2019 - ABL INSIDER (Fall)

abl insider VOL. 13, NO. 3 FALL 2019

A PUBLICATION OF AMERICAN BEVERAGE LICENSEES

American Beverage Licensees | October 2019

The Dangers Of Tainted & Counterfeit Alcohol: Could It Happen Here?

PAGE 4

Does the U.S. Have a Problem with Counterfeit & Tainted Alcohol?

PAGE 5

Tennessee Wine Implications & Communicating with Legislators

PAGE 12-13

PAGE 10-11

States Move Forward on Cannabis As Congress Continues Its Waiting Game

Courts Rule Against Vertical Integration & Habitual Drunkard Laws

Save-the-Date

2020 ABL Annual Meeting March 29-30 New Orleans, LA General Sessions

Networking

Hospitality Events

the voice of america’s independent beer, wine & spirits retailer s

contents

calendar

P. 3: RECRUITMENT

OCTOBER 2019

ABL At-Large Membership

October 9 | Albany, NY NYSLA 10th Annual Albany Holiday Trade Show

P. 4: LEADING

October 10 | Indianapolis, IN

J.J. Moran, President, ABL

IABR Annual Meeting & Board of Directors Meeting

P. 5: WHERE WE STAND

October 14-17 | Green Bay, WI

John Bodnovich, Executive Director, ABL

P. 6-7: IN THE KNOW

TLW 84th Annual Fall Convention

October 15 | Buffalo, NY

The Spread of Counterfeit & Tainted Alcohol: Could It Happen Here?

NYSLA 10th Annual Buffalo Holiday Trade Show

October 21-23 | Washington, DC

P. 8: INDUSTRY VOICES

Michelle Korsmo, President & CEO, WSWA

ABL Fall Board Meeting & Industry Meetings

MARCH 2020

P. 9: INDUSTRY VOICES

March 29-30 | New Orleans, LA

Craig Purser, President & CEO, NBWA

2020 ABL Annual Meeting

P. 10-11: CANNABIS CORNER

APRIL 2020

State-Level Cannabis Updates

April 29 | Springfield, IL ILBA Lobby Day

P. 12-13: STATE & LOCAL

JUNE 2020

Courts Rule Against Vertical Integration & Habitual Drunkard Laws

June 1 | Springfield, IL ILBA Annual Golf Outing

P. 14-15: LEGAL UPDATES

Big Legal Win for Massachusetts Package Stores

SEPTEMBER 2020 September 13-15 | Effingham, IL 135th ILBA Annual Convention

P. 16: REST OF THE STORY Article Overruns

P. 17-18: D.C. UPDATES

Impaired Driving Legislation; Music Licensing Update; FDA Hearing on CBD

P. 19: AFFILIATE & ASSOCIATE MEMBERS ISSN# 2331-6594 (c) 2019 American Beverage Licensees. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

PUBLISHED BY: American Beverage Licensees 5101 River Rd, Suite 108 | Bethesda, MD 20816 | (301) 656-1494 | www.ablusa.org editor MATTHEW EVANS director - trade relations & operations SUSAN DUFFY 2

ABL INSIDER

executive director JOHN BODNOVICH

director - Communications MATTHEW EVANS

RECRUITMENT

At-Large Membership For Independent Beer, Wine And Spirits Retailers While the overwhelming majority of ABL members receive their benefits through ABL’s Affiliate Member Program, whereby an individual retailer automatically becomes an ABL member through their direct membership in a state Licensed Beverage Association (LBA) that is a member of ABL, we also offer an At-Large Member Program that is available for retailers in states that either do not have an LBA or have an LBA but it is not an ABL member.

In an effort to highlight and promote the At-Large Member Program, we’re calling on YOU to help spread the word about ABL and the wide-range of benefits and services we provide independent beverage retailers.

DO YOU KNOW fellow beverage retailers in any of the states listed below? If so, we ask that you please reach out to them and direct them to the ABL website to learn more about ABL’s At-Large Member Program.

AZ CA HI ID IA LA ME MI

MN MO NE NV NH NM NC ND

OH OR UT VT WA WV

Economic Impact Data: ABL provides members with Detailed reports on the economic contributions of the alcohol beverage retail industry by state, Congressional district, and state legislative districts - including economic impact, jobs, wages, and tax contributions.

Subject Matter Experts: As an association built around multi-generational, family-owned small businesses, we have retailers with 30+ years experience and knowledge who make themselves available to provide guidance and advice on topics including alcohol taxes, Sunday sales, server training, residency requirements, music licensing, minimum pricing, cannabis, and direct shipping.

State Law Database: ABL offers members access to a state law database covering a wide range of legal issues across all 50 states. Unable to find what you’re looking for? Just contact ABL Staff and we’ll do the digging and provide you with the information you’re looking for!

Members-Only Magazine: ABL’s members-only digital magazine covers the latest developments in the beverage alcohol leading and features columns by ABL President, Executive Director and leading industry partners such as NBWA and WSWA; legal and legislative updates; key developments at the state level; and more.

21st Amendment Cannabis Direct Shipping Drunk Driving Estate Taxes Federal Excise Taxes Marketplace Fairness Music Licensing Overtime Pay Swipe Fees Three-Tier System

Congressional Updates: ABL provides its members with monthly updates on key legislative action in Congress including music licensing, swipe-fees, music licensing, direct shipping, estate taxes, federal excise taxes, disability act reform, and more.

Regulatory & Administrative: Whether meeting with highway safety administrators, health and human services officials, tax and trade representatives, transportation safety advocates, Department of Justice attorneys or federal government agencies, ABL shares its members’ perspective on the beverage alcohol administrative and regulatory fronts.

State Contacts: With ABL's access to a nationwide database of state legislatures, members, committee assignments, and staff, ABL Staff can provide you with the information needed to support your interests in meetings and briefings in your respective state.

Legal: In addition to maintaining an active legal fund and weighing in on court cases that may have an impact on ABL members in jurisdictions throughout the U.S., ABL also engages with the U.S. Department of Justice on federal legal issues.

FALL 2019 | ABL INSIDER

3

LEADING Does the U.S. Have a Problem with Counterfeit and Tainted Alcohol?

For more than two years – though increasingly since late Spring – story after story has been published about the spread of tainted and counterfeit alcohol in places like Costa Rica, the Dominican Republic, and Mexico.

Because of the rigorous Three-Tier System of beverage alcohol control in the United States – established under the 21st Amendment – consisting of producers and distillers, distributors and wholesalers, and retailers.

In the simplest terms, tainted a alcohol is bootleg alcohol: alcohol that is produced outside of governmentally regulated production. In the United States, this is most closely associated with the production of moonshine across Appalachia.

The Three-Tier System under which beverage alcohol is produced, distributed and sold in the United States is designed to ensure product integrity – while also establishing a clear chain of custody for all products and the

Globally, however, tainted alcohol is more commonly associated with the production of alcohol using inferior and hazardous materials to produce large volumes of product more quickly and cheaply.

This inferior alcohol is typically laced with nail polish remover, embalming fluid, battery acid, or methanol (antifreeze), which can cause a myriad of health problems including: Death | Nausea | Vomiting Abdominal Pain | Drowsiness Dizziness | Blindness Diarrhea

At the time of this writing, the official death count in the Dominican Republic alone attributed to complications from tainted alcohol has reached 25 persons.

