Control State News January 23, 2019 WV: West Virginia high schools awarded $8,500 Students SAVE THE DATE compete in a contest to prevent underage drinking March 17-19, 2019 License State News 26th Annual Symposium on Alcohol Beverage Law and Regulation CO: The first bill Colorado Gov. Jared Polis will sign is worth Registration is open for NABCA’s 2019 Legal Symposium. a celebratory beer. For program details, travel information and to register online, please click here. HI: New proposal seeks to increase punishments for drunk drivers NABCA HIGHLIGHTS International News The Public Health Considerations of Fetal Canada: P.E.I. to remove personal exemption limits for Alcohol Spectrum Disorders (White Paper) interprovincial alcohol Native American Nations & State Alcohol Policies: An Analysis (White Paper) Public Health News Alcohol Technology in the World of Tomorrow Overeating And Alcohol Use As Different Coping Strategies - (White Paper) Against Negative Emotions In Female University Students The Control State Agency Info Sheets. Please view website for more information. Alcohol-Linked Disease Overtakes Hep C As Top Reason For NABCA Survey Database (members only) Liver Transplant Upcoming NABCA Meetings Consumption of marijuana edibles rises amidst scarce Statistical Data Reports research into their health impact www.NABCA.org Industry News

Obstacles Emerging Regions Must Overcome

Education News The Bond Project: Creating a safer drinking environment Daily News Status of Small Alcohol Suppliers: Still Growing with Bright Spots and Bumps Budget 2019: Why alcohol is likely to get more expensive soon CBS rejects Super Bowl ad for medical marijuana company

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CONTROL STATE NEWS WV: West Virginia high schools awarded $8,500 Students compete in a contest to prevent underage drinking News Release January 22, 2019 Charleston, W.Va. – The West Virginia Alcohol Beverage Control Administration (WVABCA) is pleased to announce the winners of the 6th annual NO School Spirits Public Service Announcement (PSA) contest. • 1st Place-$5,000.00 to Tolsia High School in Wayne County • 2nd Place-$2,500.00 to Berkeley Springs High School in Morgan County • 3rd Place-$1,000.00 to Webster County High School Middle and high school students from across the state submitted a video entry to the WVABCA that addressed underage drinking or drinking and driving. Over 150 students took part in this year’s contest. The first-place winning video will be developed into a television and radio PSA. A grant for $10,000.00 from the National Alcohol Beverage Control Association (NABCA) will allow the PSA to run across the state during prom and gradation season. The winning prize money is provided by State Farm and must be used for a school sanctioned event or school materials. WVABCA Commissioner Fred Wooton said, “Involving our youth in an educational program to address underage drinking can be an effective way to save lives. Our grant sponsors, State Farm and NABCA, allow the WVABCA to deliver this program and reach more students every year.” Contact: Gig Robinson 304.356.5506 – office 304.541.0788 – cell [email protected]

LICENSE STATE NEWS CO: The first bill Colorado Gov. Jared Polis will sign is worth a celebratory beer. Colorado Sun By Jesse Paul, Staffwriter January 23, 2019 The measure — which is expected to get final legislative approval Wednesday — is intended to fix a problem with the law that allowed the sale of full-strength beer in grocery and convenience stores starting Jan. 1. The state’s Liquor Enforcement Division agreed to waive enforcement of the current law to give Colorado lawmakers time to address the problems regarding how beer is made, stored and delivered. “We have a waiver from liquor enforcement until Feb. 1, so we do have to get it down to the governor’s desk,” said House Democratic leader Alec Garnett, a bill sponsor. “And I do believe it will be the first bill that Gov. Polis signs into law.” Colorado lawmakers approved far-reaching legislation in 2016 — and a related bill in 2018 — that expanded full- strength beer sales to grocery and convenience stores. It represented the largest change to the state’s alcohol laws since Prohibition. Prior to Jan. 1, only liquor stores could sell full-strength beer — grocers were limited to 3.2 beer, those brands with 4 percent alcohol by volume or less. NABCA Daily News Update (1/23/2019) 3

But the law didn’t remove the dual licensing rules. So, unless it is changed, brewers would need to segregate a batch of beer headed to grocery and convenience stores from the batches destined for sale at liquor stores. Likewise, a distributor would need to store the beer intended for the two different retail outlets in different spaces at the warehouse — and deliver them separately, too. “Even though it’s under one roof, it would still require (one) on one side and full-strength on this other side — even though you can’t tell the difference,” said Steve Findley, the president of the Colorado Beer Distributors Association, as he toured the Elite Brands of Colorado Warehouse earlier this week. Under Senate Bill 11, the state would consolidate the licenses for beer makers, distributors and importers to eliminate the conflicting rules in existing law. Without it, brewers and distributors said they would need to add production equipment and storage space, making the new law untenable. “That’s what happens when you have three days left in the session and you try to jam through something as complex as the liquor laws that haven’t been touched since Prohibition. Stuff falls through the cracks,” said Mike Pfalmer, the president of RMC Distributing in Colorado Springs. The legislation received unanimous approval in the state Senate and a similar result is expected Wednesday in the House. The governor is expected to sign the measure.

