The sale of alcohol can be an incredibly profitable venture, often described as recession-proof, given that even in times of extreme economic turmoil and uncertainty, vendors continue to earn large amounts of revenue. In fact, in some such situations, the number of sales actually increases, as people use alcohol as a way to relax and get away from their current stressors for a moment.
By expanding their services to include the sale and service of alcohol, business owners are able to reap the benefits of this booming industry. California, in particular, happens to have one of the largest alcohol markets in the country, making it an ideal place for business owners to earn revenue with alcohol sales. However, in order to do so legally, business owners are required to obtain an ABC license in accordance with alcohol beverage compliance laws, which is a liquor license issued by the State Department of Alcoholic Beverage Control.
Depending on the availability of existing licenses, the process of obtaining an ABC license may vary. Business owners can apply for a new license from the State Department of Alcoholic Beverage Control of California or purchase an existing license from a private vendor. However, the transfer of license will still have to be processed and approved by the state.
How Much Is an ABC License in California?
There is no one set price for an ABC license. Instead, the amount you’ll have to invest to obtain the license will vary greatly depending on what type of license you required and whether you’re applying for a new license or purchasing an existing one on the open market.
Generally speaking, licenses that only cover the sale of wine and beer will be considerably more affordable than those that also include the sale of spirits. However, other factors are involved, as well. The type of business will also have an impact, meaning that a license for a full-service restaurant will likely be very different from that of a small gas station convenience store. The type of business may also inform whether you need an on-sale license, which is more expensive than the alternative off-sale option. On-sale licenses allow businesses to not only sell alcohol but to serve alcohol as well, which can then be consumed on the premises. Off-sale licenses only cover the actual sale of the goods, meaning that customers would have to then take their purchases elsewhere to consume them.
These factors can influence the costs involved, but the way those costs break down will depend most on your method of acquisition. Obtaining a new license from the state will involve one-time application fees, in addition to regular annual fees and, at a later date, renewal fees. Purchasing from a private vendor will also require you to cover the market value of said license, apart from any fees owed to the state to process the transition. All in all, the total cost of purchasing an ABC license can vary from $3,000 to over $400,000.
Is It Hard to Get a Liquor License in California?
Given the potentially high costs of purchasing an existing liquor license, you might be wondering, while all licenses aren’t obtained directly from the State Department of Alcoholic Beverage Control. Several states within the US have instituted some form of liquor license quota, including California. What that means is that every year the state determines the maximum number of licenses available and will not allow for the distribution of any new licenses if that number has already been reached.
The exact details in regard to how those quotas are determined are different in each state, though it is usually tied to the current population in some capacity. In California, ABC license quotas are set per county. Presently, the limitation is set at one on-sale license for every 2,000 people in a county and one off-sale license for every 2,500 people.
How Long Does It Take to Get a Liquor License in California?
A portion of time might be spent consulting with an attorney to verify that you have the correct paperwork and seller’s permits necessary to continue with the process or seeking out licenses on the open market. However, the most significant portion of time involves the State Department of Alcoholic Beverage Control. There are a few different types of documents that the state handles, including applications for new licenses, applications for transfers, license renewal forms, sales tax permits, and more. The approximate timeframe applicable for your particular circumstance will depend upon the type of transaction that is being processed.
When applying for a license or requesting a transfer, there is an initial investigation period. During this time, the application or transfer paperwork is forwarded to the relevant local officials to ensure everything all the necessary information is present. This step in the process generally takes 55-65 days. Once the investigation is complete, there is an additional waiting period, as licenses cannot be issued or approved for transfer for a minimum of 30 days. Overall, the average timeframe for a new application to be issued is 90 days, while the average timeframe for a transfer to be approved is 75 days.
Once you have an ABC license, you’ll also have to ensure that you renew it on a regular basis. In California, ABC licenses must be renewed every twelve months. If you submit your renewal fee on time, you can expect to receive the renewed license within 4-6 weeks from the expiration date.
Do You Need a Permit to Serve Alcohol in California?
In addition to an ABC license, you may be wondering what sorts of other licenses or permits you might be required to procure. While there are several documents and processes involved in the creation of a business, the most important permit you’ll need to acquire is a California seller’s permit. Selling alcohol without such a permit in place is considered a misdemeanor and could have severe negative impacts on your business.
While there are clearly several benefits to owning a liquor license, the various obstacles involved can make the process seem excessively daunting. Fortunately, the team of lawyers at Blake and Ayaz have extensive knowledge of alcohol beverage compliance cases in California. With a combined 60 years of experience, attorneys can answer all your questions and help guide you through every step of the way. For more information, contact our office via our website for a free consultation, or give us a call at (714) 455-1940.