Disclosure Rules for Alcohol, Cannabis Sales

Online retailers know about regulations and notices, such as privacy, warranties, and more. But no amount of laws and disclaimers compares to the requirements of selling alcohol and legal marijuana.

“I’m not sure that there are specific legal disclaimers. It’s more [about compliance], wherein online sellers need to comply with alcohol and cannabis laws regarding advertising and selling those products,” says attorney Rebecca Stamey-White, a partner at Hinman & Carmichael LLP and whose practice includes alcohol and legal marijuana issues.

“That may include disclosing the licensee name and, in some cases, the business’s address and license number, as well as other restrictions specific to the state in which it is licensed to sell these regulated products.”

For merchants, knowing those requirements — applicable laws and public disclosures — can be crazy complicated. It almost always calls for professional legal advice.

Unfortunately, the resulting disclaimer is often an explanatory mishmash, such as from this marijuana retailer website in Colorado:

Colorado Cannabis Company prides itself on maintaining complete compliance. We do that by staying current on all the various local and state rules and regulations. Through rigorous quality control and sound science, we ensure all CCC products are 100% compliant. Including all testing, serving, portioning, packaging, and labeling requirements as enforced by the Colorado Department of Revenue Marijuana Enforcement Division, the Colorado Department of Health and Environment, and the City of Denver Department of Health and Environment.

Alcohol, Cannabis Disclosures

More broadly, online sellers of cannabis or alcohol must follow general disclosure requirements, which include:

Age tracker of the user. This shows the site’s commitment to preventing underage sales, which is paramount in selling alcohol and cannabis online. Also required is language specifying that the product will not be delivered to an underage buyer and that anyone who purchases for a minor can be prosecuted. It’s worth noting that local television stations and alcohol enforcement agencies sometimes set up stings, as online retailers are often lax in this part of the job. Even accidentally selling alcohol to a minor is a crime.

Disclaimers on where the product can be sold. Cannabis cannot be sold across state lines, nor can alcohol in some states. Sellers need to post those restrictions.

Additional restrictions about permissible products. For instance, shipping alcohol in-state is not allowed in dry cities and counties. That restriction should be posted. And what, exactly, can be sold online varies by state. A product’s alcohol content is a common definer. A seller should also post those rules.

State privacy laws. California, for example, has the Consumer Privacy Act and the Privacy Rights Act.

General terms and conditions regarding how a visitor can use the site, as well as information disclosing how the company conducts business.

Requirements of the Children’s Online Privacy Protection Act, a U.S. law and part of the Communications Decency Act of 1996. The Protection Act lists parental controls, such as hardware, software, or filtering services (CyberPatrol or NetNanny, for example) that merchants can deploy to block underage visitors.

“Title and ownership” clause. This explains how and where ownership of the product passes from the seller to the buyer. It’s essential, given the many state and federal restrictions on how alcohol and cannabis can be shipped. Here’s an example:

By arranging for transportation of the wine, the site is providing a service to and acting on behalf of the purchaser. By utilizing this service, the purchaser is representing that he/she is acting in a fashion compliant with his/her local and state laws regarding the purchase, transportation, and delivery of alcohol.

Jeff Siegel
Jeff Siegel
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