The Division of Alcoholic Beverage Control (A.B.C.) issued an Advisory Notice, AN 2025-01, regarding the implementation of the recent liquor license reform (P.L. 2023, c.290) of inactive licenses. The advisory notice includes important updated information for the renewals of liquor licenses for 2025-2026 term.
As we previously reported the new law requires the Director of the Division of A.B.C. to produce a quartile list of inactive plenary retail consumption licenses on the effective date of the Act that must be used by the license holder, transferred by the license holder in a private sale to a transferee who will actively use the license or permit the municipality with an inactive license to transfer the he license to a contiguous municipality as part of an economic redevelopment plan or revitalization area. For those licenses that have lapsed (no attempts to renew) within the eight-year period before January 7, 2024, municipalities may be able to issue a new retail consumption license for public sale for a premise in the municipality.
The Division of A.B.C. is taken the position that the “authority over the renewal of inactive licenses now falls squarely on municipalities” as P.L. 2023, c. 290 removed the requirement that inactive license holders no longer need to apply to the Division of A.B.C. for relief under N.J.S.A. 33:1-12.39.
The Division of A.B.C. has further taken the position that “after August 1, 2024 a retail consumption license that has not been “actively used” for two consecutive years, which cannot be renewed, shall expire, unless the municipality, in the exercise of its discretion, renews the license for an additional year.”
The Advisory Notice addresses the definition of “active use” in the context of P.L. 2023, c. 290. The Division of A.B.C. has taken the position that a municipality, on a case-by-
case basis, “may consider and balance certain factors that demonstrate whether a licensee has taken significant steps to activate the license. Among the factors to be considered in determining whether an inactive license is being “actively used” include, but are not limited to:
1. Whether the license holder has retained professionals to assist in activating the license (e.g., planners, architects, attorneys, developers);
2. Whether the license holder has applied for all necessary federal, State, and local permits needed to open a licensed establishment;
3. Whether the license holder has entered into a lease agreement for the property where the license will be sited, or whether the license holder has purchased the property where the license will be sited;
4. Whether construction of the project where the license will be sited has commenced and the current status of the construction; and
5. Whether the license holder has made a significant and concrete financial investment toward activation of the license at a premises.
Furthermore, the Division of A.B.C. has taken the position that the “same factors apply when interpreting the term “active use” in the context of the intermunicipal transfer” permitted by the new law.
We suggest you review the quartile list to see if your municipality has an inactive licenses subject to the new law as well as review this notice with your municipal attorney. Further, we suggest you discuss with your municipal attorney inviting the holders of inactive licenses to appear before the governing body or local ABC Board to permit a discussion as to the licensee’s plan moving forward.
Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x112.