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This week Governor Phil Murphy (D-NJ) signed legislation (S4265/A5912) into law to substantially boost the number of available liquor licenses statewide and ease a wide range of restrictions impacting commercial spaces, marking the first substantive overhaul of New Jersey's antiquated liquor license laws since the era of Prohibition.
ICSC has advocated in support of this legislation for several years. George Jacobs, who served as ICSC Northern New Jersey Government Relations Committee Chair, testified in favor of reforming the liquor license statute as far back as 2017.
“This is an issue we have worked on for many years and we are proud of the role we played in getting this reform passed,” Jacobs said. “It’s long overdue and we look forward to these important changes being implemented.”
Previous liquor license statutes, dating back to the 1930s, tied the number of licenses that could be issued in a community to the total number of people living there (one license per 3,000 people). Once a community’s quota was realized the only option was to obtain a license on the private market, and these could sell for as much as $2 million.
“For the first time in nearly a century, New Jersey has shown the fortitude to tackle an age-old problem that has stifled economic growth and hampered the dreams of countless small business owners,” said Governor Murphy. “We knew this wasn't going to be an easy lift – nothing that has been entrenched for nearly a century ever is. Together with our partners in the Legislature, we are laying new ground rules to help our breweries and distilleries flourish at the same time creating new opportunities for smaller and more diverse mom-and-pop establishments to set up shop or expand in New Jersey and help transform our downtowns.”
The new law addresses the issue of inactive and pocket licenses. Inactive licenses are those that are associated with a specific location but are not in use, while pocket licenses are those that have been purchased but are not attached to a specific location. Under the new law, license holders will no longer be able to indefinitely retain a retail consumption license without using it. If a license has remained inactive for two consecutive license terms – a total of two years – the license holder will be required to use the license or sell it. If neither option is exercised, the license can be transferred from one municipality to a contiguous municipality.
Additionally, the governing body of a municipality where an inactive consumption license has lapsed and not been renewed for the last eight years may issue a new consumption license at public sale for use at a licensed premises located within the town. These changes will substantially boost accessibility by injecting as many as 1,356 licenses back into the market, a roughly 15% increase over the 8,905 active retail consumption licenses presently being used, according to the NJ Division of Alcoholic Beverage Control (ABC).
Additionally, the law establishes a new class of retail consumption liquor license that will potentially create upwards of 100 new licenses throughout the state. Specifically, the law will allow municipalities to issue:
For more information contact gpp@icsc.com.