Alcohol Beverage Manufacturer Sales

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO INTRODUCED HOUSE BILL 26-1190 LLS NO. 26-0067.02 Jery Payne x2157 HOUSE SPONSORSHIP Soper and Martinez, SENATE SPONSORSHIP Lindstedt, House Committees Senate Committees Business Affairs & Labor A BILL FOR AN ACT C ONCERNING THE AUTHORITY OF ALCOHOL BEVERAGE MANUFACTURERS TO PROVIDE AN ALCOHOL BEVERAGE TO CUSTOMERS.

Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) The bill creates an expanded sales room permit, which authorizes a manufacturer, limited winery, or wholesaler that manufactures beer (producer) to: ! Operate a restaurant at the producer's sales room; or ! Sell or provide alcohol beverages that are not manufactured Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

by the permit holder by the drink for consumption at the sales room if the alcohol beverage is a craft product. A producer must obtain a separate expanded sales room permit for each location. To obtain an expanded sales room permit, a producer must apply to the state licensing authority. To operate an expanded sales room, the producer must: ! Have sandwiches and light snacks available for consumption on the premises; and ! Not sell at the sales room the authorized alcohol beverages in an amount in excess of 50% of the total sales of alcohol beverages. The state licensing authority will establish the application fee for an expanded sales room permit. The bill authorizes a vintner's restaurant licensee to sell and ship wine directly to an individual who has joined a winery club. To create a winery club, the vintner's restaurant licensee must obtain and retain, for as long as the club is active, each member's name, address, and age and a record of how the member's age was verified. To join a winery club, an individual must apply to the vintner's restaurant that created the winery club. To ship wine to an address, a vintner's restaurant licensee must verify the recipient is a member of the club and that the delivery address is the same address on file for the member. Under current law, a distillery pub licensee may sell its spirits at wholesale in an amount up to 2,700 liters per product per year. The bill raises the limit to 8,100 liters per product per year.

Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 44-3-103, add (11.7) and (11.8) as follows:

44-3-103. Definitions.

As used in this article 3 and article 4 of this title 44, unless the context otherwise requires:

(11.7) "CRAFT PRODUCER" MEANS A MANUFACTURER OF ALCOHOL BEVERAGES THAT PRODUCES NO MORE THAN THE FOLLOWING AMOUNT OF THE SPECIFIED ALCOHOL BEVERAGE PER CALENDAR YEAR:

(a) ONE HUNDRED THOUSAND GALLONS, WHICH IS APPROXIMATELY THREE HUNDRED SEVENTY-EIGHT THOUSAND FIVE HUNDRED FORTY-ONE LITERS, OR LESS OF VINOUS SPIRITS;

(b) TWO HUNDRED FORTY THOUSAND GALLONS, WHICH IS APPROXIMATELY NINE HUNDRED EIGHT THOUSAND FOUR HUNDRED NINETY-EIGHT LITERS, OR LESS OF MALT LIQUORS OR HARD CIDER; OR

(c) EIGHT HUNDRED SEVENTY-FIVE THOUSAND LITERS, WHICH IS APPROXIMATELY TWO HUNDRED THIRTY-ONE THOUSAND GALLONS, OR LESS OF SPIRITUOUS LIQUORS.

"CRAFT PRODUCT" MEANS AN ALCOHOL BEVERAGE PRODUCED BY A CRAFT PRODUCER.

SECTION 2. In Colorado Revised Statutes, 44-3-422, amend (1)(a); and add (6) as follows: 44-3-422. Vintner's restaurant license - shipping to winery club members.

(1) (a) A vintner's restaurant license may be issued to a person operating a vintner's restaurant and also selling alcohol beverages for consumption on the premises. SUBJECT TO SUBSECTION (6) OF THIS SECTION, A VINTNER'S RESTAURANT MAY SELL AND SHIP VINOUS LIQUORS DIRECTLY ONLY TO AN INDIVIDUAL WHO HAS JOINED A WINERY CLUB.