With so many stories about the dangers of tainted alcohol, the question inevitably becomes: “Could it happen here?”

The short answer: highly unlikely. Why?

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ABL INSIDER

While not a threat to public health like adulterated alcohol, an issue we are seeing more-and-more of is the selling of counterfeit rare and collectible wine and spirits (think Pappy Van Winkle or George T. Stagg) in online marketplaces such as Craigslist and Facebook.

There are individuals out there selling empty bottles of rare or collectible Pappy to bad actors, who in turn are refilling the bottles with lower-quality product and then reselling them as “new” at a huge markup.

Not only is it unlawful to sell alcohol without a license (as many of the sellers are doing), these actions work to undermine the integrity of the Three-Tier System and the efforts of the thousands of stakeholders who work everyday to ensure a healthy, efficient and regulated alcohol marketplace.

J.J. MORAN PRESIDENT American Beverage Licensees

ability to track every case of beer, wine, or spirits from producer to distributor, and distributor to retailer.

The system is a model for efficiency and reliability. Take, for example, an instance where a shard of glass is found in a bottle of beer purchased from a bar or tavern (or a case of beer purchased from the corner package store).

Once discovered, the entire production run of that product can be pulled from retail shelves – and distributor warehouses – nationwide, often within 24-hours of it first being reported.

While Facebook specifically has made modest of late in shutting down some of the larger groups and marketplaces on the platform, there is still more they – and other platforms – could be doing.

The key takeaway here is that under the Three-Tier System of beverage alcohol in the United States, consumers can be confident in the integrity and quality of the beer, wine and spirits they purchase from licensed onand off-premise retailers.

Purchasing these products outside of the Three-Tier System, however, can have negative – and sometimes fatal – consequences. |

WHERE WE STAND Tennessee Wine Implications and Communicating with Legislators If you read any alcohol industry trade publications, or happened to follow mainstream media at the end of June, it would have been hard to miss the news that the U.S. Supreme Court has struck down a Tennessee law that required two years of residency for those who wished to hold a retail liquor license. The case had been working its way through the courts for a few years and is now complete.

regulation in the U.S. and its 50 states – not wishful thinking and deregulatory propaganda.

We already see that process getting underway, as there have been challenges filed in district courts in Indiana, Kentucky, New Jersey and Texas pertaining to retail alcohol shipping laws. Those cases will be litigated, and likely appealed – by whichever side does not prevail.

There’s a solid breakdown of the ruling on in this issue of the ABL Insider, but what is not said in the Court’s opinion may be the most important – and debated – news to come from this case. Namely, “What now?”

The relatively focused ruling on Tennessee’s durational residency law has not prevented false claims (EX: “Wine Shipping Laws in California and 21 Other States Ruled Unconstitutional”) from finding their way into the media and spawning a larger debate about what the ruling means for the 21st Amendment.

With that in mind, it’s important for those whose livelihoods are tied to businesses that operate in the Three-Tier System that they urge some introspection and remind everyone – legislators, regulators, industry partners, the media and even their customers – that the implications of Tennessee Wine & Spirits Retailers Association v.

Thomas have yet to be fully determined.

What’s more, legal and legislative processes will determine the future of alcohol

In Kentucky, for example, it wouldn’t be surprising to see that state’s legislature abolish its residency requirement for individual retail liquor license holders.

But what most people may not realize is that nearly every – if not all – liquor retailers in Kentucky are licensed as LLCs or corporations (to protect the personal assets of the owners, among other reasons) and that the issue is essentially moot. Nonetheless, Kentucky will likely not be the only state to see “clean-up” legislation pop up in 2020.

So, is there a larger conclusion to be drawn from the Tennessee Wine ruling during these early days following the Court’s decision?

The answer might lie in how we think about the goal of alcohol laws and regulations.

JOHN BODNOVICH EXECUTIVE DIRECTOR American Beverage Licensees

There are also two pending cases – one in Illinois, the other in Michigan – that preceded the Tennessee Wine ruling that are currently wending their way through the federal court system. The outcomes of these two cases – and how the new lawsuits are resolved – will add another data point to where alcohol regulation is headed.

It’s also reasonable to expect that state legislatures are going to address their own state laws (what a novel concept…state legislatures passing or amending state laws!) that pertain to durational residency.

If you were to ask the “man on the street” why states regulate alcohol as they do, the simple answer would likely be “because it’s not for everyone.” And that is the crux of the issue. It’s regulated differently from other consumer packaged goods because it IS different than consumer packaged goods and it is SOLD differently than consumer packaged goods.

Those facts, despite the Court’s opinion in Tennessee Wine, have not changed.

What HAS changed is the need to more clearly and directly draw lines from state alcohol policy to its intent of addressing administrative burdens; access by youth; proper tax collection; and product/public safety. |

FALL 2019 | ABL INSIDER

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IN THE KNOW The Spread of Counterfeit and Tainted Alcohol - Could It Happen Here?

Ensuring product safety; and Counterfeit and tainted alcohol is a serious problem in many places around the globe.

Preventing the sale of tainted or counterfeit Thanks to the Three-Tier System of alcoproducts. hol producers and distillers, distributors and wholesalers and on- and This system establishes off-premise retailers – as well healthy competition in the State Department Confirms Another as licensed businesses that marketplace by providing American Tourist Death in the are accountable to regulators, Dominican Republic product choice via a vast aspolicy makers and their cussortment of beer, wine and tomers – Americans enjoy an spirits brands and helps to overwhelmingly safe beverbuild and expand brands age alcohol marketplace. through merchandising, product promotion, marketing Costa Rica: Laced Alcohol in Costa Rica Has Taken 8 Lives It’s important to understand plans and local festival and the why the Three-Tier System event sponsorship. works so well, providing unparalleled consumer choice At the same time, the system and access to products, while provides accountability by creating a safe and orderly tracking products from manTainted Alcohol Has Led to 20 Deaths market where illegal or taintufacturer to retailer, allowing in Costa Rica, Authorities Say ed products can be preventthe chain of custody to be ed or quickly removed from transparent and traceable; the marketplace. safeguards product to ensure integrity by ensuring sales are The American Three-Tier Sysmade to licensed retailers and tem established under the 21st of-age consumers; and enCosta Rica: Tainted Alcohol Death Toll Rises to 20; 41 People Affected Overall Amendment has created the sures state and local tax colmost diverse and exiting beer, lection is straightforward and wine and spirits marketplace easy to track through a clear the world has even seen – chain of custody. with more products available to beverage alcohol consumTainted Alcohol Tainted Alcohol in Costa Rica Kills at ers than ever before. These Outside of the United States, Least 20 People products are affordable luxumany countries lack the rigries enjoyed by adults in all 50 orous standards established states and generate billions under the Three-Tier System, in state, local and federal taxresulting in less oversight of es; millions of direct jobs; and the alcohol industry and rais25 Dead After Drinking Tainted nearly $400 billion in direct ing concerns over quality Alcohol in Costa Rica economic impact. control. For years now, there have been reports of tainted The Three-Tier System alcohol in places like Mexico By design, the 21st Amendment left the ques- and Turkey and, more recently, Costa Rica tion of HOW to regulate the sale of alcohol and the Dominican Republic. to the individual states. As such, we have a system of alcohol regulation in this country A 2017 report by the Mexican government that has different – thought not necessarily and industry officials, for example, found dissimilar – laws in each state. Despite differ- ~36% of all alcohol consumed in Mexico ences that may exist in alcohol laws and reg- is produced under unregulated and unliulations from state-to-state, each operates censed conditions. The World Health Orgaunder the Three-Tier System – and shares nization (WHO) further estimates that ~50% the five basic tenets that define the system: of all alcohol consumed in Sub-Saharan Africa is produced illegally.

