Howard County Liquor Board

As grocery stores and restaurants deliver exponentially larger quantities of food, beer, wine and spirits sales by delivery are only a step behind.

You cannot wait to deliver by autonomous vehicle or even drone. The market shift is happening now.

This is much more than only the impact that Amazon is already having on retail. Food delivery, in particular, is projected to grow by the double digits, at 12% per year, for each of the next five years. While grocery stores see some sales cannibalization, such has not been the case for restaurants, where more than 25% of consumers spend more on off-premises orders. But that many delivery sales do not include beverages, alcohol or otherwise, (.. despite that beverages provide high margins) presents a huge opportunity for increased sales.

And in Maryland that fast growing market for beer, wine and spirits delivery will, by law, be filled by existing alcoholic beverage license holders (i.e., Amazon Prime is not delivering beer in Maryland).

And this is not Homer’s dangerously wine-dark sea. Responding to that demand and after a change in state law, Alcoholic Beverages Article, § 3-506 et seq, that expressly provides for delivery, nearly every Board of Alcoholic Beverage Commissioners in Maryland now has a procedure to approve deliveries in their respective county. As a threshold matter, of course deliveries of beer, wine and spirits may only be made by a licensee in the county where they are licensed. This limiting factor is a huge boon to existing package good operations.

The rules vary from county to county. In Baltimore City, a licensee desiring to deliver alcoholic beverages must complete the Baltimore City Delivery Registration Application Form and receive a letter of authorization from the Board before deliveries may be made.

The City rule does not require a public hearing on the delivery request. But as a limiting factor, mimicking the 2015 state law “each delivery person shall be an employee of the licensee,” which arguably precludes the use of third party delivery companies? The rule also tracks the state enabling law expressly authorizing “delivery service upon request by customers through any mode of electronic contact (e.g. smartphone application, or internet on-line purchase, etc.).” Each delivery requires, “the signature of the intended recipient who is at least 21 years old, ..”

Baltimore County is currently proposing revisions to its rules, and its rules have historically been more limiting than other jurisdictions. A request for a letter of authorization to deliver requires that the licensees appear before the Board and demonstrate at a public hearing how staff will be trained to comply with the rule. The County requires an Alcoholic Beverage Delivery Form be completed for every delivery and maintained for a period of time (although that period of time is one of the rule changes pending).

In Howard County, similarly, licensees must appear before the Alcoholic Beverage Hearing Board for their letter of authorization from the Board to make deliveries. Delivery must be “made from the licensed premises by the retail license holder or an employee of the retail license holder” (.. again, parroting the state law). A delivery log must be kept that documents all retail deliveries in a manner similar to keg registration requirements.

Again, the rules vary between local jurisdictions in Maryland, but in each instance a licensee must obtain liquor board authorization in advance of making deliveries.

Local boards are also handling ordering through a third party differently. Despite the apparent limitation in state law, among the fastest growing businesses in this sector are those accepting orders by phone app and delivery by ..?

We first posted Delivery will Change the Alcoholic Beverage Industry in 2018 and we will follow up with more and additional posts on the all but explosive business opportunities of delivery.

It was recently widely reported that online alcohol delivery sales grew over 32% last year, increasing at an average rate of just about 3% month over month. None of those deliveries were by robot; not yet .. But, if you are not delivering alcohol to your customer, your competitor will.

Following a hearing it was determined two “yoga and beer” events were permitted at a brewery in Howard County, Maryland. Yes, yoga and beer is a Millennial ‘thing’ and more.

This matter was initiated with a complaint filed by a neighbor of the Manor Hill Farm and Brewery who alleged that the yoga events were not an agricultural activity and that more than 50 people might attend which could increase traffic.

Penultimate in the consideration is that the farm has an Agritourism Special Use Farm Permit for these activities, “Farm tours, farm stays, farm photography sessions, hay rides, corn mazes, classes related to agricultural products or skills, and picnic and party facilities offered in conjunction with the farm visitation.” The County zoning inspector who conducted a field inspection during one of the events, testified that he considered this permit in his conclusions that yoga was well within the activities allowed under this permit.

On cross examination, the inspector testified the yoga “class was held in a field just west of the brewery.” The complainant averred yoga is a prohibited use.

That 25 people actually attended was well within the 50 visitors allowed at one time at a Farm Brewery Class 1 activity, which includes beer tastings.

Board of Appeals Hearing Officer Michele L. LeFaivre reasoned, “[I]t is permissible for an “educational program” to be a yoga event, activity, or performance with fewer than 50 attendees who taste beer during a visit.”

And you will be glad you took the time to read the 25 page written decision In The Matter Of Sara Domerchie, not simply for its legal scholarship but also because the writing is sheer delight when it includes passages like,

The term “educational program” is sufficiently clear. Clarity is a question of reasonableness. As future United States Supreme Court Justice Souter observed in a New Hampshire Supreme Court zoning interpretation opinion, “[a] reference to ‘sufficient’ clarity is, of course, a criterion of reasonableness, and our prior cases have avoided any suggestion that a fussy standard of technical drafting should be applied in passing on the validity of municipal or administrative regulations.” Barton v. H.D. Riders Motorcycle Club, Inc., 131 N.H. 60, 64, 550 A.2d 91, 94 (1988). An absence of fussy precision in the application of the term “educational program” does not credential Appellant’s assertion of yoga as commercial activity, not agricultural activity, and which, in the last instance, is a misunderstanding of how HCZR treats farm uses, which includes more than agricultural activity.

The Hearing Officer gave great deference to the Department of Planning and Zoning having determined there was no violation and closing out the enforcement case triggered by the complaint. While not directly relevant here, we enjoyed reading that this same complainant protested a “pet day care” conditional use permit on the same street, highlighting the interplay of zoning ordinances and alcoholic beverage laws.

The combination of yoga and beer are safe, at least in Howard County. Okay the pairing of yoga and beer was likely not conceived when the first Howard County zoning ordinance was adopted in 1949 (so it does not appear in the ordinance’s list of permitted uses), but today yoga and beer events are popular from Toronto to Kathmandu and trending across the U.S. are hosting those events to support a local charity.

We are excited that this sounds like a great way to promote not only a farm brewery and also your business in Maryland and beyond.