TRENTON - Governor Phil Murphy has signed a groundbreaking legislation into law that will revolutionize New Jersey's liquor license laws, injecting nearly 1,500 licenses back into the market and lifting restrictions that have hindered the growth of breweries and distilleries. This marks the first substantial overhaul of the state's long-standing liquor license regulations since the end of Prohibition.

The legislation, sponsored by Senator Vin Gopal and Assemblyman Clinton Calabrese, aims to promote economic growth and transform downtown areas through the revitalization of small businesses. Under the new law, craft alcohol manufacturers will have more freedom to thrive, creating opportunities for them to flourish and revitalize main street business districts across the state, according to Senator Gopal.

By addressing the scarcity of liquor licenses, particularly inactive and pocket licenses, the new law tackles the root cause of high license prices. Inactive licenses are those associated with a specific location but remain unused, while pocket licenses are purchased but not attached to a particular establishment.

Moving forward, license holders will no longer be able to indefinitely retain a retail consumption license without utilizing it. If a license remains inactive for two consecutive license terms, the holder will now be required to either use or sell the license. If neither option is pursued, the license can be transferred to a contiguous municipality. This change is expected to inject approximately 1,356 licenses back into the market, representing a 15% increase compared to the current 8,905 active licenses, as reported by the NJ Division of Alcoholic Beverage Control (ABC).

In addition, the law introduces a new class of retail consumption licenses for food and beverage establishments in shopping malls. Municipalities will be able to issue up to two licenses for malls with a minimum area of 750,000 square feet and up to four licenses for malls with a minimum area of 1.5 million square feet. With malls present in almost every county, this provision has the potential to create over 100 new licenses, bolstering the survival of malls that have faced challenges due to the pandemic and the rise of online shopping.

Furthermore, the new law provides permanent relief and lessens restrictions on breweries, distilleries, cideries, and meaderies, allowing them to compete more effectively with neighboring states. It eliminates the requirement for these establishments to provide tours and grants them the ability to offer snacks and non-alcoholic beverages. They can also collaborate with outside vendors, host unlimited onsite events and private parties, and participate in various off-site events and special functions.

Additionally, the law increases the maximum number of barrels that can be manufactured per year from 10,000 to 300,000. It also permits license holders to directly sell and distribute 50% of the beer produced on-premises to retailers without relying solely on wholesalers. Furthermore, a new farm-brewery license has been established, allowing licensees to produce malt alcoholic beverages for retail sale to consumers off the licensed premises.

The new legislation has received widespread support, with Senator Paul Sarlo noting that it strikes a balance by increasing the number of licenses while protecting the value of existing businesses. Senator Gordon Johnson emphasizes the potential of freeing up inactive licenses for transfer to bordering municipalities, creating fresh opportunities for small towns to revive their main streets.

The reforms have been hailed as long-overdue, with Senator Raj Mukherji stating that New Jersey's outdated liquor license laws have held back its economic growth and job creation potential. The changes will not only benefit breweries and distilleries but also contribute to the development of downtown areas and promote local businesses.

The approval of this legislation marks a significant milestone for New Jersey, as it paves the way for a modernized liquor license framework that aligns with the interests and investments of existing businesses while fostering the growth and vitality of the craft alcohol industry.

Eric Orlando, Executive Director of Brewers Guild of New Jersey, highlights the positive trajectory that the state's craft beer industry is expected to take as a result of the new law, applauding Governor Murphy for supporting the ingenuity and local pride that define craft breweries in the Garden State.

With the injection of nearly 1,500 licenses into the market, the new law is set to transform the landscape for breweries, distilleries, and other craft alcohol producers in New Jersey as they take advantage of the newfound opportunities for growth and innovation.