EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[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.
*hb1377*
HOUSE BILL 1377
A2 4lr2989
CF SB 1002
By: Delegate Pippy
Introduced and read first time: February 9, 2024
Assigned to: Economic Matters
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 8, 2024
CHAPTER ______
AN ACT concerning 1
Frederick County – Alcoholic Beverages – Brewery and Distillery Licenses 2
FOR the purpose of establishing in Frederick County a Class DBR brewery license and a 3
Class DDS distillery license permit; authorizing the Board of License Commissioners 4
for Frederick County to issue to the holder of a certain brewery license a Class DBR 5
license, which authorizes the holder to sell certain amounts of beer for on–premises 6
consumption; authorizing the Board of License Commissioners for Frederick County 7
to issue to the holder of a certain distillery license a Class DDS license permit, which 8
authorizes the holder to sell certain amounts of alcoholic beverages for on–premises 9
consumption; and generally relating to brewery and distillery licenses in Frederick 10
County. 11
BY repealing and reenacting, without amendments, 12
Article – Alcoholic Beverages and Cannabis 13
Section 2–202(a), (e), and (i), 2–207(b), (f), and (g), and 20–102 14
Annotated Code of Maryland 15
(2016 Volume and 2023 Supplement) 16
BY repealing and reenacting, with amendments, 17
Article – Alcoholic Beverages and Cannabis 18
Section 20–401 19
Annotated Code of Maryland 20
(2016 Volume and 2023 Supplement) 21
BY adding to 22 2 HOUSE BILL 1377
Article – Alcoholic Beverages and Cannabis 1
Section 20–407 and 20–408 2
Annotated Code of Maryland 3
(2016 Volume and 2023 Supplement) 4
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 5
That the Laws of Maryland read as follows: 6
Article – Alcoholic Beverages and Cannabis 7
2–202. 8
(a) There is a Class 1 distillery license. 9
(e) Subject to subsection (f) of this section, a license holder may conduct the 10
activities specified in subsections (c)(5) and (i)(2) of this section from 10 a.m. to 10 p.m. each 11
day. 12
(i) (1) A local licensing board may grant an on–site consumption permit for 13
use at the location of the Class 1 distillery license to a holder of a Class 1 distillery license. 14
(2) (i) The permit authorizes the holder to sell mixed drinks made from 15
liquor that the holder produces that is mixed with other nonalcoholic ingredients for 16
on–premises consumption. 17
(ii) The holder may not use more than an aggregate of 7,750 gallons 18
annually of liquor the holder produces for mixed drinks sold under subparagraph (i) of this 19
paragraph. 20
(3) A local licensing board: 21
(i) may establish and charge a permit fee; and 22
(ii) shall require the permit holder to: 23
1. comply with the alcohol awareness requirements under § 24
4–505 of this article; and 25
2. abide by all applicable trade practice restrictions. 26
2–207. 27
(b) There is a Class 5 brewery license. 28
(f) (1) (i) A local licensing board may grant an on–site consumption permit 29
to an applicant that holds a Class 5 brewery license and, subject to paragraph (5) of this 30
subsection, a Class D beer license. 31 HOUSE BILL 1377 3
(ii) On request, a local licensing board may grant an applicant a 1
conditional on–site consumption permit or a conditional Class D beer license. 2
(iii) The conditional permit or conditional license shall become 3
effective after the applicant: 4
1. files a completed brewer’s notice form with the U.S. 5
Department of Treasury; 6
2. obtains a Class 5 brewery license; and 7
3. fulfills any other obligation required by law that the local 8
licensing board identifies. 9
(2) Subject to the maximum volume limit under paragraph (4) of this 10
subsection, a Class D beer license or an equivalent license under paragraph (5) of this 11
subsection entitles the holder to sell to an individual who has attained the legal drinking 12