(6) (a) A VINTNER'S RESTAURANT LICENSEE MAY CREATE A WINERY CLUB ASSOCIATED WITH THE VINTNER'S RESTAURANT. TO CREATE A WINERY CLUB, THE VINTNER'S RESTAURANT LICENSEE MUST OBTAIN AND RETAIN, FOR AS LONG AS THE CLUB IS ACTIVE AND FOR EACH CURRENT MEMBER OF THE CLUB, THE MEMBER'S NAME, ADDRESS, AND AGE AND A RECORD OF HOW THE MEMBER'S AGE WAS VERIFIED.

(b) TO JOIN A WINERY CLUB, AN INDIVIDUAL MUST:

(I) PROVIDE THE VINTNER'S RESTAURANT LICENSEE WITH THE APPLICANT'S NAME, ADDRESS, AND AGE; AND

(II) PROVIDE PROOF OF AGE AND IDENTITY.

(c) TO SHIP VINOUS LIQUORS DIRECTLY TO AN ADDRESS, A VINTNER'S RESTAURANT LICENSEE MUST VERIFY THAT THE INDIVIDUAL WHO ORDERED THE WINE IS A MEMBER OF THE WINERY CLUB OF THE VINTNER'S RESTAURANT AND THAT THE DELIVERY ADDRESS IS THE SAME ADDRESS ON FILE FOR THE CLUB MEMBER.

(d) THIS SUBSECTION (6) DOES NOT AUTHORIZE A VINTNER'S RESTAURANT LICENSEE TO SHIP VINOUS LIQUORS DIRECTLY TO AN ADDRESS UNLESS THE VINOUS LIQUORS ARE MANUFACTURED BY A VINTNER'S RESTAURANT LICENSEE ON THE LICENSED PREMISES.

SECTION 3. In Colorado Revised Statutes, 44-3-402, add (8) as follows: 44-3-402. Manufacturer's license - sales rooms - expanded sales room permit - rules.

(8) (a) (I) THE STATE LICENSING AUTHORITY MAY ISSUE AN EXPANDED SALES ROOM PERMIT TO A MANUFACTURER LICENSED PURSUANT TO THIS SECTION. IF A MANUFACTURER OBTAINS AN EXPANDED SALES ROOM PERMIT PURSUANT TO THIS SUBSECTION MANUFACTURER MAY:

THE

(A) OPERATE A RESTAURANT AT THE MANUFACTURER'S SALES ROOM; OR

(B) SELL OR PROVIDE ALCOHOL BEVERAGES THAT ARE NOT MANUFACTURED BY THE PERMIT HOLDER BY THE DRINK FOR CONSUMPTION AT THE SALES ROOM IF THE ALCOHOL BEVERAGE IS A CRAFT PRODUCT.

(II) A MANUFACTURER MUST OBTAIN A SEPARATE EXPANDED SALES ROOM PERMIT FOR EACH LOCATION WHERE ACTIVITIES THAT ARE AUTHORIZED BY THIS SUBSECTION (8) OCCUR.

(III) TO OBTAIN AN EXPANDED SALES ROOM PERMIT UNDER THIS SUBSECTION (8), A MANUFACTURER MUST APPLY TO THE STATE LICENSING AUTHORITY. THE STATE LICENSING AUTHORITY MAY DETERMINE BY RULE THE FORM AND MANNER OF THE PERMIT APPLICATION.

(b) (I) IF THE STATE LICENSING AUTHORITY APPROVES A MANUFACTURER'S EXPANDED SALES ROOM PERMIT APPLICATION, THE MANUFACTURER SHALL:

(A) HAVE SANDWICHES AND LIGHT SNACKS AVAILABLE FOR CONSUMPTION ON THE PREMISES OF THE SALES ROOM BUT NEED NOT HAVE MEALS AVAILABLE FOR CONSUMPTION ON THE PREMISES OF THE SALES ROOM; AND

(B) NOT SELL AT THE SALES ROOM THE ALCOHOL BEVERAGES AUTHORIZED IN SUBSECTION (8)(a)(I)(B) OF THIS SECTION IN AN AMOUNT IN EXCESS OF FIFTY PERCENT OF THE TOTAL SALES OF ALCOHOL BEVERAGES.

