Marijuana Business Magazine September 2019

Marijuana Business Magazine | September 2019 42 P rohibition doesn’t work and causes more problems than it solves. So, why are some members of the hemp industry looking to repeat the boneheaded decisions made in the wake of alcohol prohibition? A recent Tennessee alcohol dispute has some important lessons for the entire cannabis industry. Lessons From Liquor The alcohol case arose from a quirky Tennessee law that probably made sense eight decides ago, when federal alcohol prohibition ended. Tennessee required liquor store owners to be state residents for two years, all in the name of protecting Tennesseans from unscrupulous out-of-state corporations. Sound familiar? The law came under fire in 2016, when a Utah couple applied for a liquor store retail license. The Tennessee Wine and Spirits Retailers Association, an industry group, fought the application, point- ing to the decades-old residency requirement. Tennessee followed the law and rejected the application, and the out-of-state couple sued. The case grabbed the attention of the U.S. Supreme Court, which voted 7-2 to throw out the residency requirement, citing a violation of the Commerce Clause. A residency requirement to own a liquor store “blatantly favors the state’s residents and has little relationship to public health and safety,” Justice Samuel Alito wrote in the June 2019 decision. Hemp Protectionism The Tennessee case is a milestone for the liquor industry, which is still deal- ing with a confusing maze of state and local particulars when it comes to making and selling alcohol. I think the case holds important lessons for hemp, too. That’s because federal hemp legalization is showing some eerie similarities to alcohol legalization. The 21st Amendment, ratified in 1933, made alcohol legal but also gave states discretion to limit the industry however they chose, result- ing in blue laws that prohibit sales on Sundays in some states and allow grocery stores to sell beer (but not wine or spirits) in others. Again, sound familiar? The 2018 Farm Bill, which legalized hemp, also calls for states to take the lead on how to regulate hemp. Limiting Competition Many in the hemp industry like the idea of states, rather than federal agriculture authorities, running the show. After all, the federal government has a track record of stymieing cannabis at every opportunity, while some states have embraced the industry. To Move Ahead, Remember the Past Hemp Notebook | Kristen Nichols There will be industry consolidation, sure, but that could be a good thing for small producers who’d rather grow hemp and leave it to someone else to market and sell.”