Colorado § 44-3-426 - Distillery pub license - legislative declaration - definition.

§ 44-3-426. Distillery pub license - legislative declaration - definition.

(1) The general assembly finds and determines that:

(a) Colorado is a state that welcomes and encourages entrepreneurs and new business opportunities;

(b) Currently, manufacturing of spirituous liquors by persons licensed as manufacturers pursuant to section 44-3-402 is a thriving industry, with new distilleries opening throughout the state and increasing the availability of Colorado-produced craft spirits both within and outside the state;

(c) The spirituous liquors manufacturing business focuses primarily on producing a spirituous liquor product that the licensed spirits manufacturer can then sell and distribute, through a wholesaler, throughout the state and in other states to retail outlets;

(d) While licensed spirits manufacturers are permitted to sell their products directly to consumers, the majority of the manufacturing business is selling the bulk of a manufacturer's product to retail outlets that then sell the product to consumers;

(e) On the other hand, the main focus of a distillery pub business authorized by this section is to operate a local pub in which food and alcohol beverages, including a small quantity of spirituous liquors fermented and distilled on site, are sold and served for on-premises consumption;

(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;

(g) Additionally, unlike a licensed spirits manufacturer, which is only required to obtain a license from the state licensing authority, a distillery pub must obtain both a state and local license after demonstrating that the distillery pub meets the reasonable requirements and the desires of the adult inhabitants of the neighborhood in which it will be situated; and

(h) It is important to encourage the new distillery pub business model, which will add to the thriving craft spirits industry in this state without disrupting the ever-growing spirituous liquors manufacturing industry.

(2) A distillery pub license may be issued to any person operating a distillery pub and also selling food and alcohol beverages for consumption on the premises. At least fifteen percent of the gross on-premises food and alcohol beverage income of the licensed distillery pub must be from the sale of food. For purposes of this subsection (2), "food" means a quantity of foodstuffs of a nature that is ordinarily consumed by an individual at regular intervals for the purpose of sustenance.

(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:

(a) Furnish its spirituous liquors for consumption on the premises;

(b) Sell its spirituous liquors to independent wholesalers for distribution to licensed retailers;

(c) Sell its spirituous liquors to the public in sealed containers for off-premises consumption, as long as the spirituous liquors are fermented, distilled, and packaged on the licensed premises by the licensee; or

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

(4) (a) Except as provided in subsection (4)(b) of this section, every person selling alcohol beverages pursuant to this section must purchase alcohol beverages, other than those that are fermented and distilled at the licensed distillery pub, from a wholesaler licensed pursuant to this article 3.

(b) (I) During a calendar year, a person selling alcohol beverages as provided in this section may purchase not more than seven thousand dollars' worth of malt, vinous, and spirituous liquors from retailers licensed pursuant to sections 44-3-409, 44-3-410, and 44-4-104 (1)(c). On January 1, 2025, and each January 1 thereafter, the state licensing authority shall adjust the purchase limitation specified in this subsection (4)(b)(I) for inflation and shall publish the adjusted purchase limitation amount on the liquor enforcement division's website.

(II) The distillery pub licensee shall retain evidence of each purchase of malt, vinous, and spirituous liquors from a retailer licensed pursuant to section 44-3-409, 44-3-410, or 44-4-104 (1)(c), in the form of a purchase receipt showing the name of the licensed retailer, the date of purchase, a description of the alcohol beverages purchased, and the price paid for the alcohol beverages. The licensee shall retain the receipt and make it available to state and local licensing authorities at all times during business hours.

(5) (a) Except as provided in subsection (5)(b) of this section, it is unlawful for any owner, part owner, shareholder, or person interested directly or indirectly in a distillery pub license to conduct, own either in whole or in part, or be directly or indirectly interested in any other business licensed pursuant to this article 3 or article 4 of this title 44.

(b) A person interested directly or indirectly in a distillery pub license may conduct, own either in whole or in part, or be directly or indirectly interested in:

(I) Other distillery pub licenses;

(II) A license described in section 44-3-401 (1)(j) to (1)(t), (1)(v), or (1)(w), 44-3-412 (1), or 44-4-104 (1)(c); or

(III) A financial institution referred to in section 44-3-308 (4).

Source: L. 2018: Entire article added with relocations, (HB 18-1025), ch. 152, p. 1028, § 2, effective October 1. L. 2019: (4) amended, (SB 19-011), ch. 1, p. 13, § 21, effective January 31. L. 2024: (4)(b)(I) amended, (SB 24-231), ch. 205, p. 1261, § 26, effective August 7.

Editor's note: This section is similar to former § 12-47-424 as it existed prior to 2018.