Major Alcohol Industry Association Calls For Federal Marijuana Legalization, Recommending Regulatory Framework

A major alcohol industry association is officially backing federal marijuana legalization, releasing a policy paper that lays out regulatory priorities as Congress continues to consider ending prohibition.

The Wine & Spirits Wholesalers of America (WSWA) said that lawmakers should draw from the experience of alcohol regulations to develop a framework for marijuana that promotes industry competition, innovation and public safety.

The transition from alcohol prohibition to legalization represents “an American success story” that should be replicated with cannabis, it said.

The association isn’t suggesting that federal regulations should totally supplant those that have been established in states across the U.S., but some level of regulatory oversight and taxation could support those programs and help normalize the cannabis sector.

“Americans have confidence in our regulated alcohol system and our experience can benefit lawmakers creating a U.S. adult-use cannabis market,” WSWA CEO Michelle Korsmo said in a press release on Friday. “WSWA members have successfully partnered with suppliers and distributed socially sensitive products to locally licensed retailers for the last century.”

“The U.S. alcohol marketplace is the safest and most diverse in the world because of the smart and enforceable federal regulatory model that ensures product integrity, efficient tax collection and public safety,” Korsmo said.

WSWA detailed four key principles for federal oversight of an adult-use marijuana supply chain: 

1. The federal permitting of cannabis producers, importers, testing facilities and distributors.

The association said states should manage licensing for marijuana retailers, but it recommended that the federal government require permits for cannabis producers, importers, testing facilities and distributors through the Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB).

2. The approval and regulation of cannabis products.

New cannabis products should be subject to pre-market approval and federal registration, also through TTB, the association said. That would support existing quality control policies that are in place at the state level.

A standardized label should be included on all marijuana items, too. They should feature information, at a minimum, about the product name, THC potency, net content, producer name and address, a government health warning and the country of origin (for imports).

3. The efficient and effective collection of federal excise tax.

WSWA advised that a federal excise tax should be imposed for cannabis products at the producer or importer level, and it should be based on potency just as beverages are taxed based on alcohol concentration. The taxes should be payable to TTB on a semimonthly basis.

4. Effective measures to ensure public safety.

With respect to public safety, the association focused on deterring impaired driving, and it said that lawmakers should prioritize collaborative partnerships with law enforcement and researchers to develop technology that can identify active impairment from cannabis while also funding training for drug recognition experts on the roads.

WSWA, which came out in support of states rights to legalize cannabis in 2018, ended its policy brief by explaining why it’s taking this step to advise on federal reform. Since the end of alcohol prohibition, a “safe and economically vibrant marketplace has developed—one that serves the dual needs of regulators and consumers,” it said.

“While individual regulations have been modified over time, the basic federal regulatory structure of permitting and tax collection has stood the test of time,” WSWA’s paper, which was noted earlier by Politico, says. “As policymakers consider the future of adult-use cannabis, we believe it is important to share the learnings of our industry. America’s wine and spirits wholesalers are a proud part of this system and believe that the principles outlined here can be extended to a national adult-use cannabis system.”

The House has twice passed bills to federally legalize and regulate marijuana, but comprehensive reform hasn’t advanced in the Senate, despite leadership having introduced much-anticipated legislation to end prohibition last session.

A key difference between that bill from Senate Majority Leader Chuck Schumer (D-NY) and the alcohol association concerns the distribution of regulatory responsibility. Advocates have worried about the Senate measure’s deference to the Food and Drug Administration (FDA), and it’s likely that WSWA’s position on having basic oversight managed by TTB would prove more acceptable to many stakeholders.

WSWA’s press release on the policy brief contains strong language about the need to lower barriers to entry for those who’ve been “victimized by the federal government’s failed war on drugs,” as well as its support for “efforts of experts who advocate for other social equity measures to alleviate the damage done to these communities.”

However, the brief itself it light on recommendations to that end, simply including a note that people with “non-violent cannabis-related offenses that occurred prior to federal legalization/descheduling” should not be disqualified from receiving federal permits to operate marijuana businesses. The proposal does not provide for any prioritization in permitting for people from communities damaged by the drug war.

While this is the first time that a major alcohol industry association has backed a specific framework for federal legalization, WSWA has made clear that the status quo is untenable. After coming out in support of states rights to legalize in 2018, it held a briefing on Capitol Hill to inform lawmakers and congressional staffers about its position.

In 2021, the association also endorsed a Senate bill to allow hemp derivatives such as CBD to be used in consumable products like foods, drinks and dietary supplements.

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