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Perspective from a Pernod Lawyer

There is lots of focus on what the craft people are up to, and certainly there is much movement in that regard. But here we turn back to the big companies, and how they see things. Artisan Spirit magazine recently published my email interview with Tom Lalla. Tom was the head lawyer at Pernod for many years. An excerpt is below, and you can find the full article at the link.

Who were the legendary beverage lawyers before you, and what made them so?

The outstanding, legendary beverage lawyer of the past few generations was Abe Buchman. I worked with Abe and his firm for 10 years and then continued to work with him when I joined Pernod Ricard. Abe was a mentor and a role model for tireless devotion to the industry. Abe taught me the necessity of finding practical solutions for our clients’ issues.  Sometimes, as lawyers, we lose sight of being practical. We get hung up in the legal niceties of an issue. What Abe stressed was that we find a solution that was practical for the client and accomplished the client’s goals without running afoul of the legal requirements. Another legend was Bill Schreiber.  I had the pleasure of working with both Bill and Abe when the Buchman and Schreiber firms merged in 1986. Having both Abe and Bill together in the same office was a beverage alcohol lawyer’s dream come true. With so much shared knowledge about the law, the industry, and its players and so many exciting projects being worked on by them, it was a unique moment in my career.

Very few other people have a vantage point as good as Tom’s, after many decades building Pernod, and working at a top law firm specializing in alcohol beverage matters.

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Crafty, In a Good Way

I heard about this on the radio this morning, on the way in. Apparently it’s illegal to allow farms, or picking fruit for free, on New York City lands — so these guys put it on a barge. It struck me as pretty crafty. That is, crafty in a good way.

The rules say:

Public foraging and policy
According to the New York City Parks Department

No person shall deface, write upon, injure, sever, mutilate, kill or remove from the ground any trees under the jurisdiction of the Department without permission of the Commissioner.

No person shall deface, write upon, sever, mutilate, kill or remove from the ground any plants, flowers, shrubs or other vegetation under the jurisdiction of the Department without permission of the Commissioner.

Swale says:

Because of the common laws of New York City’s waterways, Swale is able to act as a test case as an edible public food forest. Swale is built atop a barge that was once used for hauling sand to construction sites before it was re-purposed for growing food.

We are always on the lookout for what is crafty, in a good way. A CBS story on this is here. I wonder how well an alcohol beverage operation would fare with a similar sleight of hand.

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CBD Update

TTB approved this label July 18, 2017. There are very few other TTB labels that mention CANNABIS and SATIVA. Perhaps this product has hemp seeds, along the lines of this 2014 label approval. Then again, perhaps the Lithuanian product merely tastes like hemp or cannabis, as a literal reading of the label would suggest.

Though I see a few signs of cannabis and hemp, in recent approvals, I am not seeing any that mention CBD (aka, cannabidiol). CBD is one of many cannabinoids in cannabis; it is usually viewed as not intoxicating, though it may have various other impacts on brain function. This April 20, 2017 article does a good job of explaining about the barriers to seeing CBD in an alcohol beverage product, or on the label.

Although Dad and Dudes (“D&D,” the Colorado brewer) probably wanted to market something along the lines shown in the photo above, the actual federal approval is quite a bit less adventurous, as in the label image here.

The text near the green arrow, on a related approval, tends to show that D&D grudgingly banished the “additive(s)”.

The article says D&D:

will be fighting the federal government over a beer brewed with non-psychoactive CBD. …

Last September, Dad & Dudes was the talk of the town when it became the first brewery in the country to gain approval from [TTB] for a non-THC, cannabis-infused beer. The process took about a year, because the TTB required a thorough analysis of the ingredients and the recipe before it would give formula approval for Dad & Dudes’ patent-pending process and its beer.

[D&D] then announced plans for a new beer, General Washington’s Secret Stash, which would be brewed with cannabidiol — a hemp extract also known as CBD — and distributed in [a few states].

But on December 14, the U.S. Drug Enforcement Administration surprised the hemp and cannabis industries nationwide by declaring that it still considered marijuana derivatives like cannabidiol and hemp extract — even the non-psychoactive ones — to be Schedule 1 substances, just like marijuana. The announcement meant that these substances couldn’t be sold or carried across state lines, even if they are legal in some states.

It also meant that the TTB, which had granted formula approval to Dad & Dudes, no longer wanted the brewery to make the beer. The bureau gave the brewery ten days to surrender its formula.

TTB’s hemp-related policy is here and seems to date all the way back to 2000, a startlingly long time ago, in view of all the change swirling around these issues. DPF’s Lex Vini blog provides a good reminder about why it would not be prudent to plow ahead and make such products, before the policy gets thrashed about or modified:

California newspapers have recently reported on in-state breweries and wineries that are making CBD-infused products.  Given TTB’s treatment of Dad & Dudes Breweria, however, it is clear that the federal government believes that any such product requires a TTB-approved formula.  Moreover, given recent statements by the U.S. Attorney General, it seems unlikely that the current administration would permit TTB to grant formulas for the production of a product that involves the infusion of a Schedule I drug.  Producers engaged in making CBD-infused alcohol products absent a formula may be putting their federal licensing at risk until such time, at least, as the DEA changes its mind about the classification of marijuana extracts.

Watch this space for changes to the U.S. CBD policies.

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Powdered Alcohol is Not Dead

Just when we least expected it, here is another version of powdered alcohol. It got approved a couple weeks ago, after grinding through the process for a good long while (six months or more). Many thanks to an astute reader for pointing this out to us. The label raises a boatload of legal issues. Before wading into those issues, I’d like to ask who has seen powdered alcohol out in the wild, at retail? Who has tried it? The product is Lieutenant Blender’s Cheat-A-Rita, from a distillery in Texas. Much more coverage, of powdered alcohol and Palcohol, is here.

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Gluten

We wanted to check in and see what’s been happening with gluten claims, in connection with alcohol beverages. LabelVision data shows virtually no references to gluten until 2012. Then, TTB approved the first label with a nice, clear reference to “gluten free.” That label is below (potato vodka, brand name Spud). After rapid growth, from 212 to 2016, the gluten references seem to be leveling off, so far in 2017, at about 2016 levels. TTB’s policy is here (TTB Ruling 2014-2, Revised Interim Policy on Gluten Content Statements in the Labeling and Advertising of Wine, Distilled Spirits, and Malt Beverages).

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