What will we talk about today? 1.Federal policy issues 2.American Retail Alcohol Environment...
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Transcript of What will we talk about today? 1.Federal policy issues 2.American Retail Alcohol Environment...
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Creating a Stronger
Independent Retail Alcohol Community
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What will we talk about today?
1. Federal policy issues2. American Retail Alcohol
Environment 3. Cannabis, Marijuana, Pot,
Weed, Grass, Reefer, Ganja, Herb, Mary Jane
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You’re in Washington, DC so…
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…Let’s Talk Policy!
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Legislative Win – Estate Tax Repeal
• On April 16, the House passed the Death Tax Repeal Act (240-179)
• First time in 10 years the House has voted on repeal
• Sen. John Thune (R-SD) companion bill (S. 860) – Currently 38 cosponsors
• Repeal has always been a goal
• Thanks to ABL members who contacted their legislators
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Legislative Win – 40 Hours is Full Time
• In January, the House passed the Save American Workers Act (H.R. 30)– Restores definition of “full-time”
to 40 hours from 30 hours
• Bipartisan, commonsense bill – Reps. Todd Young (R-IN) – Dan Lipinski (D-IL)
• Senate legislation (S. 30) introduced
• “Future News”– Could be part of negotiations for
federal minimum wage increase
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Alcohol-Related Transportation Policy
• MAP-21 expires Sept 30 ‘14 July 31 ‘15 Dec 31 ‘15;
• Transpo bill is used to shape alcohol-related traffic policy– Ignition Interlocks; Repeat Offender– Incentives vs. Sanctions (i.e. unfunded mandates)
• Impaired driving bills– No D-DROP Act…yet– Marijuana-impaired and distracted driving bills introduced – NHTSA: "DADSS has enormous potential to prevent drunk
driving in specific populations such as teen drivers and commercial fleets, and making it an option available to vehicle owners would provide a powerful new tool in the battle against drunk driving deaths,"
• What we support– Opposing drunk driving without condition. “Period.
Full stop.”– Targeted enforcement for high-BAC and repeat offenders – Long-term solutions, assessment & treatment – Adjudicatory discretion for judges and DUI courts
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UPDATE - 0.05% BAC• 1 state has a legislative initiative
in 2015– New York – Lowers the blood alcohol
concentration required for DWI from 0.08 to 0.06
• There has been no federal 0.05% BAC legislation introduced at this time.
• Industry Letter to Congress in Dec. 2015– “the entire industry supports the
enforcement of 0.08 while at the same time uniformly opposing 0.05.”
– Signed by ABL, Beer Institute, DISCUS, NABI, NBWA, Presidents’ Forum, Wine Institute, WSWA
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Music Licensing• Perpetual Issue for Licensees –
Especially on-premise• Fairness in Musical Licensing Act
(1998)• Music & Copyright reform being
discussed in Congress• DoJ report on Consent decrees
– ABL letter August 2014• What we support
– Fair, transparent & predictable process of setting rates
– Reasonable standards of measurement for performance space
– More affordable and local process for fee disputes
– Online mechanism for fee disputes
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Marketplace Fairness• Marketplace Fairness would…
– Allow states to collect sales tax on remote sellers
– Level the playing field for brick & mortar retailers
– Allow communities to collect taxes already owed; It is not a new tax
– Senate bill has 22 cosponsors; bipartisan
– Previous version passed Senate 69-27• Why do we care?
– Remote sellers of beverage alcohol can gain a 5-10% price advantage over stores by not collecting sales and excise taxes
• What we support– A workable solution for Marketplace
Fairness
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Other Federal Issues• TTB Funding
– Broad industry support to fund TTB
• FET on Alcohol– Oppose federal excise tax increases; Industry
works in coalition to oppose tax increases;
• Swipe Fee Reform– Protecting reforms; Foster a competitive market
for credit card swipe fees
• S-corp Tax Structure– Protecting small businesses in the tax reform
debate
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American Retail Alcohol Environment
FRAMING THE DEBATE…• Who should be able to sell alcohol?
– Over 21? Over 18? Corporations? Producers? Wholesalers?
