Maryland only this past year repealed provisions of law applicable in specified counties that made it a criminal offense to knowingly selling or providing an alcoholic beverage to an individual with an intellectual disability or to an individual if a family member or guardian has given written notice to the license holder that the person is of an unsound mind.

It is difficult to understand how in modern times in Allegany, Carroll, Charles, Harford, Kent, Montgomery, Queen Anne’s, and Washington counties, an alcoholic beverages license holder or an employee of a license holder may not knowingly sell or provide an alcoholic beverage to: a habitual drunkard; an individual with an intellectual disability; or an individual if a family member or guardian has given written notice to the license holder or employee of the license holder not to sell or provide an alcoholic beverage to the individual because of the individual’s physical condition, intemperate habits, or unsound mind.

Generally, “knowingly” means the knowledge a reasonable individual would have under ordinary circumstances based on the habits, appearance, or personal reputation of an individual.

A violation was a misdemeanor.

Not only was the criminalization of serving someone with a disability a violation of the American with Disabilities Act, but also a violation of the U.S. Constitution and Maryland Declaration of Rights.

Senate Bill 461 passed the Senate and House of Delegates unanimously and with the Governor’s signature the bill took effect July 1, 2018.

In the final days of 2018 the President signed into law H.R. 5317 repealing the pre-Civil War prohibition on certain alcoholic beverage manufacturing on Indian lands.

I the parlance of the early 19th century the bill repeals a prohibition on creating or continuing a distillery in Indian country for manufacturing ardent spirits, when it almost cryptically provides, “Section 2141 of the Revised Statutes (25 U.S.C. 251) is repealed.”

The now repealed 1834 law was one of the Indian Trade and Intercourse Acts enacted in the 18th and 19th centuries. The law has its origins in legislation pursued by President Thomas Jefferson in 1802 banning all alcohol in Indian country.

The purpose of the 19th century laws was to regulate non-Indian interaction with individual Indians and Indian tribes on Indian lands. While the operation of the Trade and Intercourse Acts has been repealed or superseded by subsequent laws, several of them, including the one prohibiting distilleries on Indian lands, remained in effect through 2018.

The Indian Trade and Intercourse Acts reserved to the United States the exclusive right to acquire Indian lands and to regulate and restrict trade with tribes.

The early 19th century acts were intended to implement and enforce the terms of Indian treaties against “obstreperous whites, [and] gradually came to embody the basic features of federal Indian policy” to preserve peace on the frontier, including by imposed restrictions on the sale, exchange, or barter of spirituous liquors to Indians in Indian country.

Section 21 of that Act provides that if any person sets up or continues a distillery for the manufacturing of ardent spirits in Indian country, the penalty shall be $1,000 and the superintendent of Indian affairs shall destroy and break up the distillery.

Most of the 1834 law remained in effect until 1953 when Congress passed the last of six Indian termination acts to eliminate historical discriminatory legislation against Indians in the United States. Under the 1953 law, the production and distribution of liquor is permitted in Indian country subject to the laws of the State in which such acts or transactions occur, and subject also to tribal ordinances approved by the Secretary of the Interior.

Nonetheless, because the 1834 law imposing express restrictions on distilleries in Indian country remained in effect, there was a question whether a tribe may lawfully construct and operate a distillery on its reservation even though it may be permitted to build and run a brewery or winery.

The 1834 law expressly prevents any tribe from hosting a distillery project on its lands. While the law may have advanced a valid public policy goal in the mid 19th century, or not, it is not compatible with the modern policy of promoting tribal self-determination and economic diversification on Native American lands where existing laws provide reasonable regulation of liquor transactions.

The bill was especially supported by the Confederated Tribes of the Chehalis Reservation, which plans to construct and operate a distillery and restaurant on its lands. According to the Tribe, the project, part of a larger brewery, distillery, and restaurant project, will be wholly tribally owned and operated, with net profits going to the Tribe.

Last week the Baltimore County Board of Liquor License Commissioners issued a new Class B-ECF/DS alcoholic beverage license to the University of Maryland Baltimore County.

Despite that there were already 781 alcoholic beverages licenses issued for use in Baltimore County, this license is significant.

