Hurwitz, Richard & Sencabaugh LLP is pleased to announce that Bob Hurwitz and Gene Richard have been named Massachusetts and New England Super Lawyers for the fifteenth consecutive year, and that Dan Sencabaugh has been named a Massachusetts and New England Rising Star for the third time. Bob Hurwitz and Dan Sencabaugh received their honor in the field of construction law while Gene Richard received his recognition in the field of administrative law for his work as a liquor licensing attorney. The Super Lawyers and Rising Stars lists appear in Boston Magazine as well as the publication New England Super Lawyers. The Super Lawyers list recognizes the top five percent of attorneys in New England while the Rising Stars list recognizes the top 2.5 percent of attorneys 40 years old and under or in practice for 10 years or less.
Powdered Alcohol In Massachusetts
The federal Alcohol and Tobacco Tax and Trade Bureau (“TTB”) recently approved the sale of four powdered alcohol products. This follows the approval and later rescission of approval by TTB of seven powdered alcohol products in 2014.
Although this time it appears the TTB approval will stand, the Massachusetts Alcoholic Beverages Control Commission (“ABCC”) quickly issued an advisory ruling essentially stating “NOT IN MY COMMONWEALTH!” Two days after the TTB approval, the ABCC Advisory stated that Massachusetts laws prohibit the importation, sale, and manufacturing of powdered alcohol in Massachusetts.
The ABCC reasoned that:
1. M.G.L. Chapter 138 regulates both alcoholic beverages and alcohol;
2. Powdered alcohol is not a “liquid”, and thus not an “alcoholic beverage”; and
3. Existing liquor licenses for wholesalers, manufacturers and retailers only authorize the sale of alcoholic beverages – and thus, not alcohol in powdered, non-liquid form.
Some wags were heard to wonder if the ABCC were called only the Massachusetts Alcohol Control Commission whether the Advisory would have come out the other way. California, for example, took a much more welcoming approach to powders years ago in Regulation 2557.
The company that came up with “Palcohol” extols its convenience, portability and flexibility, noting that hikers for example would be able to enjoy an alcoholic beverage by a stream in the woods after a long day on the trail, without having had to carry the beverage part of their beverage all day long.
Opponents note the same convenience, portability and flexibility of Palcohol might prove irresistible to minors and other mischief-minded or just careless individuals.
Next up? How the state will regulate different forms of marijuana if legalized.
Recent Updates at the Alcoholic Beverages Control Commission
Recently, two new updates were posted on the Alcoholic Beverages Control Commission’s (“ABCC”) website. The first, effective May 28, 2013, is an advisory regarding obtaining a Certificate of Good Standing (COG) in connection with liquor license applications. Obtaining a sign-off from the Department of Revenue (DOR) can sometimes be a drawn-out process, so now the ABCC will accept COGs as part of the liquor license applications submitted to the local liquor licensing authorities. To obtain a COG from DOR, the applicant should go to DOR’s website and follow the links to obtain a COG. In situations where a license is being transferred, both the Buyer and the Seller should obtain the COG.
The second update to the ABCC’s website is the list of active state licensees. These licenses include: Farmer Brewery, Farm Distillery, Farmer Winery, Wholesalers, Manufacturers, Winery Shipment, and Caterers Licenses. The retail licenses issued by the local municipalities and approved by the ABCC are not currently listed on this site.
These updates are part of an ongoing process at the ABCC to make the more transparent and efficient for all those involved in the liquor licensing process.
WRH in Attendance at Medical Marijuana Seminar
Last Friday, Suffolk University Law School hosted a day-long seminar on Medical Marijuana: “Navigating the Law and the Science.” With many clients in the liquor and pharmacy industries, it seemed a natural for Wayne, Richard & Hurwitz, and the seminar did not disappoint.
Retired SJC Justice John Greaney moderated two morning sessions, which included discussions of Massachusetts’ new medical marijuana laws, comparisons with similar laws nationwide, and an overview of the latest research on medical and scientific uses for marijuana.
Highlights from later sessions included:
- Dr. Lauren Smith, Interim Commissioner of the Massachusetts Department of Public Health, summarizing the regulations which are due to be issued soon;
- Speculation concerning how federal officials will respond within the Commonwealth, given that marijuana remains classified as a Schedule 1 controlled substance under the federal Controlled Substances Act; and
- Views of representatives of law enforcement and municipal and state regulators from Massachusetts, Rhode Island and Maine.
One, we were surprised to learn that Question 3 (which legalized medical marijuana in Massachusetts) not only passed with a very solid 63 percent of the vote statewide, but actually received majority support in every locality except two (Lawrence and Mendon, and even there only lost 51 – 49). Supporters claim that full legalization (at the state level, ala Colorado and Washington state) is coming to Massachusetts in 2016.
