'We need to undo 80 years of statutory construction.' Committee discusses liquor licenses

Hannah Grover
Farmington Daily Times

AZTEC — Some lawmakers say the limited supply of expensive liquor licenses creates challenges for developing the economy, especially in rural New Mexico, so the state Legislature is looking for ways to reform liquor license laws.

Some of the ideas discussed include ending the ability for one business to transfer its license to another, changing or eliminating the quota system and allowing restaurants to sell spirits.

The Economic and Rural Development Committee learned about liquor licenses and discussed the challenges during a meeting on Nov. 10 that can be viewed online at nmlegis.gov.

Liquor license reform is one topic that people on both sides of the political aisle in the New Mexico Legislature agree must be taken up in the next legislative session, which starts in January.

Bottles of wine chill in the tasting room at Wines of the San Juan.

However, these changes will not be easy to accomplish.

“We need to undo 80 years of statutory construction,” said Rep. Antonio "Moe" Maestas, D-Albuquerque. Maestas is the chairman of the Economic and Rural Development Committee and anticipates bipartisan work in the upcoming legislative session to address liquor licenses reform.

This is especially important in light of the COVID-19 pandemic, he said. These businesses that have invested in liquor licenses have been limited because of the public health orders put in place to limit the spread of the coronavirus. 

“We need to do everything we can to save our economy,” Maestas said.

550 Brewing Company serves alcohol on its sidewalk patio area in downtown Aztec.

Andrew Vallejos, the director of the Alcohol Beverage Control Division's Regulation and Licensing Department, gave an example of a developer who hoped to build a truck stop in Clayton where he would have sold package liquor,. He had the money to buy the license, but there were none available and the retail license he would have had to acquire would have cost $1 million.

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There are multiple types of liquor licenses in New Mexico and they range in cost from the rural dispenser license, which costs $47,000, to the retail license that costs $1 million. The rural dispenser license has strict requirements for location. The inter-local dispenser license — which allows beer, wine and spirits to be sold on premise — costs $315,000, according to the presentation Vallejos gave to the committee. Meanwhile, the dispenser license, which allows for both package sales of alcohol and on-premise sales, costs $471,000.

Vallejos said reforming liquor licenses will be challenging and changing one part could lead to negative impacts to other parts of the liquor license economy.

A bartender draws a beer at the former Farmington HUB Brewery and Grill, which operated for a short stint on East Main Street.

He compared liquor license reform to getting “better topsoil for the garden without planting specific plants” and allowing the free market to determine which businesses are successful and which are not.

Currently, a liquor license can be transferred and people will pay for those licenses, which Vallejos said has created a false economy.

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Montoya: Current system hampers economic development

“We are going to have a problem with equity no matter what we do,” said Rep. Rod Montoya, R-Farmington.

He acknowledged that some people and families have invested a lot of money in their liquor licenses and could be harmed by changes that would reduce the price, and thus the value, of that liquor license. However, Montoya said there are more people disadvantaged by not being able to get a liquor license and it is hampering economic development throughout the state.

Montoya said he believes the state needs to do something to reform the liquor licenses to assist with economic development, especially as the state tries to promote tourism.

“There are far too many New Mexicans who are being held out of this industry unnecessarily,” Montoya said.

State Rep. Rod Montoya

Montoya said he is less concerned about people who have had a license for 50 years, but a soft landing may be needed for the people who have invested in a liquor license in the last five or six years, Montoya said.

On that same note, Maestas expressed less concern for the impacts to corporations like Speedway if the liquor licenses reduce in value than for mom and pop businesses that have made the investment. The anti-donation clause has prevented the state from buying back the licenses, but Maestas said the Legislature could look for ways make small, local business owners whole.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.