To understand the complexity of New Jersey liquor license laws, you may need a drink of your own (cheers!). Unique to New Jersey, there are several different types of licenses, each having extreme differences in their values. For example, a license in Bloomfield, NJ has a value of around $150,000-$200,000 where Montclair, NJ has licensees valued at anywhere between $800,000 and $1,000,000. Same county, neighboring towns. How did this come to be?
Based on legislation passed after prohibition, the number of liquor licenses available in a town were based on population; 1 license per 3,000 residents of a municipality. However, there were a few exceptions. Some towns issued licenses before the state statue was adopted. As a result, the values vary based on how many exist in each town. Now, NJ is probably the only state left that has not changed or updated these antiquated laws since prohibition…until 2024. Governor Murphy had made it his personal mission to be the first NJ Governor to tackle this issue. To understand what was changed, you first need to understand the basics:
Types of NJ Liquor Licenses Available in NJ
There are over 20 different types of liquor licenses in New Jersey, each identified by a number. For this article’s purpose we will be referring to the retail licenses only.
#33 – Plenary Retail Consumption with Limited Package Good Privileges:
This is the most common license a full-service bar & restaurant has. It allows the license holder to sell alcoholic beverages on and off the premises. The sale of off-premises consumption has restrictions on the location of packaged goods, designed to limit the sale of any packaged good retail sales. There are currently only 4,761 active #33 NJ liquor licenses.
#32 – Plenary Retail Consumption with Broad Package Good Privileges:
This is like a #33 license with a more privileges. This license holder can sell packed goods like a liquor store. It allows the owner to provide extensive space for the sale of carry out packaged goods. This additional opportunity for retail sales is a much-desired option for owners who will typically pay more for this license. There are currently only 423 active #32 NJ liquor licenses.
#34 & #35 – Seasonal Retail Consumption:
A #34 and #35 license holder has the same privileges as a #33 license holder but has restricted license terms. A #34 license holder can sell alcoholic beverages for on- and off-premises consumption only from May 1st to November 14th where a #35 license holder can sell only from November 15th to April 30th. There are currently only 7 active #34 NJ liquor licenses.
#36 – Hotel/Motel License:
These licenses offer the same privileges as a #33 license but apply only to hotels or motels with 100 rooms or more. Unlike the #33 license, these licenses do not depend on population. Currently, there are only 289 active #36 NJ liquor licenses.
#31 – Club License:
Non-profit organizations or clubs, like Elks Lodges or VFWs, receive these licenses, enabling them to sell alcoholic beverages for on-premises consumption to their members. At present, only 877 active #31 NJ liquor licenses are in use.
#37 – Theatre License
These licenses are exclusive to non-profits, including theaters and corporations that host musical entertainment with seating for at least 1,000 guests. Alcohol sales are strictly limited to 2 hours before, during the performance itself, and 2 hours after the performance. Unlike #36 licenses, they aren’t restricted by municipal population. Currently, there are only 10 active #37 NJ liquor licenses.
#38 – Brew Pub License:
Possibly the most debated topic of discussion today is the the #38 license. This license combines manufacturing and retail, allowing the holder to produce and sell beer, wine, or spirits. It was illegal to sell food on premises. As of August 1st, 2024, Governor Murphy signed Bill (S-4265/A-591) effectively changing this.
#43 – Limited Retail Distribution License:
The #43 license is issued to food store owners. Think, a grocery store or a local deli/market. Any alcoholic beverages sold must be un-chilled in quantities of not less that 72 fl oz. This is only for off-premises consumption. There are currently 32 active #43 NJ liquor licenses.
#44 – Full Packaged Good Retail License:
This is the license we typically think of as the liquor store. There are absolutely no on-premises consumption and no bar or food service; just grab & go/take out. There are currently only 1,707 active #44 NJ liquor licenses.
Pocket Licenses:
Inactive licenses, aka “pocket licenses”, are any license classified as in pocket within their municipality. Currently, there are about 1,176 inactive #33 and #32 licenses throughout the state.
Sometimes towns have pocket licenses that they are unable to use. This could be from the population restriction, proximity laws, or just lack of physical space to use the license. Since inception of the law, if your license fell into pocket, you were given 2 years to “open a business with that license”use it or lose it”. If a space wasn’t available, you could’ve either applied for an extension or sold it back to its municipality. This started to cause controversy when owners were applying for extensions every two years and municipalities were allowing it to continue.
As of August 1st, 2024, this was no longer allowed. For decades, New Jersey administrations have been “fighting the liquor license issues” in place since prohibition. Governor Murphy signed bill S-4265/A-5912 into law, enforcing this current law – if you are an owner of a pocket license, you have 2 years to “use it or lose it”. Additionally, before this bill, a license could not leave the municipality it was in. As of August 1st, 2024, a pocket license can move outside of its municipality only to a contiguous municipality. To learn more about this bill’s details you can read the NJ License Transfer Statute Article linked here.
Which License is Right for You?
How do you know which license is right for you? Call a professional! I am a licensed real estate agent with Delaney Restaurant Realty, a business sales consultant, and liquor license appraiser in NJ. If you are looking to value, buy, or sell a liquor license, a restaurant business, or both with the real estate, I’m your girl! Don’t hesitate to contact me!