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Governor signs major distillery bill in Durham

Gov. Roy Cooper signs Senate Bill 290 July 29, 2019 at Greybeard Distillery in Durham. (CJ photo by John Trump)
Gov. Roy Cooper signs Senate Bill 290 July 29, 2019 at Greybeard Distillery in Durham. (CJ photo by John Trump)

Editor’s note: This story was updated Monday, July 29, at 8 p.m.

Senate Bill 290, originally filed as the Distillery Regulatory Reform Bill, will soon become law.

Gov. Roy Cooper signed the game-changing measure at Graybeard Distillery in Durham on Monday, July 29.

The bill brings rules governing N.C. craft distillers more in line with those followed by the state’s breweries and wineries. Most of the provisions in the law become effective Sept. 1.

One of the biggest aspects of the bill allows distilleries to sell an unlimited number of bottles directly to customers, as opposed to the current five bottles per customer per year. The measure frees distilleries from the onerous process of tracking and policing every bottle sold to customers.

The bill also will allow distilleries to sell mixed drinks.

I do think, ultimately, the cocktail piece is huge,” said Scott Maitland, proprietor of Top of the Hill Distillery in Chapel Hill.

Several N.C. distilleries have announced plans to take advantage of the new rules, which include tastings at N.C. Alcoholic Beverage Control  stores.

North Carolina, Maitland says, has created a new business model, which will give the state’s 80 or so distilleries a chance to thrive.

“What we’ve effectively now created is micro-distillery restaurants and bars, just like we have breweries. Brew pubs have shown to be extremely successful, and distillery cocktail bars are the next obvious thing.”

Cooper talked about North Carolina agriculture, tourism, innovation, jobs, and entrepreneurship as they relate to the landmark bill.

“I think this legislation brings all of those things together,” Cooper said.

Cooper dedicated the signing to Leanne Powell, the former president and creative mind behind Southern Grace Distilleries in Mount Pleasant. Powell, a founder of Whiskey Prison in Mt. Pleasant, died last week.

The move has hit the national radar.

“Today’s spirits consumers are fascinated by cocktail culture and want to learn more about the heritage and taste profile of different types of distilled spirits,” said David Wojnar, vice president of the Distilled Spirits Council of the United States. “Consumers want to purchase these fine spirits for their home, but they would like to sample them before making their buying decision. Spirits tastings events provide consumers with the opportunity to ‘try before they buy’ in a responsible retail setting.”

The new law will:

  • Allow the holder of a distillery permit to obtain permits for on-premises malt beverage, on premises unfortified wine, on-premises fortified wine, and mixed beverages and sell those types of alcoholic beverages for consumption at the distillery.
  • Allow the holder of a distillery permit to sell mixed beverages for consumption at the distillery. This part would also direct local ABC boards to fulfill an order by a mixed-beverages permittee for individual bottles or cases of spirituous liquor produced by an eligible distillery that are listed a regular code item for sale in the state. N.C. craft distillers are already making plans to capitalize on the new rules. They’re scheduling tastings throughout the state, advertising for mixologists, and planning classes to teach people about cocktails. In fact, rum distillers Gentry and Rebecca Lassiter of Lassiter Distilling Co. have already built a tiki bar. Durham Distillery is opening Corpse Reviver, a cocktail bar.
  • Allow distilleries to issue purchase-transportation permits for spirituous liquor sold by the distillery. A purchase-transportation permit allows a person to purchase and transport an amount of spirituous liquor greater than eight liters. This part would also allow any employee of an ABC store to issue a purchase-transportation permit, if he or she is authorized to issue permits by the local board chairman.
  • Allow spirituous liquor tastings at ABC stores. A local board holding tastings must provide North Carolina distillery permit holders with reasonable opportunities to conduct tastings. The state’s craft distillers are already talking with store managers to schedule tastings.
  • Require the N.C. ABC to modify the rule on discounts for malt beverages or wine, to increase the allowed discount from 25% to 35%.
  • Restrict the creation of new ABC boards by prohibiting any jurisdiction in a county that already has an ABC board from holding an ABC store election unless they negotiate a merger with an existing ABC board and make those details available to the public prior to the election. In a county where there is currently no ABC board in the county, only a county election could be held. This would end the proliferation of the politically entrenched N.C. ABC boards. The state now has 170 boards serving 100 counties. Brunswick County, for instance, has nine boards.
  • Authorize a common area entertainment permit for common areas in multi-tenant establishments, which would allow customers to exit a permitted premises with an open container and consume the alcohol in the common area of a multi-tenant establishment. A multi-tenant establishment doesn’t include a shopping mall that has more than 50% of the shopping mall’s common areas, measured in acreage or square footage, enclosed and air-conditioned. This would apply to places such as the Morgan Street Food Hall in downtown Raleigh.
  • Require the ABC Commission to make quarterly reports, beginning Oct. 15, the chairs of the Joint Legislative Oversight Committee on Justice and Public Safety detailing the progress made in bidding and selecting an independent contractor for the receipt, storage, and distribution of spirituous liquor at and from the State warehouse. In August of last year, the Office of State Auditor Beth Wood released a report saying the N.C. Alcoholic Beverage Control commission — the agency in charge of controlling state alcohol production, storage, sales and distribution — has over past years cost the state about $13.5 million. The current contract expires in 2021.
  • Direct the Program Evaluation Division to study the actions the ABC is authorized to take for violations of Chapter 18B of the General Statutes.