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New Jersey’s decades-old liquor license laws are set to undergo some of the most meaningful changes since the regulations were first put into effect more than 75 years ago.

Under a law signed Jan. 16 by Gov. Phil Murphy, the state will boost the number of available liquor licenses as well as ease controversial food and event restrictions that New Jersey’s rapidly growing craft brewing and distilling industry have railed against. 

Unanimously supported by both chambers in the state Legislature Jan. 8, the final day of the lame duck session, the bill incorporates some of the reforms recommended in Murphy’s conditional veto in late November 2023. 

Under the newly enacted measure, the state will:

• Allow breweries, wineries and distilleries to hold unlimited events and private parties onsite, but no more than 25 special events off site;
• Permit them to sell food, like chips, nuts and other packaged snacks, as well as coordinate with outside vendors, such as food trucks and restaurants, to serve food;
• Eliminate a requirement that breweries give patrons a tour of the facility before they can consume alcohol.

It will also activate pocket licenses – inactive liquor licenses that have not been used by a restaurant or bar for at least eight years. If a license remains dormant for two years, it will expire and a municipality can auction it off to a new business or opt to extend it for another year. Additionally, towns will be able to transfer one dormant license per year, and two every five years, to a bordering municipality in need.

According to the state Division of Alcoholic Beverage Control, the changes will return as many as 1,356 licenses back into the market, a roughly 15% increase over the 8,905 active retail consumption licenses presently in use.

Communities will also be able to issue special licenses at shopping malls, allowing two additional for towns with malls larger than 750,000 square feet and four in towns that have malls larger than 1.5 million square feet.

With malls in nearly every county, plus qualifying strip malls, New Jersey could potentially see upwards of 100 new licenses created under this provision. That would bolster the survival of malls, which have struggled due to the pandemic and the proliferation of online shopping, and boost economic activity for towns statewide, the Murphy administration said.

Lastly, it will establish a farm brewery license, allowing operators who engage in farming to brew any malt alcoholic beverages of no more than 2,500 barrels of 31 fluid gallons a year and sell them on their premises.

Murphy, who has spent the past year pushing for an overhaul of the state’s liquor license laws, issued a statement after signing the legislation saying, “For the first time in nearly a century, New Jersey has shown the fortitude to tackle an age-old problem that has stifled economic growth and hampered the dreams of countless small business owners.”

The Democratic governor went on to say, “We knew this wasn’t going to be an easy lift – nothing that has been entrenched for nearly a century ever is. Together with our partners in the Legislature, we are laying new ground rules to help our breweries and distilleries flourish at the same time creating new opportunities for smaller and more diverse mom-and-pop establishments to set up shop or expand in New Jersey and help transform our downtowns.”

New opportunities

Since 1947, New Jersey has restricted the number of liquor licenses a municipality can grant based on population. Under the law, which was most recently amended in the late 1960s, towns can issue one consumption license for every 3,000 residents, making the ability to sell alcohol a highly coveted right in New Jersey — one that business owners are willing to shell out as much as $1 million to secure via the private market.

Last winter, Murphy pitched a larger revamp that, included a fix for getting some pocket licenses back on the market by forcing businesses to give them up if they haven’t been in use for at least eight years from the time of the bill’s enactment. He also asked the Legislature to create a new class of liquor licenses that would allow restaurants at shopping malls to serve patrons.

However, the Democratic-controlled state Legislature opted not to move forward with a sweeping revamp, citing concerns from the industry that eliminating caps would cause the value of liquor licenses to tumble.

In June 2023, the state Senate and Assembly approved only part of the governor’s proposal – a measure that would repeal limitations on how many special events a brewery can host, along with a rule that prevents them from working with vendors to serve food or provide packaged snacks.

Following Murphy’s enactment of the compromise bill, one of the measure’s primary sponsors, state Sen. Vin Gopal, D-11th District, said he believes the changes will give the state’s brewing and distilling industry “room to grow and prosper.”

“Under this law, craft alcohol manufacturers will flourish and revitalize Main Street business districts across the state,” he said.

Assemblyman Clinto Calabrese, D-36th District, another backer of the legislation, described New Jersey’s “outdated laws on liquor licenses” as “stifling” to the state’s development and economy.

“People want to be able to have a glass of wine while out to dinner and good restaurants can be the cornerstone of development efforts on main streets across New Jersey. Pennsylvania and New York have thriving industries for craft beer and wine, but here in New Jersey we are blocking that growth. This bill is a step in the right direction to open opportunities for new development in our communities. I look forward to continuing to advocate for common sense reforms that will allow our downtowns to thrive,” he continued.

State Sen. Gordon Johnson, D-37th District, who also sponsored the bill, said revisions to the state’s “archaic liquor licensing system are long overdue.”

“For too long individuals have held unused licenses hostage, preventing small businesses from gaining access and ultimately harming our downtowns,” he said. “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.”

Eric Orlando, executive director of the Brewers Guild of New Jersey, also issued a statement saying, “Clarifying the rights and privileges afforded to craft breweries in our state will give our industry a stronger foundation to operate on moving forward. 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 added.