HI: New proposal seeks to increase punishments for drunk drivers KHON 2 By Kimberlee Speakman January 22, 2019 HONOLULU (KHON2) - Representative Chris Lee is proposing harsher punishments for people convicted with Driving Under the Influence (DUI) or who have had their licenses revoked by the Administrative Driver's License Revocation Office for drunk driving. The new proposal would make it illegal for those convicted to buy or drink alcohol for three years. "I talked with a bunch of folks who have had DUIs who have driven drunk in the past. Often just taking away a license or paying a fine isn't enough of a deterrent," said Rep. Chris Lee, who represents Kailua and Waimanalo. "So what we're looking at doing, is for any drunk driving conviction, prohibiting people from going out in public and publicly purchasing alcohol or drinking, to prevent them from actually being in a position where they would be able to drive home drunk again," said Lee. As for enforcing the proposal, licenses will have a special mark alerting retailers to not sell alcohol to the person holding the license. "Creating a designation on a license for example is an easy way to make sure that people are identified when they try to use that identification to buy alcohol. Because that's something that's checked anytime someone wants to buy a drink," said Lee. But attorney David Fanelli says the current proposal has many problems that could cause legal issues in the future. "It's criminalizing a conviction in a sense that it's making it then criminal to consume liquor in public. This raises a host of constitutional issues with the commerce clause," said David Fanelli, an attorney. "Another issue that arises is an invasion of privacy issue where you have to show your ID, and it's going to say 'liquor restricted' on there. There's any number of places where you'd need to show your ID that have nothing to do with purchasing alcohol," said Fanelli. He says even the enforcement would be difficult because it requires help from workers. "People who have liquor licenses are now to police these people the same way they police these people under 21, and it'll be a misdemeanor if they violate it," said Fanelli. NABCA Daily News Update (1/23/2019) 4

As for the specifics of whether the new proposal will make the designation after the first or additional DUIs, Representative Lee says that's still something to discuss in future meetings. You can read the full proposal here.

INTERNATIONAL NEWS Canada: P.E.I. to remove personal exemption limits for interprovincial alcohol The Chronicle Herald January 22, 2019 CHARLOTTETOWN, P.E.I. - P.E.I. is removing personal exemption limits for alcohol in an effort to further break down barriers of trade within Canada. The change, which will allow individuals within Canada to transport any quantity of alcohol into the province for personal use, will be made during the spring sitting of the provincial legislature. Several other provinces have announced they will also remove limits, which will allow provinces easier access to other markets. Finance Minister Heath MacDonald said the province is pleased to join other provinces and territories in eliminating personal trade barriers for alcohol. “This change will contribute to our province’s economic growth, increase consumer choice and will be yet another chance for Island products to be featured and enjoyed throughout new markets across the country.” Currently on the Island the personal exemption limits are nine litres of wine (or a standard case); three litres of spirits; and 24.6 litres of beer (or three standard cases of 24). During the Council of the Federation meeting last summer, Canadian premiers discussed breaking down barriers to trade within Canada. An Alcoholic Beverages Working Group was developed to further explore options and their recommendations included a proposal to increase or remove personal limits on transport of alcohol into jurisdictions.

PUBLIC HEALTH NEWS Overeating And Alcohol Use As Different Coping Strategies Against Negative Emotions In Female University Students Science Trends By David Val-Laillet & Aymery Constant January 22, 2019 High school and university students can be exposed to social, financial, or environmental difficulties during their academic course1. To cope with these issues, some of them might invest time and resources in sport, art, or social activities2, which are recognized to provide beneficial effects in terms of physical and mental health. But many of them also engage in maladaptive coping behaviors3. Amongst these detrimental habits, substance abuse is relatively frequent in students. While men are more at risk for alcohol misuse4, several studies showed that women are more vulnerable to disordered eating5 and are more prone to “emotional overeating,” that is, consuming food as a source of psychological comfort6. Regular overeating or a problematic relationship with food in normal-weight young people could further lead to weight gain7, obesity, and eating disorders8 such as binge eating or food addictions. Characterizing emotional overeating in normal-weight students, especially young women, and understanding its relationship with other individual behavioral features such as alcohol misuse or distress management might improve risk diagnostic and preventive interventions. NABCA Daily News Update (1/23/2019) 5

In an article published in Appetite, researchers from the NuMeCan Institute (INRA, INSERM, Univ Rennes, CHU Rennes, EHESP) investigated, using dedicated questionnaires, the relationship between emotional overeating, physical activity, disordered eating symptoms, loss of control over food intake, and alcohol use in 335 French female university students aged 18-24 years with a healthy body mass index (comprised between 18.5 and 24.9). In this community sample, 68.0% were classified as moderately active, 32.5% had excessive alcohol consumption, and 15.8% were subjected to disordered eating symptoms. Cognitive restraint (i.e. conscious restriction of food intake in order to control body weight or lose weight), uncontrolled eating (i.e. tendency to eat more than usual accompanied by subjective feelings of hunger), and emotional eating (i.e. inability to resist emotional cues) were identified in 31.0%, 37.8%, and 46.5% of normal-weight female students, respectively. Emotional eating consequently represented the preponderant cognitive component in this community sample. A factor analysis on emotional overeating led to the definition of distress-induced overeating, defining overeating in response to anxiety, loneliness, sadness, anger, and fatigue, while a sixth factor, happiness, was analyzed apart. Distress- induced overeating was positively associated with the inability to resist emotional cues, eating disorder symptoms, and loss of control over food intake. It was also negatively associated with moderate and excessive drinking. Even though the proportion of respondents reporting emotional overeating in response to anxiety, loneliness, and sadness was relatively high (45-51%), it is important to highlight that this behavior occurred only during relatively short periods of time (1- to 5-day over the past 28 days). This intermittent coping response to negative emotions consequently appeared under control for a large majority of subjects, but it was aggravated in the minority of students with disordered eating symptoms and correlated with loss of control over food intake. This advocates the need for a systematic screening in normal-weight young students for better management of emerging eating disorders and further weight problems, as previously supported by other studies9,10, and especially in individuals experimenting difficulties to deal with negative emotions. An unexpected result of this work was the negative correlation between distress-induced overeating and alcohol use, meaning that female students engaging in distress-induced overeating were less prone to alcohol misuse, and conversely. The authors suggested that some students experiencing negative emotions might consider alcohol drinking as an alternative coping strategy in replacement of distress-induced overeating, as previously described in the context of anxiety for example11. Interestingly, the replacement of overeating by alcohol was more important with moderate drinking than with excessive drinking. This might be explained by the individual motives and expectations towards alcohol. Moderate drinking is associated with social drinking and is often confounded with pleasurable interactions with peers, which usually increase well-being, while excessive drinking is more related to issues avoidance, impulsivity, social and academic difficulties11,12. Be that as it may, intermittent distress-induced overeating and moderate drinking appear to be considered by female normal-weight students as relatively exclusive ways of coping with negative emotions. The “lesser of two evils” is not easily identifiable, nor the reason for which some individuals might move from these non-pathological coping strategies to more deleterious habits characterized by eating disorder symptoms or excessive drinking. Further research is needed to disentangle the complex relationship between emotion management and food or substance abuse, with the aim to understand why some individuals engage in maladaptive coping strategies and why some others manage to keep under control intermittent overeating or alcohol use. Identifying psychological or cognitive profiles at risk might help in improving screening and care strategies, especially in the context of preventive medicine in the higher education system. This work was funded by the Hed-O-Shift INRA Priority Action of the AlimH Division (Nutrition, Chemical Food Safety and Consumer Behaviour) and coordinated by David Val-Laillet. The Ph.D. grant of Yentl Gautier was provided by INRA and Région Bretagne, France. References: 1. Adams, D. R., Meyers, S. A., & Beidas, R. S. (2016). The relationship between financial strain, perceived stress, psychological symptoms, and academic and social integration in undergraduate students. Journal of American College Health, 64(5), 362–370. 2. Decamps, G., Boujut, E., & Brisset, C. (2012). French college students’ sports practice and its relations with stress, coping strategies and academic success. Frontiers in Psychology, 3, 104. NABCA Daily News Update (1/23/2019) 6