Efficiently collecting taxes; ABC News | July 14, 2019

Coastarican Times | July 14, 2019

Washington Post | July 22, 2019

USA Today | July 24, 2019

CBS News | July 25, 2019

USA Today | August 18, 2019

Preventing the sale of alcohol to minors; Fostering and overseeing responsible competition in a regulated environment and marketplace; 6

ABL INSIDER

In February 2018, more than 18,000 gallons of illegal tequila were seized in Mexico, with

IN THE KNOW tests showing more than 235 gallons of containing dangerous/unsafe levels of methanol. There have also been more than 150 reports from travelers who have experienced blackouts while staying at dozens of different resorts in Cancun, Playa del Carmen, Puerta Vallarta, and Los Cabos.

instances where authentic bottles of these products are being sold (at incredible markups), more often than not the item for sale is a real bottle filled with a lower-quality product.

So, not only are these individuals illegally selling alcohol – they are selling a counterSadly, however, the situation has progres- feit version of the product they’re offing for sively worsened, with more than 25 deaths sale in these online marketplaces. now confirmed in the Dominican Republic as a result of consuming tainted alcohol. While Online platforms and marketplaces like tainted alcohol represents the largest threat Craigslist and Facebook do not seem to be to public health, the other issue at hand is taking the issue as seriously as they could the increasing growth of counterfeit alcohol. (or should) be. Take entering “Pappy” into the search bar of Craigslist, where the first result comes up as a “sealed bottle of Pappy Counterfeit Alcohol In addition to the threat posed by taint- ‘Old Rip Van Winkle’ 10 Year Bourbon” and ed alcohol, the growth of counterfeit alco- listed for $495 (compared to a retail price of hol being sold in the online marketplace is $59.99). of increasing concern – and a threat to the It should be noted that these companies DO Three-Tier System. appear to be responsive in removing these With the growth in popularity of “super rare” postings – but typically only after they are spirits such as Pappy Van Winkle, there has notified that a prohibited item is for sale on been a marked increase in the sale of coun- their platform. If they were truly interested in terfeit products on online platforms such keeping these products off their platforms in as Craigslist and Facebook. While there are the first place, however, they could. |

SPOTTING COUNTERFEIT ALCOHOL Remember the 4P’s

PLACE

Always Purchase Alcohol From A Reputable Package Store, Bar Or Tavern.

PACKAGING

Key Indicators Include Substandard Labels With Spelling Mistakes & Tampered Seals.

PRODUCT

Stick To The Brands You Know - Avoiding Those You’ve Never Seen Or Heard Of. PRICE

Does The Price Seem Too Good To Be True? Well, It Probably Is! Source: UK Food Standards Agency

FALL 2019 | ABL INSIDER

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INDUSTRY VOICES America's Three-Tier System: The Gold Standard That's Worth Preserving The partnership between retailers and wine and spirits wholesalers provides a number of benefits to consumers, including preventing underage access, helping ensure responsible levels of consumption, and, of particular interest recently, guarding against counterfeit and illicit alcohol entering the American marketplace.

Consumers in the U.S. often take these marketplace protections created by the three-tier system for granted, but when faced with news headlines that read “Death toll from tainted liquor in Costa Rica reaches 25, officials say,” and, “Counterfeit alcohol is a growing concern for tourists abroad,” we are somberly reminded of the true benefits of the current system.

accountable–and free of widespread sales of tainted and counterfeit alcohol–lawmakers nationwide should reconsider any acts to deregulate the beverage alcohol marketplace.

This is the message that WSWA, ABL, and the American Distilled Spirits Association (ADSA) have been promoting to elected officials, their staff, and even administration employees here in Washington, D.C. Our collective group of trade associations makes up the Responsible Hospitality Caucus, which is led

by Rep. Derek Kilmer from Washington and Rep. Sean Duffy from Wisconsin to educate on and advocate for the three-tier system of beverage alcohol regulation in America.

In July, the caucus held a policy briefing for congressional staff Jet fuel, embalming fluid, rat on the dangers of tainted and poison, and methanol are just a counterfeit alcohol and how few ingredients found in taintAmerica’s three-tier system ed alcohol in other countries keeps the marketplace safe. without a three-tier system of Focusing on the recent events regulation. In the U.S., producin the Dominican Republic and ers, distributors and retailers of Costa Rica, presenters edalcohol are held accountable ucated on how the U.S. sysby a strict and robust regulatotem helps prevent this type of ry structure where each tier has tragedy from happening here a distinct responsibility in the at home. Congressman Albio supply chain. Each tier works Sires (D-NJ), Chairman of the to ensure the product that conWestern Hemisphere SubcomMICHELLE KORSMO PRESIDENT & CEO sumers receive has been submittee, House Foreign Affairs Wine & Spirits Wholesalers of America ject to oversight by appropriate Committee also gave remarks authorities. Wineries, brewers on his efforts to aid the invesand distillers—along with wholesalers—are tigation into the recent deaths of Americans all licensed and regulated by the federal in the Dominican Republic suspected of congovernment, and retail establishments are li- suming poisonous alcohol while vacationing censed at the state or local level. there.

Any company in any tier that does business with any unlicensed or unscrupulous entity places its license, and thus its entire business, at risk. Suppliers, distributors and retailers all act as eyes and ears on the market. It’s a system of checks and balances with a focus on public health and safety.

Globally, the economic impact of counterfeit alcohol is $50 billion annually, based on a three-billion case spirits market. And yet, despite this financial figure, counterfeit alcohol is not a major problem in America. Licensed suppliers, wholesalers, and retailers have a lot at stake, and work to protect their business as well as consumers. In order for the U.S. market to remain safe, competitive, and 8

ABL INSIDER

This spurred interest from the White House who became curious on the issue following media coverage of the briefing. WSWA, ABL, and ADSA met with the U.S. Intellectual Property Enforcement Coordinator and his team at the White House to discuss attempts to circumvent the three-tier system via counterfeit sales of alcohol. The group had a pro-

ductive exchange with White House personnel on the threat counterfeit alcohol poses to the industry and public health as well as steps that can be taken to prevent exposing the marketplace to unregulated, unlicensed, and harmful alcohol sales by bad actors.

Continues on Page 16

INDUSTRY VOICES The Alcohol Marketplace Has Benefited from Tech Innovations and Thoughtful Regulation Across the world, technological advancements are working their way into nearly every aspect of our lives. That, of course, is not a bad thing, but experience has shown us that many of the innovations we’ve seen throughout human history should be accompanied by thoughtful checks and balances.

counterfeit alcohol is a major public health concern, our alcohol market is built on a series of checks and balances that help keep dangerous products from reaching consumers.