• What kind of alcohol should be sold?– Powdered? FMBs?
• When should alcohol be sold?– Sundays? 24 hours a day?
• Where should alcohol be sold?– Gas? Grocery? Pharmacy? Barbershops? Food trucks?
• How should alcohol be sold?– Online? In what containers? At what price? At what
temperature?• How should these questions be
addressed?– In legislatures? In court? At the ballot box? Locally?
• What does this mean for current stakeholders?– Public attitudes toward “convenience”; government,
technology
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Sturm und Drang• Balance between the normalization of beverage
alcohol and the regulation of it– EX: Beer with lunch v. Open 24 hours
• Access is good and/but licensing structures exist for a reason
• Innovation is good and/but Three-Tier exists for a reason
• Sensible market regulation where alcohol is celebrated & respected – not demonized – is not antithetical to growth, social responsibility and consumer satisfaction
• Pressure on the Three-Tier System:– Where is it coming from? Producers ? Wholesalers?
Retailers? OTHER?– NOTE: Most retail licensees just want to be licensees
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The Game Has Changed/Is Changing
Used to be… Are now… Will be…
ID “Card hard” ID bookApp-based technology e.g. Intellicheck AgeID
Menu Chalkboard PrintedTablet e.g. iPad
Product Selection
Food & drink pairing suggestions
Drink menu & mixologists
???
Health "Light" "Diet" "Low-Fat"Government-mandated menu labeling
“Quantified self”e.g. Alcohoot
Entertainment
Satellite dishFlat screens & sports packages
Interactive, web-based e.g. Google Hangout
Technology Interactive kiosks/games Free Wi-Fi Charging stations
Responsible Service
Server Training ProgramsWritten Safety & Security Policies
Incentive & Civil Penalty Programs
Drunk DrivingServe food with drinks/“one for the road"
SafeRide programs & designated drivers
Ride-sharing servicese.g. Uber/Lyft
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Retailers’ Role in the Hospitality Industry
• Last to handle products– Closest to the customer; – Greatest influence on how
beverage alcohol is enjoyed;– Check more IDs every day
than most law enforcement officers
• Main Street businesses– Accountable to local
communities;– 703 ABL members have a
physical address of “Main Street”
• Responsibility– Lose your license, lose your
business.
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Collaboration & Building AlliancesRegulators• Create a relationship before a problem
occurs
Government• Establish and maintain relationships with
those in power
Law enforcement• Meet to learn more about enforcement
priorities/issues
Community Groups• Identify areas for collaboration
Charitable Organizations• “We support those who support us.”
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What does the future look like?
Is this a car dealership or an auto manufacturer?
Is this a bar or a tasting room?
Is this a tech company or a car service?
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What questions should we be asking?
• What are successful disrupters focusing on?• Tech savvy, millennial consumer traits, mobile device
culture, fissiparous industries and unconventional partners
• Can an industry’s technology be separated from its regulation?• HMMMM…We’ll find out sooner rather than later; check
back with me in 5-10 years.
• Can the rules change in the middle of the game?• YES. The current political, social and technological climate
has an impact on how decision makers and consumers view regulations and laws.
• What lessons can beverage licensees learn from economic disrupters?
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It’s Happening…Legalized Marijuana
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Public Opinion…Legalized Marijuana
Source: Pew Research Center, March 13-17, 2013
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Federal Issues…Legalized Marijuana
• Congresso 2015 Federal Legislation
o Respect State Marijuana Laws Act (H.R. 1940) o Regulate Marijuana Like Alcohol Act (H.R. 1013) o Marijuana Tax Equity Act (H.R. 1014) o Compassionate
Access, Research Expansion, and Respect States Act (S. 683)
o Making Medical Marijuana Legal Under Federal Law (H.R. 1538)
o Veterans Equal Access Act (H.R. 667)o 2014 amendment to “Cromnibus”:
“None of the funds made available in this Act to the Department of Justice may be used, with respect [states with medical marijuana laws], to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.”