Two, we were impressed by the list of serious medical conditions for which marijuana has been found useful by patients and sufferers (such as cancer, glaucoma, HIV, AIDS, ALS, Crohn’s Disease, Parkinson’s, MS), though research has been slow to happen in large part due to the difficulty of studying a material that is illegal to possess.
Three, Massachusetts seems intent on proceeding with a legal structure that is non-profit, and “vertically integrated” meaning dispensaries will be the source of their own product. We think the state might be better served to consider the alcoholic beverages regulatory model. This would allow for-profit entities to either manufacture or retail the product, allowing each to specialize at whatever they do best, and retain whatever after-tax profit is generated.
Recent ABCC Decision a Win for Liquor License Applicants
The Massachusetts Alcoholic Beverages Control Commission (ABCC) recently issued a decision in favor of a liquor license applicant in Falmouth.
Murphy’s Package Store (Murphy’s) applied to the Falmouth Board of Selectmen to move from its existing Main Street location to new premises approximately four miles away in West Falmouth. After hearing testimony both in favor and opposed to the move, the Board of Selectmen voted 3 to 2 to deny the application. The issues of traffic and parking at the new location were hot topics at both the Falmouth hearing, and at the subsequent appeal before the ABCC.
The ABCC disapproved of the Board of Selectmen’s denial, and remanded the matter back to the Board with the recommendation that the application be granted. In doing so, the ABCC made statements that may help counter some of the common tactics used by opponents to liquor license transfers.
All cases involving the issuance or transfer of liquor licenses in Massachusetts involve a determination of a public need for the license. However, a licensing board in reaching a decision concerning public need is required to make specific findings that are supported by the record. Regarding Murphy’s, the ABCC stated that the Board of Selectmen’s denial was inadequate as it merely recited a summation of the opponents who testified about parking and traffic. The [ABCC] finds this decision to be a general finding (emphasis added). To distinguish, the ABCC cited the case Exotic Restaurant Concepts and stated that [r]ecitals of testimony do not constitute findings. See Exotic Rests. Concept, Inc. v. Boston Licensing Board, Suffolk Superior Court, C.A. No. 07-3287 (Borenstein, J.). In denying the application for transfer, the Board of Selectmen merely recited the statements of the opponents concerning traffic and parking, and this is insufficient to deny a license transfer. In fact, the record reflected that adequate parking was available and neither the Police Chief nor Fire Chief had any objections to the transfer.
Additionally, the ABCC refused to give any weight to one opponent’s statement that there existed another package store located less than Â½ mile away from the proposed transfer location. The ABCC stated that “[t]his distance between the existing package store and the proposed location of Murphy’s was not verified to the [ABCC], nor was it explained how this distance was calculated or calibrated.”
The ABCC noted that a single liquor store in one area of a town could be considered a monopoly. The ABCC in its decision stated that “the action of the Local Board in denying this application has the effect of continuing in place the monopoly held by the sole § 15 license in this section of the town.”
Based on the ABCC’s Murphy’s decision, liquor license applicants are advised to prepare to substantively counter objections that may be raised by opponents. Common general objections such as traffic, parking, and proximity of other package stores can be countered by a license applicant who builds a strong and detailed record at the hearing.
Howard J. Wayne to Chair MCLE Panel on Alcohol, Food & Entertainment Licensing
Wayne, Richard & Hurwitz LLP invites you to join us for a seminar entitled Alcohol, Food & Entertainment Licensing & Liability Update 2013. The seminar will be taking place on Thursday, April 11th from 2:00 to 5:00 p.m. both via Webcast and live at the MCLE Center located at 10 Winter Place in Boston. Howard J. Wayne, founding partner of the firm, will be chairing our esteemed panel. The panel will include:
- Kim S. Gainsboro, Esq. Chairwoman, Alcoholic Beverages Control Commission
- William Kelley, Esq. General Counsel, Alcoholic Beverages Control Commission
- Paul M. Maleck, Esq. Doherty, Wallace, Pillsbury & Murphy P.C.
- Paul Mullan, Esq. Commissioner, Worcester License Commission
- Nicole Murati Ferrer, Esq. Chairwoman, Licensing Board for the City of Boston
At this seminar, you will hear directly about the licensing process directly from the decision makers and leading practitioners. The law surrounding licensing and liability is always changing; this program will help you and your clients stay current on this challenging area of the law. The conclusion of the program will include an “Ask the Experts” session for attendees to get answers to their licensing questions.
Please click here to register to attend the seminar or click here to sign up for the live Webcast. The panel is looking forward to fielding your questions!
