As 2017 begins, several important changes are taking effect in the Colorado Liquor industry. SB-197 was passed by the Colorado legislature in May of 2016 and signed by Governor Hickenlooper on June 10, 2016, allowing the expansion of alcohol sales in retail liquor stores and liquor-licensed drugstores. Many of the provisions of the bill have now gone into effect as of January 1, 2017.
Colorado has two types of licenses that permit the sale of beer, wine, and spirits for off-premises consumption; retail liquor stores and liquor-licensed drugstores. Historically, these two licenses have been referred to synonymously as a liquor store, but carry several significant differences. As its name entails, a liquor-licensed drugstore was required to have a regularly operating pharmacy on the premises. It is permitted to sell beer, wine, and spirits, and may sell any other non-alcohol related items on the premises. A retail liquor store was permitted to sell only beer, wine, and spirits along with a short list of alcohol-related products. Both licenses also had a limit of one location. Colorado law forbade any person that had an ownership interest in either a retail liquor store or a liquor-licensed drugstore from having an interest in any other liquor license in the state of Colorado.
SB-197 changes the product limitations and the ownership limitations drastically. A retail liquor store is now permitted to sell any items in addition to beer, wine, and spirits so long as the total sales of non-alcohol items does not exceed 20% of the total revenue for the calendar year. Liquor-licensed drugstores are still required to have an operating pharmacy, and can still sell almost anything in addition to beer, wine, and spirits; however, they are no longer permitted to sell any clothing or accessories that advertise alcohol beverages, and they must also have food sales of at least 20% of their total sales for every calendar year.
The most sweeping change in Colorado liquor law resulting from SB-197 is the expansion of liquor licenses permitted to owners of retail liquor stores and liquor-licensed drugstores as of January 1, 2017. Now, any person that has an interest in a retail liquor store license that was licensed before January 1, 2016 may have an interest in two retail liquor store licenses. That number will continue to transition up to four retail liquor stores by 2027. Any person that has an interest in a liquor-licensed drugstore that was licensed prior to January 1, 2016 may now have an interest in a total of five liquor-licensed drugstore licenses. This number phases into an unlimited number of licenses by 2037.
In order to open a new location, however, a liquor-licensed drugstore is required to purchase two retail liquor store licenses that existed prior to May 1, 2016 for each additional location they wish to open. There are several restrictions on how the liquor-licensed drugstore can purchase the other two licenses. Additionally, neither a retail liquor store or a liquor-licensed drugstore can open within a defined distance of another liquor-licensed drugstore or retail liquor store depending on the size of the city in which they intend to open.
There are additionally several requirements now imposed on liquor-licensed drugstores as of January 1, 2017, including registering a permitted manager, reporting annual sales, COD for all alcohol orders and price restrictions on alcohol sales.
If you have any questions on new requirements for your type of license, or new possibilities for expansion of your license, you may Contact Us to discuss your situation.