MD
Maryland House Bill HB565

Maryland 2023 Regular Session

Maryland House Bill HB565 Compare Versions

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1- WES MOORE, Governor Ch. 429
21
3-– 1 –
4-Chapter 429
5-(House Bill 565)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LA W.
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ *hb0565*
89
9-Alcoholic Beverages – Class 9 Limited Distillery License – Self–Distribution
10+HOUSE BILL 565
11+A1 3lr1458
12+ CF SB 431
13+By: Washington County Delegation
14+Introduced and read first time: February 3, 2023
15+Assigned to: Economic Matters
16+Committee Report: Favorable with amendments
17+House action: Adopted
18+Read second time: March 11, 2023
1019
11-FOR the purpose of authorizing a holder of a Class 9 limited distillery license to sell and
12-deliver alcoholic beverages manufactured under the license in bulk to a person in the
13-State that is authorized to acquire them and to a person outside the State that is
14-authorized to acquire them; repealing the prohibition against a holder of a Class 9
15-limited distillery license applying for or possessing a wholesaler’s license to apply for
16-and obtain a Class 8 liquor wholesaler’s license with certain privileges; and generally
17-relating to Class 9 limited distillery licenses.
20+CHAPTER ______
1821
19-BY repealing and reenacting, with amendments,
20- Article – Alcoholic Beverages
21-Section 2–203, 2–212(b), 2–308.1, and 2–311
22- Annotated Code of Maryland
23- (2016 Volume and 2022 Supplement)
22+AN ACT concerning 1
2423
25- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
26-That the Laws of Maryland read as follows:
24+Alcoholic Beverages – Class 9 Limited Distillery License – Self–Distribution 2
2725
28-Article – Alcoholic Beverages
26+FOR the purpose of authorizing a holder of a Class 9 limited distillery license to sell and 3
27+deliver alcoholic beverages manufactured under the license in bulk to a person in the 4
28+State that is authorized to acquire them and to a person outside the State that is 5
29+authorized to acquire them; repealing the prohibition against a holder of a Class 9 6
30+limited distillery license applying for or possessing a wholesaler’s license to apply for 7
31+and obtain a Class 8 liquor wholesaler’s license with certain privileges; and generally 8
32+relating to Class 9 limited distillery licenses. 9
2933
30-2–203.
34+BY repealing and reenacting, with amendments, 10
35+ Article – Alcoholic Beverages 11
36+Section 2–203, 2–212(b), 2–308.1, and 2–311 12
37+ Annotated Code of Maryland 13
38+ (2016 Volume and 2022 Supplement) 14
3139
32- (a) There is a Class 9 limited distillery license.
40+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
41+That the Laws of Maryland read as follows: 16
3342
34- (b) The limited distillery license may be issued only to a holder of a:
43+Article – Alcoholic Beverages 17
3544
36- (1) Class D beer, wine, and liquor license where sales for both on– and
37-off–premises consumption are permitted for use on the premises for which the Class D
38-license was issued; or
45+2–203. 18
3946
40- (2) Class B beer, wine, and liquor license where sales for both on– and
41-off–premises consumption are permitted for use on the premises for which the Class B
42-license was issued.
47+ (a) There is a Class 9 limited distillery license. 19
48+ 2 HOUSE BILL 565
4349
44- (c) A holder of the limited distillery license:
4550
46- (1) may establish and operate a plant in the State for distilling, rectifying,
47-and bottling brandy, rum, whiskey, alcohol, and neutral spirits if the holder:
48- Ch. 429 2023 LAWS OF MARYLAND
51+ (b) The limited distillery license may be issued only to a holder of a: 1
4952
50-– 2 –
51- (i) maintains only one brand at any one time for each product of
52-brandy, rum, whiskey, alcohol, and neutral spirits that is distilled, rectified, and sold; and
53+ (1) Class D beer, wine, and liquor license where sales for both on– and 2
54+off–premises consumption are permitted for use on the premises for which the Class D 3
55+license was issued; or 4
5356
54- (ii) does not manufacture or rectify product of any other brand for
55-another entity;
57+ (2) Class B beer, wine, and liquor license where sales for both on– and 5
58+off–premises consumption are permitted for use on the premises for which the Class B 6
59+license was issued. 7
5660
57- (2) may acquire bulk alcoholic beverages from the holder of a distillery or
58-rectifying license in the State or from the holder of a nonresident dealer’s permit;
61+ (c) A holder of the limited distillery license: 8
5962
60- (3) after acquiring an individual storage permit, may store on the licensed
