On Wednesday May 11th the Colorado State Legislature voted to enact sweeping changes to liquor laws that mostly have been unchanged since the end of Prohibition. If signed by Governor Hickenlooper it would open the way for all forms of alcohol to be sold in grocery stores, and liquor stores to expand their offerings beyond just booze. With the possible death of our superannuated statues on the horizon there is one question left to answer, what does this mean for you the drinker?
A little background first. When the 18th amendment took effect on January 16, 1920 the state of Colorado had already been dry for over four years. It outlawed alcohol on December 31, 1915. Being next door to Kansas, the birthplace of the temperance movement helped push the state to ban booze on it’s own without federal intervention. So when the 21st amendment came along in 1933 the leaders of the state allowed the reintroduction of all forms of alcohol, but with numerous provisions. Over the next few years the provisions put into place solidified allowing 3.2% beer to be sold in grocery/drugstores, with everything else above that liquor content being confined to liquor stores. Since the state was mostly ranchers and farmers no one really complained much, plus the Coors Brewery was close at hand to slake anyone’s thirst with fresh beer.
Fast forward to the late seventies. Some crazy guys start brewing beer in a goat shed in Boulder, and the first microbrewery in the state is born, Boulder Beer. As residents begin to acquire a taste for good beer several of them launched this crazy festival in 1981 in Boulder, The Great American Beer Festival. It was the seminal moment for the craft beer movement in the state. That, and the fact that the laws set in place decades earlier had kept the large grocery stores from dominating the commercial market attracted established and wanna-be brewers from across the country. Anyone could open a brewery, package their beer, and sell it into the over 1,700 independent liquor stores across the state. Unlike other states where a few large grocery chains control the lion’s share of the alcohol sales, and would only carry a fraction of the products offered by breweries, our states open market where anyone could gain exposure allowed a thriving craft beer, and now micro distilling industry to flourish. C’mon, you did not really think that a state that recently just crossed the 5 million resident mark had one of the largest brewing industries because of the scenery did you? No, it was because of the uniqueness of our setup.
The saying goes, all things change eventually, and the grocery stores have been trying to update the system and gain access to the state for decades. They argue that only allowing one liquor license per business is unfair. Over the last twenty-five years the issue has been on the general ballot once, and in front of the legislature six different times, each time it was voted down. But, when Coloradans passed legal marijuana in 2012 it seemed to signal that residents were open to change. The large grocery chains—King Soopers, Safeway/Albertsons, Walmart, and Target, formed Your Choice Colorado to get a ballot issue in front of voters to allow full-strength beer and wine sales in all grocery stores. With coffers filled with over 25 million dollars they began to mail fliers to homes, run television ads, and employ groups to gain signatures for a petition to gain ballot access. Their message was simple: convenience. To counter this effort the independent liquor stores along with some craft brewers, and others formed Keep Colorado Local to educate voters as to why overturning the current system would be detrimental to the state. Their bankroll was smaller, four million dollars, but their message struck home: If it ain’t broke don’t fix it.
Early polling for the planned ballot initiative was mixed. Some showed it winning in the fall, others predicted it would be voted down, but all hinted at uncertainty. The uncertainty of the measure coupled with the fears of what a sudden change to the states liquor laws could mean for thousands of small business owners motivated the state legislature overwhelmingly pass SB 16-197 on the eleventh hour, of the last day, of the spring session. Only eight lawmakers voted against it. The bill was the result of frantic meeting between all involved—liquor stores owners, alcohol distributors, large format grocery stores, plus craft brewers, vintners, and distillers.
If ratified by the Governor here is what will happen moving forward. Beginning in 2017 all grocery chains with a pharmacy can expand to five locations selling everything. In 2022 they can grow that number to eight, in 2027 it can increase to thirteen, and by 2032 they can have twenty total stores selling all products. At the start of 2037 all restrictions are dropped and it is a completely open market. 3.2 beer long the staple of grocery stores and a relic from Prohibition times would cease to exist on January 1, 2019, thank God. The idea of the gradual buildup is to allow existing liquor stores to adjust their businesses and recoup investments if they decide to close up shop.
On the flip side all existing liquor stores would be able to start selling other items as of July 1st of this year. So when you visited your local store you could pick up sodas, chips, and party food if they decide to carry it. Liquor stores also would be able to expand to two stores by 2017, three by 2022, and four by 2027. So chances are high you would see more Argonauts, Hazels, and other large retailers expanding. The bill blocks large liquor store chains from outside the state from coming in until 2037, so if you were pinning for BevMo to appear, sorry.
Overall it is a good compromise. It protects the unique infrastructure hat exists in the state, allowing it to adapt over a period of time, instead of an overnight change. Craft beer will continue to grow, our distilling scene will continue to expand, and a variety of offerings will still populate the shelves. Colorado is finally about to join the twenty first century.