3. Deasy, C., Coughlan, B., Pironom, J., Jourdan, D., & McNamara, P. M. (2015). Psychological distress and lifestyle of students: Implications for health promotion. Health Promotion International, 30(1), 77–87. 4. Verger, P., Guagliardo, V., Gilbert, F., Rouillon, F., & Kovess-Masfety, V. (2010). Psychiatric disorders in students in six French universities: 12-month prevalence, comorbidity, impairment and help-seeking. Social Psychiatry and Psychiatric Epidemiology, 45(2), 189–199. 5. Tavolacci, M. P., Grigioni, S., Richard, L., Meyrignac, G., Dechelotte, P., & Ladner, J. (2015). Eating disorders and associated health risks among university students. Journal of Nutrition Education and Behavior, 47(5), 412– 420. 6. Kandiah, J., Yake, M., Jones, J., & Meyer, M. (2006). Stress Influences appetite and comfort food preferences in college women. Nutrition Research, 26, 118–123. 7. Koenders, P. G., & van Strien, T. (2011). Emotional eating, rather than lifestyle behavior, drives weight gain in a prospective study in 1562 employees. Journal of Occupational and Environmental Medicine, 53(11), 1287–1293. 8. De Young, K. P., Zander, M., & Anderson, D. A. (2014). Beliefs about the emotional consequences of eating and binge eating frequency. Eating Behaviors, 15(1), 31–36. 9. Bourdier, L., Orri, M., Carre, A., Gearhardt, A. N., Romo, L., Dantzer, C., et al. (2018). Are emotionally driven and addictive-like eating behaviors the missing links between psychological distress and greater body weight? Appetite, 120, 536–546. 10. Sanlier, N., Baser, F., Mortas, H., Navruz Varli, S., Macit, M. S., & Tatar, T. (2017). Structural modeling the relationship of food addiction and eating attitudes of young adults with emotional appetite and self-esteem. Ecology of Food and Nutrition, 56(6), 514–529. 11. Brook, C. A., & Willoughby, T. (2016). Social anxiety and alcohol use across the university years: Adaptive and maladaptive groups. Developmental Psychology, 52(5), 835–845. 12. Tembo, C., Burns, S., & Kalembo, F. (2017). The association between levels of alcohol consumption and mental health problems and academic performance among young university students. PLoS One, 12(6), e0178142.

Alcohol-Linked Disease Overtakes Hep C As Top Reason For Liver Transplant KHN By Rachel Bluth January 22, 2019 An estimated 17,000 Americans are on the waiting list for a liver transplant, and there’s a strong chance that many of them have alcohol-associated liver disease. ALD now edges out hepatitis C as the No. 1 reason for liver transplants in the United States, according to research published Tuesday in JAMA Internal Medicine. One reason for the shift, researchers said, is that hepatitis C, which used to be the leading cause of liver transplants, has become easier to treat with drugs. Another could be an increasing openness within the transplant community to a candidate’s history of alcohol and addiction and when a candidate combating these issues can qualify for a liver. For years, conventional wisdom suggested that people with a heavy drinking past who did not have a period of sobriety under their belts would not be good candidates to receive a new liver. But, of almost 33,000 liver transplant patients since 2002 who were studied, researchers from the University of California-San Francisco found 36.7 percent of them had ALD in 2016, up from 24.2 percent in 2002. “Across the country, and we show in a prior study, people are changing their minds,” said Dr. Brian P. Lee, the study’s lead author and a UCSF gastroenterology and hepatology fellow. “More and more providers are willing to transplant patients with ALD.” NABCA Daily News Update (1/23/2019) 7

