Legislative Update: Maryland Passes Barrel Increase; Montana Compromises on Production Cap; Kansas Moves Toward Stronger Beer

Maryland Lawmakers Pass Barrel Increase

Maryland’s House of Delegates passed House Bill 1283 last weekend in a move that will allow the state’s brewers to sell up to 2,000 barrels of beer directly to consumers, according to the Baltimore Business Journal. The bill allows brewers to buy back 1,000 additional barrels from their wholesalers to sell in their tasting rooms.

The new law will require taprooms to close at 10 p.m. daily but existing breweries will be granted grandfathered hours.

The passage of the bill wasn’t everything that the Brewers Association of Maryland and Guinness-maker Diageo had sought. Both wanted the barrel cap to be in excess of 4,000 barrels annually.

A provision added to the bill will allow breweries to sell contract-brewed beer in their taprooms as long as it doesn’t exceed 25 percent of sales. That move will reportedly allow Diageo to sell its iconic stout, which is made in Dublin, at its proposed $50 million brewery and taproom in Relay, Maryland.

Montana Reaches Compromise on Production Cap, On-Site Sales

Montana’s big brewers are close to being able to sell beer directly to consumers.

Last week, the Montana Brewers Association, Montana Tavern Association, and Montana Beer and Wine Distributors Association reached a compromise on HB 541, which would raise the beer production cap from 10,000 barrels annually to 60,000 barrels without halting on-site sales.

The Montana Brewers Guild tweeted last night that the state’s House of Representatives had concurred with the Senate’s amendments on the legislation. This morning, the bill passed its final hurdle in the House this morning on a 94-6 vote and now heads to the governor’s desk for approval, according to the Montana Brewers Guild.

“HB 541 is the most important legislation we’ve seen for Montana’s craft brewing industry in 18 years,” Montana Brewers Association executive director Matt Leow said on the guild’s website.

“Raising the production cap to 60,000 barrels clears the way for Montana breweries to compete in the regional marketplace,” Leow continued. “This legislation will enable Montana brewers to pursue export opportunities and provide beer lovers in other states a taste of Montana.”

The Growler Fills blog, which has been tracking the legislation, noted that the compromise bill raises the production cap to 60,000 barrels but limits the amount of on-premise sales to 2,000 barrels annually. The brewers also agreed to having no more than three taprooms with all locations counting toward the 2,000 barrel sales limit. To-go sales will not count toward the limit.

Also notable: For suppliers making more than 10,000 barrels annually, the tax per barrel has been raised from $2.30 a barrel to $4.30 a barrel.

Over the last decade, Missoula-based Big Sky Brewing, which produces 43,000 barrels annually, has not been allowed to sell beer directly consumers and has instead given away more than $4 million worth of beer in its taproom due to the cap

Kansas Lawmakers Vote to Sell Strong Beer in Grocery, Convenience Stores

Kansas Gov. Sam Brownback’s signature is all that stands between stronger beer being sold in the state’s grocery and convenience stores.

Last week, the Kansas Senate and House passed the bill, which would allow grocery and convenience stores to sell beer with an ABV of up to 6 percent.

“This is a pre-emptive bill to protect both the grocery industry and the liquor store industry,” Sen. Julia Lynn told The Kansas City Star. It “is the solution to the dilemma as crafted by the stakeholders.”

If signed, the law would go into effect in April 2019.

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