Consider, for example, the alcohol beverage business. Just as we observe across other industries, entrepreneurs have set their sights on how to leverage technology to reach more consumers as quickly as possible. What’s important, however, is that we don’t lose sight of public safety as a primary focus and that we maintain the thoughtful safeguards that have served this priority for decades, while also allowing the alcohol industry to grow.

The beer industry has worked together effectively with states and local communities to create an alcohol accountability network to ensure that the beer that makes it to your taps and pints is not counterfeit or tainted.

Independent beer distributors are licensed by the state and federal governments and source high-quality beer only from federally registered brewers and sell it only to state-licensed retailers.

This tightly monitored process for getting beer to consumers prevents bootleg products from entering the broader marketplace, facilitates the collection of taxes, provides a level playing field for legitimate businesses and provides much-needed transparency and accountability in the rare event that a product needs to be pulled from shelves.

Although the alcohol beverage industry has undergone much transformation in recent years, there is one constant – our alcohol marketplace remains the most secure and consumer-friendly in the world.

This is because of time-tested laws that have evolved while continuing to protect public safety, implement consumer safeguards, ensure an orderly marketplace, allow for the effective collection of taxes and support the development of high-quality products.

Take the beer industry.

Another unique aspect of the U.S. alcohol market – and one National Beer Wholesalers Association of the reasons it’s so successful at protecting public safety – is that each state is given the flexibility to put in place alcohol laws that work best for its citAs our attention spans grow shorter and next- izens and marketplace. When it comes to a day delivery becomes an expectation for socially sensitive product like alcohol, a onemore consumers, we should not throw out size-fits-all approach simply won’t work. After well-established public protections in favor all, the views of folks in some states can differ greatly from the views of those in surroundof expediency. The stakes are just too high. ing states.

Recent reports about bootleg alcohol from around the globe have brought to light the What’s more, a vast majority of Americans dangers of unregulated alcohol. Authorities believe that the current approach to alcohol are investigating accusations that the recent regulation is working well, according to redeaths of American tourists in the Dominican cent data from the Center for Alcohol Policy.

Republic were caused by tainted or counter- And notably, during this time of hyper partifeit alcohol. Across the Caribbean Sea at an- sanship, the survey found that support exother popular tourist destination, Costa Rica, tends across party lines with 85 percent of 20 people have died from poisonous alco- Republicans, 81 percent of Democrats and 83 hol since June, according to the Ministry of percent of Independents expressing support for alcohol regulation being left to the states.

Health.

CRAIG PURSER PRESIDENT & CEO

Fortunately, we don’t face similar tragedies here in the U.S. In contrast to countries where

Continues on Page 16 FALL 2019 | ABL INSIDER

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CANNABIS CORNER States Move Forward on Cannabis As Congress Continues Its Waiting Game Alabama: In May, a state House committee narrowly defeated a bill to decriminalize small amounts of marijuana. In June, Gov. Kay Ivey (R) signed a substitute medical marijuana bill to further study the issue rather than legalize it.

Alaska: Lt. Gov. Meyer (R) signed new regulations into law in March that allows Alaska residents to consume cannabis at licensed dispensaries later this year.

Arizona: In June, Gov. Ducey (R) signed a bill requiring product testing for contaminants under its medical marijuana program. Activists and cannabis businesses in the state are seeking to launch a campaign to get marijuana legalization on the ballot in 2020.

Arkansas: A House bill was introduced in April that would decriminalize small amounts of marijuana.

Louisiana: In June Gov. Edwards (D) signed a bill allowing inhalation of medical marijuana. More than a dozen other marijuana-related bills have been filed by Louisiana Florida: In May, Gov. DeSantis legislators for this year’s ses(R) signed a bill that eliminates sion. the state’s ban on smokable Maine: In June, Maine Gov. medical cannabis.

Mills (D) signed a bill creating Georgia: In April, Gov. Kemp a framework for legal mari(R) signed a bill into law that juana sales. allows in-state production and sale of low-potency Maryland: In May, Maryland Gov. Hogan (R) signed a bill medical marijuana oil. into law legalizing edible Hawaii: In July, a bill to de- medical-marijuana products. criminalize possession of small amounts of marijuana Massachusetts: In May, the state Cannabis Control Combecame law. mission voted to approve Idaho: In April, a bill that would a “social consumption” picreate permits for interstate lot program in up to a dozhemp shipments cleared the en Massachusetts cities and towns. both the House and Senate.

District of Columbia: In May, Mayor Bowser (D) announced she’s sending a bill to legalize recreational marijuana sales to the District Council.

Illinois: In June, Gov. Pritzker (D) signed a bill making medical marijuana permanently legal expanding the list of qualifying conditions. The governor also signed a bill making Illinois the 11th state to legalize sale and use of recreational marijuana.

California: In May, the California Senate approved a bill to create a state-chartered bank to serve the marijuana indusIndiana: In April, the state try.

House cleared a bill legalizing Colorado: In May, Gov. Po- industrial hemp. lis (D) signed bills allowing marijuana hospitality estab- Iowa: In April, the state Senate lishments and marijuana de- cleared a bipartisan bill that liveries from licensed dispen- would reduce penalties for possession of small amounts saries. of marijuana.

Connecticut: In May, the state Senate Finance Committee Kansas: In May, Gov. Kelly (D) approved a bill legalizing rec- signed a bill allowing low-THC reational marijuana with asso- cannabis oil for life-threatening medical conditions. ciated taxes.

Delaware: In June, the state’s House Revenue & Finance Committee cleared a recreational marijuana bill by an 8-3 vote, advancing it to the full chamber.

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ABL INSIDER

Kentucky: In March, the state’s House Judiciary Committee voted 16-1 to advance a bill that would legalize medical cannabis in the state.

Michigan: In March, the Bureau of Marijuana Regulation and the Michigan Dept. of Agriculture & Rural Development issued joint guidance regarding CBD and industrial hemp.

Minnesota: In March, a Minnesota Senate committee rejected proposals to legalize marijuana and create a task force to study the issue.

Missouri: In April, a bill decriminalizing possession of small amounts of marijuana failed in the Missouri House after it had previously cleared the House Special Committee on Criminal Justice.

Montana: In March, a bill to legalize recreational marijuana use for adults over the age of 18 failed to advance a state House committee. In April, the state House Appropriations Committee cleared a bill to reform Montana’s medical marijuana law.

CANNABIS CORNER Nebraska: In May, Gov. Ricketts (R) signed a bill permitting cultivation of industrial hemp.

The Nebraska Legislature’s Judiciary Committee also cleared a medical marijuana bill by a vote of 5-1, advancing it to the full Legislature Nevada: In June, Gov. Sisloak (D) signed a bill creating a pilot program for marijuana banking and disallowing employers from refusing job applicants with failed marijuana tests.

New Hampshire: In August, Gov. Sununu (R) vetoed a bill to let patients grow their own medical cannabis. Earlier this summer, he vetoed a bill to allow cannabis dispensaries operate as for-profit companies, but signed a bill allowing physician assistants to recommend medical cannabis.

