Florida-based craft beer maker Cigar City Brewing is expanding and scouting the Southeast for its second U.S. location.

But nearby Alabama, which has watched its craft brew industry soar leaps and bounds in recent years, isn't even on the table as a possibility.

Cigar City founder Joey Redner told Brewbound.com in mid-October his company "kind of purposefully skipped over Alabama and Georgia because ... they really don't have the friendliest legislation" when it comes to craft beer.

Redner, who hasn't announced his decision yet on where Cigar City will land, told AL.com this month a state's legislative climate is one of the first things his brewery examines when searching for a new site.

"Favorable laws that allow direct on-site sales and self-distribution are, I am convinced, pivotal to the financial and marketing success of a small brewery," he said.

The ideal situation

Redner said 36 states allow some form of self-distribution and/or direct on-site brewery sales. "The ideal situation is to have both components: self-distribution and on-site sales," he said.

During Cigar City's search, Redner said they tossed out Alabama and Georgia right away because those critical components were not present.

"South Carolina and North Carolina do so we did site visits there," said Redner, whose head brewer is from Enterprise, Ala. "Florida only has half of the key legislative components: on-site brewery sales."

(Alabama Brewers Guild)

The fact that Cigar City chose to dismiss Alabama because of unfriendly legislation is just another missed economic development opportunity for the state, Alabama Brewers Guild (ABG) Executive Director Dan Roberts said. Alabama, which saw a 47-percent jump in annual craft brew production in 2013, made more than 28,000 barrels of beer last year.

In its annual report, ABG found the majority of craft beer in Alabama is sold through the state's three-tier system, while 10 percent is sold directly to customers at the brewery and brewpubs. Fourteen percent is exported outside the state.

Last year, California's Stone Brewing Company released a request for proposals to build a giant brewing, packaging and distribution center on the East Coast. While Stone was on Alabama's radar, the major craft beer force decided to go with Richmond, Va., for its new $74 million brewery, packaging hall, restaurant, retail store and administrative offices.

"They might not have chosen Alabama anyway, and Cigar City might not choose Alabama anyway," Roberts said. "That's possible, but we're not even in the running for these things. The same reasons that they're not interested in coming here are the same reasons our breweries are going to have a hard time really thriving in the national market."

Taking action

ABG hopes to change that in 2015.

Alabama currently operates a three-tier system, which means "in order to buy a beer in a store, you have to sell to a distributor and the distributor sells to the store," Roberts said. Most industries do that anyway.

"We are fine with the three-tier system," Roberts said. "Every state in the country has the three-tier system. But every state in the country, except Alabama and Georgia, also allows for direct-sales ... We are the exception in that we are the only two states that are holding back the growth of a viable manufacturing industry."

Roberts said Alabama and Georgia are the only states with an absolute prohibition on direct sales for off-premise consumption. A bill to be introduced in the Legislature in March would alter that, allowing Alabama to create a craft brewers license for small breweries to operate a restaurant on their licensed premises and sell their beer at the brewery and restaurant for on- and off-premise consumption.

The license would require microbreweries to make and package no more than 2 million barrels of beer annually, Roberts said.

Enabling growth

"Our bill, unlike last year's bill, will also allow brewpub licensees, which are in a different part of the Code, to sell beer for off-premise consumption and to participate in entertainment districts," he said.

A similar bill was sponsored last year by Sen. Dick Brewbaker, R-Montgomery, and Rep. April Weaver, R-Alabaster. Roberts said they haven't settled on sponsors for 2015 yet.

Roberts, who noted Georgia will also be pushing for direct sales next year, said they're not trying to tear down the three-tier system, end alcohol regulation "or anything like that."

"Every state that has a three-tier system allows this privilege except Alabama and Georgia," he said. "This is about the legislature enabling the growth of one of the few industries that have managed to thrive in recent years."