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As the New Jersey Legislature’s lame duck session winds down, lawmakers are making another attempt to bring about meaningful change to the state’s decades-old liquor license laws.

Introduced Jan. 2, Senate Bill 4265 represents a compromise, incorporating aspects of a measure previously passed by both chambers and some of the concerns expressed in Gov. Phil Murphy’s conditional veto in late November.

The legislation – sponsored by Democratic state Sens. Vin Gopal, 11th District; Paul Sarlo, 36th District; and Troy Singleton, 7th District – aims to ease some of the controversial 1.5-year-old restrictions imposed on breweries as well as increase the number of licenses available in the state.

The bill would:

• 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;
• Increase the number of barrels a brewery can manufacture a year from 10,000 to 300,000.

The measure would also activate some of the 1,400 inactive liquor licenses – known as pocket 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.

Towns would also be able to transfer one dormant license per year, and two every five years, to a bordering municipality in need of more.

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

“The New Jersey craft brewing and distilling industry is growing rapidly across New Jersey, becoming a mainstay for tourists and locals alike,” Gopal said in a statement released Jan. 4. “It only makes sense to give this industry room to grow and prosper. Under this bill, craft alcohol manufacturers will flourish and revitalize Main Street business districts across the state.”

Down to the wire

Citing sources familiar with discussions, NJ Advance Media reported that lawmakers aim to have both houses approve the bill Jan. 8 – the final planned voting day of the lame duck session.

Should the Assembly and Senate pass the measure, Murphy is expected to sign it into law, according to the media outlet.

Over the past year, the Democratic governor has called for a larger reform of New Jersey’s liquor license system, saying he believes an overhaul is needed to update the Prohibition-era laws to better reflect the current economy, as well as support business owners.

The proposed revisions from Murphy include 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. The governor also asked lawmakers to provide more opportunities for restaurants at shopping malls by creating a new class of liquor licenses. Under his proposal, the license would be open to businesses attached to a mall larger than 500,000 square feet and towns could issue up to four mall licenses that would not be subject to any population caps.

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. As a result, the ability to sell alcohol is a highly coveted right in New Jersey and business owners often spend as much as $1 million to secure one of the limited number of licenses via the private market.

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

Pint glass half full?

But, the state Senate and state Assembly approved part of the governor’s proposal in June – 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.

In issuing a conditional veto of that bill in late November, Murphy said he believed that the legislation on its own “does not sufficiently enhance our antiquated liquor license laws” and that a “more modern approach” is necessary.

In response to media reports regarding a compromise bill, Brewers Guild of New Jersey Executive Director Eric Orlando issued a statement Jan. 3 calling it “a promising development in support of the state’s craft beer industry, its retail and wholesale partners and local craft beer fans alike.”

“A resolution to this saga which began over a year ago is a long time coming. There have been businesses we’ve lost along the way because of it. But it is good to see that an agreement has been reached and very soon the industry may finally have some predictability in the way it can operate and serve its customers without these onerous restrictions,” he said.

Meanwhile, the state Division of Alcoholic Beverage Control is continuing to delay enforcement of certain restrictions against breweries, cideries and distilleries.

After going into effect June 30, 2023, the waiver was initially set to expire Dec. 31, 2023; however, ABC Director James Graziano recently announced it will be extended through Jan. 16, 2024, the final day that Murphy can sign bills from the current legislative session.

Editor’s note: This story was updated at 8:43 a.m. ET Jan. 5, 2024, to include a statement from Sen. Vin Gopal.