CSG Law Alert: Liquor License Laws are Changing in New Jersey

After more than a year of negotiations, the Legislature has responded to Governor Murphy’s call for changes to New Jersey’s liquor license laws.  The New Jersey legislature has approved a Bill which reforms the laws affecting breweries and inactive licenses. The Legislature has also created two new licenses: farm brewery and shopping mall licenses.

Craft Manufacturers (Defined as limited breweries, cidery and meadery licenses, and craft distillery licenses) Will Face Less Restrictions

  • Craft manufacturers will be permitted to hold unlimited on-premise special events without obtaining a permit from New Jersey’s Division of Alcoholic Beverage Control (“NJ ABC”).
  • Craft manufacturers will be permitted to hold 25 off premises special events a year and hold 25 social affair events hosted by a social affair permittee.
  • Craft manufacturers can coordinate with restaurants, food vendors and food trucks to provide food to its patrons.
  • Craft manufacturers licensed premises may have unlimited TVs that may televise live sporting events.
  • Craft manufacturers may sell and serve customers tableside utilizing servers or wait staff.
  • Craft manufacturers are entitled to sell products at a discount for promotional purposes, provide targeted discounts, and establish membership programs that offer discounts.
  • Craft manufacturers are no longer required to provide patrons with a tour.

Restricted Breweries

  • Entitled to brew 300,000 barrels malt alcoholic beverages, up from a limit of 10,000 barrels.

Farm Brewery License

  • A farm brewery license has been created to allow issuance of a license to a brewery located upon land where the licensee is actively engaged in farming hops or other ingredients for use in its products. This licensee may brew and sell up to 2,500 barrels per year.

Reform for Inactive (Pocket) License

  • More than 1,300 currently inactive licenses in New Jersey will be required to be activated within the next one to four years. Inactive licenses can no longer be maintained in this status indefinitely.
  • A license that remains inactive for two consecutive license terms will expire; however, the issuing municipality may extend the period during which the license may remain inactive for an additional year.
  • All inactive licenses will be divided into quartiles based on the length of inactivity by the Division of Alcoholic Beverage Control.
    • The quartile of inactive licenses that have been inactive for the longest period of time are required to be activated or transferred within one year.
    • The quartile of inactive licenses that have been inactive for the second longest period of time are required to be activated or transferred within two years.
    • The quartile of inactive licenses that have been inactive for the third longest period of time are required to be activated or transferred within three years.
    • The quartile of inactive licenses that have been inactive for the shortest period of time are required to be activated or transferred within four years.
  • A municipality may issue a new license at public sale for any license that has not been renewed within the last eight years.
  • Prior to the expiration of its inactive license, the holder of an inactive license may:
    • Activate its license;
    • Transfer its license for fair market value to another entity that will activate the license;
    • Transfer its license from a sending municipality to a contiguous receiving municipality for activation and use as part of an economic redevelopment plan or in connection with a premises within a redevelopment, improvement or revitalization area, or any improvement which is 100 percent new construction, which is an entirely new improvement not previously occupied or used for any purpose.
  • Contiguous municipalities are defined in the Bill as municipalities that are adjoined by land and share a common boundary line but does not include municipalities that are separated solely by a river, lake, bay or other body of water.
  • A municipality that receives a license from a continuous municipality is entitled to acquire one inactive license in each calendar year but not more than two inactive licenses in five calendar years.

Shopping Mall Licenses

  • A municipality may issue new “Special Licenses” to a person or entity for use in connection with a food and beverage establishment located within a shopping mall.
  • A municipality may issue up to two (2) Special Licenses to shopping malls with 750,000 square feet to 1,500,000 square feet and up to four (4) Special Licenses to shopping malls with more than 1,500,000 square feet.
  • These Special Licenses are non-transferrable, will not be issued to strip malls and are not subject to the population cap.

Governor Murphy has seven days to sign the Bill into law.

The CSG Law Liquor License Team, part of the firm’s Real Estate Group, is ready to assist licensees and developers navigate the reform as these exciting new changes transform New Jersey’s liquor license landscape.

Related Services

Real Estate

Related Industries

Food & Beverage