61-premises those products manufactured under the license;
63+ (1) may establish and operate a plant in the State for distilling, rectifying, 9
64+and bottling brandy, rum, whiskey, alcohol, and neutral spirits if the holder: 10
6265
63- (4) EXCEPT AS AUTHORIZED UNDER SUBSECTION (D)(1) OF THIS
64-SECTION, may sell and deliver those products manufactured under the license [only to a
65-licensed wholesaler in the State or person authorized to acquire distilled spirits in another
66-state and not to a county dispensary]:
66+ (i) maintains only one brand at any one time for each product of 11
67+brandy, rum, whiskey, alcohol, and neutral spirits that is distilled, rectified, and sold; and 12
6768
68- (I) IN BULK TO A PERSON IN THE STATE THAT IS AUTHORI ZED
69-TO ACQUIRE THEM ; AND
69+ (ii) does not manufacture or rectify product of any other brand for 13
70+another entity; 14
7071
71- (II) TO A PERSON OUTSIDE THE STATE THAT IS AUTHORI ZED TO
72-ACQUIRE THEM ;
72+ (2) may acquire bulk alcoholic beverages from the holder of a distillery or 15
73+rectifying license in the State or from the holder of a nonresident dealer’s permit; 16
7374
74- (5) may sell the products manufactured under the license at retail in a
75-manner consistent with the underlying Class D or Class B license;
75+ (3) after acquiring an individual storage permit, may store on the licensed 17
76+premises those products manufactured under the license; 18
7677
77- (6) may conduct guided tours of that portion of the licensed premises used
78-for the limited distillery operation;
78+ (4) EXCEPT AS AUTHORIZED UNDER SUBSECTION (D)(1) OF THIS 19
79+SECTION, may sell and deliver those products manufactured under the license [only to a 20
80+licensed wholesaler in the State or person authorized to acquire distilled spirits in another 21
81+state and not to a county dispensary]: 22
7982
80- (7) may serve not more than three samples of products manufactured at
81-the licensed premises, with each sample consisting of not more than one–half ounce from a
82-single product, to persons who:
83+ (I) IN BULK TO A PERSON IN THE STATE THAT IS AUTHORI ZED 23
84+TO ACQUIRE THEM ; AND 24
8385
84- (i) have attained the legal drinking age;
86+ (II) TO A PERSON OUTSIDE THE STATE THAT IS AUTHORIZED TO 25
87+ACQUIRE THEM ; 26
8588
86- (ii) participated in a guided tour; and
89+ (5) may sell the products manufactured under the license at retail in a 27
90+manner consistent with the underlying Class D or Class B license; 28
8791
88- (iii) are present on that portion of the premises used for the limited
89-distillery operation; and
92+ (6) may conduct guided tours of that portion of the licensed premises used 29
93+for the limited distillery operation; 30
94+ HOUSE BILL 565 3
9095
91- (8) may sell and deliver products manufactured by the license holder to an
92-individual in accordance with § 2–219 of this subtitle.
9396
94- (d) A holder of the limited distillery license may not:
95- WES MOORE, Governor Ch. 429
97+ (7) may serve not more than three samples of products manufactured at 1
98+the licensed premises, with each sample consisting of not more than one–half ounce from a 2
99+single product, to persons who: 3
96100
97-– 3 –
98- (1) [apply for or possess a wholesaler’s license, EXCEPT FOR A CLASS 8
99-LIQUOR WHOLESALER ’S LICENSE;
101+ (i) have attained the legal drinking age; 4
100102
101- (2)] sell bottles of the products manufactured at the Class 9 limited
102-distillery on that part of the premises used for the distillery operation;
103+ (ii) participated in a guided tour; and 5
103104
104- [(3)] (2) except as provided in subsection (e) of this section, distill, rectify,
105-bottle, or sell more than 100,000 gallons of brandy, rum, whiskey, alcohol, and neutral
106-spirits each calendar year;
105+ (iii) are present on that portion of the premises used for the limited 6
106+distillery operation; and 7
107107
108- [(4)] (3) sell at retail on the premises of the Class D or Class B license, for
109-on–premises or off–premises consumption, more than 31,000 gallons of the products
110-manufactured under the license each calendar year; and
108+ (8) may sell and deliver products manufactured by the license holder to an 8
109+individual in accordance with § 2–219 of this subtitle. 9
111110
112- [(5)] (4) own, operate, or be affiliated in any manner with another
113-manufacturer.
111+ (d) A holder of the limited distillery license may not: 10
114112
115- (e) To distill more than the gallonage specified in subsection [(d)(3)] (D)(2) of this
116-section, a holder of the limited distillery license shall divest itself of any Class D or Class B
117-retail license and obtain a Class 1 distillery license.