The debate, roiling for decades, culminated in 1997 when a group of doctors and medical societies and the U.S. surgeon general published a paper that recommended patients with alcoholic liver disease be sober at least six months before they could be considered for transplant. This “six-month rule” became the gold standard. The idea was that a patient who could stay sober for that long had a lower chance of returning to harmful drinking behavior. There was also concern that the public would stop donating organs if they thought livers would be going to people with alcohol addictions. “Neither of those attitudes are based on any facts or data,” said Dr. Robert Brown, director of the Center for Liver Disease and Transplantation at Weill Cornell and New York Presbyterian. The changing attitude plays out at many transplant centers where what once was viewed as a hard-and-fast requirement for six months of sobriety is now more nuanced. Specifically, a team of doctors, psychologists and social workers look at a range of factors, including financial stability and family support, to determine if a patient will relapse after the transplant. An analysis published in 2010 by researchers from the University of Pittsburgh and a 2011 study in France showed that, in any given year, there was little evidence to suggest six months of abstinence before the transplant decreased the chance of relapse. The central point, experts say, does not necessarily come down to a patient’s record of sobriety before the procedure. Foremost is determining that a patient is unlikely to drink again after receiving a new liver — that he or she is “committed to lifelong abstinence,” said Lee. Five years after transplantation, patients who were abstinent for six months and those who weren’t had about the same survival rates, according to Lee’s research. After 10 years, the patients who didn’t have six months of sobriety before the procedure had slightly worse survival rates. Lee said more research is needed to find out exactly why. There is nothing magical about six months, according to Dr. Michael Lucey, medical director of the University of Wisconsin liver transplant program. He said it shows a poor understanding of alcohol abuse as a “very complex behavioral disorder.” “Drinking isn’t a stable phenomenon,” Lucey said. “People with ALD may have long periods of drinking and abstinence.” Although advocates are glad that policy is changing, it didn’t change swiftly enough to save Chelsea Oesterle. Oesterle, who was 24 and had battled alcohol addiction since age 16, went to the emergency room in Peoria, Ill., in 2013, already in liver failure. Doctors told her in the first few days that survival depended on a transplant. When it became clear she wasn’t going to get that transplant, her mother, Terri Oesterle, had her daughter transferred to another hospital, and between both facilities she spent six weeks hospitalized. During that time, she was never put on a transplant list. The stigma around her daughter’s condition was palpable, her mother said. Doctors and nurses lectured her about quitting drinking. “They kept telling her she had to go to rehab,” Terri Oesterle said. “She couldn’t even leave the hospital, how on earth was she supposed to go to a rehab program?” One doctor point-blank asked Terri Oesterle why she thought her daughter deserved a liver over someone else. “She was dismissed from the get-go,” Terri Oesterle said. “It’s just heart-wrenching because she was such a sensitive soul. She was so scared and hopeful.” Chelsea Oesterle died in the hospital July 4, 2013. Alcohol use disorder has often been thought of as a “self-inflicted” disease that results from bad habits or moral failing, Lucey said. That attitude is changing in the medical community, but vestiges remain. “For some people, it’s not accepting that alcohol use disorder is an illness,” Lucey said. NABCA Daily News Update (1/23/2019) 8

While support for the changing approach is growing, Lee, the new study’s lead author, said it continues to be a polarizing issue. “There are still detractors and still strong opposition,” he said. “Our study suggests that is certainly present, because regional differences are disparate.” That troubles Lee, because it means a patient’s life is dependent on the attitudes of local providers, creating an unequal system. There’s “certainly value” in a national policy on the issue, he said. The United Network for Organ Sharing (UNOS), the organization that manages the U.S. transplant list, nearly two decades ago wrestled with the idea of formalizing the six-month rule, but never took final action. As a result, some centers have such a sobriety rule, others don’t. And even when a transplant center gives its approval, insurers often have their own set of requirements about how long a patient must be abstinent before they will cover the transplant. Dr. David Klassen, chief medical officer for UNOS, agreed that the “rule” is arbitrary and not evidence-based, but said that it should be up to transplant centers to decide who gets listed for an organ. “From our perspective, dictating medical care doesn’t lead to the best solutions or the best outcomes,” Klassen said. “I think transplant programs and society as a whole are moving in generally the same direction.”

Consumption of marijuana edibles rises amidst scarce research into their health impact PBS January 21, 2019 As more states legalize recreational use of marijuana, edible forms of the drug are also becoming increasingly popular. But little research has been done on potential complications of consuming the substance, and some scientists believe they can cause hallucinogenic reactions. Special correspondent Lori Jane Gliha of Rocky Mountain PBS reports on the controversial trend.

INDUSTRY NEWS Obstacles Emerging Wine Regions Must Overcome Forbes By Michelle Williams, Contributor January 23, 2019 A box of wine samples arrived unannounced. " ? Really?" The wines were from Aridus Wine Company, in Wilcox, and they were quite good—begging the question: What do consumers think when they see wines from Arizona, or any of the less renowned of the fifty states where wine is made? But market perception is only one of the obstacles faced by winemakers in an emerging region: there are also issues posed by terroir, regulation, infrastructure, and more. Winemakers from Idaho, Texas, and Arizona get personal, sharing their obstacles and how they cope. Market Consumer awareness and perception pose significant obstacles for these three emerging wine regions. According to a December 2017 report by the Alcohol and Tobacco Tax and Trade Bureau, Texas is the seventh largest state producer of bulk and bottled wine, yet many wine consumers living in Texas are oblivious wine is made here. Each of these regions suffers this fate.

