What Can the Cannabis Industry Learn from the Repeal of Alcohol Prohibition?

Cannabis businesses will have to quickly pivot when federal prohibition ends so they can comply with new laws and regulations. Understanding alcohol laws and regulations is a good way for businesses to prepare for this.

The quick history

  • 1920: The 18th Amendment to the US Constitution was implemented – which banned the manufacture, transportation, and sale of intoxicating liquors.

  • 1933: The federal government ended the prohibition on manufacturing and selling alcohol consumer products and implemented a system of comprehensive federal regulation.

  • The 1930s-60s: The federal government turned its sights on the prohibition of marijuana and effectively prohibited the sales of cannabis products.

  • 1970: As part of his “War on Drugs,” President Nixon insisted cannabis be temporarily placed in Schedule I – the most restrictive category of illegal drugs – pending results from the studies of cannabis by the commission he created. 

  • 1972: Nixon’s National Commission on Marijuana and Drug Abuse recommended that cannabis prohibition end and that it be removed from Schedule I. He disregarded the results from the commission.

  • Today: Cannabis remains a Schedule I classification over 50 years later, along with heroin and cocaine. Meanwhile, only 10 states remain where cannabis is illegal, and multiple efforts are underway to overturn federal prohibition.

So when prohibition is overturned, what can the cannabis industry learn from what the alcohol industry went through?

The significance of US alcohol regulation

The system of alcohol regulation that was implemented over 90 years ago has been so successful that the basic framework of the system remains in place today. 

Every comprehensive cannabis reform bill in Congress proposes that the same federal regulatory agencies that regulate alcohol would implement and oversee federal cannabis compliance. Federal licensing, taxation, trade practice rules, and more already exist for alcohol and tobacco, and they can be easily applied to cannabis. 

This means it’s essential for those in the cannabis industry to understand these existing federal systems because when prohibition ends, there will be a short window to comply. So it will be critical for cannabis businesses to quickly adjust their operations to comply with new laws and regulations. 

Cocannco’s role in compliance

As a public accelerator firm specializing in cannabis, Cocannco aims to discover and invest in proven cannabis companies ready to scale. With Cocannco’s __ collective years in finance and compliance, these businesses are positioned for success both in the pre-repeal market and the post-prohibition market. 

Want to learn more about investment opportunities with Cocannco?

Schedule a call here.

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