For those interested in inside baseball, this is an entirely new class of license. The Class B Education Conference Facility/ Dining Service beer, wine and liquor license was created by Senate Bill 1144 in the last General Assembly session authorizing the holder to sell alcoholic beverages for on-premises consumption from multiple designated outlets on the UMBC campus. So, yes, there will only be one of these licenses and it may only be issued for use on the UMBC campus. And as noted it was issued last week and alcohol flowed this past Saturday evening at the Inaugural Celebration for County Executive Johnny Olszewski, Jr.

While the opening of the new 172,000 square foot Event Center on the UMBC campus triggered the discussions that lead to this license, across the country, alcoholic beverages have been available to basketball fans who pay for fancy suites and premium seats, including in the Retriever Room at the UMBC venue. There has been a taboo on alcohol sales to most in attendance, in deference to the many underage college students in the bog room, but that has eroded across the country. While the NCAA is increasing the frequency of athletic events where alcohol may be sold, college campuses are also more than ever renting their venues for non traditional college uses as revenue sources.

In point of fact this Maryland bill was signed into law the same day a similar bill was signed in North Carolina allowing alcohol to be served at college sporting events.

But it is the non college athletic events that will be held in the new Event Center (.. think Harlem Globetrotters) that could only take place at a venue that sells alcoholic beverages, which events are necessary to produce the revenue required to retire the bonds that funded the building.

Which makes sense to many folks. But why was General Assembly action required? Simply put, despite that the legislature passed the largest bill in Maryland history, only 2 years ago in 2016, some 3,180 pages long, re-codifying the state alcoholic beverage laws, there was no law that authorized a license at a college campus in Baltimore County.

So, we worked with UMBC and crafted legislation modeled after the license law that exists in Prince George’s County for the University of Maryland College Park.

Historically, St. John’s College in Annapolis, the third oldest college in North America, served beer as far back as 1784. So beer on college campuses in Maryland is obviously nothing new.

And the need to seek relief in the state legislature also has application in the private sector. Some years ago we worked with a restaurant owner to create the new class of Towson Small Restaurant license in the General Assembly.

The value of liquor licenses has increased dramatically across Maryland in recent years, including because of shifting market forces that have resulted in the growth in numbers of restaurants, all of which portends the importance of a liquor license to many business justifying the time, inconvenience and expense of seeking a change in state law create a new license.

Talbot County, on the eastern shore of Maryland, is one of only a handful of places in America that prohibits the selling or providing of alcoholic beverages on an election day during the hours when the polls are open.

The picturesque waterfront county is named for Lady Grace Talbot, the sister of Lord Baltimore and wife of Sir Robert Taylor, whose family was an owner of Sean’s in Athlone, the oldest pub in Ireland (that was purchased by Boy George in 1987). And while the founding date of Talbot County is lost to history, it existed before February 12, 1661, when then is record that a writ was issued to its sheriff.

The rural jurisdiction does not appear to have any history of election day carousing or the like.

But since the repeal of prohibition, an alcoholic beverages licensee may not sell or provide any alcoholic beverages on an election day during the hours when the polls are open in any election district or precinct where an election is being held.

A person who violates the provision is subject to a fine of between $50 and $100 for each offense. However, on the day of an election, a restaurant that holds an alcoholic beverages license may provide alcoholic beverages for consumption only on the licensed premises.

This vestige of 19th century corrupt political bosses trading votes for free booze, which seems strikingly unsuitable post Citizens United, was also the law in the City of Annapolis until the Maryland legislature repealed it for that city in 2015, after it was noticed that the statewide repeal of many years before had failed to include that capitol city.

Of note, in Allegany County, Maryland a licensee may not sell or provide any alcoholic beverages on the day of any election during the hours the polls are open if the licensed premises is used as a polling place. But that appears to be a modern compromise to allow rural polling places in retail establishments.

The economic impact, if any, of this law is not clear, but Talbot County residents do consume more than their share of alcoholic beverages. In fact, the 37,512 County residents consumed 5.89 gallons of wine each, the highest per capita consumption of any Maryland county. Residents could buy their wine before the polls open or drive to Queen Anne’s County to the north?

Apparently none of the County’s 137 liquor licenses sought to have the prohibition added to the 2015 repeal for the City of Annapolis.

