Small brewer license renewals come with a surprise for some this year

Some of the smaller breweries in New Mexico, such as Kaktus Brewing, had to show proof that they met the minimum requirement of 50 barrels produced in a year in order to renew their license for 2022.

Back in 2019, Senate Bill 413 was passed, which had a potentially profound effect on breweries throughout New Mexico. One of its key provisions was a new requirement for every brewery to produce a minimum of 50 barrels per year, or at least have its own beers account for 50 percent of total alcohol sales.

There was only one catch, in that it was not actually enforced, to the best of our knowledge. For two rounds of small brewer license renewals (2020, 2021) we did not hear of a single brewery being asked to provide proof of the 50 barrels or 50-percent sales.

Then came this year, when Casa Vieja co-owner/head brewer Gary Socha informed us that when it came time to renew his license for 2022, he was required to show proof that his small brewery met those numbers. Socha told our AmyO that it was the first time since the 2019 bill passed that he was required to do that.

Since then, we have confirmed that Gravity Bound, Kaktus, and Thirsty Eye also had to provide proof of barrels produced. Among the larger production-and-packaging breweries, it was not required, as we were told by Ex Novo (EDIT: We were later contacted by Ex Novo founder Joel Gregory to let us know that they in fact did have to provide proof of barrels produced, so we guess Alcohol Beverage Control decided to be fair and just make sure all breweries were complying).

The Gravity Bound owners told us they had to sign an affidavit, but Kaktus owner Dana Koller said his brewery had to go a step further.

“We had to sign an affidavit and also provide proof of the total amount of beer being brewed,” he wrote in an email response. “The affidavit alone was not enough for them when we renewed.”

In years past, there were some brewery owners and brewers that told us off the record that they believed there was a sort of grandfather clause for any brewery that was open before the S.B. 413 was signed into law, but clearly that is not the case, since Kaktus opened well before 2019.

If anything, some speculation in the industry was that this could be a way of appeasing the angry owners of full liquor licenses, who were upset when the State Legislature passed new liquor laws in 2021 that enabled many establishments throughout the state to sell distilled spirits in addition to wine and beer. Full liquor licenses in New Mexico are limited in number, and typically carry hefty six-figure price tags. These new licenses cost around four figures, which understandably left many places upset.

A number of small- and mid-size brewery owners in the past have told us that they were always upset that places could get a small brewer license, and then just never brew any of their own beer, instead just carrying nothing but guest taps. That was behind the big push for establishing minimums for license holders, but until this renewal cycle, it was never really backed up.

Of course, some of the smallest breweries could argue that the ongoing pandemic restrictions limited their ability to produce and sell enough beer in 2021.

While we will not know the full scope of the effect of this change until after the licenses are updated on the state website (February 28 is the end date for all 2021 licenses, so expect the updates to appear publicly in mid-March as those are all processed). We are not going to speculate on what will happen to any brewery that does brew only a small amount, or if there will be breaks given to places that did not obtain their licenses until mid- to late 2021.

But, there are a few places that are still listed as having active small brewer licenses, but they do not brew. In some cases they are wineries or distilleries that used the licenses before reciprocity was put into place between the three types of license holders. We have to imagine that unless they are able to make some sort of successful people, the following places will either have to rely upon the reciprocity rules to continue to carry guest taps, if they are wineries or distilleries, or they will have to switch to the beer-and-wine license (which does come with a requirement for food to make up the majority of all sales).

  • Albuquerque Distilling
  • Alien Brew Pub (at one point they did have a small brewhouse on site that brewed small batches; this spot seems likely to be changed over to a small brewer offsite license as it is co-owned by Sierra Blanca Brewing and carries the brewery’s beers as the bulk of its draft lineup)
  • Boogie’s Brewery & Distillery, Deming (they have never advertised their own beers, just their spirits, since opening; it is entirely possible that they do brew, so this might not be an issue)
  • Branding Iron Brewery, Silver City (part of the Silver City Bistro, they have not brewed their own beer for many years, but should easily be able to switch licenses)
  • Corrales Bistro Brewery (they have not brewed their own beer since 2012, but with a full kitchen, it should be easy to switch over)
  • Desert Valley Brewing (they sold their brewhouse to Sandia Hard Cider)
  • Hausammann Brewhaus (not open for most of the year, so it will be interesting to see if the state cuts them a break)
  • Hollow Spirits (they do carry a couple of beers under the Hollow Spirits label, but those are not brewed on site, and we do not know if contract brewing will suffice for a business to keep a small brewer license)
  • Noisy Water Brewing, Ruidoso (the winery got a small brewer license, but never brewed, so we figure this will just disappear into history)
  • Painted Lady Bed & Brew (another place that got its license well into 2021, so it might catch a break)
  • Santa Fe Spirits
  • Sunland Winery, Sunland Park (same as Noisy Water)
  • Travel Bug, Santa Fe (another place that got its license well into 2021)

There are certainly other places that could be affected, as we mentioned, but for now we will just have to wait and see what happens.

In the end, we think this is a good thing. If you pay for a small brewer license and call yourself a brewery, you should be brewing your own beer, and not trying to skirt around that fact and just be a fancy beer bar.

If anyone in the industry wants to discuss this issue any further, on or off the record, you can email us at nmdarksidebrewcrew@gmail.com, or send us a direct message via social media.

— Stoutmeister

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