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State regulators propose ban on sale of alcoholic powders, crystals

PalcoholLast year, the U.S. Alcohol and Tobacco Tax and Trade Bureau approved the production and sale of Palcohol, a powdered alcohol substance, which turns into an alcoholic beverage when combined with water.

Lipsmark LLC, the makers of the powder originally touted it as a way to sneak in alcoholic beverages into places where they are either not allowed, or are “overpriced.” The powder can also be sprinkled on food items.

The company now disavows those original claims, which were scrubbed from its website shortly after ATTTB’s surprising approval. According to their current website, the makers of the powder plan to be ready for distribution in the next few months.

Iowa alcoholic beverage regulators are among many across the United States who have concerns about making the substance available on the open market. They have asked the General Assembly to consider banning the possession or sale of any powdered or crystalline alcoholic substance in Senate Study Bill 1031.

The bill prohibits a person or club holding a liquor control license or retail wine or beer permit, or their agents or employees, from selling, giving, possessing, or supplying for human consumption powdered or crystalline alcoholic liquor. A violation, if enacted, would be a simple misdemeanor, but would be grounds for revocation or suspension of the violator’s license or permit.

Mark Phillips, the inventor of Palcohol, said he is disheartened that no one has asked him to testify to explain the product to legislators. In a statement on the product website, he said regulators and legistlators have been “caught up in the hyperbole and misinformation that is being thrown about by people who don’t know what they’re talking about.”

“People say that banning powdered alcohol is the responsible thing to do,” he said. “It’s just the opposite. Banning powdered alcohol is the most irresponsible action a legislature can take. By banning a product that’s in demand, it creates a black market, which means the state loses all control over it. Then underage people can get a hold of it much easier.”

Phillips said prohibition efforts won’t work. Regulating the powder would keep it out of the hands of underage drinkers, and would be the “responsible action” for legislators to take, he said.

“[K]eep it out of the hands of underage drinkers by having it sold in licensed liquor stores where a person must present a valid ID,” he said. “In addition, legalizing powdered alcohol would realize tax revenue for the state which would be doing their fiduciary duty to the citizens.”

Lobbyist declarations in support of SSB 1031 include the Governor’s Office of Drug Control Policy and the Iowa Behavioral Health Association. The Iowa Police Chief Association and the Iowa State Sheriffs and Deputies Association, as well as grocery, lodging, restaurant, and convenience store interests have all declared they are undecided.