ABCC Rules For Gas Station Licensee
Not that long ago, it was quite unusual to find alcoholic beverages for sale at a
gasoline station in Massachusetts. However, the advent of convenience stores linked to gasoline stations is rapidly changing that situation. A recent decision by the Massachusetts Alcoholic Beverages Control Commission (ABCC) illustrates the trend.
In 2011, Northgate Mobil in Revere filed an application with the Revere Licensing Board to obtain a license to sell all alcoholic beverages, for off premises consumption (i.e., a “package store” license). Northgate Mobil already held an off-premises consumption license to sell wine and beer, and wanted to upgrade to sell spirits as well. In December 2011, the Revere Board denied Northgate Mobil’s application, stating in part that a liquor license was inappropriate for an establishment “so closely associated with the operation of motor vehicles”. The applicant appealed the decision to the ABCC, and the ABCC recently ruled in favor of Northgate Mobil.
The ABCC cited a number of factors in support of its disapproval of the Revere Board’s denial. For instance, Northgate Mobil had never been disciplined for violating laws or regulations relating to alcohol sales, and explained to the ABCC why that was no accident “the store’s owner spends approximately 50 hours a week on the premises, and all of the store’s employees and managers are trained in-house in the proper handling of alcoholic beverages sales.” Furthermore, not only was there no local opposition to the expanded license, but one city councilor appeared at the hearing and declared support for the license on behalf of himself and his constituents.
Intriguingly, the ABCC also took issue with the Revere Board’s core finding that the application should be denied because Northgate Mobil was “closely associated with the operation of motor vehicles.” Even though the applicant operates a gas station, the ABCC quite logically noted that “All off-premises alcoholic beverages licenses by their very nature generally involve an individual driving to the premises, purchasing the alcohol, and then leaving the premises with the alcoholic beverages and consuming it somewhere else”.
Given the ABCC’s recognition that most package store sales occur to consumers who have driven to the store, whether or not it is located at a gas station, their roadmap was clear the ABCC remanded Northgate Mobil’s application to the Revere Board for further consideration, with the recommendation that Revere grant Northgate Mobil’s application for an all alcoholic beverages license.
Casinos and Happy Hour Regulations in Massachusetts
There has been much debate over whether Massachusetts should permit the establishment of casinos within the Commonwealth. In an interesting development, the Massachusetts Senate approved an amendment to the pending casino bill that would eliminate the famous (or infamous, as some would say) “happy hour regulations.”
Since 1984, the Massachusetts happy hour regulations have prohibited bars and restaurants from offering free or discounted drinks to their patrons. Specifically, the regulations require bars and restaurants to keep the price of a drink the same throughout the entire calendar week. Thus, no 5 p.m. discounts allowed, unless the bar or restaurant wants to charge the reduced price for the entire week. Bars and restaurants are also prohibited from altering the volume of your drink without proportionally altering the price.
The casino bill, if passed by the Massachusetts legislature, could change all of that. On Tuesday, October 11th, the Senate voted 25 to 13 to amend the pending casino bill. The amendment would essentially rid Massachusetts of the happy hour regulations for bars and restaurants, as well as casinos. The amendment must still be approved by the House and signed by the Governor into law.
The concept of the “free drink” is closely tied to casino gambling, presumably because it keeps gamblers motivated to continue gambling. Connecticut’s Foxwoods and Mohegan Sun casinos have long offered free drinks to its customers. It is thought that if Massachusetts’ casinos are to compete, free drinks are a necessity.
However, if casinos are exempted from the happy hour regulations, many bar and restaurant owners are worried that they will not be able to compete. Thus, the amendment to the casino bill would eliminate the regulations for bars and restaurants and create a level playing field.
It also remains to be seen whether Massachusetts casinos will allow smoking. Connecticut law currently allows gamblers to smoke and Connecticut casinos have set up gambling rooms where smoking is permitted. There is no smoking amendments currently in front of the Legislature.
The Boston Globe and Boston Herald have reported on a recent change or clarification in policy regarding “farmer-brewery” licenses by the Massachusetts Alcoholic Beverages Control Commission (ABCC). Farmer-brewery licenses are intended to encourage the development of “domestic farms”, and appear in the regulatory statute alongside similar provisions for licensing of farmer-wineries, pub-breweries, and farmer-distilleries.
In late July, the ABCC denied an application for a famer-brewery license to be located in Everett, Massachusetts. The ABCC followed up on August 1 with an Advisory, announcing that all farmer-breweries will henceforth need to demonstrate that at least half of the grains or hops needed to produce their malt beverages are grown by the licensee. In an interesting exception, the ABCC announced that the “grown by the license” requirement could be satisfied if the licensee or applicant merely “contracted exclusively” for the rights to the yield of cereal grains or hops produced from acreage of domestic farmland.