(II) THE SALES LIMITATION DESCRIBED IN SUBSECTION (8)(b)(I) OF THIS SECTION IS MEASURED BY THE GROSS SALES PRICE OF THE ALCOHOL BEVERAGES AUTHORIZED IN SUBSECTION (8)(a)(I)(B) OF THIS SECTION AND BY THE GROSS SALES PRICE OF ALL ALCOHOL BEVERAGES SOLD FOR CONSUMPTION AT THE SALES ROOM.

(c) (I) TO BE ISSUED AN EXPANDED SALES ROOM PERMIT, A COPY OF A PERMIT APPLICATION FILED UNDER THIS SUBSECTION (8) MUST BE POSTED IN A CONSPICUOUS PLACE AT THE LOCATION THAT IS THE SUBJECT OF THE PERMIT APPLICATION FOR A PERIOD OF THIRTY DAYS, AND MUST BE PUBLISHED ONCE IN A NEWSPAPER OF GENERAL CIRCULATION IN THE COUNTY WITH JURISDICTION OVER THE LOCATION, BEFORE THE STATE LICENSING AUTHORITY DETERMINES WHETHER TO ISSUE THE PERMIT. THE STATE LICENSING AUTHORITY SHALL APPROVE OR DENY THE PERMIT WITHIN NINETY DAYS AFTER THE APPLICATION IS FILED.

(II) AN EXPANDED SALES ROOM PERMIT HOLDER SHALL DISPLAY THE EXPANDED SALES ROOM PERMIT WITH THE MANUFACTURER'S LICENSE AT THE LOCATION THAT IS THE SUBJECT OF THE ISSUED PERMIT.

SECTION 4. In Colorado Revised Statutes, 44-3-403, add (7) as follows: 44-3-403. Limited winery license - expanded sales room permit - rules.

(7) (a) (I) THE STATE LICENSING AUTHORITY MAY ISSUE AN EXPANDED SALES ROOM PERMIT TO A LIMITED WINERY LICENSEE. IF A LIMITED WINERY OBTAINS AN EXPANDED SALES ROOM PERMIT PURSUANT TO THIS SUBSECTION (7), THE LIMITED WINERY MAY:

(A) OPERATE A RESTAURANT AT THE LIMITED WINERY'S SALES ROOM; OR

(B) SELL OR PROVIDE ALCOHOL BEVERAGES THAT ARE NOT MANUFACTURED BY THE PERMIT HOLDER BY THE DRINK FOR CONSUMPTION AT THE SALES ROOM IF THE ALCOHOL BEVERAGE IS A CRAFT PRODUCT.

(II) A LIMITED WINERY MUST OBTAIN A SEPARATE EXPANDED SALES ROOM PERMIT FOR EACH LOCATION WHERE ACTIVITIES THAT ARE AUTHORIZED BY THIS SUBSECTION (7) OCCUR.

(III) TO OBTAIN AN EXPANDED SALES ROOM PERMIT UNDER THIS SUBSECTION (7), A LIMITED WINERY MUST APPLY TO THE STATE LICENSING AUTHORITY. THE STATE LICENSING AUTHORITY MAY DETERMINE BY RULE THE FORM AND MANNER OF THE PERMIT APPLICATION.

(b) (I) IF THE STATE LICENSING AUTHORITY APPROVES A LIMITED WINERY'S EXPANDED SALES ROOM PERMIT APPLICATION, THE LIMITED WINERY SHALL:

(A) HAVE SANDWICHES AND LIGHT SNACKS AVAILABLE FOR CONSUMPTION ON THE PREMISES OF THE SALES ROOM BUT NEED NOT HAVE MEALS AVAILABLE FOR CONSUMPTION ON THE PREMISES OF THE SALES ROOM; AND

(B) NOT SELL AT THE SALES ROOM THE ALCOHOL BEVERAGES AUTHORIZED IN SUBSECTION (7)(a)(I)(B) OF THIS SECTION IN AN AMOUNT IN EXCESS OF FIFTY PERCENT OF THE TOTAL SALES OF ALCOHOL BEVERAGES.

