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The Supreme Court considers the 21st Amendment, 100 years later.

January 15, 2019

100 years after it was enacted, the 21st Amendment is getting analyzed. The amendment, which ended Prohibition in the United States, gives the power back to the individual states to regulate alcohol matters. Now, in the age of the internet, the Supreme Court is considering how far a state can go.

Today, the Court heard argument in the case of Tennessee Wine and Spirits Retailer’s Association v. Blair. The case boils down to the constitutionality of residency requirements, in other words, to what extent can the state force alcohol licensees to be residents of their states. Here, Tennessee has a residency requirement of 2 years before a new license can be issued, followed by a 10 year residency requirement in order to renew said license. Essentially, the State of Tennessee forces alcohol licensees to be residents for at least 9 years before they can attempt to create a long lasting alcohol business.

As only the second case in the last 15 years to touch upon State’s rights under the 21st Amendment, Tennessee Retailer’s Association has the opportunity to completely change how the alcohol industry does business. With a lowered barrier to entry, there will be an opportunity for more diverse business and new business models to consider. However, after listening to the argument and the Court’s questioning of both parties, the opinion will likely not be overly expansive. There seems to be concern that reducing the residency requirement to nothing, or binding the state too much, will create an uncontrollable market, namely an immense alcohol market on the internet shipping across the country, or as one Justice called it the “Amazon of Alcohol.”

It will be interesting to hear how the Court comes down on this issue and we will update this blog with the opinion when it is made available.

But in the meantime, check out the following to learn more:

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