“The Federal Government should apply the same rules that have been successful for 90 years in the alcohol market to the cannabis industry.”
By Francis Creighton of Wine & Spirits Wholesalers of America
Have you ever wondered if the bottle of wine that you purchased at your local store is genuine? What about the 80-proof bottle of whisky that your bartender opened? No? No?
Since the end of the American experiment in prohibition, the beverage alcohol market has grown to be the most competitive, safest and vibrant marketplace in the world. We as consumers don’t know all the factors that make it successful. But there is a complex relationship between two groups. The alcohol industry, which produces, distributes and retails the product, is on one side, while the government, both state and federal, is on the other.
The same protections that we enjoy as Americans are not available to consumers in other countries. China faced intense scrutiny before COVID-19 over the counterfeit alcohol operations that operated via loosely-regulated ecommerce platforms, whose impact regulators in America have only just begun to measure. Recently, tourists in Costa Rica and Mexico have died after drinking alcoholic drinks laced with methanol. These incidents occur all over the world, but not in the U.S.
The U.S. Alcohol Regulatory System has been a great success, not only for the industry but also the consumer. All it comes down to is public safety and health.
Most people don’t know that the Alcohol and Tobacco Tax and Trade Bureau, one of the government’s most important regulators, has a complex regulatory system.
The TTB ensures that everyone in the alcohol industry is properly licensed and held accountable. The TTB regulates formulas, labels on bottles, and potency measurements (e.g. an 80-proof liquor or a wine with a 13 percent A.B.V. wine). The TTB ensures that there is fair and legal competition on the alcohol market. This allows consumers to make choices that are best for them, not the needs of the producers or sellers. The TTB ensures that taxes are paid.
Alcohol regulation has been a great success in public policy. Alcoholic drinks are very popular in America. The TTB is working hard to stop the illegal trade of products that harm consumers in other countries.
The federal government has effectively no oversight of the cannabis market, as it is still a drug that is illegal. Formulas, packaging or potency are not subject to federal safety standards. There are no regulations for the way businesses compete on the market. While there are different state-based testing programs, there is not a single standard protecting people from California all the way to Maine.
In states that have legalized cannabis, licensed businesses face competition from a thriving underground market. This market is not regulated by any agency. The illicit market, which we used to refer to as “dealers”, is not subjected any consumer protections. The illicit market (what we used to call “dealers”) is not bound by any consumer protections.
The federal government, when it ended prohibition on alcohol, set clear standards for the alcohol industry and enforced them. TTB and its predecessor agencies have now had decades of effective and successful regulation.
The federal prohibition on cannabis is essentially over today, as states are legalizing it left and right, and the federal government has refused to act. Instead of learning from the success of ending the alcohol prohibition, the federal governments is enabling a illicit market which is actively harming Americans and undermining businesses who are trying to do what is right.
Look at how many new alcohol brands are created every year.
Why would an innovator invest in a legal cannabis business if there is no meaningful regulation? A black-market actor could come along and rip them off, undercutting their prices, because they don’t pay taxes or worry about any enforcement of any sort?
All those who work in the alcohol beverage market are aware of the standards to which they must adhere. If they don’t meet those standards, then their licenses and ability to sell and produce alcohol on the market will be revoked. This is not true for the cannabis industry.
The federal government must take action to combat cannabis.
The federal government should take the successful alcohol regulations of the past 90 years and implement similar rules for the cannabis market.
It is possible to choose to do nothing. By doing nothing, the federal Government chooses to support the illicit cannabis market, the cartels that finance it and the foreign investors who are financing them.
It’s the time to make a change. It’s high time the TTB got to work to ensure the safety of Americans.
Francis Creighton, President and CEO of Wine & Spirits Wholesalers of America.
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