In mid October the Canadian federal government officially legalized recreational cannabis. As has been reported in this space, the expected success of Canada’s decision can be viewed not only through the level of interest in the financial investment community, but also in the U.S. beverage alcohol community, namely the interest in cannabis across the border shown by U.S. alcohol distributors, producers and brand holders. That success may have already shown itself: reports of supply outages across Canada surfaced just two weeks after recreational pot had been legalized.
Cannabis use restrictions in Canada vary by province—some allow it only in private residences; some allow it in public. But the provinces allowing cannabis use in public generally prohibit its use where tobacco smoking is prohibited, and that restriction probably includes wine tasting rooms.
Meanwhile, in the U.S. the foreseeable future for legalized recreational cannabis remains a state-by-state phenomenon, under an ever present threat of federal crackdown at the whim of the Attorney General, whomever he or she may be now and in the future. And the view of the country’s largest wine-producing state’s bureaucracy—the California Alcohol Beverage Control (ABC)—is that alcohol and cannabis don’t mix.
This past summer ABC issued an industry advisory on the subjects of alcohol and cannabis licenses. Soon thereafter, John Hinman, a founding partner in the law office that specializes in beverage alcohol legislation, Hinman & Carmicael, LLP, told California producers in an email that, “…even though cannabis use has been legalized in California, its sale and use on licensed premises is prohibited. This applies to licensees and customers.”
Straight from item number one of the advisory comes this: “Neither the Alcoholic Beverage Control (“ABC”) Act nor the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) prohibit persons from holding licenses to manufacture or sell alcoholic beverages from holding a license authorized under the MAUCRSA.”
Item number two of the advisory states that a holder of a cannabis license issued under the MAUCRSA “shall not sell alcoholic beverages or tobacco products on or at any premises licensed under this division.”
Conversely, consumers should not expect they can buy or fire up a joint in a wine tasting room, at a winery sponsored gathering, or anywhere on the grounds of a beverage alcohol producer, not according to Section 5026(c) of the Bureau of Cannabis Control (“BCC”) regulations (Title 16, Cal. Code of Regs., section 5026) says: “A premises shall not be in a location that requires persons to pass through a business that sells alcohol or tobacco to access the licensed premises, or that requires persons to pass through the licensed premises to access a business that sells tobacco or alcohol.”
The prohibition that applies to beverage alcohol producers as it relates to selling or allowing cannabis use on its premises shows up in Health and Safety Code section 11362.3, which applies to public places. The advisory states: “Businesses (including premises authorizing the sale or consumption of alcoholic beverages under both retail and non-retail licenses) licensed under the ABC Act are considered “public places” for this purpose (this also includes premises licensed under club licenses, or any other premises to which entry may otherwise be limited). This restriction applies even if the ABC licensee is not exercising the privileges of the license, such as after hours, while closed, or if the ABC license is surrendered or suspended.”
There will be no wine, food and cannabis pairing events in California, at least not in an ABC-licensed facility, and if producers think they have found a loophole by infusing their wine with cannabis, they had better not talk about it, because that is not legal either.
In addition, beverage alcohol producers cannot sell or allow consumers to use on their premises products derived from industrial hemp, even though that product contains no (or an infinitesimal volume of) high-inducing tetrahydrocannabinol (THC). The ABC cites a U.S. Food and Drug Administration (FDA) rule that prohibits interstate commerce of any food to which THC or non-high-inducing cannabidiol (CBD) has been added, regardless of the source (industrial hemp or cannabis).
If you as a consumer decide to light up on the picnic grounds of a California winery not only will you be breaking the law, you’d also put the winery’s licensing in jeopardy. As Hinman wrote in his email, “We are now defending accusations (in more than one county) brought by the ABC seeking license revocation for allegedly permitting patron consumption of cannabis in otherwise legal smoking areas on licensed premises.”