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ardent spirits, when it almost cryptically provides, “Section 2141 of the Revised Statutes (25 U.S.C. 251) is repealed.”

The now repealed 1834 law was one of the Indian Trade and Intercourse Acts enacted in the 18th and 19th centuries.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 While the operation of the Trade and Intercourse Acts has been repealed or superseded by subsequent laws, several of them, including the one prohibiting distilleries on Indian lands, remained in effect through 2018.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.

The Board of Liquor License Commissioners for Baltimore County has issued new Rules and Regulations effective September 30, 2018.

Liquor board Rules are of great import and govern the issuance of an alcoholic beverage license as well as the day to day operations of a business selling alcoholic beverages. While hyper technical in nature, the Rules have the force of law and a violation of a Rule can result in civil penalties and ultimately suspension or revocation of an alcoholic beverage license.

Maryland Annotated Code, Alcoholic Beverages Article, Section 13-207 provides, the Baltimore County Board may adopt Rules to carry out the State law, including rules regarding:

  1. the presence on a licensed premises of an individual who is not a consumer; and
  2. the issuance of a license when the actual use of the license is to be deferred until the completion of construction or alterations on the premises.

There are substantially the same enabling laws across the state although local licensing boards ultimately promulgate very different Rules from county to county.

As a purely housekeeping matter, the new Baltimore County Rules and Regulations identify the current members of the Board, including longtime chairman Charles Klein, recently appointed member Susan Green and new member Audie Jones.

In a procedural clarification, the Rules now make clear that a licensee may be subject to a fine of up to “$2,000 or suspension or revocation of their license for any violation of any of these rules.”

The change that garnered the must comment at the public hearing on the Rules is Rule 1 that now provides, “a license holder or an employee of a license holder may not sell or provide alcoholic beverages to any person who exhibits signs of intoxication or impairment, ..” Some argued this was a high bar for a server. Our concern is that the new Rule is a different standard than the state law that provides, “A license holder or an employee of the license holder may not sell or provide alcoholic beverages to an individual who, at the time of the sale or delivery, is visibly under the influence of an alcoholic beverage.” Md. Ann. Code art. AB, § 6-307

Possibly, the change that will impact the largest number of licensees was from the old Rule 5.B, “It shall be unlawful for the holder of a Class “D” license to allow any minor or minors under the age of twenty-one (21) years to be on the premises after 9:00 p.m.” has been altered to 10:00 p.m., “unless accompanied by a parent or legal guardian” who is 21 years or older. That change reflects a societal change as much as anything else.

Rule 6 that limits gifts from wholesalers to licensees has been completely rewritten and now expressly allows advertising support with a value of not more than $150. Of all the changes this one may be problematic to enforce and not only have real First Amendment challenges, but also problems in enforcing in the social media age?

There was a nod to modernity in the modest revision to Rule 9 that allow delivery of alcoholic beverages where the Rule had provided only for orders placed by mail or telephone and now orders may also be placed by “email, fax, text or via an app”.

And another minor, but possibly salacious edit to the Rules in this modern era was a change to the Rule 2 prohibited practices that had in the past only prohibited female nudity and now requires that ”the male or female pubic region, anus, cleft of the buttocks, or genitals” must be clothed and not exposed to public view.

There are a dozen or so other mostly modest changes that may impact individual licensees. The new Rules are a very good cleanup of the last version. All licensees should read the new Rules.

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.

Given that a liquor license is “the” key asset in a business selling alcoholic beverages, be it a restaurant or package goods store, violations of laws associated with those licenses are of great import.

The twenty three counties in Maryland, Baltimore City, and the City of Annapolis each issue retail alcoholic beverages licenses and local boards of liquor license commissioners police activities under those licenses.

This blog post is a review of retail liquor license violations across Maryland during 2017, the most recent period for which data is available.

Local licensing boards regulate the types of licenses issued, scope and restrictions of licenses, including hours of sale, and much more. Those boards enforce the more than 3,100 page state law, county and city laws, and the boards’ own rules and regulations. Enforcement varies from locale to locale and is often fact specific, but penalties can range from civil enforcement dollar penalties for a first offense or other fines to suspension of a license for a period of time often after a repeated violation, ultimately to revocation of a license. Anecdotally, we know a business with a first violation is more likely to have another violation within 12 months.

Significantly, an adjudication of guilt on a liquor license violation often has ramifications beyond the liquor board proceeding. The violation is often a breach of the lease for the licensed premises and likely to be a material breach of loan documents and terms of business financing.

Local licensing boards across the state reported a total of 852 retail license violations during 2017, only slightly less than the 859 violations in 2016 (certainly not a statistically significant difference).

Of note, the per capita consumption of alcoholic beverages, based upon deliveries to retailers, dipped ever so slightly from 19.921 gallons in 2016 to 19.684 gallons in 2017, but that modest decrease almost certainly does not impact the number of violations.

Overwhelmingly, the largest category of those violations, 450, that is significantly more than 50% of all violations, are for sale of an alcoholic beverage to a minor. Sales to a minor represent the largest number of violations not only statewide but also in nearly all counties; and generally result in larger dollar fines than other violations. Interestingly in 2016, violations for sales to minors were only 37% of violations.

101 of those 450 reported violations were in Prince George’s County, the only locale in triple digits.

The next largest categories of violations were sales conducted by a minor and interestingly 53 of those 59 reported violations were in Allegheny County.

Next in terms of violations were 53 violations for failure to produce alcohol awareness certificates.

