EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LA W.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0565*
HOUSE BILL 565
A1 3lr1458
CF SB 431
By: Washington County Delegation
Introduced and read first time: February 3, 2023
Assigned to: Economic Matters
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 11, 2023
CHAPTER ______
AN ACT concerning 1
Alcoholic Beverages – Class 9 Limited Distillery License – Self–Distribution 2
FOR the purpose of authorizing a holder of a Class 9 limited distillery license to sell and 3
deliver alcoholic beverages manufactured under the license in bulk to a person in the 4
State that is authorized to acquire them and to a person outside the State that is 5
authorized to acquire them; repealing the prohibition against a holder of a Class 9 6
limited distillery license applying for or possessing a wholesaler’s license to apply for 7
and obtain a Class 8 liquor wholesaler’s license with certain privileges; and generally 8
relating to Class 9 limited distillery licenses. 9
BY repealing and reenacting, with amendments, 10
Article – Alcoholic Beverages 11
Section 2–203, 2–212(b), 2–308.1, and 2–311 12
Annotated Code of Maryland 13
(2016 Volume and 2022 Supplement) 14
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16
Article – Alcoholic Beverages 17
2–203. 18
(a) There is a Class 9 limited distillery license. 19
2 HOUSE BILL 565
(b) The limited distillery license may be issued only to a holder of a: 1
(1) Class D beer, wine, and liquor license where sales for both on– and 2
off–premises consumption are permitted for use on the premises for which the Class D 3
license was issued; or 4
(2) Class B beer, wine, and liquor license where sales for both on– and 5
off–premises consumption are permitted for use on the premises for which the Class B 6
license was issued. 7
(c) A holder of the limited distillery license: 8
(1) may establish and operate a plant in the State for distilling, rectifying, 9
and bottling brandy, rum, whiskey, alcohol, and neutral spirits if the holder: 10
(i) maintains only one brand at any one time for each product of 11
brandy, rum, whiskey, alcohol, and neutral spirits that is distilled, rectified, and sold; and 12
(ii) does not manufacture or rectify product of any other brand for 13
another entity; 14
(2) may acquire bulk alcoholic beverages from the holder of a distillery or 15
rectifying license in the State or from the holder of a nonresident dealer’s permit; 16
(3) after acquiring an individual storage permit, may store on the licensed 17
premises those products manufactured under the license; 18
(4) EXCEPT AS AUTHORIZED UNDER SUBSECTION (D)(1) OF THIS 19
SECTION, may sell and deliver those products manufactured under the license [only to a 20
licensed wholesaler in the State or person authorized to acquire distilled spirits in another 21
state and not to a county dispensary]: 22
(I) IN BULK TO A PERSON IN THE STATE THAT IS AUTHORI ZED 23
TO ACQUIRE THEM ; AND 24
(II) TO A PERSON OUTSIDE THE STATE THAT IS AUTHORIZED TO 25
ACQUIRE THEM ; 26
(5) may sell the products manufactured under the license at retail in a 27
manner consistent with the underlying Class D or Class B license; 28
(6) may conduct guided tours of that portion of the licensed premises used 29
for the limited distillery operation; 30
HOUSE BILL 565 3
(7) may serve not more than three samples of products manufactured at 1
the licensed premises, with each sample consisting of not more than one–half ounce from a 2
single product, to persons who: 3
(i) have attained the legal drinking age; 4
(ii) participated in a guided tour; and 5
(iii) are present on that portion of the premises used for the limited 6
distillery operation; and 7
(8) may sell and deliver products manufactured by the license holder to an 8
individual in accordance with § 2–219 of this subtitle. 9
(d) A holder of the limited distillery license may not: 10
(1) [apply for or possess a wholesaler’s license, EXCEPT FOR A CLASS 8 11
LIQUOR WHOLESALER ’S LICENSE; 12
(2)] sell bottles of the products manufactured at the Class 9 limited 13
distillery on that part of the premises used for the distillery operation; 14
[(3)] (2) except as provided in subsection (e) of this section, distill, rectify, 15
bottle, or sell more than 100,000 gallons of brandy, rum, whiskey, alcohol, and neutral 16
spirits each calendar year; 17
[(4)] (3) sell at retail on the premises of the Class D or Class B license, for 18
on–premises or off–premises consumption, more than 31,000 gallons of the products 19
manufactured under the license each calendar year; and 20
[(5)] (4) own, operate, or be affiliated in any manner with another 21
manufacturer. 22
(e) To distill more than the gallonage specified in subsection [(d)(3)] (D)(2) of this 23
section, a holder of the limited distillery license shall divest itself of any Class D or Class B 24
retail license and obtain a Class 1 distillery license. 25
(f) A holder of the limited distillery license shall abide by all trade practice 26
restrictions applicable to distilleries. 27
(g) The annual license fee: 28
(1) shall be determined by the Commission; and 29
(2) may not exceed $500. 30
4 HOUSE BILL 565
2–212. 1