113+ (1) [apply for or possess a wholesaler’s license, EXCEPT FOR A CLASS 8 11
114+LIQUOR WHOLESALER ’S LICENSE; 12
118115
119- (f) A holder of the limited distillery license shall abide by all trade practice
120-restrictions applicable to distilleries.
116+ (2)] sell bottles of the products manufactured at the Class 9 limited 13
117+distillery on that part of the premises used for the distillery operation; 14
121118
122- (g) The annual license fee:
119+ [(3)] (2) except as provided in subsection (e) of this section, distill, rectify, 15
120+bottle, or sell more than 100,000 gallons of brandy, rum, whiskey, alcohol, and neutral 16
121+spirits each calendar year; 17
123122
124- (1) shall be determined by the Commission; and
123+ [(4)] (3) sell at retail on the premises of the Class D or Class B license, for 18
124+on–premises or off–premises consumption, more than 31,000 gallons of the products 19
125+manufactured under the license each calendar year; and 20
125126
126- (2) may not exceed $500.
127+ [(5)] (4) own, operate, or be affiliated in any manner with another 21
128+manufacturer. 22
127129
128-2–212.
130+ (e) To distill more than the gallonage specified in subsection [(d)(3)] (D)(2) of this 23
131+section, a holder of the limited distillery license shall divest itself of any Class D or Class B 24
132+retail license and obtain a Class 1 distillery license. 25
129133
130- (b) (1) The holder of a rectifying or winery license may apply for and obtain a
131-wholesaler’s license of any class for the same premises or elsewhere as provided under this
132-article.
134+ (f) A holder of the limited distillery license shall abide by all trade practice 26
135+restrictions applicable to distilleries. 27
133136
134- (2) The holder of a Class 4 limited winery license may apply for and obtain
135-a Class 6 limited wine wholesaler’s license for the same premises or elsewhere as provided
136-under this article.
137+ (g) The annual license fee: 28
137138
138- (3) (i) The holder of a Class 5 brewery license or Class 7 micro–brewery
139-license may apply for and obtain a Class 7 limited beer wholesaler’s license in accordance
140-with this paragraph.
139+ (1) shall be determined by the Commission; and 29
141140
142- (ii) A holder of a Class 5 brewery license that was selling the holder’s
143-own beer at wholesale in the State as of January 1, 2013, may obtain a Class 7 limited beer Ch. 429 2023 LAWS OF MARYLAND
141+ (2) may not exceed $500. 30
142+ 4 HOUSE BILL 565
144143
145-– 4 –
146-wholesaler’s license to continue to sell the holder’s own beer at wholesale in the same
147-location in an amount that is not more than 5,000 barrels annually.
148144
149- (iii) A holder of a Class 5 brewery license that produces in aggregate
150-from all its locations not more than 45,000 barrels of beer annually may obtain a Class 7
151-limited beer wholesaler’s license and distribute not more than 5,000 barrels of its own beer
152-annually.
145+2–212. 1
153146
154- (4) A holder of one or two Class 7 micro–brewery licenses that produces in
155-aggregate from all of its locations not more than 45,000 barrels of beer annually may obtain
156-a Class 7 limited beer wholesaler’s license and distribute beer that:
147+ (b) (1) The holder of a rectifying or winery license may apply for and obtain a 2
148+wholesaler’s license of any class for the same premises or elsewhere as provided under this 3
149+article. 4
157150
158- (i) totals annually not more than 5,000 barrels in aggregate from all
159-of its locations; and
151+ (2) The holder of a Class 4 limited winery license may apply for and obtain 5
152+a Class 6 limited wine wholesaler’s license for the same premises or elsewhere as provided 6
153+under this article. 7
160154
161- (ii) has been brewed at the location from where it is distributed.
155+ (3) (i) The holder of a Class 5 brewery license or Class 7 micro–brewery 8
156+license may apply for and obtain a Class 7 limited beer wholesaler’s license in accordance 9
157+with this paragraph. 10
162158
163- (5) The holder of a Class 1 distillery license may apply for and obtain a
164-Class 8 liquor wholesaler’s license for the same premises or elsewhere as provided under
165-this article.
159+ (ii) A holder of a Class 5 brewery license that was selling the holder’s 11
160+own beer at wholesale in the State as of January 1, 2013, may obtain a Class 7 limited beer 12
161+wholesaler’s license to continue to sell the holder’s own beer at wholesale in the same 13
162+location in an amount that is not more than 5,000 barrels annually. 14
166163
167- (6) THE HOLDER OF A CLASS 9 LIMITED DISTILLERY L ICENSE MAY
168-APPLY FOR AND OBTAIN A CLASS 8 LIQUOR WHOLESALER ’S LICENSE, FOR THE SAME
169-PREMISES OR ELSEWHER E AS PROVIDED UNDER THIS ARTICLE, AND DISTRIBUTE ITS
170-OWN LIQUOR.