 

But with election day 2018 approaching, there has been discussion led by a group of liquor licensees in Easton, the cosmopolitan County seat, about repealing the antiquated election day booze ban in the legislature next year.

I have just returned from a month of mountain climbing in Pakistan where alcoholic beverages are banned.

Pakistan has the world’s greatest concentration of high peaks and glaciers, with more than 160 summits of over 6,000 meters and a beauty, isolation and sheer immensity like nothing else on the planet. It was this wilderness of ice and rock that Eric Shipton called “the epitome of mountain grandeur” that drew me to the confluence of the Himalaya, Karakoram and Hindu Kush ranges and the big mountains Broad Peak and K2.

Over the course of history, the Indo-Aryans, Persians, Greeks, Scythians, Huns, Tibetans, Chinese, Mongols, Russians, and Britons, all climbed these mountains before me, and little has changed on the harsh, immense and unforgiving Baltoro Glacier of crag, cornices, and crevaces since Alexander the Great stood on that glacier in 333 BC.

At the time of its independence in 1947, Pakistani law was fairly liberal regarding liquor laws.

It is suggested that when the sale of alcoholic beverages was prohibited in April, 1977, such was more of a political convulsion than a religious tension. Under pressure from an alliance of various right wing political parties, then Prime Minister Zulfikar Ali Bhutto began to pragmatically address some of the demands made by the right including religious leaders.

Today, alcoholic beverages are legally banned in Pakistan for Muslims only (more than 97% of the population), but the penalty of 80 lashes for drinking was repealed in 2009.

And even with the recent election of former cricketer Iman Kahn’s PTI party, while I was in the country, there will be no immediate softening of religious influence.

Non-Muslims can consume alcoholic beverages after getting license from government, the only place in the world I know of where you need a license to drink. And non-Muslims foreigners are also allowed to order alcohol is some hotels. The sole authorized bar in the country is at the Pearl Continental in Peshwar. And curiously the Murree brewery exists as the nation’s only legal distillery; with a cult like following in the U.S. after Scout Willis was caught underage with a can of Murree beer in New York City.

Of course there are places in the U.S. where you cannot purchase alcoholic beverages. Ten states allow dry counties. Some states allowed counties and cities to ban alcoholic beverage sales following the repeal of Prohibition in 1933, while in others, like Alaska and Mississippi, municipalities didn’t start going dry until the 1960s and 1980s, respectively. But these dry areas are going wet. In Maryland, for example, the last dry town, Damascus, became wet in 2012.

The people of Pakistan are warm and friendly and the mountains are the most spectacular on Earth, but it is very good to be back in Maryland where I can order a cold beer.

 

The transfer of a liquor license often involves issues of life and death, and in some instances, zombies and phantoms.

A decision last year by the Maryland Court of Special Appeals in Liquor License Commissioners for Baltimore City v. Austin was instructive as to when a liquor license is really dead. The court explains at the beginning of the 25 page opinion,

.. a zombie is defined as the supernatural power according to voodoo belief may enter into and reanimate a dead body.

And the opinion goes on to make the distinction that a phantom is defined as “something (as a specter) apparent to sense but with no substantial existence.” Both are used as slang terms to refer to a liquor license that has been permitted by a local liquor board to survive, for transfer purposes, beyond the statutory expiration period.

But then, .. the Maryland legislature enacted HB 1410 that changes the law of zombie liquor licenses in Baltimore County, only, effective July 1, 2018.

Under the current law a liquor license expires 180 days after the licensee has closed the business or stopped active alcoholic beverages business operations unless an application for transfer to another location or another person has been approved or is pending; an application for a certificate of permission or a renewal license for continuation of business has been approved or is pending before the Baltimore County Liquor Board; or a written request for a hardship extension is filed within the 180-day period.

Generally, the licensee or another appropriate party may make a written request to the Board to extend the life of the license due to hardship. The Board may grant the extension if the Board finds after a hearing that existing hardship caused the closing or stopping of business operations. An extension may not prolong the life of the license beyond 360 days after the date of closing or stopping of business operations.

Today if a licensed premises is forced to close because of a casualty loss, the Board may extend the license for not more than two years after the closing.

