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Chapter 1041
(House Bill 1377)
AN ACT concerning
Frederick County – Alcoholic Beverages – Brewery and Distillery Licenses
FOR the purpose of establishing in Frederick County a Class DBR brewery license and a
Class DDS distillery license permit; authorizing the Board of License Commissioners
for Frederick County to issue to the holder of a certain brewery license a Class DBR
license, which authorizes the holder to sell certain amounts of beer for on–premises
consumption; authorizing the Board of License Commissioners for Frederick County
to issue to the holder of a certain distillery license a Class DDS license permit, which
authorizes the holder to sell certain amounts of alcoholic beverages for on–premises
consumption; and generally relating to brewery and distillery licenses in Frederick
County.
BY repealing and reenacting, without amendments,
Article – Alcoholic Beverages and Cannabis
Section 2–202(a), (e), and (i), 2–207(b), (f), and (g), and 20–102
Annotated Code of Maryland
(2016 Volume and 2023 Supplement)
BY repealing and reenacting, with amendments,
Article – Alcoholic Beverages and Cannabis
Section 20–401
Annotated Code of Maryland
(2016 Volume and 2023 Supplement)
BY adding to
Article – Alcoholic Beverages and Cannabis
Section 20–407 and 20–408
Annotated Code of Maryland
(2016 Volume and 2023 Supplement)
SECTION 1. BE IT ENACTED BY THE GENER AL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Alcoholic Beverages and Cannabis
2–202.
(a) There is a Class 1 distillery license.
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(e) Subject to subsection (f) of this section, a license holder may conduct the
activities specified in subsections (c)(5) and (i)(2) of this section from 10 a.m. to 10 p.m. each
day.
(i) (1) A local licensing board may grant an on–site consumption permit for
use at the location of the Class 1 distillery license to a holder of a Class 1 distillery license.
(2) (i) The permit authorizes the holder to sell mixed drinks made from
liquor that the holder produces that is mixed with other nonalcoholic ingredients for
on–premises consumption.
(ii) The holder may not use more than an aggregate of 7,750 gallons
annually of liquor the holder produces for mixed drinks sold under subparagraph (i) of this
paragraph.
(3) A local licensing board:
(i) may establish and charge a permit fee; and
(ii) shall require the permit holder to:
1. comply with the alcohol awareness requirements under §
4–505 of this article; and
2. abide by all applicable trade practice restrictions.
2–207.
(b) There is a Class 5 brewery license.
(f) (1) (i) A local licensing board may grant an on–site consumption permit
to an applicant that holds a Class 5 brewery license and, subject to paragraph (5) of this
subsection, a Class D beer license.
(ii) On request, a local licensing board may grant an applicant a
conditional on–site consumption permit or a conditional Class D beer license.
(iii) The conditional permit or conditional license shall become
effective after the applicant:
1. files a completed brewer’s notice form with the U.S.
Department of Treasury;
2. obtains a Class 5 brewery license; and
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3. fulfills any other obligation required by law that the local
licensing board identifies.
(2) Subject to the maximum volume limit under paragraph (4) of this
subsection, a Class D beer license or an equivalent license under paragraph (5) of this
subsection entitles the holder to sell to an individual who has attained the legal drinking
age, for on–premises consumption at the brewery:
(i) beer:
1. of which the holder of the Class 5 license is the brand
owner; and
2. that is fermented and brewed entirely by the license
holder at a location authorized by this section;
(ii) beer that is fermented and brewed entirely at the brewery under
contract with a brand owner who does not possess a Class 5 license; and
(iii) subject to paragraph (3) of this subsection, beer brewed at a
location other than the Class 5 brewery if:
1. the brand owner of the beer is the holder of the Class 5
license or an affiliate of the holder of the Class 5 license;
2. the number of barrels of the beer sold for on–premises
consumption under the Class D beer license or an equivalent license or an on–site
consumption permit in a calendar year does not exceed the greater of:
A. 25% of the total number of barrels of beer sold for
on–premises consumption under the Class D license or an equivalent license or an on–site
consumption permit in that calendar year; or
B. 1.2% of total finished production under the Class 5
brewery license; and
3. A. the license holder contracts with or on behalf of a
holder of a manufacturer’s license or nonresident dealer’s permit; or
B. the beer is manufactured by an affiliate of the license
holder.
(3) (i) This paragraph applies to a Class 5 brewery with more than
1,000,000 barrels of finished production annually, alone or in combination with its
affiliates.
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(ii) Beer that is delivered to the Class 5 brewery in finished form
may be sold for on–premises consumption under paragraph (2)(iii)2 of this subsection only
if it is purchased from a licensed wholesaler.
(4) The total amount of beer sold each year for on–premises consumption
under this subsection may not exceed 5,000 barrels.
(5) Before a local licensing board that does not issue a Class D beer license
may grant an on–site consumption permit, the local licensing board shall:
(i) establish an equivalent license; and
(ii) require the applicant to obtain that equivalent license.
(6) A local licensing board may charge a fee for granting an on–site
consumption permit.
(7) A local licensing board shall require the holder of an on–site
consumption permit or a Class D beer license or an equivalent license under paragraph (5)
of this subsection to:
(i) comply with the alcohol awareness requirements under § 4–505
of this article; and
(ii) abide by all applicable trade practice restrictions.
