Question: An
organization wants to hold a festival in the city and hopes to sell
alcohol. How does the liquor licensing
work for such an event?
Answer: Let me guess, Octoberfest? Halloween? Apple harvest? We have so many great reasons to celebrate in Minnesota well after Labor Day has passed. Most festivals, regardless of season, will take place in a park, the city
street, or a private parking lot. But an on-sale retail license within the city
typically restricts the consumption and sale of alcohol to the building and any fenced in patio area. It usually excludes the parking lot and certainly the city streets and parks.
Hmm. This means that a different kind of license is almost
always necessary.
For the city, the first step is to understand how the
alcohol will be served and who will be serving it. Remember that a license or permit (issued by
the city, state, or both!) is required to serve or sell alcohol. Also, think
about potential liability and whether or not the group has insurance coverage
for the event. Many groups will already have insurance, but for groups that
needs one-time, single event coverage, the League has a program called TULIP
that can help.
Now, there are two main methods to lawfully sell alcohol
during events:
Temporary on-sale license
for nonprofit organizations
One method is the temporary on-sale license. This
is a popular choice because it allows alcohol sales for a definite period up to
four days on property that is not owned by the license holder. The license may
be issued to charitable, religious, or other nonprofit organizations in
existence for at least three years; registered political committees; and state
universities. Since these organizations might not ordinarily sell alcohol, this
license conveniently exempts the license holder from liability insurance
requirements under Minnesota
Statutes § 340A.409. It does not
mean the licensee is exempt from liability.
A temporary on-sale license also allows the holder to
contract for liquor catering services with a duly licensed on-sale licensee,
which is common. This license is issued by the city and must also be approved
by the commissioner of public safety. While this license is fairly flexible, one
of the downsides is that cities can only issue 12 days’ worth of licenses each
year to any single organization or for any single location.
Community festival authorization
for existing license-holders
Another licensing method applies specifically to community
festivals. Here, a license may be issued
to any current holder of a retail on-sale license within the city. The license
must specify the area in which the alcohol will be sold and consumed and the
licensee must prove that it has liability insurance coverage according to Minnesota Statutes §
340A.409. This license requires only
the approval of the city.
Other licensing methods may apply, and the League’s Liquor
Licensing and Regulation memo is an incredible resource for general
information. Because every situation is
a little different–cities have different ordinances, no two events are the
same, and the organizations might be more or less organized than others–don't hesitate to work with your city attorney to hammer out the specific
details. Once the work is done, feel free to kick back with a beverage and enjoy the event!
Written by Jake Saufley. Contact the League's Research and Information Service staff by emailing research@lmc.org, or by calling (651) 281-1200 or (800) 925-1122.
This blog post conveys general information. It’s not
legal advice. Please check with your city attorney before acting on this
information.