Eight states and Washington, D.C., have legalized recreational cannabis. All have turned to state liquor officials for help with oversight and regulations. But are the two industries really that similar?
“No,” was the prevailing opinion during a brief discussion on the topic during the 24th Annual NABCA Symposium on Alcohol Beverage Law and Regulation, held March 12-14 in Arlington, VA.
“It isn’t as simple as a wholesaler picking up a finished product and then bringing it from point A to point B,” says Jesse Sweet, director of administrative policy and process, Oregon Liquor Control Commission. Sweet says he now spends “70-80%” of his time dealing with cannabis after the state’s 2015 vote to legalize.
“Marijuana is an agricultural product,” he adds. “And producers in Oregon don’t always have the sufficient space to dry, cure, and trim it.”
These responsibilities can fall to state departments. Further complicating matters, the cannabis industry can be cash-only. Federal law disallows banks from investing. And U.S. tax code 280E forbids tax deductions related to the marijuana business.
For control states facing legalization in future years, due diligence is important.
“You can’t just toss cannabis on the back of the beer truck,” Sweet says. “There are specific needs for temperature, and for security because there’s so much cash involved.”
“Dealing with cannabis has been a lot of fun because we’re figuring out so much as we go along,” he adds, “but it’s important to remember that this is still in the early-going.”