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While legislation that would overturn some of New Jersey’s restrictions for breweries, cideries and distilleries awaits action by lawmakers, the state’s Division of Alcoholic Beverage Control will continue to delay enforcement on the very rules the industry has been fighting.

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

As part of a special ruling handed down four years ago by the ABC, New Jersey’s growing craft brewing industry must comply with a series of regulations, including limits on the number of on-site events that can be held and a ban on offering food, serving coffee and coordinating with food vendors. The regulations – which went into effect July 1, 2022 – also require breweries to give patrons a tour of the facility before they can consume alcohol.

Following concerns from the industry that the rules could put them out of business or force them across state lines, lawmakers began looking to roll back those measures to help New Jersey breweries compete with those of nearby states.

Approved unanimously by the state Senate June 26 and the state Assembly June 30, the legislation would repeal limitations on how many special events a brewery can host, as well as a rule that prevents them from working with vendors to serve food or providing packaged snacks.

It also gives licensed alcoholic beverage manufacturers the option to hold an unlimited number of private parties on premises each year and the ability to host up to 25 off-premises special events and 25 social affairs events per year.

In late November, Murphy issued a conditional veto of the measure, saying he believes the legislation on its own “does not sufficiently enhance our antiquated liquor license laws” and that a “more modern approach” is needed to update the state’s Prohibition-era laws to better reflect the current economy, as well as support business owners.

The Democratic governor was widely expected to conditionally veto the legislation, as his administration has publicly said he wants to see the bill included in a larger reform effort of the state’s decades-old liquor license system.

Among the proposed revisions made by Murphy include a fix for getting some 1,400 inactive liquor licenses – known as 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 is also asking lawmakers to provide more opportunities for restaurants at shopping malls by creating a new class of liquor licenses. Under the 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 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.

As part of the framework Murphy unveiled last year, New Jersey would expand the number of plenary retail consumption licenses by gradually relaxing an existing cap as well as lowering the costs for restaurants and bars seeking to obtain a permit.

Citing projections from the New Jersey Economic Development Authority, the governor’s office has said reforming the system could generate up to $10 billion in new economic activity over a 10-year span and create upward of 10,000 jobs annually. It also has the potential to introduce “significant new state and local revenue” that could be reinvested “into new economic development efforts.”

A spokesperson for Murphy did not immediately respond to a request for comment.

While leaders in the Democratic-controlled Legislature have said they are reviewing the conditional veto and its recommendations, there has reportedly been little sign of movement on the measure, with State Senate Majority Leader Nicholas Scutari saying he doesn’t believe lawmakers will be able to move anything forward during the lame duck session that ends Jan. 9.

Should the status of the pending legislation change before Jan. 16, Graziano said in the state’s Dec. 28 notice the ABC “will conform its regulatory policies to the law as necessary, including withdrawing or modifying the special ruling and/or rescinding all or some of the special conditions imposed on the licenses and TAPs [Temporary Authorization Permits] and commencing rulemaking.”

Following the state’s announcement, the Brewers Guild of New Jersey and New Jersey Brewers Association issued a joint statement saying, “While this brief extension in the pause of enforcement … of harmful brewery license restrictions on the eve of the deadline was necessary, what is ultimately needed is a permanent fix of brewery laws by the Legislature and Governor immediately.

“New legislation to fix the state’s brewery laws should be one of the Legislature’s top priorities in the final days of this session so that breweries and their fans can finally stop dealing with these draconian restrictions which have hampered the growth and operation of these local small businesses since their issuance back in July 2022. We look forward to working with policymakers in the next few weeks to finally get this done,” the groups stated.