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On March 11^th, Senator Mark Leno introduced Senate Bill 635 which would allow California businesses to serve alcohol between the hours of 2 and 4 am. These extended hours would apply solely to on-sale premises such as restaurants, entertainment venues and nightclubs, and not to off-sale premises such as liquor stores or gas stations. SB 635 would allow California cities to join the ranks of other major U.S. cities such as New York City, Las Vegas, Chicago, Miami and Washington D.C., as well as numerous international cities and countries which permit late or continuous beverage service. At least nine other states have similar legislation in place.

Supporters of the bill argue the extended hours will increase tourism, tax revenue and jobs, and provide relief to law enforcement agencies and public transportation systems currently burdened by uniform closing times. Critics cite noise and various other public safety concerns that may arise from an additional two hours of boozing.

If SB 635 passes, cities and counties that want to extend their hours will be required to apply to the California Department of Alcoholic Beverage Control (“ABC”) for approval.  Under the bill, the ABC is required to conduct a “thorough investigation into whether the additional hours would serve the public convenience or necessity.” Similar to the process of obtaining an alcoholic beverage license, the city or county would be required to notify residents, law enforcement agencies and other interested parties of their application. Interested parties would then have a 30-day period from the date of notice to file protests. The ABC would reject protests it deems unreasonable.  For those with protests deemed acceptable, the ABC would provide an opportunity to address their concerns in a hearing.

Even if the bill becomes law, our experience with “public convenience or necessity” determinations and neighbor protests tends to suggest an uphill battle for many licensees who would like to obtain a 4 a.m. closing time. We will see how the bill fairs in policy committee hearings this spring.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·

Strike & Techel is pleased to announce three recent additions to its alcoholic beverage licensing practice.

Daniel Kramer joins Strike & Techel as a partner. Mr. Kramer represents local and national hotel, restaurant and general retail companies in all aspects of alcoholic beverage licensing, including license acquisitions and transfers, entity structuring, and the preparation of concession agreements, interim management agreements, and restaurant purchase and sale agreements.

Linda Gago-Seco joins Strike & Techel as a paralegal. Ms. Gago-Seco has spent the last 14 years as an alcoholic beverage licensing specialist and previously worked for the California Department of Alcoholic Beverage Control.

Manny Diaz joins Strike & Techel as a consultant. Mr. Diaz previously worked for the California Department of Alcoholic Beverage Control for over 30 years, including as Assistant Director of the Northern Division, before becoming a licensing consultant.

We are thrilled to have Dan, Linda and Manny join us.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

We’ve been getting lots of inquiries about the privileges and limitations of the new limited off-sale license offered by the ABC.  Though we’ve already commented on the basics of the permit here, we’re following up with answers to the clarification questions we’ve been getting:

Where can I find the privileges for the new off-sale wine license?

Read the ABC Advisory and the enabling statute CAL. BUS. & PROF. CODE §23393.5.

Can I sell tequila and beer with the Type 85?

No, the privilege is limited to wine.

Can I get the Type 85 license if I have an upper-tier California license?

No.  The Type 85 is a retail-tier license, and there are no special exceptions permitting it to be held with an upper-tier license.  On the flip side, you can get it if you are an employee of an on-sale retailer.  This is a key distinction between the Type 85 and the Type 17/20 combination that remains popular in California.

Can I deliver product stored out-of-state directly to consumers in California with the Type 85?

No.  You must have possession and title to the wine in California. It must be delivered to the consumer from your licensed premises in California or the premises of a licensed public warehouse (Type 14 License).

Can I deliver wine to consumers outside of California with the Type 85?

Yes, but only to about 13 states.  2/3 of those states require additional licensing. You can’t reach New York, Texas, Illinois or Florida.

Do I have to have a location to obtain the Type 85?

Yes.  You have to choose an address where the license will be active and your records will be kept.  It may not be open to the public. You will have to post notice at the premises and mail notice to nearby neighbors.