Effective July 1, 2018, as a result of HB 1410, the request for a hardship extension in Baltimore County (but not the rest of the state) automatically extends the life of the liquor license, such that the bill actually repeals the authority of the Baltimore County Board to grant a hardship extension (because it will be automatic).

The bill clarifies that the expiration period resumes on the last to occur of: final action of the Board denying an application for transfer or a request for a certificate of permission or a renewal license for continuation of business; final judgment of the reviewing court if judicial review of the Board’s action on an application or request has affirmed the Board’s action; or the dismissal of a petition for judicial review of the Board’s action.

If a licensed premises is forced to close because of a casualty loss, the Board may extend the license for not more than three years, rather than previous two years, after the closing.

This is a significant change in the life of a zombie liquor license in Baltimore County. Generally, a hardship extension may not prolong the life of an inactive license beyond the total of two years after the date of closing or stopping of alcoholic beverages business operations and any time period during which the license is suspended under an application for approval of a transfer to another location or another person, or an application for a certificate of permission or a renewal license for continuation of business has been approved or is pending.

With 781 alcoholic beverages licensees issued for use in Baltimore County the economic impact of this change in the law should not be underestimated.

And while the licenses beverage industry supported this bill, cosponsored by the entire Baltimore County delegation, its negative impact on the alienability of licenses in a highly regulated industry make the enactment of questionable positive impact on small businesses in the Baltimore County. The bill’s provisions allow a small business licensee to retain a license for a longer period of time after closing or stopping of alcoholic beverages business operations and while this may result in a licensee being able to reopen a business, it does make licenses more difficult to acquire when it slows down efforts to sell the license before the license expires.

While it is difficult to comprehend what new liquor licensing laws could possibly be enacted in Maryland after the legislature passed the largest bill in Maryland history, only 2 years ago in 2016, some 3,180 pages long, re-codifying the alcoholic beverage laws, this is review of just that ..

At the close of the just concluded 438th session of the Maryland General Assembly on April 9, 2018, 1,269 Senate bills and 1,832 House bills were introduced of which 889 bills were enacted, including more than a few that will provide business opportunities for those engaging in the business of alcoholic beverages.

Among the significant issues involving alcoholic beverages are:

Comptroller’s Office

In Maryland, alcoholic beverages manufacturers and wholesalers are regulated by the Comptroller’s Office, while alcoholic beverages retailers are regulated by local boards of license commissioners. House Bill 1316 (Ch. 25) is largely seen as a rebuke to the Comptroller for his legislative activism on craft breweries when it establishes a Task Force to Study State Alcohol Regulation in the State. The 21-member task force, whose membership includes legislators, alcohol industry representatives, law enforcement representatives, and health care professionals, must examine whether the Comptroller’s Office is the most appropriate agency to ensure the safety and welfare of Maryland residents, or whether those tasks should be assigned to another State agency or to one created specifically to carry out those tasks.

Wineries

A Class 4 limited winery license, issued by the Comptroller, authorizes the sale and sampling of wine and pomace brandy produced by the license holder for consumption. Among other things, a license holder may distill and bottle up to 1,900 gallons of pomace brandy made from available Maryland agricultural products. House Bill 972 (passed) establishes stricter requirements for a business to obtain a Class 4 limited winery license. Specifically, the bill changes the broad requirement that a licensee use Maryland agricultural products to produce wine and pomace brandy to instead require the licensee to own or have under contract at least 20 acres of grapes or other fruit in cultivation in the State for use in the production of wine or ensure at least 51% of the ingredients used in alcoholic beverages production are grown in the State. The Secretary of Agriculture each year may grant a one-year exemption to an applicant from the 51% requirement. The bill will not apply until May 1, 2022, to any person who holds a Class 4 license on or before June 30, 2018.

Class 6 Limited Wine Wholesaler’s License

A holder of a Class 4 limited winery license whose winery produces no more than 27,500 gallons of its own wine annually may obtain a Class 6 limited wine wholesaler’s license. The Class 6 license allows the winery to sell and deliver its own wine produced at the licensed premises to a retailer or other person authorized to acquire the wine; however, a license holder may not sell the wine to another wholesaler. House Bill 896 (passed) increases the annual amount of wine that can be produced, sold, and delivered by the holder of a Class 4 limited winery license that also has a Class 6 limited wine wholesaler’s license from 27,500 gallons to 35,000 gallons. The bill also authorizes a Class 6 license holder to sell its wine to a holder of a wholesaler’s license.

