SB 796 accomplishes a variety of things, with the most notable for craft breweries being the cap placed on retail locations.
The new provision loosens the tied-house restrictions in some aspects by allowing an individual already in possession of an on-sale license to also own a beer manufacturing license, so long as that individual owns no more than six such licenses. That same individual can invest, serve on the board of directors, or be employed at the brewery.
On the other hand, the law simultaneously limits the number of retail locations that a brewery may operate, whether directly though its own license, or indirectly through common ownership (including these new-fangled investors), to a maximum of six. Any alcoholic beverages purchased for the on-sale licensees associated with that new investor must be purchased either through an independent wholesaler or from a licensed beer manufacturer that is adjacent and contiguous to the on-sale licensee.
On a similar note, individuals with less than 10% interest in a private equity fund that also holds an interest in another license are now eligible investors for another licensed entity. The private equity fund’s interest in the other ABC license must be a passive investment and its advisors must be compliant with the federal Investment Advisors Act for the arrangement to pass muster. The potential investor must not have any control over the investment decisions of the equity fund, as attested by the fund’s manager.
Another update provided by this bill relates to acceptable prizes when conducting contests and sweepstakes. The current law allows prizes to be awarded to the winners of consumer contests and sweepstakes, so long as the prize is not alcohol or redeemable for alcohol. Strictly speaking, that language remains in place, but now there is a newly added caveat that the inclusion of alcoholic beverages as an incidental part of a prize package is acceptable.
Lastly, SB 796 extends indefinitely the existing law that allows for autograph events under certain conditions. This law was set to expire next year but, pursuant to SB 796, the current arrangement is extended indefinitely.