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Ron Yates of Texas’s Spicewood Vineyard, Spicewood, Texas, explains, “Sales is probably our biggest challenge— we still have people who say, ‘What? We make wine in Texas?’” According to Yates it takes a tremendous amount of time and resources to educate people about the industry. Pat Brennan, of Texas’s Brennan Vineyards, Comanche, Texas, elaborates, “We don’t make a lot of familiar wines. People are often intimidated to try a variety they don’t know.” Brennan expresses frustration that some tried Texas wines a decade ago when the quality was poor and never tried it again, saying, “Consumers are not quite so forgiving of local wines.” Sam Pillsbury of Arizona’s Pillsbury Wine Company, Wilcox, Arizona, faces the same perceptions. “Our obstacle is consumer education. Most people in Arizona are unaware of Arizona wine. Those that are familiar think it must be poor quality because good things come from elsewhere,” he shares. Similarly, Todd Bostock of Dos Cabezas Wine Works, Sonoita, Arizona, realizes, “the world is not clamoring for Arizona wines.” Bostock says the sales road is long and slow, finding success selling to snowbirds rather than Arizonians. Bostock shares an experience when he was pouring Dos Cabezas at a James Beard event. An attendee told Bostock the wine was as good as the $100 Napa Valley Cabs he buys; then inquired about the wine’s price. Learning the wine cost $50, the man said it was too expensive; he would not pay that much. Bostock has gotten creative. Dos Cabezas is experimenting with a 500ml can of sparkling rosé, a blend of , , and Tempranillo. It is so popular they cannot keep it in stock. “Wine in a can obliterates barriers,” shares Bostock. Will the canned rosé entice consumers to try additional Dos Cabezas wines? Idaho experiences a similar situation with consumers. “Perception of an emerging wine region is a struggle, we are heavily scrutinized and not accepted outside the state,” explains Meredith Smith, winemaker at Sawtooth and Ste Chapelle, in Caldwell, Idaho. However, she explains attitudes are evolving, restaurants and consumer support is growing. Tim Harless of Idaho’s Hat Ranch Winery, Caldwell, Idaho, shares Smith’s sentiment, saying, “Most people are shocked [Idaho] makes wine, but pleased [upon tasting] given the quality and the price.” According to Smith the industry feels a certain frustration because, “people place pressure on Idaho to signify a ‘state ,’ people want to know our ‘best wine,’ we are not there yet, we don’t want to limit ourselves—we are still trying to figure out who we are.” Terroir Winemakers have been battling the elements since the beginning of time. Each wine region’s terroir offers its own challenges and rewards. Dr. Robert W. Young, winemaker at Texas’s Bending Branch Winery, Comfort, Texas, shares, “The biggest challenge facing the Texas wine industry is our variable climate conditions, particularly the heat—a constant problem that makes it very difficult for fruit to reach its phenolic ripeness.” Ron Yates, winemaker at Texas’s Spicewood Vineyards echoes the Texas climate concern, “It is difficult to make wine in Texas. In the vineyard, we deal with humidity, late freezes, hail storms, too hot at night for the to properly rest, and of course, disease pressure.” Julie Kuhlken of Texas’s Pedernales Cellars shares, “The biggest obstacle for a long time was we thought we needed to grow and produce , and to be commercially viable.” Today, she says, producers have learned the climate and are growing varietals that work. Todd Bostock, winemaker of Arizona’s Dos Cabezas Wine Company shares much of Texas’ climate concern, expounding on late spring frost and deep winter freezes. However, he sees a bright side to their weather woes. “We have vintage variation each year— we create blends to combat this extreme climate. The challenging weather creates value because of the uniqueness of the wines.” Like Kuhlken, Bostock recognizes Arizona must find grapes that grow best in their climate. “Napa can have Cabernet, but what’s it going to be for Arizona? Perhaps Petite Manseng, Aglicanico, or even hybrids.” Idaho’s Snake River Valley AVA is home to a majority of the state’s wineries. In this region the struggle is frost. Meredith Smith, winemaker of Idaho’s Sawtooth and Ste Chapelle Wineries shares, “The January 2017 frost was devastating—many lost their entire crop. Most of our vines are own rooted so we cut them down to the dirt, [this year] spurs are coming out again.”

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Lack of Infrastructure Somewhere between Don Quixote and Captain Ahab lies a winemaker’s struggle with terroir. But, the third obstacle that sifted out of conversations with emerging region winemakers—lack of infrastructure—came as a surprise. The challenges it poses in an emerging market are real, multi-faceted, and at times daunting. Ron Yates of Texas’s Spicewood Vineyards explains, “[Texas] doesn’t have the industry infrastructure in place. We still have to order winemaking and other materials from California to be shipped halfway across the country instead of going down the street and picking up what you need.” Bostock of Arizona’s Dos Cabezas echoes these infrastructure difficulties. He explains Arizona wants the same quality wine making equipment as Napa but it’s expensive to purchase and have it shipped to Arizona. If something should go wrong there is no one to call locally for repair - the choice is either to ship the equipment back to the manufacturer or fly someone to the winery. “It is cost prohibitive but we must have the equipment.” Tim Harless of Idaho’s Hat Ranch Winery echoes the same experience, “Because of the smaller size of the industry we usually have to go out of state to find the equipment and sometimes materials needed for both the winemaking and the grape growing.” Lukas Bernard of Arizona’s Page Springs Cellars, Cornville, Arizona, accepts the infrastructure difficulties, explaining, “The wine industry in Arizona is in its infancy. There is not a lot of supporting infrastructure, we have to think outside the box.” Images of MacGyver repairing a leaky tank with bubble gum and super glue come to mind. Legal Issues and Compliance All three states struggle with production issues. In Idaho the demand is outpacing production, resulting in the need of some to purchase Washington grapes. This is not seen as an issue. Conversely, in Arizona and Texas the purchase of bulk juice from outside the state is controversial. Currently, Texas wines see little distribution outside of the state. But Kuhlken of Pedernales Cellars sees this changing in the future – raising the issue of ‘For Sale in Texas Only,’ a federal loophole allowing states to purchase bulk juice from another state and label it as the purchasing state’s wine. Kuhlken explains, “A [Texas] winery cannot be distributed nationally unless it is producing wines made of Texas grapes, and many of the larger wineries have been making ‘For Sale in Texas Only’ wines.” Kuhlken opposes the use of outside grapes, believing if Texas wine is produced from grapes that grow well in the state there is no need for outsourcing. Some Arizona wineries are fighting the same issue. Bostock, a founding member of the Arizona Vignerons Alliance, who seek to have Arizona wines made exclusively from Arizona grapes, echoes Kuhlken’s belief that growing the right grapes negates the need for outsourcing juice. Lukas Bernard of Arizona’s Page Springs Cellars raises another infrastructure obstacle involving laws and government agencies. He explains the Arizona wine industry is booming, but “the Liquor Board did not have proper laws in place, resulting in gray areas with many legal restraints that confine our success.” Now the Arizona Department of Liquor Licenses and Control is scrambling to figure out how to deal with it. One example both Bernard and Bostock share the production cap on a Domestic Farm Winery License states is limited to less than 20,000 gallons of wine per year. Any winery in Arizona producing more loses self-distribution, resulting in the loss of a tasting room that is vital to revenue due to higher margin sales and wine club membership sales. This loss would be catastrophic. According to Bernard, the production limitation has resulted in Page Springs Cellars inability to keep pace with demand. Another legal obstacle, Bostock explains, results from an online sales limitation enforced by the Arizona Attorney General—who has stated wineries selling online between 2am – 6am violates the state’s liquor sales laws. This disrupts online wine sales for those who may want to purchase from inside and outside the state. Bernard feels frustrated, sharing, “these laws are not creating a platform for growth.” The Arizona wine industry is positively impacting the state’s economy, limiting their success seems counterproductive.

