location, and target audience.
  • The packaging and labeling requirements are similarly detailed, regulating the types of packaging, content of labels, and required warnings.
  • The laboratory regulations establish a comprehensive framework for testing of cannabis in the state.
  • There are significant penalties for violating these regulations, including license suspension, revocation or cancellation, as well as fines and fees.
  • The regulations will be published in the State Register. A 60-day public comment period will follow.

The Bottom Line

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

On June 1, 2022, New York’s Cannabis Control Board (Control Board) approved regulations related to advertising, packaging, and laboratory testing of legal adult-use cannabis to be sold in the state. The regulations will next be published in the State Register, followed by a 60-day public comment period, before they are finalized.

This is the second set of regulations that the Control Board has issued. In February, it issued regulations regarding conditional licenses for adult-use retail dispensaries. Together with these latest regulations, the Control Board has taken a significant step towards defining the parameters of New York’s marketplace for legal recreational cannabis. More regulations are expected in the coming months, as the Control Board readies for the marketplace 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. While 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 jeopardize public health or safety, promote youth use, or be attractive to individuals under twenty-one.” To that end, among many other requirements, the regulations require specific warnings to accompany every advertisement; require “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 charitable and sporting events, where the target audience requirements are not met; and for licensees who advertise via website or digital application, require them to have a “mechanism designed to keep those under the age of twenty-one from visiting the website or digital application.” The regulations also ban certain forms of advertisements, such as billboards, and ban certain content in the advertisements, such as “colloquial references to marijuana,” like “stoner,” “weed” and “pot.” The regulations further ban depictions of cannabis, cannabis products, smoking or vaping; use of the term “organic,” health claims that cannabis has curative or therapeutic effects; and disparagement of other cannabis businesses.

The labeling and packaging regulations are similarly detailed. The minimum standards require a retail package to be child-resistant, be tamper-evident, fully enclose the cannabis product, and prevent toxic substances from getting into the product. The packaging may not, among other things, contain more than one brand logo and brand name, which must meet certain size restrictions; emit scent or sound; or “be made attractive” to individuals under twenty-one, through the use of cartoons, neon colors, or similarities to products typically marketed to such individuals, such as candy, cookies, and cereal. The labels are required to display THC content per serving and container; all ingredients; a universal warning symbol; and various written warnings, depending on the type of cannabis product.

Finally, the laboratory regulations establish a comprehensive regulatory scheme for testing cannabis within the state. The granular regulations address nearly every aspect of the testing process, including general laboratory requirements; laboratory proficiency testing, unsatisfactory testing performance and audits; qualifications for laboratory personnel; and approval of laboratory-developed methods.

Cannabis companies that plan to participate in the New York market, and media companies that plan to carry advertisements for them, should conduct a careful review of these complex regulations. With the public comment period set to open soon, now is the time to raise any concerns with the Control Board about how these regulations may work in practice. Once the regulations are final, they will demand familiarity from any company operating in this industry, as the penalties for violations of the regulations can be severe, including suspension, cancellation or revocation of a license to operate in the state, as well as the imposition of fees and fines.

Attorneys in our Cannabis Group closely watch changes in state and federal law, and advise growers, dispensaries, technology companies, researchers, media companies, and investors on a variety of regulatory, licensing, corporate, financing, intellectual property, and other legal issues. Please contact us for further information.

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