164+ (iii) A holder of a Class 5 brewery license that produces in aggregate 15
165+from all its locations not more than 45,000 barrels of beer annually may obtain a Class 7 16
166+limited beer wholesaler’s license and distribute not more than 5,000 barrels of its own beer 17
167+annually. 18
171168
172-2–308.1.
169+ (4) A holder of one or two Class 7 micro–brewery licenses that produces in 19
170+aggregate from all of its locations not more than 45,000 barrels of beer annually may obtain 20
171+a Class 7 limited beer wholesaler’s license and distribute beer that: 21
173172
174- (a) There is a Class 8 liquor wholesaler’s license.
173+ (i) totals annually not more than 5,000 barrels in aggregate from all 22
174+of its locations; and 23
175175
176- (b) The license may be issued only to a person that:
176+ (ii) has been brewed at the location from where it is distributed. 24
177177
178- (1) holds a:
178+ (5) The holder of a Class 1 distillery license may apply for and obtain a 25
179+Class 8 liquor wholesaler’s license for the same premises or elsewhere as provided under 26
180+this article. 27
179181
180- (I) Class 1 distillery license; OR
182+ (6) THE HOLDER OF A CLASS 9 LIMITED DISTILLERY L ICENSE MAY 28
183+APPLY FOR AND OBTAIN A CLASS 8 LIQUOR WHOLESALER ’S LICENSE, FOR THE SAME 29
184+PREMISES OR ELSEWHER E AS PROVIDED UNDER THIS ARTICLE, AND DISTRIBUTE ITS 30
185+OWN LIQUOR. 31
181186
182- (II) CLASS 9 LIMITED DISTILLERY L ICENSE; and
187+2–308.1. 32
183188
184- (2) produces in the aggregate from all of its locations not more than 100,000
185-gallons of liquor annually.
189+ (a) There is a Class 8 liquor wholesaler’s license. 33
186190
187- (c) The license authorizes the license holder to:
191+ (b) The license may be issued only to a person that: 34 HOUSE BILL 565 5
188192
189- (1) sell and deliver its own liquor produced at the license holder’s premises
190-to: WES MOORE, Governor Ch. 429
191193
192-– 5 –
193194
194- (i) a holder of a retail license that is authorized to acquire liquor
195-from a wholesaler; and
195+ (1) holds a: 1
196196
197- (ii) a holder of a permit that is authorized to acquire liquor from a
198-wholesaler; and
197+ (I) Class 1 distillery license; OR 2
199198
200- (2) distribute not more than 27,500 gallons of its own liquor annually.
199+ (II) CLASS 9 LIMITED DISTILLERY L ICENSE; and 3
201200
202- (d) The annual license fee is $100.
201+ (2) produces in the aggregate from all of its locations not more than 100,000 4
202+gallons of liquor annually. 5
203203
204- (e) The license holder may use an additional location for the warehousing, sale,
205-and delivery of liquor:
204+ (c) The license authorizes the license holder to: 6
206205
207- (1) if approved by the Comptroller following submission of a separate
208-application for each location; and
206+ (1) sell and deliver its own liquor produced at the license holder’s premises 7
207+to: 8
209208
210- (2) on the payment of a $100 fee for each additional location.
209+ (i) a holder of a retail license that is authorized to acquire liquor 9
210+from a wholesaler; and 10
211211
212-2–311.
212+ (ii) a holder of a permit that is authorized to acquire liquor from a 11
213+wholesaler; and 12
213214
214- (a) The holder of a Class 1, Class 2, or Class 3 wholesaler’s license may obtain
215-more than one such license [provided] IF separate records are kept.
215+ (2) distribute not more than 27,500 gallons of its own liquor annually. 13
216216
217- (b) (1) The holder of a rectifying or winery license may apply for and obtain a
218-wholesaler’s license of any class for the same premises or elsewhere as provided under this
219-article.
217+ (d) The annual license fee is $100. 14
220218
221- (2) The holder of a Class 4 limited winery license may apply for and obtain
222-a Class 6 limited wine wholesaler’s license for the same premises or elsewhere as provided
223-under this article.
219+ (e) The license holder may use an additional location for the warehousing, sale, 15
220+and delivery of liquor: 16
224221
225- (3) (i) The holder of a Class 5 manufacturer’s license or Class 7
226-micro–brewery license may apply for and obtain a Class 7 limited beer wholesaler’s license
227-in accordance with this paragraph.
