Today’s off-premises retail landscape is dominated by large chains that rely on practices generally known as category management to maximize the profitability of their stores. Some of the activities falling under the category management umbrella require close interaction between the retailer and the producers, importers, or distributors supplying them product. As a result of this interaction, the federal Alcohol & Tobacco Tax & Trade Bureau (TTB) last year issued a ruling indicating that industry members’ participation in category management activities could result in a violation of the tied-house provision of the Federal Alcohol Administration (FAA) Act and the TTB’s corresponding tied-house regulations.

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Originally published in The New Brewer, September/October 2017.

To follow up on our prediction last month that the Trump Administration may take a more aggressive stance toward the legalization of marijuana, White House Press Secretary Sean Spicer stated during the February 23 daily briefing that he anticipates greater federal enforcement of marijuana laws.  Spicer emphasized the distinction between medical marijuana (the legalization of which President Trump does not oppose) and recreational marijuana.  In discussing the latter, Spicer invoked the country’s opioid addiction crisis, suggesting a link between recreational marijuana use and such other drugs.

Spicer hinted that the Justice Department’s enforcement of federal drug laws would extend to the nine jurisdictions that have legalized recreational marijuana, potentially putting at risk the schemes many of these states have created–or are in the process of creating–to regulate marijuana.  As of today, the recreational use of marijuana is legal in Alaska, California, Colorado, the District of Columbia, Maine, Massachusetts, Nevada, Oregon and Washington.  (Note:  Congress has blocked the DC government from using funds to actually implement a system to regulate recreational marijuana, so although technically legal, there is currently no “market” for recreational marijuana in DC.)

If President Trump’s Justice Department does begin to pursue more active enforcement of marijuana laws in states that have legalized marijuana, it may meet pushback from Congress.  Just last week, four congressmen announced the formation of the Congressional Cannabis Caucus (the Caucus), a bipartisan organization seeking to change the federal government’s attitude toward legalized marijuana and, notably, to leave the legalization question to the states.  In support of this mission, earlier this month Representative Dana Rohrabacher (R-CA), a member of the Caucus, introduced a bill (HR 975) in the House that would prevent federal enforcement of the Controlled Substances Act (the Act) in states that have legalized the recreational use of marijuana.

Likely by design, the bill’s introduction occurred just a day before the confirmation of Jeff Sessions, a vocal opponent of marijuana legalization, as Attorney General.  The bill would add a new section to the Act expressly stating that the Act’s provisions concerning marijuana do not apply to persons acting in compliance with state law regarding the possession or sale of marijuana.  The bill, titled the “Respect State Marijuana Laws Act of 2017,” has been referred to the House Judiciary and Energy and Commerce Committees.

Of course, whether the bill will gain enough support to pass in Congress and survive a potential Trump veto remains to be seen.  Nevertheless, the timing of the bill’s introduction, the bipartisan support it has garnered to date (half of its current cosponsors are Republicans), and the announcement of the Caucus indicate a growing tension between Congress–including some members of President Trump’s own party–and the Administration with respect to the enforcement of federal marijuana laws.