Distilleries

There are two types of manufacturer’s license issued in the State that authorize the production of liquor. A Class 1 distillery license authorizes the establishment and operation of a plant for distilling brandy, rum, whiskey, alcohol, and neutral spirits at the location described in the license. Similarly, a Class 9 limited distillery license, which may be issued to a holder of certain Class B or D beer, wine, and liquor licenses, authorizes the license holder to distill, rectify, bottle, or sell up to 100,000 gallons of the same types of alcoholic beverages; however, the Class 9 license holder may sell at retail on the premises of the Class D or Class B license only 15,500 gallons of liquor each year. Senate Bill 384 (passed) increases the annual amount of liquor that may be sold at retail under a Class 9 limited distillery license to 31,000 gallons.

Manufacturer Off-site Permits

The Harford County Farm Fair is an annual event celebrating Harford County’s agricultural heritage and features rides, farm animals, and food, among other attractions. House Bill 270 (passed) allows the holder of a brewery off-site permit or a winery off-site permit to use the permit to sell and provide samples of beer or wine at this fair.

Retail Sales of Alcoholic Beverages – Licenses from Multiple Jurisdictions

A Class B beer, wine, and liquor license allows a restaurant, hotel, or motel to sell alcoholic beverages for consumption on- and/or off-premises, depending on the license. State law generally limits the number of alcoholic beverages licenses that may be issued to a single license holder to one; however, there are exceptions in some jurisdictions. For example, with certain specified requirements, Montgomery County authorizes a single license holder to obtain up to 10 Class B beer, wine, and liquor licenses. House Bill 1003 (passed) authorizes a single individual to hold multiple Class B beer, wine, and liquor licenses or equivalent licenses issued by different local licensing boards for restaurants, hotels, or motels. The number of licenses that a single individual may hold is only limited by the cap imposed by each local licensing board on the licenses that the board issues. The licenses may be issued for use by the license holder, a partnership, a corporation, an unincorporated association, or a limited liability company.

Continue Reading Alcoholic Beverages in the 2018 Maryland General Assembly Session

Among the more curious environmental issues of the day appears to be criminalizing plastic drinking straws and stirrers.

The “war on drinking straws” must be true because this week there is a viral video viewed on YouTube more than 5.5 million times of a 2015 incident where a Texas A&M University research team in Costa Rica found a plastic straw stuck in the nose of a sea turtle.

Then there is the widely tossed around statistic that Americans use 500 million plastic drinking straws a day, but upon investigation it appears that number is suspect and had as its basis a 2011 environmental group’s print ad, but no science. There is apparently a single manufacturing facility in Virginia that produced nearly 4 Billion straws last year, most of them small plastic straws for juice boxes, but not swizzle sticks.

Interestingly, on April 1, 2016 Bacardi Limited announced “it has launched an in-house initiative to remove straws and stirrers in cocktails at company events” to prevent 12,000 straws going to landfill every year. We are assured it was not an April Fools joke? And while corporate social responsibility is no doubt a good thing, it is suggested this was a spin on a cost reduction effort, gone bad, .. that has not been widely followed by others.

But in response to the current hue and cry over one of the oldest eating utensils, the California cities of San Luis Obispo and Davis both have gone as far as enacting “straws on request” laws and Manhattan Beach has a law banning all disposable plastics. Also, Seattle has enacted a ban on plastic utensils, including straws, going into effect in July.

However, potentially impacting more than the populations of those few cities, the state of California has pending, Assembly Bill 1884, that would prohibit sit down food facilities from providing a single use plastic straw to customers unless specifically requested by the customer.

Criminalizing the distribution of drinking straws, alcoholic beverage swizzle sticks, coffee stirrers and the like, under the guise of environmental policy, in a state that decriminalized cannabis distribution, appears foolish to many and of concern to even more that this misguided idea might spread East.

The origin of the first drinking straw is not known, but it dates to more than 5,000 years ago. There is a gold straw in a Giza Pyramid that dates to 2589 BC. We are told Sumerians used straws to drink their beer 3,000 years ago to reach the solids at the bottle of the brew.