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Federal Issues…Legalized Marijuana• Administration
o DOJ “trust but verify” policy:8 enforcement priorities (no sales to minors, interstate trafficking, cultivation on public lands, profits to cartels, presence of guns, drugged driving, other narcotics, possession on federal property)
o Treasury’s FinCEN guidance:3 new classes of Suspicious Activity Reports (SAR) for cannabis
o Attorney General nominee Loretta Lynch: “I can tell you that not only do I not support the legalization of marijuana, it is not the position of the Department of Justice currently to support the legalization. Nor would it be the position should I become confirmed as attorney general.” (1/28/15)
“I don’t think it is more dangerous
than alcohol.”President Obama
talking about marijuana
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• Marijuana Primary – Who said it?
Federal Issues…Legalized Marijuana
#1 "I'm a big believer in acquiring evidence, and I think we should see what kind of results we get, both from medical marijuana and from recreational marijuana, before we make any far-reaching conclusions.”
#2“States should be able to set their own policies on abortion, same-sex marriage and marijuana legalization.”
#3“I don’t think legalizing marijuana or even decriminalizing it is the right decision for our country.”
#4“I think legalizing marijuana is the wrong thing to do from a societal perspective, from a governmental
perspective.” #5“So if your kid was caught selling marijuana or growing enough that it’s a felony conviction, they could be in jail for an extended period of time. They also lose their ability to be employable. So I want to change all of that.”
#6“It may be something that resonates in the future, but I just don’t see any movement for it right now.”
#7“I think that states ought to have a right to decide these things. I think the federal government’s role in our lives is way too-overreaching. Maybe, the federal law needs to be looked at — interstate commerce.”
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• Marijuana Primary – Who said it?
Federal Issues…Legalized Marijuana
#1 HILLARY CLINTON"I'm a big believer in acquiring evidence, and I think we should see what kind of results we get, both from medical marijuana and from recreational marijuana, before we make any far-reaching conclusions.”
#2 RICK PERRY“States should be able to set their own policies on abortion, same-sex marriage and marijuana legalization.”
#3 MARCO RUBIO“I don’t think legalizing marijuana or even decriminalizing it is the right decision for our country.”
#4 CHRIS CHRISTIE“I think legalizing marijuana is the wrong thing to do from a societal perspective, from a governmental
perspective.” #5 RAND PAUL“So if your kid was caught selling marijuana or growing enough that it’s a felony conviction, they could be in jail for an extended period of time. They also lose their ability to be employable. So I want to change all of that.”
#6 SCOTT WALKER“It may be something that resonates in the future, but I just don’t see any movement for it right now.”
#7JEB BUSH“I think that states ought to have a right to decide these things. I think the federal government’s role in our lives is way too-overreaching. Maybe, the federal law needs to be looked at — interstate commerce.”
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What do States say? (Hint: YES)
55% - 45%
56% - 44%
52% - 48%
56% - 44%
70% - 30%
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• STATESo 5 – Recreational – AK, CO, DC, OR, WAo 24 – Medicinal – AK, AZ, CA, CO, CT,
DC, DE, HI, IL, ME, MD, MA, MI, MN, MT, NV, NH, NJ, NM, NY, OR, RI, VT, WA
o 12 – Obtaining 2016 ballot access – AZ, AR, CA, GA, ME, MA, MS, MO, MT, NV, NM, WY
o 5 – Marijuana Policy Project campaigns – AZ, CA, MA, ME, NV
• PEOPLE– 17.6 million – Americans in jurisdictions
with legalized recreational marijuana use (5.6% of pop.)
– 91.5 million – American in jurisdictions that could legalize recreational marijuana use in 2016 (28.9% of pop.)
I was told there’d be no math…Legalized Marijuana
- 109.14 million – Americans potentially in jurisdictions with legalized recreational marijuana use after 2016 (34.5% of pop.)
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Regulatory Parameters…Legalized Marijuana
PUBLIC SAFETY• Restrict access and availability• Manage license acquisition• Prevent underage access/use• Address abuse, addiction, DUID,
workforce productivity• Consider related crime; black and
gray markets• Plan Enforcement: Resources,
training, testing
PRODUCT SAFETY• Ensure product quality controls
and standardization, labeling, handling
• Testing edibles, liquids, etc
FINANCE• Banking options• Optimize tax revenues
ECONOMICS• Supply chain: Production,
Processing/Distribution, Retail• Demand & consumption – Who?