222+ (1) if approved by the Comptroller following submission of a separate 17
223+application for each location; and 18
228224
229- (ii) A holder of a Class 5 manufacturer’s license that was selling the
230-holder’s own beer at wholesale in the State as of January 1, 2013, may obtain a Class 7
231-limited beer wholesaler’s license to continue to sell the holder’s own beer at wholesale in
232-the same location in an amount that is not more than 5,000 barrels annually.
225+ (2) on the payment of a $100 fee for each additional location. 19
233226
234- (iii) A holder of a Class 5 manufacturer’s license that produces in
235-aggregate from all its locations not more than 45,000 barrels of beer annually may obtain
236-a Class 7 limited beer wholesaler’s license and distribute not more than 5,000 barrels of its
237-own beer annually.
238- Ch. 429 2023 LAWS OF MARYLAND
227+2–311. 20
239228
240-– 6 –
241- (iv) A holder of one or two Class 7 micro–brewery licenses that
242-produces in aggregate from all of its locations not more than 45,000 barrels of beer annually
243-may obtain a Class 7 limited beer wholesaler’s license and distribute beer that:
229+ (a) The holder of a Class 1, Class 2, or Class 3 wholesaler’s license may obtain 21
230+more than one such license [provided] IF separate records are kept. 22
244231
245- 1. totals annually not more than 5,000 barrels in aggregate
246-from all of its locations; and
232+ (b) (1) The holder of a rectifying or winery license may apply for and obtain a 23
233+wholesaler’s license of any class for the same premises or elsewhere as provided under this 24
234+article. 25
247235
248- 2. has been brewed at the location from where it is
249-distributed.
236+ (2) The holder of a Class 4 limited winery license may apply for and obtain 26
237+a Class 6 limited wine wholesaler’s license for the same premises or elsewhere as provided 27
238+under this article. 28
239+ 6 HOUSE BILL 565
250240
251- (4) A HOLDER OF A CLASS 9 LIMITED DISTILLERY L ICENSE MAY
252-APPLY FOR AND OBTAIN A CLASS 8 LIQUOR WHOLESALER ’S LICENSE, FOR THE SAME
253-PREMISES OR ELSEWHER E AS PROVIDED UNDER THIS ARTICLE, AND DISTRIBUTE ITS
254-OWN LIQUOR.
255241
256- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
257-1, 2023.
242+ (3) (i) The holder of a Class 5 manufacturer’s license or Class 7 1
243+micro–brewery license may apply for and obtain a Class 7 limited beer wholesaler’s license 2
244+in accordance with this paragraph. 3
258245
259-Approved by the Governor, May 3, 2023.
246+ (ii) A holder of a Class 5 manufacturer’s license that was selling the 4
247+holder’s own beer at wholesale in the State as of January 1, 2013, may obtain a Class 7 5
248+limited beer wholesaler’s license to continue to sell the holder’s own beer at wholesale in 6
249+the same location in an amount that is not more than 5,000 barrels annually. 7
250+
251+ (iii) A holder of a Class 5 manufacturer’s license that produces in 8
252+aggregate from all its locations not more than 45,000 barrels of beer annually may obtain 9
253+a Class 7 limited beer wholesaler’s license and distribute not more than 5,000 barrels of its 10
254+own beer annually. 11
255+
256+ (iv) A holder of one or two Class 7 micro–brewery licenses that 12
257+produces in aggregate from all of its locations not more than 45,000 barrels of beer annually 13
258+may obtain a Class 7 limited beer wholesaler’s license and distribute beer that: 14
259+
260+ 1. totals annually not more than 5,000 barrels in aggregate 15
261+from all of its locations; and 16
262+
263+ 2. has been brewed at the location from where it is 17
264+distributed. 18
265+
266+ (4) A HOLDER OF A CLASS 9 LIMITED DISTILLERY L ICENSE MAY 19
267+APPLY FOR AND OBTAIN A CLASS 8 LIQUOR WHOLESALER ’S LICENSE, FOR THE SAME 20
268+PREMISES OR ELSEWHER E AS PROVIDED UNDER THIS ARTICLE, AND DISTRIBUTE ITS 21
269+OWN LIQUOR. 22
270+
271+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take e ffect July 23
272+1, 2023. 24
273+
274+
275+
276+
277+Approved:
278+________________________________________________________________________________
279+ Governor.
280+________________________________________________________________________________
281+ Speaker of the House of Delegates.
282+________________________________________________________________________________
283+ President of the Senate.