32 alcoholic beverage businesses had penalties assessed for being a public nuisance.

25 were penalized for sales after prohibited hours.

And 25 were also penalized for sales to intoxicated persons.

23 establishments were cited for unauthorized entertainment.

22 businesses paid penalties for failure to maintain records, reports of purchases, and invoices.

21 were fined or had licenses suspended for failure to cooperate with police.

16 purchased alcoholic beverages from other than a wholesaler.

There were also license violations for: an intoxicated server; gambling on the premises; open container; failure to display a license; inappropriate relationship with a wholesaler; tampering with contents of nonalcoholic beverages on the premises; business being operated by other than the owner; operating under a trade name not approved, etc.

Statistically, with 168 violations Montgomery reporting the largest number of those violations followed closely by Prince George’s County with 164. The only other jurisdiction in triple digits was Allegheny County with 135 violations. Baltimore City reported 91 violations. Baltimore County reported 67 violations. Only Queen Anne’s County reported no violations.

With a liquor license being the key asset in an alcoholic beverage business, a licensee should consider the value of that license when cited for a violation and is likely best served to be represented by legal counsel at a license board proceeding.

A liquor license holder in Maryland may now be issued more than one restaurant liquor license.

Effective July 1, 2018, House Bill 2018-1003, now Chapter Laws 225, authorizes a single individual to hold multiple Class B, beer, wine, and liquor licenses or equivalent licenses issued by different local liquor licensing boards for restaurants, hotels, or motels.

Nancy Hudes has focused experience advising chain restaurants and other with multiple restaurant locations about alcoholic beverage licensing matters.

The number of licenses that a single individual may hold is only limited by the cap imposed by each local liquor 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.

In Maryland, 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 had before the bill generally limited the number of alcoholic beverages licenses that may be issued to a single license holder to one.

However, there were express 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. Other jurisdictions issue other classifications of licenses that authorize alcoholic beverages to be sold in a restaurant, hotel, or motel. For example, Anne Arundel County issues a Class BLX license that may be used to sell beer, wine, and liquor in a luxury-type restaurant in the 27th legislative district of the county, and Montgomery County issues a Class BD-BWL license that authorizes the sale of beer and wine for on- and off-premises consumption and authorizes the sale of liquor for on-premises consumption. Those local provisions, although found in State law arguably contradicted the general State law as recodified by the legislature two years ago.

And then last year, the Maryland Attorney General’s office gave advice that a license holder that has a Class B license in one jurisdiction cannot have another Class B license in another jurisdiction. With that advice a prospective restaurant owner on Pratt Street in Baltimore was told by the local liquor licensing board that it would not approve a license for that location when the licensee already had a license at a restaurant in Annapolis.

House Bill 1003 was enacted to clarify and correct the apparent inconsistencies.

Now Maryland law authorizes a single individual to hold multiple Class B alcoholic beverage licenses issued by different local liquor licensing boards for restaurants, hotels, or motels.

You may not yet know that you need an expert witness? But, in a public hearing before a Board of Liquor License Commissioners, expert witness testimony often is admitted when the Board determines that the testimony will assist it, as the trier of fact, to understand the evidence or to determine a fact in issue.

Thomas Jefferson may be the earliest known expert witness in an American court when in 1771 in Hite v. Fairfax, the future President offered his knowledge and experience on behalf of Lord Fairfax, a proprietary land owner, in a complicated chancery suit. Dr. Henry Chang-Yu Lee may be the best known modern expert witness for his forensic science analysis and testimony challenging the police collection of blood evidence that was instrumental in O.J. Simpson being found not guilty of murder. And Michael Egen is a counterfeit wine expert consulting and testifying about wine authenticity, including for the FBI.

Our attorney, Stuart Kaplow, has testified as the expert witness on alcoholic beverage matters and could be your expert.

We can provide a written report and expert testimony before a local liquor licensing board as is considers “.. the public need and desire for the license.” Maryland the law provides the “local licensing board shall deny a license application .. if the local licensing board determines that .. the granting of the license is not necessary to accommodate the public.” And the testimony of an expert is the way to address that legal test.

In making a determination to accept expert testimony on that and other matters, the local liquor licensing board will determine whether the witness is qualified as an expert by knowledge, skill, experience, training, or education; the appropriateness of the expert testimony on the particular subject; and, whether a sufficient factual basis exists to support the expert testimony. We are qualified and have the experience to satisfy those requirements.

We may need your assistance to form the basis of our expert opinions. The facts or data in a particular case upon which an expert bases an opinion are those perceived by or made known to the expert at or before the hearing. Ideally, we develop and can offer testimony of alternative and redundant theories, at times based upon facts independently developed or based on third party purchased market data, to advance each case.

All of this noted, none of this limits the right of an opposing party to cross examine an expert witness or to test the basis of the expert’s opinion or inference.

Interestingly, testimony in the form of an opinion or inference otherwise admissible is not objectionable merely because it embraces an ultimate issue to be decided by the local liquor licensing board. There is much courtroom debate over experts in litigation, from medical malpractice cases to lead paint cases, but much of that debate does not extend to the administrative proceedings that are alcoholic beverage licensing matters. There are formal rules of evidence that govern expert testimony in federal and state courts, but liquor licensing boards use ‘relaxed’ less formal rules, common in administrative proceedings, allowing wider and more expansive use of experts in liquor licensing hearings.

When you think you may need an expert, we would be pleased to work with you and your attorney to provide analysis and expert witness testimony for your liquor licensing board hearing, and more.

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.

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.