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Conversely, Pat Brennan of Texas’ Brennan Vineyards would like to see more government involvement, although in a different vein than what is happening in Arizona. He explains, “I’d like to see a concerted effort and investment by the Texas Department of Agriculture to help educate and promote Texas wines. We have great potential. I thought we were at a tipping point about two years ago, but we are not quite there. We need consumers, sommeliers and retail buyers to embrace Texas wines like they do craft breweries and distillers.”

EDUCATION NEWS The Bond Project: Creating a safer drinking environment Daily Emerald By Casey Miller January 22, 2019 On a night out with friends, a University of Oregon student might have gone up to the crowded bar at Taylor’s Bar and Grill to order a “F#?&-It Bucket,” a student favorite that dumps vodka, Redbull, and various other liquors into a green pail. But now, bartenders must deliver the news to “Fuck-It Bucket fans”: Taylor’s no longer sells the infamous drink. Instead, patrons can order the “Duck-It Bucket,” which is served in a smaller glass with smaller portions. This is one of the safety-inspired initiatives being implemented at Taylor’s after the campus bar nearly lost its liquor license this summer due to an increased amount of crime over the past year. The Oregon Liquor Control Commission originally decided to pull the bar’s license due to 29 incidents of “serious and persistent problems,” such as fighting, drugging, excessive intoxication, theft and sexual assault over the last year. Taylor’s and the OLCC are scheduled to have a hearing in June that will determine the bar’s future. The bar’s former management is also being sued for $5 million by two women who say a bartender may have helped someone drug their drinks, according to an Oregonian report. Taylor’s isn’t alone in its problems, though. Other bars in the area have had similar alcohol-induced issues and incidents of sexual harassment: According to Eugene Police Department data, since Jan. 1, 2013, officers have responded to 17 incidents of assaults, fights or disputes at Webfoot Bar and Grill, 28 at Max’s Tavern and 80 at Taylor’s. To make the near-campus bars safer for students, groups such as the University of Oregon Police Department and the Office of the Dean of Students have been involved by adding their professional and legal expertise. But one student in particular has kickstarted a vital project for ensuring safer bars: UO senior Janelle Bond, who is heading The Bond Project. The Bond Project is a joint effort between the UOPD, DOS and Bond to create a safer drinking environment for students. Bond is in charge of the program, which trains bar staff to better recognize signs of predatory behavior and intoxication via educational videos and information from professionals, with the end result being that trained staff can prevent dire problems before they occur. The project started after a conversation Bond had with UOPD Chief Matt Carmichael, discussing how her role as chapter president within her sorority was becoming more difficult once members turned 21 and started going to the bars. At bars like Taylor’s, Webfoot and Max’s, the women said they experienced issues like sexual harassment and over-intoxication. “Getting the staff more aware of what's going on and feeling confident in their abilities to intervene — that in itself will show perpetrators that they are not welcome in those bars,” Bond said. The project training kicked off at the beginning of January by training staff at downtown bars such as the Drake Bar, the Starlight Lounge and Lucky’s Club. The team decided to start with these bars to receive feedback on the program first, then initiate training with the campus bars on 13th Avenue toward the end of winter term.

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Much of the training consists of behavior awareness. The team is planning to use a video called “Who Am I?” that details a woman’s night out that ends in sexual assault and shows where bystanders could have intervened. Additionally, Bond said there will be multiple points of view for the trainees: herself representing the student perspective, Kerry Frazee as the expert on sexual violence prevention and education and Geri Brooks as a campus police officer. Since the OLCC threatened to pull Taylor’s liquor license over the summer, changes have already been implemented to encourage safer drinking. Bond is taking this one step further with the trainings but acknowledged the effects that the bars’ choices can have on student nightlife and safety. “I think even small changes matter, like not calling a drink a ‘Fuck-It Bucket.’ By calling it that, you're implying that you'll be blacking out by drinking it, and blackout culture is such an issue. By perpetuating that, people are going out with the intention of blacking out and that's where the problem is,” Bond said. Bond said various bars have already been responding with enthusiasm to The Bond Project. “They are in the bars, and they witness these things, and they're also passionate about everyone feeling safe and comfortable at their bar,” she said. “They get more customers, and they get more money because people enjoy being there. So they're really passionate about the project because it will just create a safer space.” An important part of The Bond Project is making sure every individual gets home safe at the end of the night. Bond is encouraging more staff to be outside of the bars, checking on patrons leaving by asking about their plans. “If you see somebody leaving by themselves, it’s something as simple as, ‘Hey, are you meeting up with someone?’ or ‘Hey, do you live close?’” Bond said. It’s this kind of comradery, of looking after one another, that Bond and others hope to inspire in nightlife culture. “It really takes the local bars’ initiative to create change and change the culture,” Frazee said. “I’d want everyone working at these bars to truly care about the results, to have the desire to change the culture at the bar and make it a safe place.” In the end, it’s about community for Bond and her project partners. “Helping students feel more comfortable in those environments will contribute to an overall better campus community and a sense of safety,” Bond added.