New Jersey: In August, Jersey Gov. Murphy (D) vetoed a marijuana expungement bill, while proposing several changes. Senate President Steve Sweeney (D) announced that the legislature was unable to work out differences on a recreational marijuana legalization bill, likely moving the issue to the state’s 2020 ballot.

New Mexico: In March, the state’s House of narrowly passed a recreational marijuana bill by a margin of 36-34, with significant modifications.

The bill stalled in the Senate Finance Committee – though a bill to decriminalize marijuana was signed into law.

New York: In July, Gov. Cuomo (D) signed a bill to further decriminalize marijuana and expunge past convictions.

North Carolina: In April, four state representatives filed a bill which would decriminalize small amounts of marijuana. Another bill filed in March would legalize medical marijuana in the state.

North Dakota: In May, Gov. similar bill seeks to decrimiBurgum (R) signed a bill de- nalize marijuana possession criminalizing possession of of less than one ounce. small amounts of marijuana.

Texas: In April, the state Ohio: In July, Gov. DeWine House approved a bill to de(R) signed a bill that legaliz- criminalize small amounts of es hemp and CBD in light of marijuana. In June, Gov. Abthe state’s prior crackdown on bott (R) signed a bill allowing the production and regulation CBD. of industrial hemp and legalOklahoma: In May, Gov. Stitt izing CBD. (R) signed a bill allowing the sale of hemp-derived CBD. Vermont: In May, the state He also signed legislation House cleared a bill to tax expanding the pool of phy- and regulate recreation-al sicians able to recommend marijuana sales (current law allows low-level possession marijuana licenses. and home cultiva-tion).

Oregon: In June, the state House cleared a bill that Virginia: In March, Gov. would allow interstate trans- Northam (D) signed a bill exfer of marijuana but would panding the state’s medi-cal require federal action before marijuana program by allowing a range of different going into effect. cannabis products in-cludPennsylvania: In March, a bill ing CBD and enabling nurse was introduced that would al- practitioners and physician low recreational use of mari- assistants to dis-tribute certijuana for adults over the age fications. of 21, possession of six marijuana plants, home delivery of Washington: In April, the state marijuana, and on-site canna- Senate passed a bill legalizing industrial hemp. In August, bis use businesses. state regulators issued a noRhode Island: In March, the tice banning CBD as a food state Senate Judiciary and ingredient.

Finance Committees and House Finance Committee West Virginia: In March, Gov. held hearings on legalization Justice (R) signed a bill which “allows the State Treasurer of recreational marijuana. to select, by competitive bid, South Carolina: In March, a one or more financial instituSenate subcommittee passed tions to provide banking serthe Compassionate Care Act, vices for the fees, penalties, which would legalize medical and taxes collected in assomarijuana – but wasn’t debat- ci-ation with West Virginia’s ed before the end of the leg- medical cannabis program.” islative session.

Wisconsin: In May, the budSouth Dakota: In March, Gov. get proposed by Gov. Evers Noem (R) expressed open- (D) to include decriminalizing ness to revisiting hemp legal- possession of up to 25 grams ization after the USDA issues of marijuana and allow recreational use was rejected by guidelines in fall 2019. the state Legislature’s joint fiTennessee: In March, the nance committee. | state’s Criminal Justice Subcommittee reviewed a bill that would allow possession of medical marijuana for valid cardholders in other states. A FALL 2019 | ABL INSIDER

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STATE & LOCAL Courts Rule Against Vertical Integration and Habitual Drunkard Laws Alabama: Medical Marijuana Commission to Hold First Meeting - Dr. Steven Stokes was once skeptical about medical marijuana. But the “semiretired” oncologist from Dothan has changed his mind after volunteering at a clinic in Marianna, Florida, where medical cannabis is available.

“I think it helps them,” Stokes said in a phone interview on Monday.

Alaska: Proposed Ordinance to Amend Alcohol Laws Passes Introduction - An ordinance that would amend the current Bethel Municipal Code’s alcohol laws passed introduction during the Bethel City Council’s June 25th regular meeting. The proposed amendments would implement more strict laws associated with the sale, distribution, purchasing and consumption of alcoholic beverages, states Ordinance 19-14, in an effort to mitigate nuisances and harm caused by alcoholic beverages in the community.

rulings in the state’s appellate courts. That issue has prosecutors and defense attorneys — not to mention presiding judges — scratching their heads over how to handle felony DUI cases.

Florida: Court Rules Vertical Integration Is Unconstitutional - There might be some significant changes coming to the Florida cannabis industry as a Florida court rules that vertical integration is “unconstitutional.” This ruling comes four months after the Florida House rescinded a ban on smoking medical marijuana.

Meanwhile, Florida Governor Ron DeSantis’ reversed his position and walked back his stance on vertical integration.

Florida: State Opens Door to Out-of-State Retailer Shipping - As of Aug. 1, Florida residents can order and receive wine from out-of-state retailers through common carriers. That’s big news for fine wine retailers looking to ship to consumers in the SunArkansas: State Sees Uptick shine State, which represents in Craft Beers - Arkansas’ a huge market for alcohol craft brewers made near- sales. ly 37,500 barrels of suds in 2018, up slightly from the pre- Georgia: Albany Commission vious year, with a single Little Approves Sunday Alcohol Rock brewery accounting for Referendum - Albany citialmost 40% of the beer pro- zens will soon vote whether duced in the state, according to allow earlier alcohol sales to state data. at restaurants on Sundays.

Tuesday morning, the Albany Colorado: Legal Eagles Be- City Commission approved wildered Over New Felony putting the option for restauDUI Law - A motorist facing rants to sell alcohol earlia felony for driving under the er on Sundays on the ballot. influence has the right to a Commissioners also had the preliminary hearing to deter- option to put the option for mine whether there is enough Sunday package sales on the evidence to go to trial, but ballot for voters, but voted that doesn’t mean prosecu- against that option. tors have to present evidence Illinois: A Bigger Boost for to support the charge is war- Video Gaming? - So far in ranted, under two conflicting 2019, there have been 1,344 12

ABL INSIDER

active video gaming machines played in La Salle, Bureau and Putnam counties.

By the end of the year, that number has the potential to increase significantly due to recent changes in the legislation surrounding video gambling in Illinois. When the new gaming bill passed through the Illinois Legislature in June, it implemented sports betting and expanded the casino market.

Kansas: Wichita Liquor Store Sees Little Change in Sales Since New Laws Enacted - It was only four months ago that Kansas grocery and convenient stores stocked their shelves with 6% beer for the first time instead of 3.2%.

However, those stores were not the only ones who started selling new products. Changes in liquor sale laws also included a compromise: liquor stores could sell nonalcoholic products.

Maryland: State Is Latest Testing Ground for Tech Aimed at Drunken Driving State officials are testing new technology installed in vehicles that prevents the car from moving if the driver’s had too much to drink. The Driver Alcohol Detection System for Safety analyzes the driver’s breath — there’s no need for a separate device — and if the sensors in the vehicle pick up a given level of alcohol, the engine will turn over, but the car won’t move.

Massachusetts: State Bills Would Equalize Minimum Wages for Wait Staffers, Other Workers - Two bills filed in the state Legislature could raise the wages of thousands of waitstaff at restaurants across Massachusetts. The

STATE & LOCAL “one fair wage” bills S.1082 and H.1617, sponsored by state Sen. Patricia D. Jehlen, D-Somerville, and state Rep. Tricia Farley-Bouvier, D-Pittsfield, would steadily equalize the minimum wage for tipped and non-tipped workers by 2027.