What? When? Where?
GOVERNMENT• Federal: DOJ, Treasury guidelines• State: Cross-border sales;
enforcement• Local: Abide local option rules
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Regs Compared…Legalized Marijuana Alaska Colorado Oregon Washington
RegulatorAlaska Alcoholic Beverage Control Board
Colorado Department of Revenue
Oregon Liquor Control Commission
Washington Liquor Control Board
Local Option Yes Yes Yes Yes
IntegrationProducers; Wholesalers; Processors; Retailers
Vertical integration allowed
Producers; Processors; Wholesalers ; Retailers
Producers; Processors; Retailers
Taxes $50/oz. 15% excise; 12.9% salesExcise: $35/oz of buds; $10/oz of leaves; $5/immature plant
25% excise at each level
Retail Outlets TBD Unlimited TBD334 licensed marijuana stores
Possession 21+ Persons: 1 oz;21+ Residents: 1 oz; Non-residents: 1/4 oz.
21+ Persons: 8 oz total; 1 oz in public
21+ Persons: 1 oz; 16 ounces of infused solids; 72 ounces of infused liquids
Home Cultivation 6 plants 6 plants 4 plants Prohibited
Public Use Penalties$100 fine for public consumption
$100 fine for public consumption
$100 fine and up to 15 days in jail for public consumption
DUID Law No per se standard 5ng/ml per se standard"Rebuttable presumption" at 5ng/ml 5ng/ml per se standard
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What do Alcohol Retailers think?
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Three-Tier Systems…Legalized Marijuana
MARIJUANA
Growing/CultivationGrow and cultivating plants for the harvesting of retail marijuana
Production/Processing/WholesaleManufacture and prepare marijuana and marijuana products for retail
RetailSell marijuana to consumers 21 and older
ALCOHOL
ProductionUse natural ingredients to brew, distill and make wine for retail alcohol
Wholesaling/DistributionWarehouse and distribute beer, wine and spirits to retailers
RetailSell beer, wine and spirits to consumers 21 and older
Without a similarly robust system, the marijuana market could present the potential for illicit and unregulated activity akin to that which occurred with alcohol prior to and during Prohibition.
-Wine & Spirits Wholesalers of America
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Opportunity…Legalized Marijuana
• Remember Ron Paul…It’s Happening!
• Demand already outstrips supply and will increase
• Mature regulations mean more market certainty
• State governments like raising revenue without raising taxes i.e. legal gaming
• Opportunities abound, direct and ancillary
.
Note: $162.9 billion total U.S. alcohol sales in 2014
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Challenges…Legalized Marijuana“Regulate marijuana like alcohol”
• Easy analogy, complicated reality• So far, no comingling of retail alcohol and recreational
marijuana sales
Three ways to write a marijuana ballot initiative with regard to alcohol:
• Marijuana can not be sold by alcohol licensees• Marijuana can be sold by alcohol licensees• Marijuana can only be sold by alcohol licensees
• Which one is easiest to pass?
How would the alcohol industry be affected?• Producers and wholesalers have federal permits• Demonization of alcohol by pro-legalization advocates
Federal “wait and see” approach dampens enthusiasm• 2016 Presidential election could change enforcement priorities
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Alcohol Demonization…Legalized Marijuana
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Discussion…Legalized Marijuana• On-premise licenses for marijuana
• These don’t exist…yet
• Dram shop liability• Will there be new dram shop laws for cannabis?
• Backlash• Is there a ballot referendum “wall” that will eventually be hit?
• Marijuana server training • When do you cut off marijuana-intoxicated customers?
• National standard for per se DUID? • Was it the single cocktail or the edible that impaired the “drunk”
driver?
• Field sobriety testing• Will laws require testing for drugs as opposed to just testing for
alcohol impairment?
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Thank You
John Bodnovich | Executive Director | American Beverage Licensees
[email protected] | www.ablusa.org | @ablusa