(g) (1) This subsection does not apply to:
(i) the holder of a Class 5 brewery license that held an on–site
consumption permit and a Class D license or an equivalent license on or before April 1,
2017, and any transferee of those licenses;
(ii) an individual who held a minority interest in an on–site
consumption permit and a Class D license or an equivalent license on or before April 1,
2017, and then obtains by transfer a majority interest in the same license or permit;
(iii) a location in the State for which a completed brewer’s notice form
was filed with the U. S. Department of Treasury on or before April 1, 2017;
(iv) a permit issued under § 2–140 of this title; and
(v) a guided tour during which:
1. samples of beer are served under subsection (c)(5) of this
section; or
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2. beer is sold for off–premises consumption under
subsection (c)(6) of this section.
(2) This subsection applies to:
(i) a holder of a Class 5 brewery license who:
1. after April 1, 2017, obtains an on–site consumption permit
and a Class D beer license or equivalent license for on–premises consumption; or
2. not holding a minority interest in an on–site consumption
permit and a Class D license or an equivalent license on or before April 1, 2017, obtains a
majority interest by transfer in an on–site consumption permit and a Class D license or an
equivalent license; and
(ii) notwithstanding paragraph (1)(iii) of this subsection, a
manufacturer of beer with more than 1,000,000 barrels of finished production annually
alone or in combination with its affiliates.
(3) Notwithstanding any provision in Division II of this article, the sales
and serving privileges of an on–site consumption permit and a Class D license or an
equivalent license may be exercised only from 10 a.m. to 10 p.m. Monday through Sunday.
20–102.
This title applies only in Frederick County.
20–401.
(a) The following sections of Title 2, Subtitle 2 (“Manufacturer’s Licenses”) of
Division I of this article apply in the county without exception or variation:
(1) § 2–201 (“Issuance by Comptroller”);
(2) [§ 2–202 (“Class 1 distillery license”);
(3)] § 2–203 (“Class 9 limited distillery license”);
[(4)] (3) § 2–204 (“Class 2 rectifying license”);
[(5) § 2–207 (“Class 5 brewery license”);
(6)] (4) § 2–210 (“Class 8 farm brewery license”);
[(7)] (5) § 2–211 (“Residency requirement”);
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[(8)] (6) § 2–212 (“Additional licenses”);
[(9)] (7) § 2–213 (“Additional fees”);
[(10)] (8) § 2–214 (“Sale or delivery restricted”);
[(11)] (9) § 2–215 (“Beer sale on credit to retail dealer prohibited”);
[(12)] (10) § 2–216 (“Interaction between manufacturing entities and
retailers”);
[(13)] (11) § 2–217 (“Distribution of alcoholic beverages — Prohibited
practices”); and
[(14)] (12) § 2–218 (“Restrictive agreements between producers and
retailers — Prohibited”).
(b) The following sections of Title 2, Subtitle 2 (“Manufacturer’s Licenses”) of
Division I of this article apply in the county:
(1) § 2–202 (“CLASS 1 DISTILLERY LICENSE ”), SUBJECT TO § 20–408
OF THIS SUBTITLE;
(2) § 2–205 (“Class 3 winery license”), subject to § 20–403 of this subtitle;
[(2)] (3) § 2–206 (“Class 4 limited winery license”), subject to § 20–404 of
this subtitle;
(4) § 2–207 (“CLASS 5 BREWERY LICENSE ”), SUBJECT TO §
20–407 OF THIS SUBTITLE ;
[(3)] (5) § 2–208 (“Class 6 pub–brewery license”), subject to § 20–405 of
this subtitle; and
[(4)] (6) § 2–209 (“Class 7 micro–brewery license”), subject to § 20–406 of
this subtitle.
20–407.
(A) THERE IS A CLASS DBR LICENSE.
(B) THE LICENSE MAY BE IS SUED TO A HOLDER OF A CLASS 5 BREWERY
LICENSE.
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(C) THE LICENSE SERVES AS THE ON–PREMISES CONSUMPTION PERMIT
REQUIRED UNDER §§ 2–207(F) AND (G) OF THIS ARTICLE.
(D) THE LICENSE HOLDER MA Y SELL:
(1) FOOD AND NONALCOHOLI C BEVERAGES; AND
(2) BEER BREWED AT THE B REWERY FOR ON – AND OFF–PREMISES
CONSUMPTION TO THE E XTENT THE LICENSE HOLDER IS AL LOWED UNDER THE
LICENSE HOLDER ’S CLASS 5 BREWERY LICENSE .
(E) THE BOARD SHALL ADOPT REG ULATIONS TO CARRY OU T THIS SECTION
AND TO SET THE ANNUA L LICENSE FEE.
20–408.
(A) THERE IS A CLASS DDS LICENSE PERMIT.
(B) THE LICENSE PERMIT MAY BE ISSUED TO A H OLDER OF A CLASS 1
DISTILLERY LICENSE .
(C) THE LICENSE PERMIT SERVES AS THE ON –PREMISES CONSUMPTION
PERMIT REQUIRED UNDE R §§ 2–202(E) AND (I) OF THIS ARTICLE.
(D) THE LICENSE PERMIT HOLDER MAY SELL :
(1) FOOD AND NONALCOHOLI C BEVERAGES; AND
(2) BRANDY, RUM, WHISKEY, ALCOHOL, AND NEUTRAL SPIRITS THAT
ARE DISTILLED , RECTIFIED, BLENDED, AND BOTTLED AT THE D ISTILLERY FOR
ON– AND OFF–PREMISES CONSUMPTION TO THE EXTENT THE LICENSE PERMIT
HOLDER IS ALLOWED UN DER THE LICENSE HOLD ER’S CLASS 1 DISTILLERY LICENSE .
(E) THE BOARD SHALL ADOPT REG ULATIONS TO CARRY OU T THIS SECTION
AND TO SET THE ANNUA L LICENSE PERMIT FEE.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2024.
Approved by the Governor, May 16, 2024.