Below is a brief excerpt from a complimentary research note written by our Cannabis analysts Howard Penney and Daniel Biolsi. We are pleased to announce our new Sector Pro Product Consumables Pro. Click HERE to learn more.
Guess how the Wine and Spirits Wholesalers of America want to regulate the cannabis industry?
A report by the alcohol industry association says, "One of the most remarkable aspects of this system is its adaptability. The underlying regulations in place today are largely unchanged from nearly a century ago. Yet, innovation abounds — in the form of new products, packaging, retail business models, home delivery, and more."
As a reminder, the alcohol industry has a vested interest in the industry. Constellation Brands, AB InBev, and Molson Coors Beverage Company have made investments in the cannabis industry. Those companies are part of a policy coalition launched last week to influence the "how" of federal cannabis regulations. The report outlines four principles of alcohol regulation that it argues would create a good framework for the Cannabis industry:
- A federal permitting system for producers, importers, testing facilities, and distributors
- A system for approving and regulating products
- Establishing federal excise taxes
- Creating measures to ensure public safety and reduce intoxicated driving.
- The industry would be regulated by the Alcohol and Tobacco Tax and Trade Bureau.
The alcohol model is already under consideration, with Senator Ron Wyden's (D-Ore.) Marijuana Revenue and Regulation Act (introduced in 2019), proposed transferring jurisdiction over cannabis from the DEA to the Alcohol and Tobacco Tax and Trade Bureau, which we assume is a descheduling of the drug.
That bill also adds "marijuana" to several bills that address liquor and alcohol regulation, such as the Wilson Act, which allows states to continue to prohibit alcohol.
Some specifics of the plan:
- The proposed regulations would require separate licenses for producing and distributing cannabis but would not prohibit companies from holding both. Producers could distribute cannabis within their state without a distribution license — which would only be required for interstate commerce.
- Importing cannabis would require a separate permit, as would operating a cannabis testing facility. States, not the federal government, would regulate retail licenses.
- Recommends that anyone convicted of a non-violent cannabis-related offense should still be eligible for these permits.
- Suggests that cannabis labels require the product name, THC potency, producer information, a health warning, and a country of origin for imports. It also suggests developing national "units of sale" based on milligrams of THC per serving.
- "Beverage alcohol uses 'standards of fill,' which specify the volumes of alcohol that may be sold," the report states. "A similar approach could be developed for cannabis."
- The plan doesn't include the regulation of hemp or CBD products with less than 0.3% THC.
- Proposes taxing cannabis when it leaves the producer or importer for sale — a similar model to alcohol. It also suggests a tax rate based on THC potency, much like alcohol — which has a higher tax rate for stronger beverages.
Like the issues that have slowed legalization in NY, the data impaired driving is spotty. WSWA's plan suggests that the NHTSA work with law enforcement and other federal agencies to research tests to determine impairment from marijuana and develop protocols for training officers to recognize drug impairment.
More to come on this issue!