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News Alert: WSWA Says It Supports Legalized Cannabis If Regulated Like Alcohol

July 13, 2018

The Wine & Spirits Wholesalers of America (WSWA) trade group is mounting a new push to convince Congress to recognize the legality of cannabis in states that have approved it for recreational use—but only if states agree to regulate cannabis as they do alcohol.

In a statement released this evening, the WSWA said that “similar to alcohol, the federal government should give the states the power to legalize cannabis, but should ensure they meet an appropriate regulatory threshold.” Cannabis has already been legalized for recreational use in nine states and the District of Columbia, but remains illegal under federal law. The WSWA noted that the legal cannabis market in the U.S. generated $7.2 billion in economic activity in 2016, and is expected to continue to grow.

In an interview with Shanken News Daily, WSWA acting executive vice president for external affairs Dawson Hobbs said, “This is something that everybody needs to engage on, because it’s not going away. More states are going to legalize, and when they do, it’s important that they do it responsibly.”

The WSWA is urging Congress to pass legislation that adopts a number of regulatory components for cannabis that are similar to those for beverage alcohol. They include a minimum purchase age of 21; driving under the influence standards; licensing for producers, processors, distributors, and retailers; policies to prevent vertical monopoly/integration; hours and days of sale in parity with alcohol; tax collection and enforcement mechanisms; labeling requirements; advertising restrictions; product tracking; restrictions on common carrier delivery; and measures to prevent diversion of cannabis to other states.

The WSWA’s newly announced support of legalization in the U.S. comes as Canada’s recreational cannabis market officially opens for business this summer. U.S.-based beverage alcohol behemoths are already on the move in the category north of the border, effectively positioning themselves for U.S. legalization.

Constellation Brands was first in with its acquisition of a minority stake in Canadian cannabis group Canopy Growth Corp. last fall. Constellation’s partnership with Canopy is focused on developing cannabis-based drinks for the Canadian market. But Constellation CEO Rob Sands has said he sees eventual legalization in the U.S. as “inevitable.” Sands noted recently that Constellation has already recognized a pre-tax gain of $700 million on the Canopy investment.

Meanwhile, in May, Southern Glazer’s Wine & Spirits opened a new Canadian subsidiary, Great North Distributors, to distribute cannabis across the market. As its first order of business, Great North cut an exclusive deal with cannabis producer Aphria, whose chief commercial officer is former Diageo North America CFO Jakob Ripshtein. Watch for our full interview with the WSWA’s Dawson Hobbs on the subject of U.S. cannabis legalization in tomorrow’s SND. –Daniel Marsteller

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