Caffeine Undergrounds storefront in Brooklyn, N.Y. / Caffeine Undergrounds Yelp Page Caffeine Undergrounds storefront in Brooklyn, N.Y. / Caffeine Undergrounds Yelp Page

New York Restaurants Grapple With Unexpected CBD Ban

Restaurants have been left scrambling this week after the New York City Department of Health and Mental Hygiene decided to issue a ban on the use of cannabidol, a non-psychoactive chemical component of cannabis, in food and beverage items.

The action came as a surprise to restaurants that have been selling cannabidol — widely known as CBD — for months without any complaint from visiting health officials.

On February 4, Eater reported that the DOH had banned the sale of CBD edibles at Fat Cat Kitchen, a restaurant and bakery in Manhattan’s Lower East Side. The DOH bagged up about $1,000 worth of CBD-infused items and told Fat Cat’s co-owner, C.J. Holm that the food could no longer legally be sold. The DOH had previously visited the restaurant on several occasions and never mentioned that there was an issue with the CBD items on the menu.

“Restaurants in New York City are not permitted to add anything to food or drink that is not approved as safe to eat,” the Department of Health and Mental Hygiene said in a statement sent to Skift Table. “The Health Department takes seriously its responsibility to protect New Yorkers’ health. Until CBD is deemed safe as a food additive, the Department is ordering restaurants not to offer products containing CBD.”

Similar actions have taken place in Maine and Ohio, the New York Times reported, where state health departments have started to crackdown on CBD usage in local restaurants and bars.

At Caffeine Underground, in Brooklyn, owner Ian Ford said that health officials had visited his shop as recently as a few weeks ago, and confirmed that everything checked out, even the CBD items on his menu.

“The DOH has not stopped by or sent me any communication,” said Ford. “All the information I have been hearing from the department or media reports is vague.”

Ford first learned of the department’s initiative when he saw his photo plastered on The New York Daily News, Tuesday.

Loads of Confusion

Up until this past week, the DOH hadn’t publicly issued strong guidance on CBD usage in restaurants and bars, despite operators asking for it. In an alert sent to members, Tuesday, the New York Hospitality Alliance said that they’ve repeatedly requested clarity from the DOH for some time around whether restaurant owners can legally put CBD on menus. The Alliance never received a response to those requests.

“This aggressive enforcement is another example of New York City’s regulatory approach: issue fines first, and educate last,” the Alliance said. “Issuing a violation for using CBD in food and drink is especially ironic to happen when New York is seriously considering legalizing marijuana.”

According to the DOH, health officials are currently alerting restaurants to the CBD ban and will start issuing violations beginning on July 1. Non-compliant businesses will be subject to fines ranging from $200 to $650, depending on the amount of CBD identified on the premises.

In the last year, plenty of New York businesses ranging from fast casual chains to luxury hotel restaurants have dipped into the trend. Vegan chain By Chloe launched a CBD section to its menu in all seven New York locations last fall. The James Hotel also created an in-room dining menu in June 2018 that featured CBD in every dish. The Ainsworth additionally added CBD-infused items to its menu last month.

In the National Restaurant Association’s annual culinary trend report, which predicts what food and beverage trends will dominate the industry in the coming year, CBD was listed as one of the most popular new trends to try. Seventy-seven percent of 650 chefs surveyed for the report identified CBD-infused drinks as the top culinary trend in the industry for 2019. Meanwhile, another 76 percent of chefs listed CBD-infused food as the second most popular trend in the industry.

The Association acknowledged, however, that adding CBD items to the menu was a risky bet while the laws around restaurant usage were still unclear. “Operators are urged to follow all laws, including applicable federal, state and local laws that apply when selling or using those items at their restaurants,” the Association stated in the report.

Operator Response

At Caffeine Underground, Ford plans on continuing to sell CBD products to customers until he gets more clarity from officials directly. It’s a significant chunk of business for the coffee shop, which was the first in New York City to start selling CBD drinks.

Adding to Ford’s confusion is the new uncertainty over the legality of the product, which he first started to sell in-store in March 2018. The product represented 30 percent of sales at first, but that number has since dwindled down to 20 percent since, according to the business.

“I’ve heard conflicting reports from ‘we can’t sell it at all, to us only being able to sell it if the product is made out of state,’” said Ford. “If that’s the case, then what am I supposed to do about my sodas from California that have CBD in it?”

Even nearby bodegas in Bushwick carry CBD sodas, he added. For many businesses, throwing away thousands of dollars of inventory is not an option. And putting items under embargo isn’t much of a consolation either.

“Maybe the workaround in the future is having customers buy the oil separately, and add it themselves,” he said. “The DOH is being sneaky about it and it’s hurting businesses and customers who rely on CBD to reduce pain and anxiety.”

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