New Jersey Gov. Phil Murphy signed into law a bill that will ease strict restrictions on the way craft breweries in the state can operate their taprooms.
Under the new law, which passed both houses of the state Legislature last week, craft breweries can host an unlimited number of special events in their taprooms, coordinate with food trucks and restaurants to offer food service and sell snacks and non-alcoholic beverages – all of which had been prohibited under strict guidelines created by the New Jersey Division of Alcoholic Beverage Control (NJABC) in 2018 in an attempt to strike a balance between the investment retailers made in their licenses and the craft brewing industry’s turn toward own-premise taprooms.
Murphy conditionally vetoed a similar bill last fall, telling lawmakers he wanted to see greater reform to the state’s complicated liquor license system for retailers.
“The New Jersey craft brewing and distilling industry is growing rapidly across New Jersey, becoming a mainstay for tourists and locals alike,” state Sen. Vin Gopal said in a press release. “It only makes sense to give this industry room to grow and prosper. Under this law, craft alcohol manufacturers will flourish and revitalize Main Street business districts across the state.”
The law increases the production cap for the state’s brewpubs to 300,000 barrels annually, up from 10,000 barrels, and creates a farm-brewery license for breweries using agricultural products grown on their own land.
“Clarifying the rights and privileges afforded to craft breweries in our state will give our industry a stronger foundation to operate on moving forward,” Brewers Guild of New Jersey (BGNJ) executive director Eric Orlando said in the release. “The legislation allows all state craft beverage manufacturers more opportunities to deliver both the unique products and experiences our customers deserve in our tasting rooms and throughout our communities.
“Gov. Murphy’s approval will most certainly set New Jersey’s craft beer industry on a positive trajectory for years to come and shows the state’s commitment towards embracing the ingenuity and local pride which are at the core of every craft brewery which calls the Garden State home,” he continued.
In addition to easing conditions for craft breweries, the new law modernizes some aspects of New Jersey’s complicated licensing system for retailers. Inactive licenses will have to be returned to circulation if still unused after two years, which has the capability to return nearly 1,400 currently unused licenses back to communities, the release said.
“For too long individuals have held unused licenses hostage, preventing small businesses from gaining access and ultimately harming our downtowns,” state Sen. Gordon Johnson said in the release. “This will not only free up those pocket licenses but allow their transfer to bordering municipalities, creating new opportunities for our small towns to revitalize their main streets.”
The law also creates a special license for shopping malls, which can apply to multiple retailers within the same mall, rather than requiring each establishment to have its own license.
The cap on New Jersey’s liquor licenses often created a rift between craft breweries, which operate under a different licensing system, and bars and restaurants.
“The political nature of the way this drama has played out is [that] significantly less bars and liquor stores are supporting New Jersey breweries and thus are supporting our competitors from out of state,” Scott Wells, director of sales at Carlstadt-based Bolero Snort and a BGNJ board member, told Brewbound last fall.
New Jersey ranks 44th in breweries per capita, with 2.2 breweries per 100,000 legal-drinking-age residents, according to the Brewers Association (BA). The state’s 152 craft breweries generated $1.6 billion economic impact in 2022, according to the BA.