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Gas Stations and Alcohol Beverage Licensing: What You Need to Know

posted on January 31, 2017 by Scott A. Breen

by Alcohol Beverage, Scott Breen

The Michigan Legislature has been active in the past few years in the area of alcohol beverage licensing.  One of the most notable changes affects gas stations that did not previously qualify for a license to sell beer and wine for off-premises consumption (also known as an SDM license).  Under prior law, many gas stations simply did not qualify for these licenses because they could not meet an “inventory requirement.” More specifically, gas stations were required to have $250,000 of inventory, which were goods and services calculated at cost.

The Good News and the Bad News

Under new law, gas stations no longer have to meet this onerous inventory requirement to obtain an SDM license.  This will allow small gas stations to compete with the larger operations that may have previously been able to offer beer and wine to customers.

As with many pieces of legislation, although this new law provides a benefit to liquor license applicants in one area, there are new restrictions on other aspects of liquor licensing.  Under prior law, SDM licenses were not subject to a quota (there was no limit on the number of licenses that the Liquor Control Commission could issue within a particular local unit of government).  Under new law, there are quotas related to the number of SDM licenses that may be issued.  The Liquor Control Commission, however, may waive this requirement during a period that ends during the first week of March 2017.  Therefore, it is important that owners of gas stations act fast in submitting their applications.

If you need assistance in preparing and submitting an application in connection with this new legislation, our firm can assist you.

Scott A. Breen is an attorney and shareholder at Willingham & Cote’, P.C. in East Lansing, Michigan.  He specializes in the areas of hospitality and alcohol beverage law as well as business and real estate transactions.  Mr. Breen may be reached at 517-324-1021 or sbreen@willinghamcote.com.

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