Key Takeaways from Joint Senate & Assembly Hearing on California’s Wine Industry
The California Senate Select Committee on California’s Wine Industry and Committee on Governmental Organization and the California Assembly’s Select Committee on Wine and Committee on Governmental Organization held a joint hearing in San Diego on Thursday, November 29, 2018. Jacob Appelsmith, the Director of the California Department of Alcohol & Beverage Control (“ABC”), and other members of the wine industry, including growers and producers, also participated.
The hearing covered a wide range of topics, and below are a few highlights from the hearing.
1. CANNABIS AND ALCOHOL: Throughout the hearing, Director Appelsmith repeatedly emphasized the prohibition on consuming or selling cannabis and alcohol at an ABC-licensed premises. The Director also reiterated the ABC’s position that alcoholic beverages cannot be infused with cannabis (as detailed in the July 25, 2018 ABC Industry Advisory) although he did hypothesize that a hybrid product involving de-alcoholized beverages may be permissible. Under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), a license holder pursuant to MAUCRSA may not sell alcohol or tobacco products on its premises. The Bureau of Cannabis Control (“BCC”) Regulations go even further by prohibiting the sale of cannabis in a location that requires persons to pass through a business that sells alcohol or tobacco.
Not only is the sale of alcohol and cannabis on the same premises prohibited, but Health and Safety Code Section 11362.3 forbids the smoking or ingesting of cannabis in any public place, except as authorized under Business and Professions Code Section 26200. According to Appelsmith, all ABC-licensed businesses (which would include all premises authorizing the sale and consumption of alcoholic beverages under both retail and non-retail licenses) are considered “public places,” and thus cannabis is not permitted to be smoked or ingested on such premises. This restriction applies even if the ABC licensee is not using the license at that time, such as after hours, while closed, or if the ABC license is surrendered or suspended.
Director Appelsmith stated that a failure to strictly adhere to these restrictions may result in the loss of an ABC license, civil suits, and even criminal charges.
2. RESPONSIBLE BEVERAGE SERVICE TRAINING REQUIREMENT: Beginning July 1, 2021, all alcohol servers must comply with the Responsible Beverage Service Training Program Act of 2017 (“RBS”) within 60 days of employment. The ABC must come up with a curriculum for an RBS training program by January 1, 2020. An alcohol server expressly includes employees of on-sale licensees who serve alcoholic beverages, any person who supervises or manages such an employee, and a designee for alcoholic beverage sales and service pursuant to a temporary license. The training will include instruction on state laws and regulations relating to alcoholic beverage control and driving under the influence, the social and physical impacts of alcohol, and intervention techniques to prevent sales to underage and intoxicated persons. Training may be provided by the ABC for no more than $15 or through an ABC approved accredited agency. All licensees must maintain records of certifications for inspection, upon request, by the ABC. A failure to comply may result in disciplinary action.
3. SAN DIEGO COUNTY TIERED WINERY ORDINANCE: Ed Embly, President of the San Diego County Vintner’s Association, provided a presentation on San Diego County’s Tiered Winery Ordinance which was passed on August 4, 2010 and amended on April 27, 2016. According to Embly, the ordinance has made it easier for certain wineries to begin operating without obtaining a major use permit so long as they meet certain qualifications. In particular, the amended ordinance established a new category of winery – the “Boutique Winery” – which can operate as a wine production facility with an on-site tasting room without obtaining a discretionary permit from the county so long as it meets certain requirements, including the following:
- Production limit: Produce no more than 12,000 gallons of wine (approximately 5,000 cases) in any given year;
- Sourcing Requirements:
- A minimum of 25% of the winery’s production must be from fruit grown on the property where the wine is being made (note: the county has interpreted this as requiring that vines must be planted and producing fruit);
- A minimum of 50% of the winery’s production must be from fruit grown in San Diego county, or juice or wine produced within San Diego county using San Diego County grown grapes;
- No more than 25% of the total may include fruit, juice, or non-bottled bulk wine from outside San Diego County;
- Maximum Production Facility Size: The production facility size is limited, and the applicable limit depends on the size of the lot. For example, for a lot of less than 1 acre, the production facility can be no larger than 1,000 square feet.
- Tasting Room Size: The tasting room cannot be more than 30% of the total square feet of the production facility.
Boutique wineries face certain land use restrictions, including but not limited to:
- Tasting room can only be open from 10:00 am to legal sunset (until 6:00 pm from November 1 to March 1);
- Buses and caravans are not permitted (capacity for no greater than 15 passengers);
- Outdoor eating areas are limited to not more than five tables or 20 people;
- Outdoor amplified sound is not permitted;
- Sale and consumption of pre-packaged food is permitted, as is catering and/or a food truck, but there are restrictions on food preparation at the winery;
- Events, such as weddings and parties, are prohibited absent an Administrative Permit;
Parking lot must include at least six spaces for customers and three spaces for operations.
For any questions about cannabis-related regulations that impact alcohol licensees, the RBS training requirements, or the Tiered Winery Ordinance, contact Brian Noack, Bahaneh Hobel, or John Trinidad.