age, for on–premises consumption at the brewery: 13
(i) beer: 14
1. of which the holder of the Class 5 license is the brand 15
owner; and 16
2. that is fermented and brewed entirely by the license 17
holder at a location authorized by this section; 18
(ii) beer that is fermented and brewed entirely at the brewery under 19
contract with a brand owner who does not possess a Class 5 license; and 20
(iii) subject to paragraph (3) of this subsection, beer brewed at a 21
location other than the Class 5 brewery if: 22
1. the brand owner of the beer is the holder of the Class 5 23
license or an affiliate of the holder of the Class 5 license; 24
2. the number of barrels of the beer sold for on–premises 25
consumption under the Class D beer license or an equivalent license or an on–site 26
consumption permit in a calendar year does not exceed the greater of: 27
A. 25% of the total number of barrels of beer sold for 28
on–premises consumption under the Class D license or an equivalent license or an on–site 29
consumption permit in that calendar year; or 30
B. 1.2% of total finished production under the Class 5 31
brewery license; and 32 4 HOUSE BILL 1377
3. A. the license holder contracts with or on behalf of a 1
holder of a manufacturer’s license or nonresident dealer’s permit; or 2
B. the beer is manufactured by an affiliate of the license 3
holder. 4
(3) (i) This paragraph applies to a Class 5 brewery with more than 5
1,000,000 barrels of finished production annually, alone or in combination with its 6
affiliates. 7
(ii) Beer that is delivered to the Class 5 brewery in finished form 8
may be sold for on–premises consumption under paragraph (2)(iii)2 of this subsection only 9
if it is purchased from a licensed wholesaler. 10
(4) The total amount of beer sold each year for on–premises consumption 11
under this subsection may not exceed 5,000 barrels. 12
(5) Before a local licensing board that does not issue a Class D beer license 13
may grant an on–site consumption permit, the local licensing board shall: 14
(i) establish an equivalent license; and 15
(ii) require the applicant to obtain that equivalent license. 16
(6) A local licensing board may charge a fee for granting an on–site 17
consumption permit. 18
(7) A local licensing board shall require the holder of an on–site 19
consumption permit or a Class D beer license or an equivalent license under paragraph (5) 20
of this subsection to: 21
(i) comply with the alcohol awareness requirements under § 4–505 22
of this article; and 23
(ii) abide by all applicable trade practice restrictions. 24
(g) (1) This subsection does not apply to: 25
(i) the holder of a Class 5 brewery license that held an on–site 26
consumption permit and a Class D license or an equivalent license on or before April 1, 27
2017, and any transferee of those licenses; 28
(ii) an individual who held a minority interest in an on–site 29
consumption permit and a Class D license or an equivalent license on or before April 1, 30
2017, and then obtains by transfer a majority interest in the same license or permit; 31
HOUSE BILL 1377 5
(iii) a location in the State for which a completed brewer’s notice form 1
was filed with the U. S. Department of Treasury on or before April 1, 2017; 2
(iv) a permit issued under § 2–140 of this title; and 3
(v) a guided tour during which: 4
1. samples of beer are served under subsection (c)(5) of this 5
section; or 6
2. beer is sold for off–premises consumption under 7
subsection (c)(6) of this section. 8
(2) This subsection applies to: 9
(i) a holder of a Class 5 brewery license who: 10
1. after April 1, 2017, obtains an on–site consumption permit 11
and a Class D beer license or equivalent license for on–premises consumption; or 12
2. not holding a minority interest in an on–site consumption 13
permit and a Class D license or an equivalent license on or before April 1, 2017, obtains a 14
