Part of running a successful business is knowing when and how to diversify. As the agricultural market becomes more competitive and consumer driven, farmers are becoming experts on creating niche market opportunities to meet consumer demands.
Over the last several years in Pennsylvania, the liquor laws have become more relaxed. Thanks to the passing of Act 39 by Governor Wolfe, farmers have been able to expand their offerings to include farm fresh, locally produced beer, hard cider, and wine. The new laws allow agricultural producers to not only grow, process, package, and sell their own alcoholic beverages, but they can also do all of this right on their own farms. It is not uncommon to see farms opening their own “tasting rooms” in old barns on the farm property, and now, doing so is a much easier process than obtaining a traditional liquor license.
Pictured on the left is River Bend Hop Farm and Brewery located in Newport, PA. It opened in 2017 thanks to the passing of Act 39.
Getting Started
Obtaining the appropriate licenses and permits can be a lengthy process, so it is best to start filing the necessary paperwork right away. A delay in receiving the required approvals could mean a delay in opening your new business, which could seriously impact your cash flow and the ultimate success of the business.
Because there are several different types of licenses you can apply for, before you file, you must first decide which license is appropriate for your particular business goals. Each license comes with its own set of requirements and only allows your business to engage in certain activities.
Your first option under the new liquor laws is to apply for a Manufacturing License, known in the business as a “G” license. This license allows you to manufacture wine, beer or hard cider on your premises and sell it to consumers for both on and off-site consumption. The “G” license requires that you have at least 10 seats and food available on the premises. A “G” license will also permit you to sell your alcoholic beverage in pints, growlers, and even kegs. For agricultural entrepreneurs who have limited funds, want to start small, or are not interested in managing a huge operation, a “G” license may be the best option to provide supplemental income for the farm.
A second license option for your farm is to apply for a Brew Pub License, which is known as a “GP” license. Keep in mind that your farm would need to apply for both a “G” license and a “GP” license to enjoy the perks and benefits that come with a “GP” license. Under this license, your on-farm tasting room can stay open until 2:00 a.m., but you must have seating and food for at least 30 people. Additionally, under this license, your business must apply to the Pennsylvania Department of Health for a health permit.
It is important to remember that the federal government has its own set of laws that govern the production and sale of alcohol for on-farm operations. Getting the appropriate federal approval is even more complicated and time consuming, so it is best to start this process right away. You can apply for both federal and state approval at the same time, so there is no need to wait to receive approval from one before applying for the other. For more information on that process, check out this resource.
Additional Profit-Making Opportunities
Act 39 also changed existing law to allow farmers and agricultural producers to sell their alcoholic beverages off-site at a farmers market. Like the other types of licenses discussed above, a farmer is required to apply for and receive a special license to sell at a farmers market. There is a filing fee, and you must inform the Pennsylvania Liquor Control Board of the location of the market you want to sell at as well as the hours you expect to be there. In addition to the farmers market license, you should always check with the coordinator of the farmers market you wish to attend because most markets also require proof of insurance and inspection certificates.
Reid’s Winery is just one of many Pennsylvania vendors that attends farmers markets throughout Adams County to sell their locally produced wine and hard cider.
Act 39 provides additional incentives to create your own on-farm tasting room by making it permissible to sell beverages from other local breweries. This allows agricultural entrepreneurs to not only expand their product offerings, but increases their ability to collaborate with other local agricultural entrepreneurs.
Other Important Considerations
As an agricultural entrepreneur, expanding your business to offer your own locally produced beer, hard cider or win can bring in additional revenue that will make your larger farm business more sustainable. Like all new entrepreneurial endeavors, you should always consult your local township’s laws to make sure you do not violate any zoning ordinances. Attending local town council meetings or consulting with a local attorney are advisable to make sure your business is operating in accordance with all applicable permits and licenses. It is also recommended that you consult with your farm insurance agency to make sure you are in compliance (or start complying) with any regulations the agency has about on-farm businesses and customers.
You can stay up to date with Pennsylvania’s changing liquor laws by subscribing to the Pennsylvania Department of Agriculture’s Weekly Roundup Newsletter, which provides timely updates on laws and regulations that can affect agricultural entrepreneurs and their respective businesses.
Sources:
Click to access Winery%20and%20Farmers%20Market%20QandA.pdf
Click to access February%202017%20Presentation%20for%20PA%20Producers%20and%20Licensees.pdf
https://www.wesa.fm/post/farmers-markets-get-boozy-thanks-pas-relaxed-liquor-laws#stream/0
http://www.riverbendhopfarmandbrewery.com
https://bit.ly/2OHIgJX
Picture Sources:
https://bit.ly/2H7OCht
https://www.reidsorchardwinery.com
Sarah, your blog was so interesting and detailed, and it was obvious that you are well-versed in this topic! It was also very well organized and informative; I loved the way you ended it with important and logical considerations/conclusions, even providing a link to allow readers to subscribe to the weekly newsletter!
I really liked this post. As someone who enjoys a drink now and again, and as someone who has been to several farms that have started to sell drinks, I never put a second thought into the laws that allowed them to do so. It was really interesting to learn the difference between a “G” license and a “GP” license. It almost makes me want to ask next time I go to one of them, but I have a feeling, given what they are selling, I might not remember. Regardless, I can always refer to this blog and try to make an educated guess. Great job!
I’m very curious on this blog. I’ve read the G licensee requirements and think the devil is in the details. There is no state law that allows brewing from your farm. You still have to look at the local zoning laws. So while my farm is in Ag zoning, there isn’t a bridge between farming my own barley and hops and the ability to open a brewery and especially a tasting room on my property. Yes, a G license would allow that, but my local zoning doesn’t seem to connect farming and brewing and doesn’t appear to want to approve a G license. Do you have any advice, insight or legal precedent on this? Would appreciate any advice… Thanks!