(II) THE SALES LIMITATION DESCRIBED IN SUBSECTION (7)(b)(I) OF THIS SECTION IS MEASURED BY THE GROSS SALES PRICE OF THE ALCOHOL BEVERAGES AUTHORIZED IN SUBSECTION (7)(a)(I)(B) OF THIS SECTION AND BY THE GROSS SALES PRICE OF ALL ALCOHOL BEVERAGES SOLD FOR CONSUMPTION AT THE SALES ROOM.

(c) (I) TO BE ISSUED AN EXPANDED SALES ROOM PERMIT, A COPY OF A PERMIT APPLICATION FILED UNDER THIS SUBSECTION (7) MUST BE POSTED IN A CONSPICUOUS PLACE AT THE LOCATION THAT IS THE SUBJECT OF THE PERMIT APPLICATION FOR A PERIOD OF THIRTY DAYS, AND MUST BE PUBLISHED ONCE IN A NEWSPAPER OF GENERAL CIRCULATION IN THE COUNTY WITH JURISDICTION OVER THE LOCATION, BEFORE THE STATE LICENSING AUTHORITY DETERMINES WHETHER TO ISSUE THE PERMIT. THE STATE LICENSING AUTHORITY SHALL APPROVE OR DENY THE PERMIT WITHIN NINETY DAYS AFTER THE APPLICATION IS FILED.

(II) AN EXPANDED SALES ROOM PERMIT HOLDER SHALL DISPLAY THE EXPANDED SALES ROOM PERMIT WITH THE LIMITED WINERY'S LICENSE AT THE LOCATION THAT IS THE SUBJECT OF THE ISSUED PERMIT.

SECTION 5. In Colorado Revised Statutes, 44-3-407, add (5) as follows:

44-3-407. Wholesaler's license - discrimination in wholesale sales prohibited - expanded sales room permit - rules.

(5) (a) (I) THE STATE LICENSING AUTHORITY MAY ISSUE AN EXPANDED SALES ROOM PERMIT TO A WHOLESALER'S LIQUOR LICENSEE THAT MANUFACTURES MALT LIQUORS.

MANUFACTURES MALT LIQUORS OBTAINS AN EXPANDED SALES ROOM PERMIT PURSUANT TO THIS SUBSECTION (5), THE WHOLESALER MAY:

IF A WHOLESALER THAT

(A) OPERATE A RESTAURANT AT THE WHOLESALER'S SALES ROOM; OR (B) SELL OR PROVIDE ALCOHOL BEVERAGES THAT ARE NOT MANUFACTURED BY THE PERMIT HOLDER BY THE DRINK FOR CONSUMPTION AT THE SALES ROOM IF THE ALCOHOL BEVERAGE IS A CRAFT PRODUCT.

(II) A WHOLESALER THAT MANUFACTURES MALT LIQUORS MUST OBTAIN A SEPARATE EXPANDED SALES ROOM PERMIT FOR EACH LOCATION WHERE ACTIVITIES THAT ARE AUTHORIZED BY THIS SUBSECTION (5) OCCUR.

(III) TO OBTAIN AN EXPANDED SALES ROOM PERMIT UNDER THIS SUBSECTION (5), A WHOLESALER THAT MANUFACTURES MALT LIQUORS MUST APPLY TO THE STATE LICENSING AUTHORITY. THE STATE LICENSING AUTHORITY MAY DETERMINE BY RULE THE FORM AND MANNER OF THE PERMIT APPLICATION.