majority interest by transfer in an on–site consumption permit and a Class D license or an 15
equivalent license; and 16
(ii) notwithstanding paragraph (1)(iii) of this subsection, a 17
manufacturer of beer with more than 1,000,000 barrels of finished production annually 18
alone or in combination with its affiliates. 19
(3) Notwithstanding any provision in Division II of this article, the sales 20
and serving privileges of an on–site consumption permit and a Class D license or an 21
equivalent license may be exercised only from 10 a.m. to 10 p.m. Monday through Sunday. 22
20–102. 23
This title applies only in Frederick County. 24
20–401. 25
(a) The following sections of Title 2, Subtitle 2 (“Manufacturer’s Licenses”) of 26
Division I of this article apply in the county without exception or variation: 27
(1) § 2–201 (“Issuance by Comptroller”); 28
(2) [§ 2–202 (“Class 1 distillery license”); 29
(3)] § 2–203 (“Class 9 limited distillery license”); 30 6 HOUSE BILL 1377
[(4)] (3) § 2–204 (“Class 2 rectifying license”); 1
[(5) § 2–207 (“Class 5 brewery license”); 2
(6)] (4) § 2–210 (“Class 8 farm brewery license”); 3
[(7)] (5) § 2–211 (“Residency requirement”); 4
[(8)] (6) § 2–212 (“Additional licenses”); 5
[(9)] (7) § 2–213 (“Additional fees”); 6
[(10)] (8) § 2–214 (“Sale or delivery restricted”); 7
[(11)] (9) § 2–215 (“Beer sale on credit to retail dealer prohibited”); 8
[(12)] (10) § 2–216 (“Interaction between manufacturing entities and 9
retailers”); 10
[(13)] (11) § 2–217 (“Distribution of alcoholic beverages — Prohibited 11
practices”); and 12
[(14)] (12) § 2–218 (“Restrictive agreements between producers and 13
retailers — Prohibited”). 14
(b) The following sections of Title 2, Subtitle 2 (“Manufacturer’s Licenses”) of 15
Division I of this article apply in the county: 16
(1) § 2–202 (“CLASS 1 DISTILLERY LICENSE ”), SUBJECT TO § 20–408 17
OF THIS SUBTITLE; 18
(2) § 2–205 (“Class 3 winery license”), subject to § 20–403 of this subtitle; 19
[(2)] (3) § 2–206 (“Class 4 limited winery license”), subject to § 20–404 of 20
this subtitle; 21
(4) § 2–207 (“CLASS 5 BREWERY LICENSE ”), SUBJECT TO § 22
20–407 OF THIS SUBTITLE ; 23
[(3)] (5) § 2–208 (“Class 6 pub–brewery license”), subject to § 20–405 of 24
this subtitle; and 25
[(4)] (6) § 2–209 (“Class 7 micro–brewery license”), subject to § 20–406 of 26
this subtitle. 27 HOUSE BILL 1377 7
20–407. 1
(A) THERE IS A CLASS DBR LICENSE. 2
(B) THE LICENSE MAY BE IS SUED TO A HOLDER OF A CLASS 5 BREWERY 3
LICENSE. 4
(C) THE LICENSE SERVES AS THE ON–PREMISES CONSUMPTION PERMIT 5
REQUIRED UNDER §§ 2–207(F) AND (G) OF THIS ARTICLE. 6
(D) THE LICENSE HOLDER MA Y SELL: 7
(1) FOOD AND NONALCOHOLI C BEVERAGES; AND 8
(2) BEER BREWED AT THE B REWERY FOR ON – AND OFF–PREMISES 9
CONSUMPTION TO THE E XTENT THE LICENSE HOLDER IS AL LOWED UNDER THE 10
LICENSE HOLDER ’S CLASS 5 BREWERY LICENSE . 11
(E) THE BOARD SHALL ADOPT REG ULATIONS TO CARRY OU T THIS SECTION 12
AND TO SET THE ANNUA L LICENSE FEE. 13
20–408. 14
(A) THERE IS A CLASS DDS LICENSE PERMIT. 15
(B) THE LICENSE PERMIT MAY BE ISSUED TO A H OLDER OF A CLASS 1 16
DISTILLERY LICENSE . 17
(C) THE LICENSE PERMIT SERVES AS THE ON –PREMISES CONSUMPTION 18
PERMIT REQUIRED UNDE R §§ 2–202(E) AND (I) OF THIS ARTICLE. 19
(D) THE LICENSE PERMIT HOLDER MAY SELL : 20
(1) FOOD AND NONALCOHOLI C BEVERAGES; AND 21
(2) BRANDY, RUM, WHISKEY, ALCOHOL, AND NEUTRAL SPIRITS THAT 22
ARE DISTILLED , RECTIFIED, BLENDED, AND BOTTLED AT THE D ISTILLERY FOR 23
ON– AND OFF–PREMISES CONSUMPTION TO THE EXTENT THE LICENSE PERMIT 24
HOLDER IS ALLOWED UN DER THE LICENSE HOLD ER’S CLASS 1 DISTILLERY LICENSE . 25
(E) THE BOARD SHALL ADOPT REG ULATIONS TO CARRY OU T THIS SECTION 26
AND TO SET THE ANNUA L LICENSE PERMIT FEE. 27
8 HOUSE BILL 1377
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2024. 2
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.