Minnesota: State Moves to Block CBD Beverage Sales - Citing U.S. Food and Drug Administration’s (FDA) guidance prohibiting the sale of CBD-infused food and beverage products, the Minnesota Department of Agriculture (MDA) last week issued cease and desist notices to CBD Massachusetts: Cumberland beverage manufacturers and Farms Takes Aim at Massa- has embargoed sales for at chusetts Liquor Laws - Cum- least one beverage company. berland Farms is taking aim at Massachusetts liquor laws, Missouri: Restaurant Owners filing a ballot question with Organize to Oppose Drink the state attorney general’s Special Restrictions - Looffice that would lift the state cal restaurants and bars are restrictions on the number of voicing their concerns about alcohol licenses a food retail- proposed drink special reguer can have. The convenience lations. The regulations would store chain argues that it’s prevent places from being time to modernize the state’s able to have drink specials, archaic liquor laws, while such as two for ones, botpackage stores are gearing tomless cups, or samples. It up for a fierce fight to defend would also set the prices for their turf, reported The Bos- drinks based on alcohol sales ton Globe. at each establishment.

Michigan: Lawmakers Look into Legal Limits for High Drivers - State lawmakers are currently kicking around legislation that would help establish a marijuana blood level driving threshold. Introduced by Sen. Betty Jean Alexander, a Detroit Democrat, Senate Bill 347 would amend the Michigan vehicle code to prohibit driving with a blood level of five nanograms of delta 9-tetrahydrocannabinol (THC) — the active mind-altering ingredient in marijuana.

Michigan: 400K of Illegally Shipped Bottles of Alcohol Sold Across State - Michigan has an alcohol smuggling problem. That’s according to the Michigan Beer and Wine Wholesalers Association. The association compiled data from the Liquor Control Commission and the state’s excise tax information to determine how much alcohol is being shipped to Michigan illegally.

New York: Governor Signs Bill Decriminalizing Marijuana Use - The penalties for possessing and smoking marijuana in New York will be loosened in 30 days under a new law that supporters say will lead to fewer arrests for users of the drug. Gov. Andrew Cuomo on Monday signed into law a bill that sets the fine for possessing up to an ounce of marijuana at $50 and up to two ounces at $200.

Oklahoma: Judge Hears Arguments Over Alcohol Distribution Law - Attorneys on Thursday argued the pros and cons of a new law that will determine how alcohol is distributed throughout Oklahoma.

Petitioners representing a dozen local and national alcohol businesses are asking Oklahoma County

District Judge Thomas Prince to block the implementation of Senate Bill 608, which they claim violates the state’s constitution.

Texas: State Prepares for Beer-to-Go and Booze Delivery - Starting Sept. 1, Texans will be able to leave brewery taprooms with a case of their favorite craft beer, and order wine and beer for delivery, thanks to two laws passed by the Legislature this year.

Brewers and beer lovers around the state fought for beer to go, saying it will boost business and drive tourism to Texas.

Texas: Walmart Won’t Be Selling Liquor in Texas After All, Appeals Court Rules - Walmart won’t be opening liquor stores in Texas anytime soon. The 5th U.S. Circuit Court of Appeals this week reversed an earlier federal court ruling in favor of Walmart, which challenged the constitutionality of a law that prevented it from selling liquor in Texas.

Virginia: Federal Court Strikes Down “Habitual Drunkard” Law - Prohibition may have ended back in 1933, but that hasn’t stopped police in Virginia from arresting hundreds of adults for possessing alcohol. Under a bafflingly archaic law, courts have “interdicted,” or designated, Virginians as “habitual drunkards,” who can then be arrested and charged for possessing or attempting to possess alcohol. |

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LEGAL UPDATES Retail Shipping; Wal-mart v. tabc; and Big Legal Win for Massachusetts Package Stores It’s been a busy few months on the alcohol legal front since the Tennessee Wine opinion was issued by the Supreme Court. Four new alcohol retail shipping cases have been filed, to go along with pending cases in Illinois and Michigan, and there has been a decision in the Wal-Mart case in the 5th Circuit in Texas. There was also a big win for independent retailers in Massachusetts.

• Texas (Brockie v. Abbott)…A Chicago wine retailer (House of Glunz), as well as an Illinois resident are challenging Texas’ law that make the Illinois retailer ineligible for a Texas retail alcohol license.

Wal-Mart v. TABC On August 15, the 5th Circuit Court of Appeals affirmed lower court’s determination that Section 22.16 of the Texas Code, which prohibits public ownership of retail liquor stores, does not violate the Equal Protection Clause. The 5th Circuit then vacated and remanded the district court’s ruling that Section 22.16 violated the dormant Commerce Clause because the district court “erred in its findings regarding the discriminatory nature and burden imposed by the public corporation ban.”

Retail Shipping Cases Shortly after the Supreme Court ruled in Tennessee Wine, seasoned alcohol law litigants brought four lawsuits against Indiana, Kentucky, New Jersey and Texas, claiming that those states’ laws violate the Commerce Clause and the Privileges and Immunities Clause of Article IV, Section 2 of the United States Constitution by allegedly discriminating against out-of-state retailers.

As it stands, Section 22.16 does not present discrimination between in-state and out-of• Kentucky (Tannins of Indianapolis v. Bevin)… state corporations, as Texas corporations and An Indiana retailer is seeking to nullify Ken- corporations based in other states are equally tucky’s retailer residency law and its law pre- prohibited from owning retail liquor stores. venting out of state retailers from shipping to Kentucky residents. Of note – and apparently The 5th Circuit decision is the first to scrutinews to the plaintiffs – is that Kentucky law nize state alcohol laws in the context of the “expressly exempts corporate entities” (like dormant Commerce Clause since the U.S. the plaintiffs), which the state pointed out in Supreme Court ruling in the Tennessee Wine its motion to dismiss the case. Also notewor- & Spirits Retailers Association v. Thomas case thy is that the plaintiff has yet to apply, much in June. The 5th Circuit included in its examless be denied, a license. ination the Tennessee case and other appeals court and Supreme Court precedents.

• Indiana (Chicago Wine Company v. Holcomb)…The complaint alleges Indiana reg- Wal-Mart’s attempts to bring the legislative ulations that allow in-state wine retailers to intent of the Texas legislature into the case sell, deliver, and ship wine directly to con- were swatted away in the opinion, as was sumers but prohibit out-of-state wine re- the rational the district court used to ascertailers from doing so, are unconstitutional. tain discrimination. The district court will now The Wine & Spirits Distributors of Indiana apply the Pike v. Bruce Church balancing test, has filed a motion to intervene in the case which subjects state laws and regulations to and the state has denied the complainants’ an analysis against the commerce of other claims, calling the allegations “vague and states. speculative.”