The origin of drink stirrer’s likely dates to sugar plantations in the West Indies in the 1600s originally a small branch used to stir a refreshing rum elixir called “Switchel.” Queen Victoria was known to use a stirring rod to chase bubbles out of her Champagne, quietly avoiding any embarrassment from those pesky fizzy gasses.

In America it became fashionable in the 1800s to drink from an inexpensive and easily created rye grass straw. The first modern drinking straw was likely the creation of American inventor Marvin C. Stone who began selling paper straws in 1888. And while straws have remained popular, the 1960 era of The Graduate, and “a great future in plastics” has resulted straws becoming part of our culture.

There appears to be little if any science supporting the criminalization of drinking straws? Anti-straw advocacy activists (.. yes, that is a thing) appear focused on post consumer pollution of discarded straws after a single use, but they don’t seem concerned about the associated ‘less than ideally biodegradable’ drink boxes, usually 6 layers of paper lined with aluminum foil, nor is there a hue and cry because plastic drinking straws are typically made from polypropylene, contributing to petroleum consumption?

There are biodegradable drinking straws on the market, but corn based straws have not proven popular when many melt with alcohol. There are paper straws as well as bamboo and straw straws. Metal straws have always had a place, but have carbon footprint issues of their own despite being distributed among Bacardi employees.

Bans do not have a good track record in the alcoholic beverage industry. The 18th amendment may have been ratified in 1919 but Prohibition was overwhelmingly repealed in 1933 with the ratification of the 21st amendment.

Maybe the real issue is that drinking straws are not actually the single greatest environmental threat to life as we know it on this planet?

Bacardi Limited may be the largest privately held spirits company in the world, but most people do not think that the environmental apocalypse will begin with a drinking straw or stirrer, even one in a Mojito served in California. In 2018, possibly the alcoholic beverage industry can find another boogeyman as a last straw for rational environmental policy?

Delivery to consumers will be the biggest change to the alcoholic beverage industry in Maryland during 2018.

A tipping point is now being reached among retail license holders offering delivery to consumers. Despite that it was a change in state law in 2015 that enables delivery, it has taken some time for what is a new rapid and dramatic evolution in operations, widely adopting by the broader retail industry.

The package good store that is not delivering in 2018 has missed the moment of critical mass. Shopping behaviors have changed and while one of the most disruptive Amazon effects is the consumer expecting delivery, Amazon does not delivery alcoholic beverages in Maryland. But as Millennials move into their prime food and beverage spending years, they want everything delivered, not just their prepared food, but also their beverages.

We are not predicting delivery by drones in 2018, but the entire retail alcoholic beverage industry is being reshaped with more modest delivery vehicles.

There are other concomitant trends that both attract Millennials, and also simplify delivery for retailers, like mobile pay. Retailers maximizing delivery opportunities do not limit themselves by only accepting old fashioned credit cards, but also accept Apple Pay, Android Pay, Masterpass, and Visa Checkout. And a retailer can link a PayPal account to Android Pay, or pull from Venmo.

But an alcoholic beverage retailer in Maryland must comply with specific state and local laws to be authorized to deliver.

In Maryland retail delivery to a purchaser of alcoholic beverages is prohibited unless a retail license holder obtains a letter of authorization from the local licensing board to make deliveries. Additionally, and why brick and mortar liquor stores will continue to flourish is that the delivery must be made,

from the licensed premises by the retail license holder or an employee of the retail license holder.

Local licensing boards across the state have different requirements for approving deliveries by a license holder and issuing the required letter of authorization. Fairly typical is the Baltimore County Rule 9 that establishes a fairly rigorous procedure, both for approval and operation. Written application must be made to the Board and the licensee must appear at a public hearing. The rule further provides,

At the time of application for a permit under this rule, a retail licensee shall submit to the Board information concerning the training of its drivers in verifying the age of recipients of alcohol deliveries.

Once approved, the Board requires that for each delivery of alcoholic beverages, “the person delivering the alcoholic beverages and the person receiving the alcoholic beverages shall complete and sign a form provided by the Board.” The retail licensee must retain the form for not less than a month after the delivery.

