How major Nevada liquor law changes could mean more local beer and wine, explained

Mike Higdon | Reno Gazette-Journal

Nevada's craft brewpubs will be able to make more than twice as much beer starting in July if Gov. Brian Sandoval signs an omnibus liquor bill.

Nevada is one of the top beer consuming states but one of the most restrictive on production, according to 24/7 Wall Street. Most of that consumption comes from Las Vegas tourism and most of that beer is large-scale domestic beers with no limits to the amount they can import and sell in the state, according to Nevada Department of Taxation numbers.

The local craft brewers would like to change that in their favor so that tourists seek out local beer on tap at the casinos instead. This new bill might give them that opportunity.

“This shows that this state has recognized all craft alcohol manufacturers and we do have a voice and we’re residents and proud to manufacture here," said Wyndee Forrest, co-owner and founder of Craft Haus Brewery in Las Vegas. Forrest is also a board member of Nevada Craft Brewers Association. "It’s time that we’re allowed to compete on a national scale.”

Assembly Bill 431 passed both houses of the Nevada Legislature unanimously and is awaiting Gov. Brian Sandoval's signature.

But the bill is full of other changes, such as adding opening up wine laws, allowing for liquor sales at farmer's markets and making sure distributors are guaranteed a larger portion of beer sales in the state.

So what does the liquor bill mean for Nevadans? Here's the breakdown:

More beer, but less in brewpubs

Before the bill, brewpubs (breweries with storefronts or restaurants) could only produce 15,000 barrels of beer per year (a barrel is 31 gallons). This number is far below all Nevada's neighboring states.

If the governor signs the bill, brewpubs will be able to produce 40,000 barrels of beer starting July 1. But only 5,000 barrels of that can be sold in the brewpub and of that 5,000, only 1,000 can be sold to customers in the form of kegs.

That means brewpubs now have to track where and how all their beer is sold and report that to the Nevada Department of Taxation.

What happens to the other 35,000 barrels? It all gets sold to liquor distributors, who truck the beer to stores and bars in the region and potentially around the country.

Unlike neighboring states, craft breweries cannot self-distribute their beer. Under the new legislation, those craft breweries won't be able to sell all of their beer from their brew pub either.

“It’s still a positive and a win for craft beer but our neighboring states, even Utah, don’t have caps on manufacturing," Forrest said. "Utah let’s self-distribution up to 60,000 barrels. We cannot self-distribute, we have to sell to distributors for us to get our beers to market."

In Utah, Washington and California, a small brewpub can drive their beer across the street, or across the state, to a bar without selling it to a third party. Or they can hoard all of it and try to sell it all on tap.

Nonetheless, it's a big leap from where Nevada started 25 years ago when Washoe County brewpubs were limited to 5,000 barrels per year.

"It is the culmination of years of efforts to get the bar raised on what Nevada's brewpubs can produce and sell," according to a statement from the Nevada Craft Brewers Association. "The resulting bill involved cooperation and compromise by Nevada's brewpubs, liquor distributors and legislative members to get to where we are today.

Wineries could maybe be a thing now...

Two years ago, lawmakers lifted the ban on opening wineries in Washoe and Clark counties, where people actually live. But still, no wineries opened.

This year, a three-brand partnership wanted to open a winery on Fourth Street next to Lead Dog Brewing, but couldn't because no law allowed a multi-brand winery to open in Nevada.

If Sandoval signs the bill, the law would add an "alternating proprietorship" model so that the three separate winery companies — Nevada Sunset Winery, Basin & Range Winery and Great Basin Winery — can all open in one building.

"We do need state approval to open, but hopefully things will move along quickly and we'll be able to open this summer," Alynn Delisle, co-owner of Nevada Sunset Winery, wrote to the RGJ about the bill.

A similar facility in Las Vegas, Grape Expectations, could also take advantage of the rule.

Go to a farmer's market just for the beer

A small provision allows brewpubs to apply for 20 special permits per year to sell beer to distributors who can in turn sell that beer at a farmer's market.

Forrest said that's not a win since the original goal was to allow brewpubs to sell directly at farmer's market instead of distributing to them.

The law does not allow drinking at a farmer's market either. The market organizers would need to buy an additional permit to allow alcohol consumption within the market perimeter.

Distributors win big

The liquor distributors received tightened protections against brewery interference in their business. Brewpubs cannot interfere with their sales efforts, management, ask for other brewpub's financial information or invest in distributors. The new provisions further the separations between liquor makers and liquor distributors.

Mike Higdon is the city life reporter at the RGJ and can be found on Instagram @MillennialMike, on Facebook at Mike Higdon, Reno Life and on Twitter @MikeHigdon.