Who can I buy wine from with the Type 85?

Licensed California wholesalers and wineries.  Not retailers.

How do I apply for the Type 85?

If you are interested in obtaining the license, you need to fill out the forms for an original retail license (e.g.  ABC 211-SIG, 217, 208-A/B, 253, 257, 255, 247, 251, 140, entity forms).  You can obtain them from the ABC website, or can hire an attorney or licensing specialist to complete them and assist you with the process.  The filing fee is $342 ($100 application fee plus $242 annual fee).

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

California Business and Professions Code Section 23393.5 went into effect on January 1, 2012, authorizing the state’s new limited off-sale wine license.   The new “Type 85” license, which we first discussed here, will allow licensees to make direct sales of wine to consumers over the internet and via direct mail and telephone, without requiring the licensee to maintain a brick and mortar retail location or to hold a beer and wine wholesaler license.  Up until now, businesses looking to focus on internet wine sales have been required to obtain both an off-sale beer and wine retail license and a beer and wine wholesaler license, commonly referred to as a 17/20 license combination.  With a 17/20 combination, licensees are able to sell wine via the internet, but also must meet the requirements of a wholesaler licensee, including selling wine to other retailers.

The California ABC recently posted an Industry Advisory on the new off-sale wine license.  The advisory makes clear that Type 85 license holders may not maintain a brick and mortar store that is open to the public, and all sales must be made via direct mail, telephone or the internet.  Additionally, the ABC confirmed that the new license alleviates the need for a beer and wine wholesaler license for retailers focused on selling wine via the internet, but the ABC will continue to process applications for 17/20 license combinations.  If you would like more information about the license, please feel free to contact any of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

The San Francisco ABC office will be moving to Oakland this month to allow for remodeling efforts at the San Francisco office.  The current San Francisco office, located at 71 Stevenson St. will be closed beginning at 5 p.m. on Friday, January 20, 2012.  They will re-open at their temporary Oakland location on Monday, January 23, 2012.  The temporary office contact information is:

Department of Alcoholic Beverage Control

1515 Clay Street, Suite 2208

Oakland, CA 94612

(510) 622-4970

Be sure to update your records and plan accordingly if you need to contact the San Francisco ABC office.  It is anticipated that the office will move back into San Francisco in March 2012, but construction delays may extend the moving date.  We will keep you posted as new information arises.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

Beginning January 1, 2012, a new license will be available for direct-to-consumer wine sales. The new license is the result of approval of Assembly Bill No. 623, which revises California’s Business and Professions code to add Section 23393.5 authorizing the license. Sales may only be made to consumers. All sales must occur through direct mail, telephone or Internet; they may not be conducted from a location that is open to the public. The licensee must take possession and title to all wine sold. All wine must be delivered to the consumer from the licensee’s premises or a licensed public warehouse. The application and annual fee are the same as those applicable to a Type 20 off-sale beer and wine license. The key differences between the new limited off-sale retail license and a type 20 license are that the type 20 requires a brick and mortar store that is open to the public and a type 20 license also allows the sale of beer for consumption away from the licensed premises. If you would like more information about the license, please feel free to contact any of the attorneys at Strike & Techel.

Priority application season is upon us, beginning September 12^th.  ABC Headquarters recently announced the authorization for the issuance of new on-sale general and off-sale general licenses in certain counties.

What this means:

General licenses authorize the sale of beer, wine and distilled spirits. They are restricted based upon county population. If your county is already at its maximum, you can’t get a new general license from the ABC and instead must buy one from an existing licensee in your county, typically at a significant premium. However, in counties where growth has occurred, the ABC permits new general licenses within the county once per year during a ‘priority’ application period by allowing both new issuances of licenses in the county and intercounty transfers of licenses. An intercounty transfer means a business owner in the priority county can buy a general license on the open market anywhere in the state and transfer it in to the priority county. A person can apply for one of the priority general license spots in the county, or for one of the priority intercounty general license transfer spots, or for both.

