Cannabis News

New York Takes Another Step Closer To Adult-Use Cannabis: OCM Releases Draft Rules On Packaging And Marketing


Earlier this month, the Office of Cannabis Management (OCM) released draft regulation for the packaging, labeling, marketing and advertising of cannabis products in New York State. Although these are still subject to change before they are finally adopted, the draft regulations provide an overview of the rules that the cannabis industry will have to follow. Many of the proposals seek to ensure that cannabis products are not marketed or made attractive to people under 21. Many aspects of these proposed regulations are derived or adapted from the regulations of other states. Still, some of the proposed restrictions on the marketing of cannabis may come as a surprise to some industry players. Additionally, the CMO is apparently trying to incorporate some sustainability initiatives into the burgeoning industry. Below are some of the more notable aspects of the draft settlement, but please note that this overview is not exhaustive and is subject to change.

Packaging, labeling, marketing and advertising

Not appealing to under 21s

The proposed regulations explicitly prohibit any of the following from the labeling, packaging and marketing of cannabis: cartoons, bubble/cartoon type fonts, bright neon colors and images of anyone reasonably appearing under the age of 21.

Pursuant to §128.1(b)(4), there is a prohibition on similarities to products, or words referring to products, that are commonly associated with or marketed to appeal to minors, including any imitation of foods, candies, sodas, drinks, cookies or cereal. In addition, the words “sweets” and “sweets”, as well as all spelling variants are prohibited. These regulatory projects include targeting the commoditization of (often illicit) cannabis products to knock down well-known food characters and brands to increase appeal.

Similar to the provision above, Section 128.1(b)(6) defines the prohibition of symbols, images, characters, public figures, phrases, toys, or games that are commonly used to market products to persons under 21 years old. This provision seems intended to prohibit any further use of the media that might appeal to minors.

These labeling, packaging, advertising and marketing restrictions are common enough in the industry to prevent underage consumption. What remains unclear, however, is the threshold for “commonly associated with” and “commonly used,” when it comes to underage influence. That is, the degree of use or combination necessary to meet the above criteria. In the case of features that are not used to market products to minors, but are associated with minors through use, it is not known when they would be prohibited for use in of cannabis.

Miscellaneous Restrictions

Under the proposed regulations, the following would be prohibited in cannabis packaging, labelling, marketing and advertising:

  • Use of the term “organic” or incorrect use of “artisanal”;
  • Use of mascots;
  • Disparage the products of another cannabis company;
  • Use or display of “colloquial marijuana references”, including but not limited to “‘stoner’, ‘chronic’, ‘weed’, ‘pot’ or ‘sticky buds'”;
  • Imagery or action of smoking or vaping;
  • Causing reasonable confusion to the consumer as to the trademark.

Marketing and Advertising

90% audience threshold

Under the proposed regulations, a cannabis licensee (i.e. business owner) may only advertise on social media, television, print media, etc., if “the license holder has reliable evidence that at least 90%, unless otherwise determined by the [OCM]the audience is reasonably expected to be 21 or older.

This threshold of 90% of the advertising audience aged 21 or over also applies to a licensee who wishes to sponsor or advertise at a “charitable, sporting or similar event”. The burden of proof of the composition of the hearing rests with the licensee. It’s unclear what such “reliable evidence” would be, but the proposed regulations also require a licensee to maintain records and documentation that demonstrates that their marketing meets these requirements.

While it’s entirely possible to hit that 90% threshold for digital and virtual ads through age-tested sites, hitting it in physical media will be quite difficult. Almost all charity, sporting and other events allow under-21s. Even if an event rarely has more than 10% underage attendance, it can be difficult to get reliable evidence of this. Also, many adult-only events probably don’t meet the 90% threshold due to potential viewers between the ages of 18 and 21, and they probably can’t be expected to do so reliably. . This leaves applicable events almost exclusively like those related to other substances (like alcohol and tobacco) that require participants to be 21 years old. This 90% threshold is almost identical to the Connecticut State Status requiring the same percentage of viewers to be over 21. This audience-based threshold can be seen beyond the cannabis industry, with many companies in the alcohol industry using similar (often self-imposed) thresholds for alcohol advertising. In comparison, the proposed cannabis regulations notably require even less exposure from minors, with most alcohol advertising thresholds requiring only 70-80% of the audience over 21. Advertisers will need to be creative in their marketing campaigns for their efforts to be successful and consistent.