Status of Small Alcohol Suppliers: Still Growing with Bright Spots and Bumps Healthy Alcohol Marketplace By Pamela S. Erickson January 17, 2019 Small suppliers of beer, wine and distilled spirits continue to grow albeit at a slower rate overall. Some areas of the country do better than others for some products and there are spots where local markets may be saturated. Here is a summary: Beer: The growth of breweries continues upward and surpassed 7,000 in 2018 according to the Brewers Association. While the overall 2017 beer sales and production dropped by about 1%, craft beer (as defined by the Brewers Association) grew by 5%--not the double-digit rates of the past, but still healthy. This equates to a 12.7% market share. Because a number of small beer companies have been purchased by large corporate entities, they no longer meet the Brewers Association definition of "craft." Thus, the total share of these products is probably higher. The "craft" segment is dominated by "regional" breweries which account for 70% of production. While beer can be made anywhere, small beer suppliers have predominated in a few states, but that is changing. • The most populous states had the greatest number of breweries: California (764), Washington (369), Colorado (348), Michigan (330) and New York (329). But the top five per capita are Vermont (11.5), Montana (9.6), Maine (9.6), Oregon (8.5) and Colorado (8.4), according to VinePair. NABCA Daily News Update (1/23/2019) 13

• "Craft" beer has shown higher growth elsewhere: New Jersey (43%), Kentucky (43%), Oklahoma (39%), North Carolina (37%), Virginia (36%), New Hampshire (33%) according to a report by C + R research. • Economic impact was substantial, but varied greatly from one state to another. According to the Brewers Association, total economic impact in 2017 was over $76 billion with wages averaging $48,905. Twenty-two states had an annual economic impact of over a billion dollars. The highest per capita economic impact occurred in Colorado, Oregon, Pennsylvania, and Vermont. • Closures and bankruptcies increased. Among brewpubs, there were fewer openings in 2017 and more closings than in 2016 although the overall number of closures was small. For micro-breweries, there were both more openings and closings...again the number was small. There were a few high-profile closures that seem to happen as expansion efforts soured. One was the San Diego brewer, Green Flash, which had expanded nation-wide and via exports, but they took on too much debt. "Most recently, Oregon's Deschutes Brewery slashed 7 percent of its workforce, and affected positions came from sales, marketing and operations." Several others, including the large companies cut staff. Various reasons have been offered for cut-backs such as increased competition from large companies with "craft" products and out-of-state microbrewers, lack of customer loyalty, the overall slowing of sales due to health concerns and possible marijuana substitution. Wine: The wine industry continued its growth trajectory going from 9,091 wineries in 2016 to 9,654 in 2017 and California continued its dominance with 45% of the nation's wineries and 86% of the production. Other states in the top five included Washington, Oregon, New York and Texas. As with previous years, the vast majority of wineries were very small. While every state has at least one winery, climate and soil do make a difference for growing wine grapes. So not every state is likely to be a major wine producer. Distilled Spirits: This segment of the industry has grown over the past five years to reach revenue of $14 billion, according to an industry market report. The number of businesses has grown by 19% and employees by 7.2%. According to the American Craft Spirits Association, the number of distilleries grew in 2018 to reach 1,835 by August. Thirty four percent were concentrated in five states: California, New York, Washington, Texas, and Colorado. The next five with 18.4% of the craft market are Oregon, Pennsylvania, North Carolina, Ohio and Florida. Overall market share is 3.2% by volume and 4.6% by value. One state not on this list is Kentucky which has seen an explosion of distilleries that produce whiskey, particularly bourbon. Kentucky makes 95% of bourbon whiskey and sales of that product increased by more than 50 percent. Not only have new distilleries popped up, but they are building facilities that cater to tourists so people can have the entire "bourbon experience." And, people are talking about "Napa-fication" involving tours of distilleries in the countryside. Funds, loans and government subsidies have become available for alcohol suppliers. Two decades ago, alcohol businesses had great difficulty getting bank or government loans. Many funding sources simply did not support alcohol businesses. That has changed. By looking at Small Business Loans granted for breweries, wineries and distilleries in 2009 versus 2018, one can see how much it has changed. In addition, states have given a lot of subsidies to alcohol companies. These can be viewed at https://www.goodjobsfirst.org/subsidy-tracker. Efforts are needed to examine regulations, resolve conflicts with other categories of licensees, and carefully evaluate promises of jobs and tax revenue (...as what goes up may come down!). Here are two examples: A Virginia Senate Committee is studying the feasibility of consolidating licenses. Currently, there are 100 different licenses and permits for retail, manufacturing and wholesale businesses. In 1934, there were only 10. They are also looking at the "inconsistencies in quantity limits on wine, beer and spirits samples..." The state of Michigan recently established production and equipment requirements for satellite facilities and a tasting room license. Now the state will require microbreweries to produce at least 50% of the beer sold on-site for satellites. The change was supported by the Michigan Brewer's Guild which stated, "The Guild's basic position is that a brewery opening a tied house - a retail operation without a brewery with exclusive focus to them - has not proven to be a good model for small craft brewers."