Following the ruling, Wal-Mart requested • New Jersey (Freeman v. Murphy)…A New York an en banc review – which is a rehearing of retailer alleges it is unlawful for the state to the case before all the judges of the 5th Cirallow in-state wine retailers to ship to resi- cuit – arguing that the current decision is at dents while prohibiting out-of-state retailers. odds with the Tennessee Wine ruling by the The retailer is joined by three New Jersey Supreme Court. The Texas Package Stores residents who claim, as wine collectors, they Association, which was an intervenor in the are unable to purchase directly from out-of- case, has also filed for a rehearing of the case state retail licensees. No New Jersey statutes before the three judge panel, asking it to “reare specifically challenged in the complaint. verse and render judgment in favor of Defendants on the Plaintiffs’ claim of an impermissible burden under Pike v. Bruce Church.” The 14

ABL INSIDER

LEGAL UPDATES state of Texas has not sought a rehearing with Tennessee Wine & Spirits Retailers the 5th Circuit.

Association v. Thomas On June 26, in a 7-2 vote, the Supreme Court Big Legal Win for Massachusetts Package struck down the Tennessee residency requirement for retail liquor licenses. As the petiStores On July 24, the Massachusetts Supreme Judi- tioner in the case, the Tennessee Wine & Spircial Court (SJC) reversed a lower court ruling its Retailers Association had asked the Court that allowed retailers in Massachusetts to sell to hold that Tennessee’s durational-residency liquor at below wholesale prices. The SJC’s requirement for granting retail and wholesale ruling is in favor of the Massachusetts Alco- alcohol licenses is protected under the Twenholic Beverages Control Commission’s (ABCC) ty-first Amendment, and to reverse the 6th interpretation and enforcement of state stat- Circuit Court of Appeals’ contrary ruling. Click utes forbidding below cost discounts being here to read the full text of the 57-page opinpassed on to customers. Massachusetts law ion. Key takwaways from the ruling include: prohibits retailers from selling alcoholic beverages for “less than [the] invoiced cost.” The • Reaffirming the existence of the Dormant Commerce Clause; state defines “cost” as the “net cost appearing on the invoice” for an alcoholic beverage.

• Expanding Granholm by holding that Gra-

nholm and the Dormant Commerce Clause A Maryland-based liquor store chain seeking are not just limited to alcohol producers; to sell items below wholesale cost first challenged the ABCC interpretation in 2017 after • Establishing a Dormant Commerce Clause/ receiving several one-day suspensions for Section 2 test that a State must provide “contwo of its stores selling certain brands of licrete evidence” that an alcohol regulation quor to consumers for anywhere from $1 to “actually promotes public health or safety, $6 below wholesale prices. The complainant while also showing “nondiscriminatory alterargued that “cumulative quantity discountnatives would be insufficient to further those ing,” wherein retail prices are considered to interests”; and be above wholesale price when discounts are awarded from distributors for cumulative or- • Holding that the 2-year durational residency requirement wasn’t even close to meeting ders and prompt payments, was permissible. this test.

Ben Weiner, Owner of Sav-Mor Liquors in Somerville, MA, and President of the Massa- This decision will prompt more challenges to chusetts Package Stores Association (MPSA), state alcohol regulations, including basic reswas extremely pleased with the decision. “For idency requirements. The Court has created more than two years, we have been involved a test for alcohol laws that will require exfinancially, legally and emotionally in the ap- pert evidence and analysis to defend alcohol peal by the ABCC and the Attorney Gener- regulations. State alcohol associations and al’s office with MPSA as a friend of the court,” those with interests in state alcohol regulation he said. “Today, the SJC affirmed what we all should be vigilant about intervening in future cases. knew.”

The two-part test the Court has now set for alcohol laws: • Is there concrete evidence that the regulation provides enough public health and safety benefits?

• Are there no other policy or regulatory alternatives to get at that interest? |

Source: Wikipedia FALL 2019 | ABL INSIDER

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REST OF THE STORY

Save-the-Date

2020 ABL Annual Meeting March 29-30 New Orleans, LA General Sessions

Networking

Hospitality Events

Continued from Page 8

America’s Three-Tier System: The Gold Standard That’s Worth Preserving During the summer months when international travel is frequent, it is a great opportunity to educate consumers and non-consumers alike on the importance of America’s alcohol regulatory system. The partnership between ABL, WSWA, and ADSA, along with others in the industry, is a great example of what can happen when associations work together with the same goal in mind. Going forward, we will continue to educate on the dangers of counterfeit alcohol and work together to educate on the importance of America’s three-tier system. With an 85-year record of success, this model is the gold standard and is worth preserving. |

Continued from Page 9

The Alcohol Marketplace Has Benefitted from Tech Innovations and Thoughtful Regulation Despite the overwhelming support for the way alcohol is regulated, there is now a proposal in Congress – the United States Postal Service (USPS) Shipping Equality Act – that would undermine the existing structure. If adopted, the bill would disregard the ability of states to oversee the alcohol market within their borders by allowing the USPS to bypass state law and deliver alcohol. Unfortunately, allowing the shipping of alcohol through these unregulated channels could have severe consequences, like opening the market to potentially harmful foreign or domestic-sourced alcohol and creating easier access to alcohol for underage consumers.

When considering any alcohol-related legislation, Congress should reject efforts to undermine current law and preserve polices that protect both consumers and the public.

Simply put, careful regulation, for some industries, is exactly the right solution. When Henry Ford created a way to travel that was more efficient than simply faster horses, we started to need stop signs, speed limits and eventually seat belts. Likewise, alcohol regulations, though improved upon for decades, are in place for good reason. And it’s only becoming more important as technological advancements continue to make counterfeit concerns – particularly on e-commerce sites – more of an issue here in the U.S. Alcohol, like rockets, self-driving cars and cutting-edge medications, is a fascinating industry that will always benefit from and evolve with technological innovations that make the industry and the consumer experience better. But we also must acknowledge that alcohol is a different type of product – one that should always be accompanied by thoughtful regulation. Too many Americans depend on that regulation, whether they know it or not. | 16

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D.C. UPDATES Impaired Driving Legislation; Music Licensing Update; and FDA Hearing on CBD H. Res. 285 Introduced on April 3, H. Res. 285 recognizes “over 85 years of successful State-based alcohol regulation since the creation of an effective system of independent beer, wine, and spirits distribution.” It is cosponsored by Rep. Derek Kilmer (D-WA) and Sean Duffy (RWI), the co-chairs of the Congressional Hospitality Caucus. It emphasizes many principles and facts that ABL supports federally and its members embrace in their states.

Impaired Driving Legislation

nition interlock system is installed. The driver would also need to undergo mandatory substance-abuse treatment, while authorities would be required to report the incident to a state child-abuse registry.

States that fail to comply with the law would lose a percentage of federal funding, the bill states.

End Drunk Driving Act of 2019 (H.R. 3011): Rep. Kathleen Rice (D-NY); Introduced 5/23/19; No cosponsors – This bill would give automobile manufacturers a decade to equip all new cars sold in the United States with technology that detects a driver’s blood alcohol content and prevents the vehicle from moving, if the driver is at or above the legal intoxication limit.

DOJ Review of ASCAP & BMI Consent Decrees

There are four bills that ABL is monitoring that address drunk driving: Abbas Stop Drunk Driving Act (H.R. 514): Rep. Debbie Dingell (D-MI); Introduced 1/11/19; No cosponsors – This bill calls for the Department of Transportation to implement a federal motor vehicle safety standard that requires all new vehicles be equipped with an ignition interlock device within one year of the bill’s enactment.

