San Francisco’s Black Hammer Brewing was ordered by the TTB to cease production of all of its CBD beers. The TTB requires special approval for any non-standard beer ingredients, which the brewery did not receive. Plenty of materials that are food-safe aren’t on that list, so breweries will often apply for special approval of their formula when they want to use one. Hemp is not on the list. Nor are terpenes, the compounds that Black Hammer uses to imbue beers with that cannabis flavor. The hemp-derived CBD does not have any flavor on its own. Black Hammer intends on complying with the TTB regulations, and has already begun the process of applying for approval for hemp so that it can resume CBD brewing. In the meantime, the brewery can sell the CBD infused beers that it has already produced.

The Small Business Administration (SBA), a United States government agency that provides support to entrepreneurs and small businesses, recently made things harder for loan seekers with even a remote affiliation to the marijuana industry. Previously, SBA refused to grant government backed loans to businesses with direct involvement in the  industry, even if the business was legal under state law. Now, according to a CNBC report, the new SBA rule goes much further and also precludes lending to any firm that is even indirectly doing business with a marijuana-related operation, significantly expanding the number of businesses no longer eligible for SBA-backed loans. The rule defines such a business as one that “derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to support the use, growth, enhancement or other development of marijuana.” In Places like Colorado and California, where marijuana-related operations comprise such a substantial part of the economy, many otherwise legal business operations may now be ineligible for SBA loans.

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The Alcohol and Tobacco Tax & Trade Bureau (TTB) continues to make its presence known in the unfair trade practice arena. The TTB has accepted a $900,000 offer in compromise from Warsteiner Importers Agency Inc. for alleged violations of the trade practice provisions of the Federal Alcohol Administration (FAA) Act. The allegations include violations of 27 U.S.C. 205(a) (Exclusive Outlet), 27 U.S.C. 205 (b)(Tied House), 27 U.S.C. 205 (c) (Commercial Bribery), and 27 U.S.C. 205 (d) (Consignment Sales). With the increased resources allocated to the TTB, it’s evident that enforcement of the unfair trade practice provisions remain a top priority. For basics on pay-to-play violations, see this article.

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