(b) (1) The holder of a rectifying or winery license may apply for and obtain a 2
wholesaler’s license of any class for the same premises or elsewhere as provided under this 3
article. 4
(2) The holder of a Class 4 limited winery license may apply for and obtain 5
a Class 6 limited wine wholesaler’s license for the same premises or elsewhere as provided 6
under this article. 7
(3) (i) The holder of a Class 5 brewery license or Class 7 micro–brewery 8
license may apply for and obtain a Class 7 limited beer wholesaler’s license in accordance 9
with this paragraph. 10
(ii) A holder of a Class 5 brewery license that was selling the holder’s 11
own beer at wholesale in the State as of January 1, 2013, may obtain a Class 7 limited beer 12
wholesaler’s license to continue to sell the holder’s own beer at wholesale in the same 13
location in an amount that is not more than 5,000 barrels annually. 14
(iii) A holder of a Class 5 brewery license that produces in aggregate 15
from all its locations not more than 45,000 barrels of beer annually may obtain a Class 7 16
limited beer wholesaler’s license and distribute not more than 5,000 barrels of its own beer 17
annually. 18
(4) A holder of one or two Class 7 micro–brewery licenses that produces in 19
aggregate from all of its locations not more than 45,000 barrels of beer annually may obtain 20
a Class 7 limited beer wholesaler’s license and distribute beer that: 21
(i) totals annually not more than 5,000 barrels in aggregate from all 22
of its locations; and 23
(ii) has been brewed at the location from where it is distributed. 24
(5) The holder of a Class 1 distillery license may apply for and obtain a 25
Class 8 liquor wholesaler’s license for the same premises or elsewhere as provided under 26
this article. 27
(6) THE HOLDER OF A CLASS 9 LIMITED DISTILLERY L ICENSE MAY 28
APPLY FOR AND OBTAIN A CLASS 8 LIQUOR WHOLESALER ’S LICENSE, FOR THE SAME 29
PREMISES OR ELSEWHER E AS PROVIDED UNDER THIS ARTICLE, AND DISTRIBUTE ITS 30
OWN LIQUOR. 31
2–308.1. 32
(a) There is a Class 8 liquor wholesaler’s license. 33
(b) The license may be issued only to a person that: 34 HOUSE BILL 565 5
(1) holds a: 1
(I) Class 1 distillery license; OR 2
(II) CLASS 9 LIMITED DISTILLERY L ICENSE; and 3
(2) produces in the aggregate from all of its locations not more than 100,000 4
gallons of liquor annually. 5
(c) The license authorizes the license holder to: 6
(1) sell and deliver its own liquor produced at the license holder’s premises 7
to: 8
(i) a holder of a retail license that is authorized to acquire liquor 9
from a wholesaler; and 10
(ii) a holder of a permit that is authorized to acquire liquor from a 11
wholesaler; and 12
(2) distribute not more than 27,500 gallons of its own liquor annually. 13
(d) The annual license fee is $100. 14
(e) The license holder may use an additional location for the warehousing, sale, 15
and delivery of liquor: 16
(1) if approved by the Comptroller following submission of a separate 17
application for each location; and 18
(2) on the payment of a $100 fee for each additional location. 19
2–311. 20
(a) The holder of a Class 1, Class 2, or Class 3 wholesaler’s license may obtain 21
more than one such license [provided] IF separate records are kept. 22
(b) (1) The holder of a rectifying or winery license may apply for and obtain a 23
wholesaler’s license of any class for the same premises or elsewhere as provided under this 24
article. 25
(2) The holder of a Class 4 limited winery license may apply for and obtain 26
a Class 6 limited wine wholesaler’s license for the same premises or elsewhere as provided 27
under this article. 28
6 HOUSE BILL 565
(3) (i) The holder of a Class 5 manufacturer’s license or Class 7 1
micro–brewery license may apply for and obtain a Class 7 limited beer wholesaler’s license 2
in accordance with this paragraph. 3
(ii) A holder of a Class 5 manufacturer’s license that was selling the 4
holder’s own beer at wholesale in the State as of January 1, 2013, may obtain a Class 7 5
limited beer wholesaler’s license to continue to sell the holder’s own beer at wholesale in 6
the same location in an amount that is not more than 5,000 barrels annually. 7
(iii) A holder of a Class 5 manufacturer’s license that produces in 8
aggregate from all its locations not more than 45,000 barrels of beer annually may obtain 9
a Class 7 limited beer wholesaler’s license and distribute not more than 5,000 barrels of its 10
own beer annually. 11
(iv) A holder of one or two Class 7 micro–brewery licenses that 12
produces in aggregate from all of its locations not more than 45,000 barrels of beer annually 13
may obtain a Class 7 limited beer wholesaler’s license and distribute beer that: 14
1. totals annually not more than 5,000 barrels in aggregate 15
from all of its locations; and 16
2. has been brewed at the location from where it is 17
distributed. 18
(4) A HOLDER OF A CLASS 9 LIMITED DISTILLERY L ICENSE MAY 19
APPLY FOR AND OBTAIN A CLASS 8 LIQUOR WHOLESALER ’S LICENSE, FOR THE SAME 20
PREMISES OR ELSEWHER E AS PROVIDED UNDER THIS ARTICLE, AND DISTRIBUTE ITS 21
OWN LIQUOR. 22
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take e ffect July 23
1, 2023. 24
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.