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The term “Quota license” refers to a license issued pursuant to section 561.20(1), Florida Statutes, authorizing the sale of beer, wine and liquor in Florida. These licenses are limited in the number permitted to be issued by the county and are subject to the statutory population restraints on the issuance of new licenses.
Recently, the Florida Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco, announced that the entry period for the 2022 Quota Alcoholic Beverage License Drawing will open on August 15, 2022. The entry period, which lasts for 45 days, allows interested individuals and business entities to submit one entry per person or entity per available county into the lottery pool. Each entry requires a non-refundable fee of $100.00. The winners of the drawing will obtain the right to apply for a new quota beverage license in the associated county.
Benefits of a “Quota” Retail Alcoholic Beverage License
Most counties in Florida are issued one license per 7,500 residents (some counties have special acts legislatively modifying the license per resident threshold), and a new license is made available in the drawing the first time a county population exceeds that threshold. For counties with a resident population less than 22,500, at least three licenses will be made available in each county. Quota licenses are desirable for several reasons. Primarily, these licenses can sell all three types of alcoholic beverages (beer, wine, and liquor) for either consumption on or off the license premises based on the licensee’s business model. Further, they are not subject to any food and beverage mix revenue requirements, square footage requirements, or business-type requirements that are found in the special license exceptions listed in section 561.20(2), Florida Statutes. Thus, quota licenses are essential for:
- Opening a brick-and-mortar liquor store
- Going into business as a bar or nightclub that will not make at least 51% of its gross revenue from the sale of food and non-alcoholic beverages: or
- Opening a bar or restaurant location for consumption on the premises in a location that will not meet applicable statutory square footage requirements.
Additionally, these license types have other benefits related to selling alcoholic beverages at catered events as described in section 561.20(2)(a)5, Florida Statutes.
Secondary Market Value
Uniquely among licenses issued by the Division, quota licenses also developed a secondary market for the sale of such licenses between individuals and entities. The statutorily prescribed scarcity of these licenses, and their ability to freely transfer ownership, as well as their ability to transfer location within their assigned county, created value in these licenses. As such, license holders are often prospective sellers of their license, and prospective buyers often broker transactions to obtain the transfer of the license to enable their business.
The Drawing Process
Pursuant to section 561.19, Florida Statutes, licenses become available in the lottery through either an increase in county population, a decision by a county to allow the sale of intoxicating beverages where such sale had previous been prohibited, or the revocation or cancellation of a previously issued quota license. This year, there will be 35 licenses available in the lottery, spread across 19 counties. Section 561.19, Florida Statutes, also outlines the method by which the drawing takes place. The drawing is a double-blind procedure viewable to the public. The Division currently announces the drawing date via publication in the Florida Administrative Register, and it usually takes place about two weeks after all entries have been validated for compliance and any timeframes for administrative remedies have expired. Over the past few years, the Division received over 20,000 entries on average for each drawing. As such, the drawing generally takes place several months after the entry period closes.
A Newly “Wet” County in 2022
This year’s drawing features the first opportunity for quota licenses to be issued in Washington County, as the county voted to allow the sale of liquor for consumption on and off the premises earlier this year. Three licenses will be available for Washington County, and as they will represent the only options to lawfully pursue certain business models within Washington County, the expectation is that these licenses will be in great demand this year.
The attorneys and professionals at Dean Mead can guide you through the process of entering the quota drawing, obtaining an alcoholic beverage or tobacco products license, or defending your license in an administrative action brought by the Division of Alcoholic Beverages and Tobacco. Should you require any assistance, please contact the firm at 850-999-4100.