It’s tough out there for any new business. Even in the best of economies, you have to deal with the formalities required by state and federal governments, filings, fees, and – let’s face it – lawyers. But some types of businesses have it especially bad, and high on that list is the new alcohol producer. Draconian Prohibition-era laws make it especially difficult for them to get off the ground, as one of our clients recently found.

The California Department of Alcoholic Beverage Control (fondly, the ABC) issues many different types of licenses – some to serve alcohol, some to sell on-site or off-site, others to produce. Our client, we’ll call them “Brandywine,” wanted to do all of those things: to create a business location where they would distill brandy and other liquors, with a tasting room where visitors could sample the wares, and a shop where they could purchase bottles to take home. Each one of these requires a different license, and the ABC looks very carefully at applications that ask for everything but the kitchen sink.

The special problem with Brandywine’s application was a peculiar inconsistency in California’s laws: brandy is licensed separately, and with different privileges from other liquors. Specifically, a general liquor production license carries with it a privilege to have a tasting room, while a brandy production license does not. Why? No one really knows – not even the ABC. But that didn’t stop their local office from grilling us on what – EXACTLY – Brandywine had planned for their business. Would they be producing liquor other than brandy? Yes. Immediately when they opened, or sometime in the unknown future? Immediately. It took some convincing, but then that’s what we are here for. Having a positive working relationship with regulatory agencies is one of the values we offer our clients, and it showed when the ABC was willing to issue the licenses before the build-out of Brandywine’s facility had even started.

From a certain perspective, the ABC’s insistence makes sense: they want to be sure that no one applies for a general liquor production license just so that they can have a tasting room for the brandy which is unavailable under their brandy license. That would just be sidestepping California law and ABC regulations. But from another, it is an overzealous application of irrational rules. It’s the very last thing a business owner wants to deal with when still figuring out branding, marketing, supply chain logistics, and everything else necessary to start a business. Knowing you have someone on your side who can solve the problem and make the regulators smile while they sign off on your licenses can make the difference between sleepless nights and sweet dreams.


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