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Here are some questions state/local leaders should consider: Outlet density: how many alcohol licenses should there be given the research that indicates that too many licenses can create problems. (See thecommunityguide.org for recommendations on outlet density.) What conflicts and inconsistencies exist with license categories? For example, some states have gradually given tasting/tap rooms additional privileges that makes them full-blown retail operations without the same fees, quota requirements, training requirements, etc. How will license changes impact local economies? Will new jobs materialize or just replace current jobs? Are local markets saturated and likely to experience job and business losses? What level of taxpayer support should be available for alcohol businesses via subsidies and tax decreases? Sources: • https://vinepair.com/articles/map-america-states-most-distilleries/ • https://vinepair.com/articles/map-states-most-craft-breweries-2018/ • https://www.statista.com/statistics/259365/number-of-wineries-in-the-us-by-state/ • http://wineamerica.org/impact (by state, 2017) • https://usawineratings.com/en/blog/insights-1/how-many-wineries-are-there-in-the-united-states- 37.htm 7,762 • https://www.winesandvines.com/template.cfm?section=widc&widcDomain=wineries&widcYYYYMM=20 1810 • https://www.beveragedaily.com/Article/2018/07/18/Number-of-US-craft-distilleries-rises-by-26 • https://www.ktuu.com/content/news/Brewers-are-hopping-mad-about-SB-76-482239291.html • http://www.newsminer.com/news/alaska_news/alaska-house-slips-in-amendment-to-slash-brewery- distillery-serving/article_56334778-5293-11e8-8b46-ab91e5364912.html • https://www.nbwa.org/resources/industry-fast-facts • http://dls.virginia.gov/groups/abcrs/sm060518.pdf • •file:///C:/Users/Pam/Desktop/January%202019%20newsletter/*%20Number%20of%20operating%20cr aft%20breweries%20 • 3 Big Storylines that Defined Beer in 2018, By Chris Furnari, Dec. 31, 2018. • 9 Beer And Spirits Predictions For 2019, By Tara Nurin, Forbes, December 18, 2018 • 2018_Craft%20Spirits%20Data%20Project_092418%20FINAL.pdf • Brewers%20Association%20Celebrates%20the%20Year%20in%20Beer.html • "Deschutes Cuts 7 Percent of Workforce," by Justin Kendall, Dec. 17, 2018 • "A 31% Increase In Number Of California Wineries Makes Financial Success That Much Harder," By Thomas Pellechia, December 10, 2018, https://www.forbes.com. • https://www.thecommunityguide.org/findings/alcohol-excessive-consumption-regulation-alcohol-outlet- density • SBA.gov "Distillers dream of a "Napa-fication" of Kentucky," by Clay Risen, New York Times News Service,, January 10, 2019.

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Budget 2019: Why alcohol is likely to get more expensive soon The country's alcohol business, among the top three revenue sources, is likely to be slapped with higher taxes as states grapple with fiscal deficit. Business Today January 23, 2019 On Sunday, Telangana Chief Minister K Chandrasekhar Rao announced that the government will waive off Rs 24,000 crore worth crop loans of farmers in a phased manner. Last month, the newly-formed Congress governments in Madhya Pradesh, Chhattisgarh, and Rajasthan announced major farm loan waivers, and the BJP government in Assam was quick to follow suit. So far, the promised farm relief reportedly totals Rs 1.75 lakh crore. With such populist decisions likely to gain significance in the run-up to the forthcoming next general elections, aggregate fiscal deficit of the states is expected to reach 3.2% in financial year 2020, warns a recent report by India Ratings. And, in the bargain, the country's alcohol business is likely to take a hit. According to Bloomberg, in an attempt to plug this fiscal hole, states are expected to hike taxes on liquor, one of the top three revenue sources. "Raising liquor taxes - which bring in nearly 25% of revenue - is the most likely option as state governments are unlikely to borrow and worsen their debt-to-GDP ratios," Abneesh Roy and Alok Shah, analysts at Edelweiss Securities Ltd wrote in a recent investor note. But any increase in taxes will have an adverse effect on alcohol demand as liquor companies are sure to pass on the buck to customers. "In the past, there have been multiple instances where volumes have taken a beating owing to price hikes emanating from an increase in the tax rate," the note added. Maharashtra has already taken a step in this direction. The Devendra Fadnavis government earlier this month increased the excise duty on Indian-made foreign liquor by 20%, and the buzz is that it will help fetch additional revenue of Rs 2,000-2,500 crore. Last year, too, several states had hiked up taxes on alcohol. For instance, Gujarat had tripled the excise duty on alcohol while Kerala had announced a hike of up to 210% on liquor. Karnataka, meanwhile, announced an excise duty hike by 8% on liquor, after upping the additional excise duty on it to 21% in the previous budget. According to IndiaFilings, it is estimated that the taxes on beer and liquor fetch state governments around Rs 90,000 crore in taxes each year. That is the main reason why alcohol is out of the GST net, despite being a "sin good". For the record, a sin tax is levied on items that are harmful or costly to society, like tobacco. The idea behind this tax is to provide a revenue source to governments while deterring consumption of such items by keeping prices high. While alcohol has been kept out of the new tax regime, the input raw materials used in manufacturing liquor do incur GST. This used to be taxed at around 12-15% under various VAT regimes previously, but under GST the tax incurred on most of the raw material stands at 18%. Also, the GST applicable on freight and transportation charges is higher than under the previous tax regime. Due to these factors, alcohol prices went up after the introduction of GST, and continue to rise year-on-year. NITI Aayog's recent proposals could further push up taxes on liquor, if approved. Last month, the government think-tank proposed hiking taxes on alcohol, tobacco and unhealthy beverages in its 'Strategy for New India @75' document, which outlines clear policy objectives till 2023.

CBS rejects Super Bowl ad for medical marijuana company Profootball Talk Posted by Michael David Smith January 22, 2019 Beer ads will be all over Super Bowl LIII, but marijuana ads will not. The cannabis company Acreage Holdings told Bloomberg that CBS rejected a Super Bowl commercial calling for the legalization of medical marijuana. The company says it gave CBS an outline of what it wanted to say in the commercial and CBS rejected it based on that outline. NABCA Daily News Update (1/23/2019) 16

Super Bowl commercials can cost more than $5 million for 30 seconds, but as marijuana continues to grow as a business in the United States, that price is not too high for some of the biggest movers in the industry. However, CBS (and the NFL) may not be ready to be associated with the marijuana business. Companies often view Super Bowl commercials not only as an opportunity to have their message seen by the 100 million or so people watching the game, but also as an opportunity to get media coverage of the commercials themselves. In that respect, Acreage Holdings has succeeded even if it didn’t get its message onto the game broadcast.

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