New York has brought in a new law that will allow city entrepreneurs to manufacture and sell hemp products, including CBD.
On Monday Governor Andrew Cuomo signed the new regulations – which require growers, processers and sellers to obtain state permits and hire independent labs to test their merchandise.
The law also clarifies what goes on the label and forces New York-based hemp companies use only crops grown in the city.
Cuomo said: “The hemp industry in New York is exploding and with that growth comes a responsibility to regulate the industry in a way that helps ensure its long-term viability and protects consumers.
“By establishing a regulatory framework for producing and selling hemp and hemp extract we can set the industry on a path to continued growth in a smart, safe way that empowers both farmers and consumers.”
The new legislation does not cover food and beverages containing CBD, which New York City banned over the summer.
Earlier this month US lawmakers sent a warning to 15 companies that illegally sold products containing CBD.
The Food and Drug Administration sent letters to the firms that it claims are violating the Federal Food, Drug, and Cosmetic Act.
The FDA also urged consumers to be wary of the safety of CBD products more broadly.
In April a former Food and Drug Administration (FDA) commissioner warned that all CBD added to food in the US is still illegal.
Scott Gottlieb, who left the FDA in April, told CNBC that consumers must be vigilant because the quality of the product can vary widely.
He said: “A lot of it does have high concentrations of THC. When you get CBD online, a lot of times it has high concentrations of THC.”