The Department of Justice (DOJ) opened a review and public comment period on the consent decrees governing ASCAP and BMI earlier this year. ABL submitted comments to the DOJ on August 9 urging it to maintain the decrees. Collectively, the public comments were overwhelmingly in favor of maintaining the consent decrees in the current form.

Impaired Driving Repeat Offender Prevention Act (H.R. 2998): Rep. Nita Lowey (D-NY); Introduced 5/23/19; No cosponsors – This bill would require states to mandate the installation of an ignition interlock device in vehicles operated by those who have DWI convictions for at least 180 days.

Craft Beverage Modernization & Tax Reform Act A majority of U.S. Senators are now cosponsoring the 2019 Craft Beverage Modernization and Tax Reform Act (CBMTRA). As of July 1, there are 64 cosponsors of S. 362, joined by 238 cosponsors of the House bill, H.R. 1175.

Prevent Impaired Driving Child Endangerment Act (H.R. 3008): Rep. Kathleen Rice (D-NY); Introduced 5/23/19; No cosponsors – This bill would set criminal penalties for motorists convicted of driving while intoxicated or impaired with a child passenger. The bill would require drivers accused under the law be charged with a felony, punishable by up to 4 years in prison. Those convicted would have their license suspended unless an ig-

Federal excise taxes on alcohol will revert to their previous levels on January 1, 2020 if the current rates are not made permanent or extended. Industry associations supporting the CBMTRA include Brewers Association, Beer Institute, WineAmerica, Wine Institute, Distilled Spirits Council, American Craft Spirits Association, and U.S. Association of Cider Makers.

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D.C. UPDATES to 107.ABL continues to believe that marshalling support for this bill is an effective way to combat the roll-back of TCJA estate tax provisions.

S-Corp The House Select Revenue Subcommittee held a hearing on June 25 entitled “How Recent Limitations to the SALT Deduction Harm Communities, Schools, First Responders, and Housing Values.” Many Main Street employers lost the ability to deduct the State and local taxes they pay on their business income because tax reform subjected deductions on state and local taxes (SALT) paid by pass-through business owners to the same $10,000 cap as taxes paid on wages and property.

In response to this new policy, the S Corporation Association and the Parity for Main Street Employers coalition has been working with states to restore the SALT deduction at the state level by allowing pass-through businesses the option of paying their SALT at the entity level. To date, four state legislatures have adopted this reform - Connecticut, Wisconsin, Oklahoma, and Louisiana.

Estate Tax As Congress looks for ways to extend expiring tax provisions in the Tax Cuts Jobs Act, one of the majority proposed pay-for’s is to end current estate tax provisions early. This proposal came to fruition with the introduction of the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (H.R. 3301) on June 17.

The bill sunsets the temporary $11 million per person estate tax exemption prematurely.

The exemption will revert to $5.5 million per person on December 31, 2022 instead of December 31, 2025 as passed in the Tax Cuts and Jobs Act. The Family Business Coalition and the Family Business Estate Tax Coalition sent letters to Congress opposing the estate tax roll back.

On a related note, the list of cosponsors on the Death Tax Repeal Act (H.R. 218) is now up 18

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Industry Letter on Retaliatory Tariffs In August, ABL joined other industry groups to sign-on to a letter to the U.S. Trade Representative (USTR) to urge that the U.S. remove imports of brandy/Cognac, liqueurs, cordials and wine from the EU from a proposed retaliatory tariff list in connection with a World Trade Organization (WTO) case.

ABL joined American Distilled Spirits Association, American Craft Spirits Association, Distilled Spirits Council, Kentucky Distillers Association, National Association of Beverage Importers, Wine & Spirits Shippers Association, Wine & Spirits Wholesalers of America, WineAmerica, and Wine Institute on the letter.

FDA Hearing on CBD The Food and Drug Administration (FDA) held its first public hearing on CBD in food and drinks and how to regulate the newly legalized cannabis product on May 31. The hearing provided information on CBD’s safety in food products and how the FDA might regulate manufacturing, marketing and labeling.

Speakers included hemp growers, start-up businesses, academic researchers and consumer advocates, all with varying views on how strictly CBD should be regulated but united in their urging of the FDA to act soon with its rules. CBD, short for cannabidiol, is a non-psychoactive compound found in the cannabis plant that purports to relax the body without altering the mind like THC. Congress legalized hemp-derived CBD in December 2018.

The hearing came at the urging of Congress, and with some large, potential CBD market entrants sitting on the sidelines due to the regulatory uncertainty surrounding the ingredient. |

associate members DIAMOND

Beer Institute National Beer Wholesalers Association Wine & Spirits Wholesalers of America

affiliate members ALABAMA

Alabama Beverage Licensees Association

ARKANSAS

United Beverage Retailers of Arkansas

COLORADO

GOLD

Breakthru Beverage Group Castle Brands, Inc. Republic National Distributing Company Southern Glazer’s Wine & Spirits, LLC Wine Institute

SILVER

American Distilled Spirits Association Brewers Association McCormick Distilling Co.

Coloradans for Safety

CONNECTICUT

Connecticut Package Stores Association

DELAWARE

Delaware Small Beverage License Council

FLORIDA

Florida Independent Spirits Association

GEORGIA

Georgia Alcohol Dealers Association

ILLINOIS

Illinois Licensed Beverage Association

INDIANA

BRONZE

Indiana Association of Beverage Retailers

3x3 Insights, LLC City Hive, Inc. ECR Software Corp.

KANSAS

Kansas Licensed Beverage Association

KENTUCKY

Kentucky Association of Beverage Retailers

contact us American Beverage Licensees 5101 River Road Suite 108 Bethesda, MD 20816

MARYLAND

Maryland State Licensed Beverage Association

MASSACHUSETTS

Massachusetts Package Stores Association

MISSISSIPPI

Mississippi Hospitality Beverage Association

MONTANA

Email

Montana Tavern Association

info@ablusa.org

NEW JERSEY

Facebook

New Jersey Liquor Store Alliance

facebook.com/ablusa

NEW YORK

Twitter

New York State Liquor Stores Association

@ablusa

OKLAHOMA

Instagram

AmericanBeverageLicensees

about us

Retail Liquor Association of Oklahoma

PENNSYLVANIA

Malt Beverage Distributors Association of Pennsylvania

RHODE ISLAND Rhode Island Liquor Stores Association American Beverage Licensees is the preeminent national trade association for SOUTH CAROLINA retail alcohol beverage license holders ABC Stores of South Carolina across the United States. Its members are SOUTH DAKOTA comprised of on-premise and off-premise South Dakota Licensed Beverage Dealers & retailers who annually help infuse billions Gaming Association of dollars into the American economy. ABL represents the interests of American small TENNESSEE business owners and a historical part of Tennessee Wine & Spirits Retailers Association the American way of life. Many members TEXAS are independent, family-owned operators Texas Package Stores Association who assure that beverage alcohol is sold VIRGINIA and consumed responsibly by adults.

Virginia Licensed Beverage Association

WISCONSIN

Tavern League of Wisconsin

WYOMING

Wyoming State Liquor Association

WINE & SPIRITS GUILD OF AMERICA

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