(b) (I) IF THE STATE LICENSING AUTHORITY APPROVES AN EXPANDED SALES ROOM PERMIT APPLICATION OF A WHOLESALER THAT MANUFACTURES MALT LIQUORS, THE WHOLESALER SHALL:

(A) HAVE SANDWICHES AND LIGHT SNACKS AVAILABLE FOR CONSUMPTION ON THE PREMISES OF THE SALES ROOM BUT NEED NOT HAVE MEALS AVAILABLE FOR CONSUMPTION ON THE PREMISES OF THE SALES ROOM; AND

(B) NOT SELL AT THE SALES ROOM THE ALCOHOL BEVERAGES AUTHORIZED IN SUBSECTION (5)(a)(I)(B) OF THIS SECTION IN AN AMOUNT IN EXCESS OF FIFTY PERCENT OF THE TOTAL SALES OF ALCOHOL BEVERAGES.

(II) THE SALES LIMITATION DESCRIBED IN SUBSECTION (5)(b)(I) OF THIS SECTION IS MEASURED BY THE GROSS SALES PRICE OF THE ALCOHOL BEVERAGES AUTHORIZED IN SUBSECTION (5)(a)(I)(B) OF THIS SECTION AND BY THE GROSS SALES PRICE OF ALL ALCOHOL BEVERAGES SOLD FOR CONSUMPTION AT THE SALES ROOM.

(c) (I) TO BE ISSUED AN EXPANDED SALES ROOM PERMIT, A COPY OF A PERMIT APPLICATION FILED UNDER THIS SUBSECTION (5) MUST BE POSTED IN A CONSPICUOUS PLACE AT THE LOCATION THAT IS THE SUBJECT OF THE PERMIT APPLICATION FOR A PERIOD OF THIRTY DAYS, AND MUST BE PUBLISHED ONCE IN A NEWSPAPER OF GENERAL CIRCULATION IN THE COUNTY WITH JURISDICTION OVER THE LOCATION, BEFORE THE STATE LICENSING AUTHORITY DETERMINES WHETHER TO ISSUE THE PERMIT. THE STATE LICENSING AUTHORITY SHALL APPROVE OR DENY THE PERMIT WITHIN NINETY DAYS AFTER THE APPLICATION IS FILED.

(II) AN EXPANDED SALES ROOM PERMIT HOLDER SHALL DISPLAY THE EXPANDED SALES ROOM PERMIT WITH THE LICENSE OF THE WHOLESALER THAT MANUFACTURES MALT LIQUORS AT THE LOCATION THAT IS THE SUBJECT OF THE ISSUED PERMIT.

SECTION 6. In Colorado Revised Statutes, 44-3-426, amend (1)(f) and (3)(d) as follows: 44-3-426. Distillery pub license - legislative declaration - definition.

(1) The general assembly finds and determines that:

(f) While a distillery pub is allowed to produce, serve, and distribute its own spirituous liquors, unlike a licensed spirits manufacturer, the production level for a distillery pub is capped, and the ability to distribute to retail outlets is greatly restricted, thereby establishing a new business model that is distinct from, and serves a different clientele than, a licensed spirits manufacturer;

(3) During the hours established in section 44-3-901 (6)(b), a licensed distillery pub may, with regard to spirituous liquors fermented and distilled by the distillery pub licensee on the licensed premises:

(d) Sell its spirituous liquors at wholesale to licensed retailers in an amount up to two EIGHT thousand seven ONE hundred liters per spirituous liquor product per calendar year.

SECTION 7. In Colorado Revised Statutes, 44-3-501, amend (3)(a)(XXII) and (3)(a)(XXIII); and add (3)(a)(XXIV) as follows:

44-3-501. State fees - rules.

(3) (a) The state licensing authority shall establish fees for processing the following types of applications, notices, or reports required to be submitted to the state licensing authority:

(XXII) Applications for each noncontiguous manufacturing facility pursuant to section 44-3-402 and rules adopted pursuant to that section; and

(XXIII) Applications for an alcohol beverage shipper license pursuant to section 44-3-430 and rules adopted pursuant to that section;

AND

(XXIV) APPLICATIONS FOR THE EXPANDED SALES ROOM PERMIT ISSUED UNDER SECTION 44-3-402 (8), 44-3-403 (7), OR 44-3-407 (5).

SECTION 8. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.