Posted by: Jul 18, 2021

We reviewed the 2021 Florida Craft Distilleries Law in two prior blog posts–2021 Florida Craft Distilleries Law: General Overview and 2021 Florida Craft Distilleries Law: Destination Entertainment Venues–but questions remain. Following are just five questions we have about the new law.

Question #1: Can new Florida craft distillery apply directly for the DD(CD) license?

It is unclear whether a new craft distillery must first obtain a Florida distillery (DD) license and only then can request designation as a craft distillery (DD(CD)). Concerning licensing of a craft distillery, the 2021 Florida Distilleries Law added the following statutory provision:

A distillery may not operate as a craft distillery until the distillery has provided to the [Florida Division of Alcoholic Beverages and Tobacco] written notification that it meets the criteria specified in paragraph (1)(b). Upon the division’s receipt of the notification and its verification that the distillery meets all such criteria, the division shall add the designation of craft distiller on the distillery’s license.

Fla. Stat. S. 565.03(2)(a) (2021)

The answer to this question is worth $3,000. That is, the annual license fee for a DD license is $4,000, whereas the annual license fee for a DD(CD) license is $1,000. Will the ABT require a new applicant to first pay $4,000 to obtain a DD license before requesting the “craft distillery” designation, or will the ABT allow an applicant to provide the craft distillery written notification at the time of application and pay only $1,000?

Question #2: Can Florida breweries with a craft distillery license sell distilled products from their taproom?

The 2021 Florida Craft Distilleries Law has already generated strong interest among licensed breweries and wineries wanting to also manufacture and sell distilled products. Nearly all Florida breweries and wineries have an adjoining taproom or tasting room with a vendor license–most often, a 2COP (beer and wine, consumption on premises or carryout) license. Now that Florida craft distilleries are authorized to sell their own distilled products, for consumption on premises, from a “gift shop or tasting room” attached to the distillery, can that be the same space as the brewery taproom or winery tasting room?

Where the brewery taproom or winery tasting room has the 2COP license, the answer is probably no–at least until the ABT says otherwise. The premises of a license–the physical space covered by a license–is significant under the Florida Beverage Law. It is unlawful to sell particular alcoholic beverages–whether beer, wine, or distilled spirits– except on the premises covered by the license. See Fla. Stat. S. 562.02. Generally, one licensed premises cannot overlap another licensed premises. The 2021 Florida Craft Distilleries Law authorizes retail sales of distilled spirits as part of the DD(CD) manufacturing license itself, meaning that the distillery’s gift shop/tasting room must be part of the licensed distillery itself. That is, a craft distillery that is attached to a Florida brewery should be permitted to make sales from its owned tasting room that is covered by the craft distillery license, but probably not from a 2COP licensed taproom attached to the brewery. However, the Florida Beverage Law supports at least two exceptions.

First, a brewery or winery with a craft distillery, that also has a 4COP (beer, wine, and liquor) licensed taproom or tasting room, should be able to transfer its own distilled products to the 4COP licensed premises for sale under that license. Nothing prohibits a brewery’s taproom having a 4COP quota license or a 4COP-SFS restaurant license.

Second, Florida law does allow “special low proof products”, however derived, distilled, mixed, or fermented and which contain less than 6 percent alcohol by volume, to be sold by 2COP licensed vendors. See Fla. Stat. S. 564.06(5)(b). However, the ABT’s existing rule concerning these special low proof products is much more restrictive, limiting the definition of special low proof products to “products sealed by the manufacturer and offered for sale to vendors through licensed distributors in the originally sealed containers.” FAC Rule 61A-3.050. Particularly in light of the 2021 Florida Craft Distilleries Law, this rule may require modification.

Question #3: How does a craft distillery obtain a permit to regularly participate in farmers markets?

Under the 2021 Florida Craft Distilleries Law, craft distilleries may providing tastings and sales at organized, including farmers markets. The entire statutory provision is here:

Craft distilleries may conduct tastings and sales of distilled spirits produced by the craft distilleries at Florida fairs, trade shows, farmers markets, expositions, and festivals. The division shall issue permits to craft distilleries for such tastings and sales. A craft distillery must pay all entry fees and must have a distillery representative present during the event. The permit is limited to the duration and physical location of the event

Fla. Stat. 565.17(2) (2021).

How will craft distilleries apply for the required permit? Will one permit allow a craft distillery to participate in the same farmers market every week, or will separate permits be required? What will be the cost of each permit? The ABT will have to provide answers to these questions.

Question #4: How will Florida craft distilleries comply with the Florida agricultural products requirement?

Effective July 1, 2026, Florida craft distilleries will be required to ensure that a minimum of 60 percent of their total finished branded products are distilled in Florida and contain one or more Florida agricultural products. Our sister website and blog, Groves Law, which focuses on the law of Florida agribusiness, already did a deep-dive into what might constitute “Florida agricultural products” for this purpose, but hopefully additional guidance will be provided by the ABT.

In addition to what constitutes “Florida agricultural products”, how will the ABT verify that this requirement is met? What records will the distillery be required to keep? Are “total finished branded products” counted by volume or by package? There are a lot of practical questions that must be answered before this requirement becomes effective?

Question #5: How many destination entertainment venues (DEVs) will we see?

A large part of the 2021 Florida Craft Distilleries Law is focused on the creation of a new liquor vendor license for so-called “destination entertainment venues” (DEVs), which we covered in our blog post 2021 Florida Craft Distilleries Law: Destination Entertainment Venues. Given the very specific requirements of where a DEV can be located, it is unknown how many 4COP-DEV licenses will actually be issued. In other words, is Florida going to have dozens and dozens of DEVs in the next 5 years, or just a handful? Presumably, the 2021 Florida Craft Distilleries Law was written with one or two potential DEVs in mind–the language is much too specific to think that it was created without a targeted purpose. But there is no immediate indication of what those license-ready DEVs are or could be. Once those targeted DEV projects are launched, we might have a better sense of what other areas will meet the requirements for the 4COP-DEV and warrant the investment.

Do you have any other questions about the 2021 Florida Craft Distilleries Law? Contact us at contact@brewerlong.com to schedule a consultation.

Because we’re attorneys: Disclaimer.