Major changes to Alaska’s alcohol industry are coming on Jan. 1

Major changes to Alaska’s alcohol industry will come into effect Monday, which business owners and public health groups say will improve public safety and better match how Alaskans now consume alcohol. State regulators are scrambling to ensure business owners are in compliance with the new law.

The Alaska Legislature passed Senate Bill 9 in 2022 after a decade of attempts to modernize the alcohol industry. Regulators were given 18 months to develop the new rules, which affect licensing, how alcohol can be delivered across Alaska and the enforcement of alcohol laws.

For patrons, there will be immediate changes starting Jan. 1. Taprooms at breweries and distilleries will be able to stay open until 9 p.m. Current law requires them to close at 8 p.m.

Taprooms are currently barred from holding live events, but the new regulations allow them to hold a limited number per year. Other restrictions remain in place: no TVs, no chairs or stools at the taproom bar, and limited serving sizes. And, among many other changes in the law, liquor stores will be able to hold events and serve alcohol samples.

The 127-page alcohol bill was intended to end the “bar wars” — a long-running conflict between traditional bars and breweries over the cost of licenses, manufacturing equipment and how both business types operate.

Lee Ellis, owner of Midnight Sun Brewing Co., said a “huge” change from the new law is that business owners can have multiple, overlapping licenses, melding roles between businesses that were previously kept separate in statute.

Breweries will be able to host restaurants with fewer operating restrictions and sell other brewers’ beer. Traditional bar owners were prohibited from manufacturing their own drinks — for example, brewing beer — but now that will also be possible.

Ellis, who is also president of the Brewers Guild of Alaska, surveyed members last year and found that 88% were interested in new licenses to operate with fewer restrictions as a bar or when hosting a restaurant. He said for brewers and distillers, the new law represents the biggest expansion of privileges since Prohibition.

Midnight Sun is in the process of applying for a restaurant endorsement that will allow it to hold more live events, to sell cider and to stay open after 9 p.m., Ellis said. Those changes are set to come into effect in April.

“We’ll still be able to do everything we’re doing now, and just more,” Ellis said.

Evan Wood, one of the founders of Devil’s Club Brewing, said the change he is most excited about is holding live events at the downtown Juneau tasting room. Those could be theater performances, movie premieres or concerts, he said, but they will be limited to four events per year.

“We’re still exploring what kind of fun and exciting events we could do to try to draw as many people as possible,” he said.

Wood said often when regulatory changes are made to the alcohol industry, the general public doesn’t notice. With broad changes for tasting rooms, bars and how alcohol is delivered across Alaska — that won’t be the case this time, he said.

“I think this is just going to be an exciting year for the alcohol industry at large,” he said. “Because I think that there’s some really exciting changes happening for a lot of different license types.”

Public safety

Public health and safety groups championed the new law as a way to address high rates of alcohol abuse and alcohol-related deaths in Alaska, which have been twice the national average.

New mandatory beer keg registrations are intended to limit underage drinking, and there will be updated population-based limits on the number of new taprooms that can operate in a town or a city, intended to prevent an overabundance of alcohol in communities.

The state will start to license companies that ship alcohol, taxing those businesses for the first time. Licensing will help police fight bootlegging to the state’s “dry” communities, proponents say.

The law will also bring changes to enforcement of alcohol offenses, starting Monday. Licensees can be held partially liable for some violations, like serving alcohol to minors.

Because the Alaska Department of Law rarely prosecutes misdemeanors, many low-level alcohol crimes will instead become citations. Underage drinking violations will remain a misdemeanor, but shipping alcohol without a state endorsement will become a $500 fine.

Joan Wilson, executive director of Alaska’s Alcohol & Marijuana Control Office, said the shift to citations should increase accountability.

There have been outreach efforts with law enforcement officers across the state to define the new role for police and alcohol regulators, she said, allowing law enforcement to focus on more serious public safety issues while regulators focus on licensing.

Licensing race

Staff at the state’s alcohol regulator are working overtime to ensure all businesses are in compliance with the new law by the start of the new year.

Breweries and distilleries need to file applications to keep their taprooms open. Wilson said just 40 of 90 licensees had done so as of Tuesday evening.

Bars and clubs that operate restaurants need to file so minors over the age of 16 can still be served and be employed. Around 105 have applied out of 440 that need to, Wilson said.

“We’re not going to shut folks down, but they will be out of compliance with the new law and we’ll continue to work with them,” Wilson said about the Dec. 31 deadline. “But they risk fines and other consequences, which I don’t want to happen to anybody.”

The new law authorized regulators to open license applications in September. Wilson said she wished that licenses would automatically convert if no changes were proposed, but that wasn’t how the law was written.

The Alaska Department of Commerce and Economic Development recently launched a new online portal for licensees. Paper applications will still be accepted.

Sarah Oates, president and CEO of CHARR, Alaska’s leading alcohol-industry trade group, said overall, the rollout of the new law had been going well, but there have been some kinks. The trade group has been helping inform its members about the new requirements.

“For those businesses who do not do things on the internet, the transition for them is going to take more time,” Oates said.

After much legislative debate, the alcohol law came with limits on the number of new taprooms allowed, based on the size of a community’s population. Existing taprooms are grandfathered into the new regulatory system.

In communities already over population limits, Wilson said tardy licensees could face risks. New applicants could theoretically swoop in and take licenses from existing brewers and distillers who wait too long to file a new application.

“That’s why it’s really important to get their application in, because I don’t want people to lose their grandfather rights,” Wilson said. “So suppose they applied three months late and someone came in and took the one available for retail — they’re out of luck.”