Alcohol helps the marijuana industry

Have cannabis leaders working hard for federal legalization found a powerful ally? Does alcohol help the marijuana industry? On March 22, 2023, the Wine & Spirits Wholesalers of America (WSWA) sent a letter to Congress stating: “[t]”It’s time for Congress to legalize and regulate adult-use cannabis at the federal level” and for the disparity between federal and state cannabis policies to “undermine.”[s] undermines the rule of law and undermines public health and safety, while states are denied support in their efforts to create safe, regulated markets and eliminate dangerous black market activities.”

There was a lack of support for cannabis legalization on Capitol Hill from mainstream non-cannabis related organizations. So this move by the WSWA is a welcome move, but it also raises the question: is the WSWA’s support for cannabis legalization too good to be true?

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The alcohol lobby could see cannabis as the next big growth engine for their business. Alcohol consumption has declined in recent years as consumers in the US become increasingly health conscious. Combine that with the expected growth of the cannabis industry, and you can understand why alcohol companies are suddenly so keen on legalizing cannabis at the federal level. In recent years, there has been a significant increase in the number of alcohol companies entering the cannabis market through investments and THC-infused beverages. And on August 7, 2023, Canada-based cannabis company Tilray Brands announced the acquisition of eight beer and beverage brands from Anheuser-Busch.

The alcohol lobby could see cannabis as the next big growth engine for their business. Alcohol consumption has declined in recent years as consumers in the US become increasingly health conscious. Combine that with the expected growth of the cannabis industry, and you can understand why alcohol companies are suddenly so keen on legalizing cannabis at the federal level. In recent years, there has been a significant increase in the number of alcohol companies entering the cannabis market through investments and THC-infused beverages. And on August 7, 2023, Canada-based cannabis company Tilray Brands announced the acquisition of eight beer and beverage brands from Anheuser-Busch.

However, the entry of alcohol companies into the cannabis industry raises a number of important questions. In a possible sign of the future, the WSWA notes that “the current federal system for regulating alcohol serves as a strong model for the structure that should be enacted for cannabis” and that federal legalization “should be accompanied by the creation of a law” . robust regulatory structure that licenses manufacturers, testing facilities and distributors.” But should the same corporations that control the alcohol industry also be allowed to dominate the cannabis beverage industry?

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The alcohol industry is known for its high level of consolidation, with a few large companies dominating the market. So how would a federal legal cannabis industry modeled on the “Federal System for Regulating Alcohol Services” work? At the very least, a shift toward a regulatory structure more akin to the alcohol industry would change the paradigm of a cannabis industry that has evolved decentralized (out of necessity) over the past several decades.

The backing of an industry group with influence on Capitol Hill could be a welcome development for a cannabis industry seeking relief from federal laws and regulations that are slowing its growth. As such, the cannabis industry may not want to look a gift horse in the mouth. But operators can also beware of a Trojan horse at their gates. (For more information contact akahari@dfmklaw.com.) 🪴

This article originally appeared in Feuerstein Kulick’s monthly cannabis newsletter, The Leaflet, which you can subscribe to here. For more information, you can contact Rich at rich@dfmklaw.com or (201) 410-4737 or email The Leaflet at theleaflet@dfmklaw.com.