Effective in 2017, the Michigan Legislature changed the law related to a business owner’s ability to obtain a license to sell beer and wine for off-premises consumption (known as SDM licenses).
SDM licenses are most commonly held by grocery stores, gas stations, convenience stores, and restaurants that sell growlers. Under previous legislation, any applicant could apply for a new SDM license and generally only had to pass a criminal background check. Under new law, SDM licenses are considered “quota licenses.” Under this new law, the Liquor Control Commission can only issue one SDM license for every 1,000 of population in a local unit of government (e.g., city or township).
As with most pieces of legislation, there are a number of exceptions to the general SDM quota rules. For example, the quota requirements do not apply to restaurants, pharmacies, large stores where at least 20% of gross receipts come from the sale of food, marinas, and various other types of businesses. In addition, the Liquor Control Commission has the discretion to waive the quota requirements in certain instances, such as when an applicant is not located within two miles of another SDM licensee.
Finally, any applicant who applies for a new SDM license prior to March 5, 2017, is not subject to the quota. Therefore, if a business owner desires to obtain a new SDM license, immediate action should be taken to submit an application.
If you need assistance in preparing and submitting an application for an SDM or another type of liquor license, 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.
The information contained in this website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