Anyone that anticipates the need for an Off-Sale General Package Store License (Type 21), an On-Sale General Eating Place Restaurant License (Type 47), or a Special On-Sale General Club License (Type 57) within the next year in a county with licenses available should apply.

Licenses Available by County:

For a complete listing of licenses available by county, click here.

2011 Filing Period:

ABC District Offices will accept in-person or mail-in priority applications from September 12-23, 2011. Mail-in applications must be postmarked September 23 or earlier in order to be accepted. If the Department receives more applications than licenses available (which it will), a public drawing is held. Applicants are typically notified two weeks later of their priority status. Once approved for priority, the applicant has 90 days to complete the full formal license application for the identified premises.

Fees:

Priority application fees are $13,800 for new general licenses and $6,000 for intercounty transfers. Only a certified check, cashier’s check or money order will be accepted, and it must be submitted with the priority application. Unsuccessful applicants’ fees will be refunded, less a $100 service charge, within 45 days of the drawing.

Residency requirements:

Every applicant must be a resident of California for at least 90 days prior to the drawing. The 90 day clock starts ticking upon registration with the CA Secretary of State for corporations, limited partnerships, and limited liability companies. Individuals and partners must submit proof of California residency.

If you are interested in applying for a new on or off-sale general priority license, please feel free to contact the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2011 · All Rights Reserved ·

While patience is a long standing member of the virtue list, it’s not always easy. But a little patience goes a long way when dealing with regulatory compliance matters like certificate of label approvals (COLAs). The Alcohol and Tobacco Tax and Trade Bureau (TTB) began accepting COLA applications online several years ago, which reduced the processing time for new COLA applications to just a few days. In their ongoing efforts to streamline their processes for industry members, the TTB began accepting formulas and permit applications online as well. More recently, the TTB announced a streamlined approval process along with the end of expedited review (previously discussed here and here). Notwithstanding these efforts, the volume of COLA applications has continued to swell with processing times becoming progressively longer. To help people estimate their wait time the TTB is now providing average COLA processing times through its website (the information is in a chart on the upper right hand side of the page) or by phone (dial 1-866-927-2533, press 4 for malt beverages and distilled spirits labels and 6 for wine labels). Given government budgets cuts and increases in label approval applications, it seems likely that the days of getting labels approved in four or five days are not likely to return.  The federal labeling regulations allow the TTB to take up to 90 days to approve a COLA application. 27 C.F.R. § 13.21(b) (2011). Processing times currently are much shorter than that, but industry members should plan accordingly and allow at least 30 days for label approval through COLAs Online.  The attorneys are Strike & Techel are available if you need assistance with TTB regulatory matters, including COLAs.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·

The SF office of the California Alcoholic Beverage Control informed us today that they are no longer accepting walk-in applications.  This means that you must call the SF ABC to make a filing appointment and then mail-in your application. Be sure to plan ahead for the additional time this may take.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·

 The typical license for a winery in California is a Type 02 Winegrower license, but many businesses interested more in marketing wine, or having wine custom crushed to their specifications, instead of actually producing the wine on a bonded wine premises, obtain a combination Type 17/20 license instead.  The Type 17 license is a wine and beer wholesaler license, and the type 20 is a retail license for the sale of wine and beer for consumption off the licensed premises.  When the licenses are held together, they allow the sale to retailers and consumers of wine only.  The combination license does not allow the holder to produce wine.  Significantly, California law was changed in 2009 to permit these 17/20 license holders (sometimes called “virtual wineries”) to donate their wines to non-profit organizations.  This privilege, previously reserved to licensed producers and importers, enables virtual wineries to participate in wine tastings and other events held by non-profit organizations.  The 17/20 license structure and abundance of wineries that do custom crush production in California have made it relatively easy for virtual wineries to succeed and, as a result, we have seen tremendous increases in the 17/20 license model over the last several years.       

 Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·