StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions
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StateWays | www.stateways.com | May/June 2017 12 REPORT tr i p an independent supplier, and offered at the same price as the original brand. Wolf cautioned control states to remain wary of support from big box stores for privatization. "Costco and Kroger are who brought privatization about in Washington State," he says, "Not necessarily in a way that was benefi cial to the consumer, but benefi cial to them." When Washington State privatized fi ve years ago it was "the best thing that ever happened to us," says Jesse Sweet, director of administrative policy and process at the Oregon Liquor Control Commission. "Sales spiked at all our border stores." CANNABIS COMETH Eight states and Washington, D.C., have legalized recreational cannabis. All have turned to state liquor offi cials for help with oversight and regulations. But are the two industries really that similar? "It isn't as simple as a wholesaler picking up a fi nished prod- uct and then bringing it from point A to point B," says Sweet, who now spends "70-80 percent" of his time dealing with can- nabis after the state's 2015 vote to legalize. "Marijuana is an ag- ricultural product. And producers in Oregon don't always have the suffi cient 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 specifi c needs for tempera- ture, and for security because there's so much cash involved." ARBITER OF INNOVATION Managing innovation means deciding which new products are suitable for market. For alcohol regulators, that has recently meant judging the merits of al- ternative-consumption products. "Palcohol" — literally powdered alco- hol — is the most famous of these. Met with protest over obvious risks, it never took off. But other alternatives like spiked seltzer have made it to market. "I think these can be easily accommo- dated because the consumer is interested and the ABV is in the same range as a beer," says Maggie Ozarowski, chief attor- ney, Florida division of beverages and tobacco. "Who would be harmed?" What about alcohol popsicles and ice cream? "It could be in your best interest to say, 'These could end up in the wrong hands with children,'" Ozarowski says, "and 'Who would actu- ally sell that?'" • "YOU CAN'T JUST TOSS CANNABIS ON THE BACK OF THE BEER TRUCK. THERE ARE SPECIFIC NEEDS FOR TEMPERATURE, AND FOR SECURITY BECAUSE THERE'S SO MUCH CASH INVOLVED." —Jesse Sweet, director of administrative policy and process, Oregon Liquor Control Commission Themes at the event included innovation, embracing modern trends and upholding safe consumption practices.