New Grocery Store Liquor Licensing Laws in Colorado

Through enactment of SB 197, the state legislature created a framework for expansion of retail liquor store locations as well as expansion of the number of grocery stores that can sell wine, beer, and spirits. The statutory framework, however, creates a few hurdles for prospective store owners, and further regulations may be promulgated to help enforce the new statutory framework. For the time being, SB 197 created the following framework for possible expansion of retail liquor sales:

Retail Liquor Stores:

For retail liquor stores licensed before January 1, 2016, and whose license holder is a Colorado resident, SB 197 paved the way for possible expansion to a second location. Through 2022, an existing retail liquor store licensee can apply to obtain a second license for an additional location. But as expected, there are a few limitations in this expansion:

1. The prospective premises cannot be located within one thousand five hundred feet of another retail liquor store. This distance is expanded to three thousand feet if the premises will be located in a municipality with a population of ten thousand of fewer.
2. The retail liquor store can sell non-alcohol products so long as the annual gross revenues from these non-alcohol products do not exceed twenty percent of the store’s gross annual revenues.

Drug Stores (Grocery Stores):

For liquor-licensed drugstore (in most cases, a grocery store with a pharmacy), SB 197 established a framework for obtaining a total of four additional liquor-licensed drug store licenses through 2022. In order to obtain these licenses, the applicant must comply with the following requirements:

1. The prospective liquor-licensed drugstore cannot be located within one thousand five hundred feet of a retail liquor store; if the premises is located in a municipality with a population of ten thousand or fewer, it cannot be located within three thousand feet of a retail liquor store.
2. The prospective licensee must apply to local and state licensing authorities, as part of a single application, for the transfer of ownership of at least two retail liquor store licenses that were licensed on or before May 1, 2016. In this application, the prospective licensee must apply to change the location of one license in addition to merging the liquor licenses into a single liquor-licensed drug store license. Additionally, the two retail liquor stores should be located within the same licensing authority jurisdiction as the prospective liquor-licensed drugstore. If there are no licensed retail liquor stores in the same jurisdiction (or only one), the applicant must apply to transfer and obtain ownership of retail liquor store licenses from a licensing authority jurisdiction that is nearest to that of the applicant.
3. If any other retail liquor stores are located within a 1,500-foot radius (3,000-foot radius for a municipality with a population of 10,000 or fewer) of the prospective licensee, the applicant must also apply to transfer and obtain ownership of those retail liquor store licenses.
4. The applicant must provide evidence to state and local licensing authorities that at least twenty percent of the applicant’s gross annual income at the location for which the license is sought is derived from the sale of food items.
5. The location must be open to the public.

The above-provided requirements are not an exhaustive list, but the list provides ample evidence that any prospective license holder, or current license holder, should obtain the advice of counsel before beginning the licensing process. If you are contemplating a decision to sell your liquor license or to obtain an additional license, our attorneys at Jorgensen, Brownell & Pepin can help you navigate through the approval process.