Proposed liquor law change would allow home delivery

Restaurants could serve spirits without expensive dispenser licenses

New Mexico’s liquor laws may undergo their most significant changes in 40 years if legislation allowing for home deliveries and the creation of a new restaurant license gets signed into law.

A bill introduced by Rep. Dayan Hochman-Vigil, D-Albuquerque, seeks to make major changes to New Mexico’s liquor laws by allowing home delivery of alcohol, and by creating a new restaurant license that would substantially expand the number of establishments allowed to sell spirits, among other changes.

Similar bills have been introduced in recent legislative sessions — most recently in 2019, when Gov. Michelle Lujan Grisham vetoed a home alcohol delivery bill. At the time, Lujan Grisham said she was open to allowing limited deliveries but vetoed the measure due to provisions she said violated tenets of the Liquor Control Act.

But as New Mexico continues to grapple with the pandemic, House Bill 8 is being touted by the Lujan Grisham administration as a way to support the hospitality industry by providing a new source of revenue for businesses and restaurants “adversely affected by the pandemic,” and is considered a priority bill.

“The pandemic has shown what a useful tool this legislation would be, and the governor is clear that in addition to being helpful to consumers, it will be a real boon to restaurant revenues,” Governor’s Office spokeswoman Nora Meyers Sackett wrote in an email. “In fact, she pushed for legislation of this type to be approved by the Legislature in the first special session of 2020.”

The bill would mark some of the most significant changes to existing liquor laws since 1981.

Under the legislation, restaurants, grocery and liquor stores, craft distillers, small brewers and bars would all be able to offer home delivery of alcohol. But restaurant deliveries would be limited to beer and wine with a minimum $25 food purchase. Other liquor selling establishments would not have a food restriction or quantity cap.

If passed, the bill could provide a path for bars — which have been closed since March — to bring in revenue through delivery without having to open.

Matt Kennicott, spokesman for the New Mexico Bar, Entertainment and Nightclub Association, said the organization supports the proposed changes and hopes to see other changes for bars — like the suspension of yearly fees — included in legislation.

“It would allow us a different income-earning opportunity that a lot of our owners don’t have right now,” he said.

Aside from home delivery, HB 8 would create a new type of license that would allow restaurants to serve spirits without the purchase of an expensive dispenser license.

Dispenser licenses, which allow for package sales and on-premise consumption of liquor, are notoriously costly to obtain. Currently, only a set amount of liquor licenses are available in the state, and the licenses are treated similarly to private property. Recent dispenser license sales on the open market have cost buyers about $350,000 — with some types of dispenser licenses going for as much as $750,000 — in addition to yearly fees.

With the creation of the new license, restaurant owners would only have to pay $3,000 every year to be allowed to sell hard liquor.

Previous debates about liquor license reform have faced criticism from some dispenser licensees, who fear changes to the system or the creation of new licenses could devalue their investments.

Tomasita’s and Atrisco Cafe and Bar owner George Gundrey, who leases his three liquor licenses, said Wednesday the proposal is unfair to current licensees because it would devalue the expensive licenses.

“What they’re basically doing is making (the licenses) worth nothing, so obviously that’s very problematic,” he said. “… The only ethical thing for them to do is somehow reimburse the owners.”

Myra Ghattas, owner of Slate Street Cafe and Sixty-Six Acres, said the proposed changes are “huge.”

Ghattas said Slate Street Cafe currently only sells beer and wine, although Sixty-Six Acres, which is located on tribal property, also sells liquor.

“A lot of people in my position who own restaurants have been working to get that playing field leveled for a long time, because those old laws were really dated,” she said.

Ghattas said she has periodically considered pursuing a full liquor license for Slate Street Cafe, but has never purchased one because of the high costs. She said if the legislation passes, she will immediately apply for the new license.

“I think it would significantly help independent local restaurants, who I think have the short end of the stick when it comes to liquor licensing in New Mexico,” Ghattas said.

Regulation and Licensing spokeswoman Bernice Geiger said since there are no differences between the newly proposed restaurant license and dispenser licenses for restaurants, there could be business owners who opt to sell their dispenser license to other establishments in favor of the new restaurant license.

Those sales would increase the number of dispenser licenses available.

“Currently one of the impediments to economic development in the state is the relatively high cost of a dispenser type liquor license,” Geiger said. “One of the goals of this bill is to give people who are priced out of the market the ability to get into the market, to decrease the cost of licenses across the board, but (to give) current licensees the flexibility to pivot to new business opportunities by allowing the buy-back of lost package privileges or the ability to sell the license in markets that currently are restricted.”