The rules goes on to make clear, that the person making the delivery “shall refuse to deliver alcoholic beverages” when the intended recipient is under 21 years of age or when “the intended recipient refuses to sign the form required under this rule, or refuses to provide the person making the delivery with a valid driver’s license or other valid government-issued proof of identity with proof of age.”

Completing the form is the price of doing business by delivery and purchasers have come to accept that mild inconvenience for the greater benefit of having that cold craft beer delivered to their door.

Make no mistake, whether or not a particular retail store is delivering, delivery is here and about to explode. Including there are already national phone apps and websites, enabling ordering with a tap or a click, that have partnered with local liquor stores. Other industries, including a local florist is now approved to deliver alcoholic beverages with flowers and gift baskets. Delivery is going to upend existing retailers who do innovate.

There are those who deliver illegally, including those out of state businesses that ship into Maryland (.. that by some estimates may be up to 5% of all retail sales) and expanding legal delivery outlets will no doubt take a bite out of the scofflaws.

Taking advantage of this huge market shift is very much about how well a retailer adapts. The future of alcoholic beverages involves delivery. All existing licensees should make application to the local licensing board today. If we can assist you with your application of structuring a delivery operation, do not hesitate to give us a call.

It is not surprising that in Maryland the determination as to whether the liquor license is owned by the individual applicants, or by a corporation that operates the business, depends on the circumstances of the particular case.

That said, Maryland law has been and continues to be that liquor licenses issued to individuals for the use of a corporation, which is the most common situation, are owned by the corporation.

The Baltimore County alcoholic beverage license that was the subject of the court challenge in 2001, in the widely discussed case of Rosedale Plaza Limited Partnership v. Lefta, Inc., et al., over who owned the license read, in pertinent part:

THIS IS TO CERTIFY, that Andreas Pitsos, Maria Papadimitriou, Irene A. Pitsos, Lefta, Inc., t/a Hillbrook Station Raw Bar & Grill/Chesaco Liquors, 1703–09–11 Chesaco Avenue, Baltimore, MD 21237 is licensed by the State of Maryland to keep for sale, and to sell all alcoholic beverages at retail at the place herein described, for consumption on the premises or elsewhere.

In that case and despite a statute (.. that no longer exists), then Article 2B Section 9-101(a), which provided in pertinent part:

License issued to individuals; application for partnership.—A license may not be issued to a partnership, to a corporation, or to a limited liability company, but only to individuals authorized to act for a partnership, corporation, or limited liability company who shall assume all responsibilities as individuals, and be subject to all of the penalties, conditions and restrictions imposed upon licensees ..

The appellate court found that liquor license was owned by the corporation. And that has been Maryland law.

Note, Maryland is a minority jurisdiction in this regard and most other states hold to the contrary. But at least 38 states have a Dram Shop Act (but not Maryland) which raises the stakes on who is strictly liable to anyone injured by a drunken patron.

Consistent with the decision is Lefta, in another instance, the Court of Appeals held that a state tax lien of a corporation could be enforced by a writ of execution upon a liquor license issued for the benefit of that corporation. Similarly, in another case, the Court of Appeals accepted that a writ of execution that had been entered against the liquor license to satisfy a personal debt of the licensee arising from his divorce would be improper if the license was owned by a corporation.

Subsequent to all of that and if it were not already clear how Maryland courts will addresses this issue, there are now new sections Maryland Alcoholic Beverages Article of the Annotated Code (the recodified Article 2B), specifically entitled,

Section 4-103 Application on Behalf of Partnership

Section 4-104 Application on Behalf of Corporation or Club

Section 4-105 Application on Behalf of Limited Liability Company

While the current codes expressly provides, “[T]his section is new language derived without substantive change from the second sentence of former Art. 2B, § 9-101(a)(1) and the second sentence of (b)(2), as it related to partnerships,“ .. it is a substantive change in the statute to be consistent with the accepted interpretation.

None of this precludes an individual from doing business in his own name, as a sole proprietorship, and having the liquor license is his name.

There is now no question in Maryland liquor licenses issued to individuals for the use of a partnership, a corporation or an LLC, are owned by the that legal entity and, absent some express agreement to the contrary, the persons named on the liquor license as a licensees have no individual ownership interest in the liquor license.