Worcester Business Journal

wbjournal.com | October 26, 2020 | Worcester Business Journal 5 that city specifically, for all types of pouring licenses. While local licensing authorities may have additional rules and regulations, the ABCC specifies that to be eligible for a pouring license, applicants must be U.S. citizens of legal drinking age. A corporation or LLC can hold a license as long as there is an appointed license manager who meets the eligibility requirements. A conviction for a violation of state or federal narcotic drugs law disqualifies applicants from holding a license. Off-premises liquor licenses are governed by different rules and regulations, with different quotas, although these licenses can be administered by the same local licensing authority as on-premises licenses and are also overseen by the ABCC. e ABCC also handles all licenses that do not fall under local authority, such as those for manufacturers and importers. Population figures for calculating quotas are taken from the decennial U.S. Census, the last of which was in 2010 (the 2020 Census is ongoing). No-Quota Communities ere are 25 cites and towns in Massachusetts that do not impose a quota on the number of pouring licenses granted (see map 1). e quota for off- premises liquor licenses, or the "package store quota," is still enforced, as it is unrelated to the pouring license quota. e 25 cities and towns have an average population of around 31,000 residents. Worcester, with around 185,000 residents, is the largest, and Provincetown, with fewer than 3,000 residents, is the smallest. Of the group, 10 would otherwise be restricted to the minimum 14 regular pouring licenses. Of the no-quota communities, 21 have more regular licenses granted than the quota formula would otherwise dictate. is is in line with the motivation to do away with the quota—municipalities count on readily available licenses to encourage more alcohol-serving businesses to come to their community. In 2019, a total of 92 cities and towns exceeded the quota on regular liquor licenses, including 71 that are governed by the quota. is is because if a community finds itself in a situation where it has more licenses than the cap dictates—for example, due to a decline in population but not the number of bars and restaurants—the "excess" licenses are only lost if the licensed business shuts down without transferring (effectively selling) the license to another business. is has created a secondary market for liquor licenses in towns that abide by the quota, oen with the encouragement of local government officials, who know that surrendering a license to the state means a permanent reduction in that community's liquor license capacity. In total, the 25 communities with no section 12 quota have granted 1,254 all-alcohol liquor licenses, well above the theoretical cap of 869. e average no- quota community has 15 more regular liquor licenses than the quota would normally allow. Dry Towns While there are towns in Massachusetts with no liquor licenses due to disinterest by business owners or the small size of the community, there are eight towns that explicitly ban establishments that serve alcohol—"dry" towns. ese eight towns are Dunstable, Westhampton, Chilmark, Montgomery, Alford, Hawley, Mount Washington and Gosnold. Dunstable, with a 2018 population of around 3,350, is the largest, and the average population of these dry towns is just under 1,000. In 2017, Westhampton made an exception to allow Outlook Farm, a brewery, to sell their wares onsite, granting one pouring license for wine or malt beverages, and requiring extra restrictions based on local feedback. Despite this, the ABCC still lists Westhampton as a dry town. In addition to the seven dry towns with no licensed liquor establishments, there are 18 towns in Massachusetts that granted no annual liquor licenses of any kind in 2019, for a total of 25 towns with no alcohol-serving businesses. e largest of these is Carlisle, with around 5,200 residents, and the smallest is Gosnold, with around 48 residents. Community Comparisons While a variety of factors impact alcohol-driven businesses, there are patterns in the distribution of licenses in communities with a quota versus communities without a quota. ese differences are consistent with the idea that not having a quota makes it easier and less costly to start a bar or restaurant in a no-quota community, and theoretically leads to more such businesses in those cities or towns. No-quota communities have 2.2 liquor licenses of all kinds (all- alcohol and wine/malt) per thousand residents, compared to 1.2 licenses per thousand residents of cities and towns with a quota. e 10 largest no-quota communities have 1.7 such licenses per thousand, while the 10 largest communities with a quota have 1.1 such licenses per thousand residents. For regular (all-alcohol) licenses, Restaurant General On-premises Club Hotel/Innkeeper Other 71% 77% Worcester Mass. 18% 10% 5% 3% 3% 5% 4% 3% Types of liquor licenses Communities Without a Section 12 Cap This report, along with all the Worcester Regional Research Bureau projects, is available at www.wrrb.org. Continued on page 6

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