Federalism

United StatesRecently, my 14-year old son asked me – in the context of our home state’s relatively recent decision to permit recreational cannabis use – “Dad, how can something be legal under state law at the same time it is illegal under federal law?”

Smart kid, that one.  Although from the look on his face after I finished expounding on principles of federalism and constitutional law, I’m not entirely sure he was glad he’d made the inquiry.

Our nation is a patchwork of laws.  Occasionally those laws will conflict.  And even more frequently, laws in individual states will change.  It can be difficult to keep up with those changes – although one must try.  In the spirit of that effort, let me comment on two recent changes (and one recent failed attempt at a change) in state Hooch laws.

Our virtual tour of these states starts in the Kansas: land of corn, humidity and relatively little in the way of downhill skiing.

Kansas Governor Sam Brownback signed a bill in late April which will allow grocery stores to sell up to 6% ABV beer.  Previously, grocery stores were prohibited from selling beer in excess of 3.2% ABV.  The prior prohibition on grocery stores selling wine or spirits remains in place.

At the same time, the new Kansas law permits any liquor store operating in the state to begin selling some grocery items (non-alcoholic mixers, for example) so long as sales of those items make up less than 20% of the store’s total sales.

Heading north from Kansas we may eventually find ourselves in Minnesota.  Minnesota – whose name I believe derives from a Sioux word meaning “mosquitoes the size of Volkswagens” – has also recently changed its liquor laws.

Starting July 2, liquor stores in Minnesota will be permitted to operate on Sundays.  The last time a liquor store could operate legally in the State of Minnesota on a Sunday? Never.  The ban has been in place since Minnesota became a state.  Of course, it is possible that some stores may have operated illegally on Sundays in violation of the law. In fact, there is at least one store that decided to go ahead and open on Sundays during the period between Governor Mark Dayton signing the bill and its effective date.  It is worth noting that some opposition to this change came from existing independently owned liquor stores, who feared that to remain competitive with larger players they would need to begin being open on Sunday – adding expense to their operations without necessarily increasing their sales.

Leaving the Midwest, the third and final stop on our tour of recent changes – or in this case attempted changes – to state Hooch laws takes us to the state of my birth: Florida. [Full Disclosure: As a native “Florida Man,” I do occasionally feel compelled to do stupid things.  But I’ve given up any hope of keeping up with those who remained in my home state – like this guy.  Possibly I’ve just gone soft, but I just can’t see trying to French kiss a rattlesnake.]

Last week, Florida Governor (and adversary of electric fans everywhere) Rick Scott vetoed a bill that would have allowed liquor to be sold in grocery stores.  Current law – in place since the repeal of prohibition – requires liquor to be sold in stores separate from groceries and other retail items.

By all accounts, the push to allow for spirits in the grocery aisles came primarily from some big players – notably Wal-Mart and Target.  Opposition to the bill came from Florida retail juggernaut Publix, which had already gone to the trouble of setting up its own stand-alone liquor stores (often conveniently located next door to their grocery stores), Orlando-based ABC Fine Wine & Spirits, and a handful of smaller independent liquor stores.  According to news reports, it was the potential harm to independent storefronts that swayed Governor Scott to veto the bill.

What common theme can we distill from the experiences in these three states?  Is the lesson here that ongoing tensions between the interests of small businesses and big businesses will continue to play out in how laws impact booze?  Alternatively, should we infer from these examples that the conflict between consumer freedom and the paternalism of the state remains strong?  Perhaps instead we should see these as evidence that selling regulated products in a federal system remains as complicated as ever?

Maybe all of the above?

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