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SB 1039

Establishes provisions relating to alternative dispute resolution

2026 Regular Session

Raises on-premises share of non-self-brewed beer at Class 5 breweries from 25% to 35%; keeps affiliate, production, and contracting rules intact.

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Bill Summary · SB 1039

SB 1039 — Alcoholic Beverages: Class 5 Breweries — On‑Premises Consumption

Chapter 144 (Approved by Governor April 22, 2025). Effective July 1, 2025.

Purpose

Amend Maryland law governing Class 5 brewery licenses to increase the permitted share of on‑premises beer sales that may consist of beer not brewed by the license holder (or its affiliate) from 25% to 35% of on‑site sales volume, subject to existing statutory conditions.

Key provisions

  • Modifies Article — Alcoholic Beverages and Cannabis §2‑207(f)(2)(iii)(2), replacing the prior 25% threshold with 35%.
  • Leaves intact the other statutory limitations and conditions, including:
    • A Class 5 brewery with an on‑site consumption permit may sell certain beer for on‑premises consumption (the general 5,000‑barrel annual limit under the on‑site permit remains in force).
    • Beer brewed at a location other than the Class 5 brewery may be sold on‑site only if:
    • The brand owner is the Class 5 licensee or an affiliate; and
    • The number of barrels sold on‑site that were brewed elsewhere in a calendar year does not exceed the greater of:
      • 35% (was 25%) of total barrels sold for on‑premises consumption under the on‑site/Class D/equivalent license in that year; or
      • 1.2% of total finished production under the Class 5 brewery license; and
    • The licensee either contracts with (or on behalf of) a holder of a manufacturer’s license or nonresident dealer’s permit, or the beer is manufactured by an affiliate of the licensee.
    • For breweries (alone or with affiliates) that produce more than 1 million barrels annually, finished beer delivered to the Class 5 brewery may be sold for on‑premises consumption only if purchased from a licensed wholesaler (subject to the other annual limits above).

Who is affected

  • Primary: Holders of Maryland Class 5 brewery licenses and local licensing boards that issue on‑site consumption permits.
  • Secondary: Manufacturer licensees, nonresident dealers, wholesalers, and affiliated brewing operations that supply beer to Class 5 breweries.
  • The Maryland Alcohol, Tobacco, and Cannabis Commission indicated the change affects one known Class 5 licensee in the State (Open Gate Brewery, Baltimore County).

Fiscal and policy impact

  • The Department of Legislative Services fiscal note: no material effect on State or local finances or operations; no small business impact reported.
  • Practical effects: provides additional flexibility to Class 5 breweries to offer a larger share (up to 35%) of non‑self‑produced brands on tap, subject to existing production/affiliate/contracting constraints. Likely modest, localized business impact given statutory caps and the small number of affected licensees.

Other

  • Crossfile: HB 1551 (companion).
  • Legislative timeline: Introduced Jan 31, 2025; enacted as Chapter 144 and approved by the Governor April 22, 2025; effective July 1, 2025.

Compiled from official sources — confirm details with the bill’s official record.

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