When California-based Stone Brewing expanded to the East Coast three years ago, it chose Virginia. Maryland was never in the running. And when the owners of Union Craft Brewing, a small Baltimore start-up, decided to expand, they settled on a 50,000-square-foot space with a smaller taproom than they originally wanted.
“We would make a greater investment and a greater commitment if we knew there was certainty to allow us to grow,” said Adam Benesch, founder of the five-year-old brewery. “It didn’t make sense to build a huge taproom if we’re not allowed to sell enough beer to warrant that size.”
Unlike neighboring Virginia, Pennsylvania and Delaware, Maryland strictly limits how much craft-beer breweries can produce, sell in taprooms and sell for customers to take home, a set of restrictions that critics say is archaic.
While Maryland has taken advantage of the exploding industry to some extent, brewers and their supporters say there is considerable untapped potential.
That’s why Maryland Comptroller Peter Franchot (D) has vowed to try again in 2018 to overhaul state law in hopes of better attracting and retaining craft-beer manufacturers. This week he unveiled a legislative package that, among other things, removes the caps on how much craft beer can be sold and brewed, and changes the hours and conditions for buying craft beer in some locations.
Franchot said that Maryland brewers support 6,500 jobs and account for $228 million in wages and $58 million in state and local revenue. The industry’s total economic impact is $632 million annually, he said, but could be much more.
“We ought to start welcoming, appreciating and thanking this unbelievable sector,” Franchot said this week at a news conference attended by several local brewers at Benesch’s new, still-empty warehouse in Baltimore.
Kevin Atticks, a lobbyist for the Brewers Association of Maryland, said that state laws have not kept up as the craft-beer industry has grown over the past several years.
“We have gone from start-ups to major employers producing hundreds of thousands of barrels of beer, with a broad fan base,” he said. “And as they contemplate expansion to meet demand they are reluctant to invest because of the onerous, arbitrary restrictions.”
Del. Dereck E. Davis (D-Prince George’s), chairman of the House Economic Matters Committee, said that the limits have been in place for years and while the industry is growing, none of the state’s existing brewers have come close to the current caps in place. The legislature raised the cap from 500 barrels to 2,000 barrels annually for taprooms.
“If you are giving your child an allowance of $5 a day and they are only spending $2.30 but still they are asking for $30 a day, that doesn’t make sense,” said Davis, whose panel oversees liquor regulation. “They are asking for more and complaining about something that they are not even close to reaching.”
Franchot has been the leading voice in state government in the fight for the breweries. This spring he created a task force, “Reform on Tap,” to highlight the industry’s growth. The group produced a report that says there were 22 craft breweries in Maryland in 2010, producing nearly 92,000 barrels of beer. This year 84 craft breweries are projected to produce 247,000 barrels. But the state still ranks 25th nationally in per capita beer production, 36th in the number of breweries and 47th in overall economic impact.
Franchot, a former state lawmaker who is close to Republican Gov. Larry Hogan but has a strained relationship with Democratic legislative leaders, suggested at the news conference that resistance to his proposals in Annapolis could stem from those tensions.
He and state Sen. Ronald N. Young (D-Frederick), who supports the effort to change the laws, encouraged brewers and their customers to lobby their legislators.
“This has nothing to do with me or what the senators think of me or the Senate president thinks of Senator Young,” Franchot said. “It has everything to do with the people, and the people of Maryland in a very broad-based way and a very potent way are going to weigh in on this and ask the legislature to do the right thing.”
Davis said the legislature will “take a look at what the comptroller has to offer,” adding that while the “comptroller likes to say he is the chief alcohol regulator in the state, the 187 members of the legislature are the chief policymakers when it comes to alcohol. We’ll do our job and we’ll let him do his job.”
Todd Haymore, Virginia’s secretary of commerce and trade, said Maryland breweries reached out to Virginia officials earlier this year about the differences in craft-beer rules in the two states.
Since then, he said, he and Gov. Terry McAuliffe (D) have had talks with Maryland brewers about the opportunities that exist in Virginia.
“Am I aware of any Maryland breweries who have pulled up stakes and crossed the Potomac into Virginia? No,” Haymore said. “But at the same time, am I aware of Maryland brewers and entrepreneurs in Virginia in dialogue per our invitation? Yes.”
Benesch, whose company has 26 employees and plans to add 100 new jobs over the next seven to 10 years, said Maryland is “stuck” with restrictive laws because there had not been many craft brewers in the state a decade ago.
Now, he said, there are those who are willing to make investments but “the government is sending a very mixed message to them on whether they want them to make those investments or they don’t want them to make those investments.”
Correction: An earlier version of this report said that Stone Brewing’s headquarters was relocated from California to the East Coast. The firm merely expanded, and its headquarters remains in the state.