The 442nd session of the Maryland legislature adjourned on April 12, 2021.
There were no balloons dropped from the balconies at sine die, ostensibly because of Covid-19 social distancing there were no high school pages to drop celebratory balloons from the balconies, but it is worthy of note that this year the legislature passed House Bill 391 criminalizing intentionally releasing balloons?
During the 90 day General Assembly session, senators and delegates considered 2,347 bills and passed 817. Only a modest number of that legislation passed involves alcoholic drink. The Governor has until the 30th day after presentment to sign or veto bills.
This post is a review of the alcoholic beverage legislation enacted this session.
Time and space do not allow a recitation of the bills that failed, but many were not successful, including a much discussed bill that would have allowed supermarket sales.
The new laws compiled below, while adding to the alcoholic beverage regulatory scheme, merely tweak production, distribution and sales. Savvy players in the alcoholic beverage industrial complex will find business opportunities to lead and profit in matters of beer, wine and spirits, including opportunities advantaged by these newly enacted laws.
Retail Sale or Delivery for Off-premises Consumption
On March 19, 2020, in response to the spread of Covid-19 in the State and citing the protection of public health by furthering the goals of social distancing and promotion of compliance with isolation protocols, Maryland Governor Hogan issued an executive order expanding alcoholic beverage delivery and carryout services. The order allowed licensed establishments to deliver or sell alcoholic beverages for off-premises consumption despite any restrictions inherent in their licenses. The order remains effective until after the termination of the state of emergency and rescission of the proclamation of a catastrophic health emergency.
Senate Bill 205/ House Bill 12 are no doubt the most impactful enactment this year when that new law will authorize local alcoholic beverages licensing boards to temporarily adopt regulations authorizing specified license holders to provide alcoholic beverages by delivery or sale for off-premises consumption on a temporary basis. In considering whether to adopt these regulations, a local licensing board must weigh the need to promote economic recovery for small businesses in the wake of the Covid-19 pandemic and the need to protect public health and welfare.
The bills limit an alcoholic beverages license holder to delivering or selling alcoholic beverages that are authorized under its license. Local licensing boards may not increase a license fee or otherwise charge extra for the expanded privileges authorized under the bills, but may set a limit on the amount of alcohol that may be sold or delivered in a single transaction. The bills also require the Alcohol and Tobacco Commission and the Maryland Department of Health jointly to conduct a study on the impact of the expansion of access to alcohol and report to the General Assembly on the findings of the study by December 31, 2022. The bills terminate on June 30, 2023.
Manufacturer’s Licenses and Off-site Permits
Senate Bill 821/ House Bill 1232 are emergency bills that make various temporary changes to the regulation of alcoholic beverage manufacturers in the State. Broadly, the bills significantly alter provisions on off-site and special event permits and alter the licensing fees and privileges of several manufacturer’s licenses. With respect to permits, the bills repeal specified manufacturer’s permits and establish a manufacturer off-site permit and a brewery special event permit. With respect to licensing, the bills alter the fee structure for most manufacturer’s licenses, authorize most manufacturers to sell and deliver their own alcoholic beverage products to consumers if specified procedures are followed, alter the limitations of the Class 7 limited beer wholesaler’s license, and alter the privileges associated with Class 1 distillery licenses and Class 8 farm-brewery licenses. The consumer delivery provisions in particular are intended to help manufacturers return to economic health after suffering the impacts of the pandemic.
A manufacturer off-site permit may be issued to the holder of a specified manufacturer’s license. The permit authorizes the holder to provide samples of and to sell alcoholic beverages produced by the holder. The brewery special event permit may be issued to the holder of a specified brewery license and authorizes the license holder to conduct a special event to provide samples and sell products manufactured by the license holder.
Existing law provides that alcoholic beverage manufacturer’s licenses may be issued by ATC for a set annual fee. These bills instead authorize ATC to determine the annual license fee, as long as the fee does not exceed a specified cap, which is the existing annual fee. The bills also authorize most alcoholic beverage manufacturers to sell and deliver their products in accordance with specified rules.
In addition, the bills increase certain barrel limits for a Class 7 limited beer wholesaler’s license and allow the holders of Class 1 distillery and Class 8 farm brewery licenses to sell and deliver their products directly to individuals in the State who meet specified criteria. The bills terminate on December 31, 2022.
Industry Practice Prohibition
House Bill 185 prohibits an alcoholic beverages license holder in the State, or an employee of a license holder, from conditioning the sale of alcoholic beverages for on-premises consumption on the purchase of more than one serving of an alcoholic beverage at a time. The issuer of an alcoholic beverages license may revoke or suspend the license for violating this prohibition. In addition, the bill establishes criminal penalties for a violation, which include a fine or possible imprisonment.
Alcohol and Tobacco Commission
Senate Bill 761/ House Bill 1336 include the Executive Director of ATC in the State’s retirement and pension plan and provide that the Executive Director has the designation of a peace officer. This gives the Executive Director the same status as other ATC employees in the pension system.
Local Alcoholic Beverages Legislation
Senate Bill 677/ House Bill 883 establish a Class B-D beer, wine, and liquor license that authorizes the holder to sell beer, wine, and liquor for on-premises consumption, as specified. The bills also authorize the board of license commissioners to issue up to two licenses in a single year. A license holder must complete a Food Alcohol Ratio Report once every licensing cycle.
Senate Bill 731/ House Bill 1059 establish a gift basket permit that may be issued to a person whose primary business is the sale and delivery of flowers or specified gift baskets. The permit holder may not hold any other alcoholic beverages license or permit in the county. The permit holder’s annual sales from alcoholic beverages may not exceed 10% of the holder’s annual gross sales.
Senate Bill 679/ House Bill 880, both emergency bills, authorize the board of license commissioners to reimburse license holders for certain annual license fees, as specified, for the 2020 through 2021 licensing period. The board must also waive or impose lower annual fees relating to the same types of licenses for the 2021 through 2022 licensing period.
Anne Arundel County
Senate Bill 489/ House Bill 679 establish a Class MT (movie theater) beer and wine license. The board of license commissioners may issue the license to the owner of a movie theater in the county that holds a crowd control training certification. The license authorizes the sale of beer and wine for on-premises consumption, as specified.
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