Don’t Let Incompetent Wine Wholesalers Kill Cannabis

If there is one thing you can reliably count on in the same way you can count on the sun rising and setting, it is the leadership of America’s wine and spirit wholesalers disregarding what’s good for the marketplace and consumers and landing on a policy that primarily benefits them. A corollary to this fact of life is that this same booze wholesaler leadership will cast their self-serving positions in the guise of societal good.

So, it’s no surprise that the Wine & Spirit Wholesalers Association has declared its support for Cannabis legislation under the condition that wholesalers be given a legal mandate that all cultivators MUST sell only to them and all dispensaries MUST only purchase their inventory from them.

Try to imagine Google announcing that they are all in favor of social media services like Twitter and Facebook, but only if Facebook pages and tweets are accessed via a Google search. The WSWA’s position is just that insane.

Moreover, the WSWA insists that the federal government cede all regulatory interest in the product to the states. Finally, they insist that their support for cannabis legislation is dependent upon rules that prohibit interstate direct to consumer shipping of the product.

It’s worth noting that this system of product regulation has resulted in one of the most inefficient, anti-consumer, litigation-prone marketplaces ever created in the United States: The alcohol sale and distribution market—which is controlled by wholesalers due to the implementation of the very same system they endorse for cannabis sales.

Lacking a willingness by Congress to endorse legal recreational sales of cannabis, the legalization process will proceed on a state-by-state basis. In doing so, you have little chance of interstate sales of the product. However, that does not mean states should or will impose a strict three-tier system of cannabis sales that put middlemen in charge of cannabis distribution. In fact, unless a state is willing to make grower and dispensary success difficult and in the process lift up the black market, they should make use of wholesalers and middlemen entirely voluntary.

Look how badly alcohol wholesalers screwed up Cannabis distribution when they got their way and were given control in Nevada.

I’m on the record as stating that in the end Cannabis legislation will harm the wine industry by cutting into its sales. Of this, I have no doubt. However, I support Cannabis legislation for any number of good reasons, not the least of which the stuff is pretty likable.

However, making the cannabis market in the image of the alcohol marketplace will lead to corruption, rent-seeking by middlemen, higher prices, and control of the industry by a cabal of incompetence. 

 

Posted In: Cannabis

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2 Responses

  1. Guy Azera - July 13, 2018

    I am a wine distributor and I can assure you that it would be a big mistake if the distribution of Cannabis was controlled by the Wine and Spirits “industry”.
    Not only this wouldn’t be a benefit for the N consumer in terms of service and selection as previously seen in Nevada or in any other markets where the big distributors controlled most of the brands. The N consumer ends up by paying more money as the lack of competition allows the big distributors to charge higher pricing.
    More importantly the big distributors are the only able to pay lobbyists to promote bills that would help them have a monopoly on the Cannabis distribution, allowing them to overcharge the end user.
    With this mind and for the State to collect their taxes, a licensing structure can be set in place to allow an orderly distribution with accountability by everyone involved.

  2. VVP (veux, veux-pas) - July 13, 2018

    Proverb says: Don’t judge others by your own faults.

    At least three things really bother in this article:

    Not the nearly 3000 or more wholesale distributors in US, but two cartels and WSWA sponsors want to control market in every state.

    While there thousands and thousands of alcoholic liquor brands and hundreds types and flavors, how many of those in tobacco? How many brands, types and flavors expected to be for cannabis? Cannabis and cannabis lite? Cannabis by Phillip Morris and cannabis by BAT?

    The alcohol sale and distribution is controlled by states in their own borders and by Congress in Interstate Commerce. The quality and safety of alcoholic beverages is controlled by TTB. Nothing is controlled by WSWA and two its sponsors, despite they truly believe in contrary.

    Your “imagine Google…” scheme was practically used in the recent 75th Annual Convention & Exposition in the same Nevada where all, no exception producers, importers, wholesale distributors, etc. were mandated to register send all their products for exhibition strictly through two WSWA major members, SGW&S and Breakthru.

    We are still waiting for the answers from Hawaii conference, Tom! (see email)


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