Alcohol and Cannabis Ventures: 5 Legal consideration

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Since long, it has been controversial that alcohol doesn’t get along with the burgeoning marijuana industry in the U.S. The logic is that marijuana is a substitute for alcohol. Cannabis is the most commonly used drug amongst those who drink. Also, in the adult general population, it has been found that there are people who use cannabis and alcohol simultaneously and concurrently. It is an irony that both cannabis and alcohol share similar social and historical path.

Read our full article on crossfading to see how cannabis and alcohol interact with your body when consumed at the same time.

Likewise cannabis, there was a time when alcohol was criminalized and political demonetized prior it was accepted by states’ rights and a tax and regulate model. While many different sources have discussed the interplay between cannabis and alcohol to a varied extent, the article in detail provides top five legal considerations related to federal law, licensing, special events, brand marketing and mixed products.

Cannabis Under Federal Law

Even after several states and Washington, DC, allows marijuana, till date, cannabis is still federally illegal and remains a Controlled Substance Act Schedule I drug. This is because the federal government classifies marijuana as a schedule 1 drug which means it holds no medical value and has a high potential for abuse. This means that cannabis businesses are still under the risk of federal enforcement.

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Despite federal prohibition, the Obama administration adopted a relaxed approach to marijuana – this means they allowed the states to deal in the same till they meet certain criteria. However, the Trump administration adopted a tougher approach – means they crack down on marijuana even in states where it is legal. Enforcement is often inconsistent, but it eliminates black marketing and promotes public health and safety.

With time, the alcohol and tobacco-based firms are entering into the cannabis business. In 2018, the value of mergers and acquisitions in the cannabis industry topped $15 billion, more than a third of which came from players in the tobacco and alcohol industries. Followed up is the big pharma industry.

Legal Considerations Of Medical Marijuana

In 1998, Washington state passed a law – Initiative 692 wherein individuals found in possession of marijuana for medical purposes need to provide a note from their doctor mentioning the condition that marijuana can help you with. This does not mean that medical use of marijuana is legalized and does not affect Federal Law. Also, the Washington Law limits the amount of marijuana a patient can possess and defines the condition for which the medical marijuana may be used. However, as a seed, cannabis is innocuous. Hence, all the types of cannabis seeds in their ungerminated form are legal nationwide.

Legal Consideration To Produce, Distribute & Sell Cannabis

In 1998, Washington state passed a law – Initiative 692 wherein individuals found in possession of marijuana for medical purposes need to provide a note from their doctor mentioning the condition that marijuana can help you with. This does not mean that the medical use of marijuana is legalized and does not affect Federal Law. Also, the Washington Law limits the amount of marijuana a patient can possess and defines the condition for which medical marijuana may be used.

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Currently, having an alcohol license is not a bar to having a cannabis license, although legislative procedures are underway to prevent alcohol retailers from holding cannabis licenses. Practically speaking this means that both alcohol seller and cannabis products seller cannot share the same premises. Therefore, it is recommended that alcohol producers and distributors who are interested in cannabis should know about their respective TTB permits, landlord approval and whether or not insurance would cover both the products together with the premises.

Cannabis vs Alcohol In Events & Parties

A recent study revealed that the U.S. population consumes twice as many alcoholic beverages and cannabis during the holiday season, in events and parties.

The cannabis laws and regulations do permit special events, but these events are very limited in nature. You need to have specific state licenses and also you cannot permit alcohol consumption on the same premises.

Henceforth, till the law changes, the only option left for serving and enjoying alcohol and cannabis in events and parties is to host parties on the private and unlicensed property.

But, you need to have authorization from the property owner without having paid any commercial transaction. This means no ticket sales or donations, no sale of alcohol or cannabis, no membership fee. But, how you control social media influencers is very vital.

Products Containing Alcohol & Cannabis

The Department of Public Health’s emergency regulations prevent the infusion of alcoholic beverages with cannabis, but notably excludes “tinctures”, without defining the term. As per the Alcohol and Tobacco Tax and Trade Bureau Hemp Policy, the products containing hemp, cannabis and alcohol are difficult to manufacture because for the production of these products, you need to have both alcohol and cannabis licenses.

It is next to difficult to produce these products legally because of the involvement of many regulatory agencies namely DEA, TTB, FDA, FTC, among your state and local agencies. This is the reason why most products available in the market have varying shades of gray and are all set to defend their legal position in the court. This also stands true for the retail locations who want to sell products whose alcohol and cannabis are the main ingredient.

Marketing and Brand Partnerships Of Alcohol and Cannabis Products

The last topic in the limelight is the use of marketing partnerships to leverage alcohol-related brands in the cannabis industry. The strategies the marketers can adopt to build brand awareness in the alcohol industry includes co-marketing efforts, influencer campaigns on social media, brand partnerships at events to IP licensing arrangements.

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Gone are the days when US cannabis culture was considered anti corporate. With the spread of legalization, the cannabis industry is seeking the attention of the legal authorities as well as big corporations. No sooner, there will be and end of Prohibition and a new era of rational regulation of mixed use substances will kickstart. However, the risks associated will not end any time soon, but it is the moral duty of an individual to understand their respective tolerance levels. As always, it is recommended to consult your legal counsel if you’re planning to invest and make your place in this space of CBD.

Ivan Green
About Ivan Green 1 Article
Ivan Green is a Tulsa-based writer and graduate of Tulsa Community College. He's a contributing writer to cannabisherald.co & writing about Cannabis since 2014. When not writing about cannabis, he enjoys watching Wheel of Fortune and reading biographies. Contact: ivan@cannabisherald.co

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