Yesterday, the United Stated Department of Agriculture (USDA) released its interim final rule setting forth the proposed rules and regulations regarding the production of hemp under the provisions of the Agricultural Improvement Act of 2018, or the “2018 Farm Bill.” As mandated by the 2018 Farm Bill, the proposed regulations outline provisions for both the approval by the USDA of State or Indian Tribe proposed plans as well as the development of its own federal plan for the production of hemp in the absence of an applicable approved State or Tribal program.
First introduced in 2013, the SAFE Banking Act just passed the House 321-103. This bill, an exciting and promising development for cannabis advocates, provides safe harbor to banks and financial institutions doing business with state-legal cannabis businesses, and allows cannabis businesses to move away from conducting business exclusively in cash.
Recent cases offer lessons for brewers navigating the often-tricky obstacles surrounding the selection, use and enforcement of trademarks. Whether a brewery is choosing a logo or naming a new beer, the latest decisions highlighted in this article underscore the importance of doing due diligence when it comes to trademarks.
Originally published in The New Brewer, September/October 2019.
Sharp disagreements in the Second Circuit over whether a Connecticut liquor law runs afoul of antitrust law, recently exposed in a bitter dissent, highlight a circuit split that some experts predict will be taken up by the US Supreme Court.
A three-judge panel upheld the law in February by batting down a retailer’s challenge to three parts of Connecticut’s liquor sales law, including a controversial “post and hold” provision that lets wholesalers match each other’s prices. The panel rejected the retailers’ claim that the provision forced wholesalers into illegal price-fixing deals.
“There is a split, and it’s an important area,” said Raymond Jacobsen Jr., McDermott partner, backing the retailer’s view that the “post and hold” requirement creates a clear state-sanctioned violation of the Sherman Act. He said he believes it’s a question that will intrigue the justices.
Originally published on Law360, September 2019.
In August, the US District Court for the District of Columbia issued its final decision in Bellion Spirits, LLC v. United States, Civ. No. 17-2538 (JEB). The Bellion case was brought by spirits company Bellion Spirits after the Alcohol and Tobacco Tax and Trade Bureau (TTB) refused to approve a series of health claims advanced by Bellion in connection with its vodka products. According to Bellion, the infusion of its vodka with a compound called NTX will mitigate the damage alcohol inflicts on human DNA. Continue Reading Court Dismisses Challenge to TTB’s Rejection of Health Claims on Vodka
I. Factual Background
During the 34-day government shutdown occurring between December 2018 and January 2019, producers and importers of beer, wine and distilled spirits needing label approval to bring new products to market were forced to wait until the shutdown was resolved, when TTB could begin again to process COLA applications. The difficulties presented by this situation included the prospect of needing to destroy valuable, perishable inventory.
Unable to obtain a COLA due to the shutdown, Atlas Brew Works (Atlas) filed suit in January in the US District Court for the District of Columbia, challenging the constitutionality of the COLA system. Atlas alleged that the requirement to obtain label approval violates the First Amendment, since, in the event of a government shutdown, the COLA requirement amounted to a prior restraint on protected speech. As the court explained in its opinion, Atlas’s argument boiled down to the claim that “a law that prohibits speech without regulatory approval becomes an outright ban on speech when the approval process is shuttered.” Shortly after the case was filed, the shutdown ended and Atlas received its COLA. The government asked the court to dismiss the case, arguing that it was now moot. After giving the parties several months in which to brief the issue, the court ruled in favor of the government’s motion, finding Atlas’s case moot. Continue Reading TTB Label Approval System Survives First Amendment Challenge from DC Brewery
On August 12, 2019, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published its updated Formula and Process for Nonbeverage Product, TTB Form 5154.1. The Nonbeverage Product approval process is critical to obtain “drawback” (a refund) on most of the alcohol excise tax on distilled spirits used to make such products deemed “unfit for beverage purposes.” The Nonbeverage Formula Form accordingly is important to producers of flavorings and extracts, soft drink concentrates and other non-beverage products made using potable alcohol. Continue Reading TTB Publishes New Nonbeverage Product Formula Form
Cannabis legalization receives widespread popular support. According to opinion polls, more than two-thirds of Americans support full legalization—a steep rise in support considering that as recently as 2005, almost two-thirds of Americans opposed legalization. The country appears on the path to full cannabis legalization, but until that time, citizens and companies should be aware of the legal risks involved in entering the cannabis space.
Originally published in The New Brewer, July/August 2019.
The Food and Drug Administration (FDA) has increased its efforts to follow through on its commitment to provide guidance to stakeholders on the regulatory landscape for products containing CBD. On May 31, 2019, the FDA held a public hearing to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling and sale of products containing cannabis or cannabis-derived compounds. Following the hearing, the FDA established a docket to allow the public to submit additional comments, research and information to the Agency. The docket closed on July 16 and received nearly 5,000 comments. On July 12, FDA Chief Information Officer and Principal Deputy Commissioner Dr. Amy Abernethy confirmed via Twitter that the Agency is “expediting its work to address” questions surrounding CBD and plans “to report on [its] progress around end of summer/early fall.” Due to the significant number of comments to the docket, it remains to be seen whether FDA will provide any material development that impacts the regulation of CBD products beyond a progress report on its review of the docket.
As virtually everyone in the US alcohol beverage industry knows, last week the US Supreme Court handed down its opinion in Tennessee Wine and Spirits Retailers Assn. v. Thomas, S.Ct. No. 18-96 (June 26, 2019). Now that over a week has passed since the release of that decision, it’s time to reflect on what it means and what is coming next. Continue Reading Implications of the Supreme Court’s Tennessee Retailers Decision