In other words, the ABCC ruled that a farmer-brewer needs to actually grow at least half of the cereal grains or hops needed to produce its malt beverage “unless someone else grows the grains and hops for them, both exclusively and domestically”.
Some remaining confusion stems from whether “domestic” as used in the statute means “from within Massachusetts” versus “from within the United States”. Most observers think the ABCC interprets “domestic” to mean “from within Massachusetts”, such that “farmer-brewers” would need to obtain their grains and hops largely from within Massachusetts.
That interpretation, however, could well be unconstitutional, under a line of recent court cases from around the country interpreting farmer-winery licenses. Those cases basically hold that under the Commerce Clause of the US Constitution, a state cannot favor in-state interests over out-of-state entities in its liquor licensing scheme.
Stay tuned, the Globe reports that brewers are meeting next week with state treasurer’s office (which oversees the ABCC).
Golfers are notorious for continually seeking quick and not-so-quick fixes to better scores.Â They buy expensive new drivers, hybrids and â€œgame improvingâ€ irons.Â They switch to golf balls touting clever patterns of aerodynamic dimpling.Â They gobble up swing aids and instruction books.Â They pay extra to play better conditioned courses.Â Some â€“ relatively few? â€“ golfers even try the extreme measure of better conditioning their own bodies.Â Â Nevertheless, despite all the time and money spent to improve their games, last time we checked,Â the statistical evidence matched our personal, empirical observations â€“ none of it works.Â In other words, the average golf score isnâ€™t actually going down, and hasnâ€™t for a long time.
Which is not to say golfers havenâ€™t experienced real advances on the golf course.Â One area of the golf world thatâ€™s definitely improved of late, in Massachusetts, is in one of everyoneâ€™s favorite aspects of the game â€“ the beverage cart.Â For years, many golf courses in Massachusetts included bars which sold beer, wine and/or cocktails pursuant to so-called restaurant or â€œpouringâ€ licenses pursuant to M.G.L. Ch. 138 Â§12.Â Like any other bar or licensed restaurant, however, patrons had to imbibe right there, inside (or right next to) the premises.
In the Spring of 2009, however, the State Alcoholic Beverages Control Commission (â€œABCCâ€) issued Guidelines that for the first time admitted Massachusetts to the ranks of states which allow beer and other alcoholic beverages to be legally purchased and consumed outside, on the links, where the game is played and alcoholic assistance is most directly needed.Â Yes, two years ago, beer carts finally sputtered their way onto courses and up and down golf cart paths throughout Massachusetts.
As an aside, some might wonder how pre-2009 Massachusetts golfers dealt with their poor play (of their notably frustrating sport) without immediate access to alcoholic beverages.Â Others would note that golf bags then and even today possess numerous capacious pockets, and follow the melting ice to their own logical (and sudsy) conclusion.
But back on the legalized links, the ABCCâ€™s 2009 Guidelines set forth rules for the legal sales and consumption of alcoholic beverages out on the course in Massachusetts.Â To summarize:
1.Â Sales and service of alcoholic beverages outside on theÂ course has to first be authorized and approved by the local licensing authorities AND by the ABCC.Â No unlicensed sales â€“ ever.
2.Â Once properly authorized and approved, ALL alcoholic beverages out on the course have to be obtained from the licensee.Â No more smuggled six-packs; not even any unauthorized nips or flasks.
3.Â Signs have to be posted at conspicuous locations, advising â€œno alcoholic beverages permitted beyond this pointâ€.
4.Â Of course, all the usual restrictions still apply:Â No sales to minors.Â No sales to intoxicated persons.Â No delivery of more than two drinks to one patron at any one time. No beverages carried away from the licensed premises.
That last restriction â€“ no â€œcarry-outâ€ â€“ leads to one unusual wrinkle in the legal, licensed sale of alcohol out on golf courses.Â Most restaurants, bars and other licensed premises donâ€™t have roads, streets or even highways running through them, whereas many golf courses do.Â So, how did the ABCC handle streets and other â€œpublic waysâ€ right in the midst of licensed premises?
The ABCCâ€™s golf course Guidelines on this point are clear, and clever.Â First, if your course is intersected by a public way, and you want a single license to cover both sides of the street (and who wouldnâ€™t?), all beverage carts must get a transportation permit from the ABCC.Â Just like the big beer delivery trucks have to have to operate out on the roads.
Second, and perhaps even less obvious except to the liquor licensing cognoscenti, â€œNo licensee shall permit any patron to possess or carry alcoholic beverages in or on a public way.â€Â So, if Mr. or Ms. Golfer buys a beer on the second hole, and must cross a street to get to the third hole â€“ drink fast!Â Or, think of your local beer cart girl as the pre-security gift shop at the airport, and that street between the second and third holes as the TSA â€“ no liquids (of the alcoholic beverages sort) permitted through security!