Certain restricted promotions

Cannabis companies may not advertise using free giveaways or promotional items such as t-shirts, nor are they permitted to advertise discounts, reward systems based on points, customer loyalty programs, coupons, or “free”/“donated” cannabis products.

Prohibited advertising space

Advertising of cannabis products or services is prohibited on signs in stadiums, arenas, shopping malls, arcades and fairs that receive state allocations. Billboards are not permitted. Retail dispensaries cannot use neon signs.

Additionally, no marketing or advertising of cannabis products will be permitted within 500 feet of a school, playground, recreation center, daycare center, public park or a library.

Packaging and labeling

Minimum packaging standards

The proposed regulations detail minimum standards for the retail sale of cannabis products, requiring packaging to be child-resistant (per §128.1(f)), tamper-proof (per §128.1(w)), enclose the product completely, minimizes exposure to oxygen, prevents contamination and/or degradation of the cannabis product, and does not transmit toxins or harmful substances to the product. The licensee must also retain a copy of the certificate showing that each package complies with the applicable requirements under §128.2(b)

Packaging bans

  • 128.3 prohibits the following: pictures, images or graphics beyond what is required, features that emit a scent or sound, features that alter the appearance of a package through technology, appeal to minors, plastic single-use unless it contains at least 25% consumer recycled post-content, and more than one brand name and logo. Limiting packaging graphics will likely make it difficult for brands to differentiate themselves, with many brands likely to use an external “marketing layer” to further distinguish themselves. Beyond limiting packaging graphics, these restrictions can make cross-brand products difficult to manage.

Sustainability program

In addition to the restriction on single-use plastics, these regulations require the submission of an environmental sustainability program for cannabis product packaging for applicable licenses. Further details on potential sustainability programs are detailed in §128.4.

Minimum labeling standards

  • 128.5 requires licensees to display the following in black font (at least 6 point size) on a white background:
  • Milligrams (mg) per serving of total THC, total CBD, and any other marketed phytocannabinoid or terpene profile;
  • Milligrams (mg) per pack of total THC;
  • Amount of total THC and any other phytocannabinoid marketed as a percentage of volume, excluding edibles;
  • Number of servings in total, excluding flower and vape forms of cannabis;
  • Weight of the cannabis product; and
  • Batch number.

Additionally, the package and any marketing layer should include:

  • List of all ingredients in descending order of predominance by weight in the cannabis product;
  • A separate list in bold of all major allergens described in the Food Allergen Labeling and Consumer Protection Act of 2004, Title 21, with Respect to Foods and Drugs, US Food Code § 343 mislabeled (with edibles and beverages labeled in accordance with §101.9(c) for nutrition labeling of foods);
  • List of any solvent used to manufacture the product;
  • Expiration date of the unopened cannabis product;
  • Use by date;
  • Good storage conditions;
  • Name, address, license number and contact details of the manufacturer or distributor;
  • Total milligrams of THC and CBD in fat;
  • Clear instructions for use;
  • Scannable bar code or QR code linked to a downloadable certificate of analysis (or a site containing one); and
  • One of the following symbols printed according to the standard defined by §128.5(b)(7);

Required warnings

In addition, the following disclaimers must appear on retail packaging or marketing layers (displayed pursuant to §128.5(g)):

  • This product contains cannabis and THC;
  • In all capital letters as indicated: “KEEP OUT OF REACH OF CHILDREN AND PETS. For the exclusive use of persons aged 21 and over”;
  • Warning: Do not use if you are pregnant or breastfeeding;
  • National Poison Center 1-800-222-1222;
  • For cannabis products intended to be smoked, inhaled or vaporized: Warning: Smoking or vaping is dangerous to your health;
  • For cannabis products intended for oral ingestion: Warning: The effects of this product may be delayed for 4 hours or more; and
  • For all topical products: Warning: For topical use only. Do not eat or smoke;

Enforcement

The OCM also outlined the actions to be taken against non-compliant licensees, which include suspending or canceling a license and imposing fines or fees. If any third party uses a Licensee’s trademark, name, trademark, or other distinguishing feature in a nonconforming manner, Licensee must immediately notify OCM, issue a notice of cessation and forbearance to the third party and may take appropriate legal action.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.



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