Liquor licenses are state-issued licenses that enable your business to legally sell alcohol. The laws around liquor licenses vary by state and New Jersey has some of the most restrictive liquor license laws in the nation (along with being some of the most expensive). In New Jersey, the Division of Alcoholic Beverage Control (“ABC”) regulates the sale of alcoholic beverages and the conduct of licensees through the issuance of licenses. There are three types of licenses: manufacturing, wholesale and retail. The subject of this article is a “33 License” or a Plenary Retail Consumption license (i.e. the license you need for a restaurant or similar.)
New Jersey law grants individual municipalities substantial discretion in passing ordinances regulating the sale and consumption of alcoholic beverages within their limits. The number of 33 Licenses available is determined by a municipality’s population, and may be further limited by the town’s governing body. As a result, the availability of alcohol and regulations governing it vary significantly from town to town. Retail licenses tend to be difficult to obtain. The market is in high demands and because of this 33 Licenses are subject to exorbitant prices if and when they become available. License holders (“licensees”) resell their license on the private market — subject to limitation. A license may only be used within the municipality that issued it originally. Moreover, any sale must be approved by the issuing authority. Here is how to get a liquor license broken down into four steps.
- Find the license, for sale on the private market. You will have to enter into a Purchase and Sale Agreement contingent upon successful application to the municipal ABC Board. You will also want to check to ensure the license is in good standing, has been properly renewed, etc. In order to do this you will want to run lien searches, request documentation of renewals, etc.
- Apply with the ABC. There is a 12-page application for every prospective purchaser to fill out and be filed within the municipality where the license is located. The application can be a person-to-person license, a place-to-place license or both. In order to transfer a license from person-to-person you do not need a sited premises, these licenses are called “in-pocket” as they are held by the licensee until premises is ready. Once you are ready to activate the license you will need to apply for a place-to-place transfer, this would include a tour of the premises and sketch were alcoholic beverages are to be sold. As a part of any transfer you will need to provide personal information. In addition, you will likely be fingerprinted and undergo a background check. Most municipalities also required an in-person interview. Some even will want to review where the money to pay for the license is coming from. Also check with the municipality as some have application riders that must also be filed.
- Notice and Hearing. You will need to publish twice in the local paper (as designated by the municipality) regarding the transfer of the License. The two publications must be at a minimum seven (7) days apart and be published at least seven (7) days prior to the hearing. If all goes to plan you will go to the hearing where the License transfer application will be reviewed and hopefully approved.
- Closing. Once approved you can move onto the closing of the liquor license. Typically this requires a closing statement, bill of sale and other closing documents similar to a house closing.
Although seemingly straightforward this process is highly nuanced and riddled with intricacies. Having an experienced attorney can make the process seamless and prepare all the necessary materials from the purchase and sale agreement to application materials. Lindabury’s Food and Beverage group regularly advises clients on securing and transferring liquor licenses in New Jersey.