Buying Beer In Colorado: Grocery Store Rules Explained

Colorado has some unique alcohol laws that are quite different from other states. Before recent changes, liquor stores were the only establishments able to sell beer, wine, and liquor. Grocery stores could only sell low-strength beer (3.2%), which was not popular. However, in 2019, Governor Hickenlooper signed Senate Bill 243, allowing grocery stores to sell full-strength beer and letting employees aged 18 or older sell beer. This bill also expanded the number of grocery locations allowed to sell beer, wine, and liquor. Now, consumers can buy any beer, regardless of alcohol content, from grocery stores daily from 8 am to midnight.

Colorado's taprooms and tasting rooms are popular destinations for suppliers and consumers

In Colorado, consumers can buy beer and malt beverages at grocery stores. However, liquor is typically sold through package stores in the state.

Colorado's wine industry, with more than 110 producers, offers settings and wine-tasting rooms like no other wine region in the world. The state's unparalleled natural beauty has attracted up-and-coming wineries, and its wines are gaining recognition throughout the US and beyond. Colorado's wineries are known for their innovative blends, such as apples and chardonnay, and their focus on lesser-known grape varieties.

The state also has a thriving craft beer scene, with many breweries expanding and opening new taprooms. Some of the breweries that have recently expanded or plan to expand their taprooms include Sanitas, Upslope, Incantation, Downhill Brewing, Lone Tree Brewing, Westbound & Down Brewing, Cerebral Brewing, Verboten Brewing & Barrel Project, Living the Dream Brewing, Westfax Brewing, Denver Beer Co., and Breckenridge Brewery.

Colorado's Distillery Pub License further adds to the appeal of its taprooms and tasting rooms. This license allows distilleries to operate more like pubs, serving their spirits and food to consumers on-site.

Alcohol consumption in Colorado varies depending on the category of alcohol

Until recently, liquor stores were the only establishments allowed to sell beer, wine, and spirits in Colorado. Grocery stores could only sell low-strength beer (3.2%), which was not popular among consumers. This gave liquor stores a monopoly on beer, wine, and liquor sales, with grocery stores locked out of selling full-strength beer and unable to sell wine and spirits.

However, in 2019, Governor Hickenlooper signed Senate Bill 243, which allowed grocery stores that previously sold 3.2% beer to sell full-strength beer. The bill also permitted employees aged 18 or older to sell beer and expanded the number of grocery locations allowed to sell beer, wine, and liquor over the next 20 years.

Colorado's alcohol laws continue to evolve, with new ballot initiatives seeking to further change the retail landscape for liquor and craft beer in the state. For example, Initiative 121, which would allow any licensed seller of beer to sell wine starting in 2023, could cover grocery and convenience stores.

The state's alcohol consumption reflects these legal differences. For instance, over the previous five years, the compound annual growth rate (CAGR) for spirits was 8.78%, while beer only grew at 0.76%.

Colorado's taprooms and tasting rooms have become popular destinations, attracting suppliers and consumers nationwide. The state was an early leader in popularizing craft beer and has since embraced the craft spirits category.

The sale of alcohol in Colorado is regulated by the Colorado Liquor Enforcement Division, which oversees licensing and enforces state laws and regulations. The state also has specific hours during which alcohol can be sold and strict open container laws.

All businesses dealing with alcohol in Colorado must be licensed

Colorado has a dual licensing authority for the state's licensed retailers and special event permittees. All businesses that deal with manufacturing, distributing, selling, or importing alcohol in Colorado must be licensed. The Colorado Liquor Enforcement Division oversees and regulates the beverage alcohol market in Colorado. The agency is responsible for licensing, tax collection and auditing, fee collection, and enforcing the state’s laws and regulations. It oversees all tiers, including manufacturers (breweries, wineries, distilleries, cideries, meaderies, and rectifiers), wholesalers or distributors, and retailers (on-premise and off-premise).

The process of obtaining a license in Colorado varies depending on the type of business and the specific local regulations. For new license applicants, retailers typically need to demonstrate the neighborhood's needs and desires for each new liquor license. Local governments will usually conduct a background investigation of the individuals involved with a retail liquor license application. This includes a review of the applicant's criminal history, liquor license violation history, and ownership interests in other liquor industry members.

There are different types of licenses available, depending on the nature of the business. For example, the Distillery Pub License in Colorado allows distilleries to operate more like pubs, serving their own spirits with food on-site. Manufacturer Licenses (Distilleries) allow license holders to conduct tastings and sell their spirits directly to customers on the licensed premises of the distillery and at one other approved salesroom location.

The requirements and regulations for alcohol licensing in Colorado are extensive and subject to change, so it is essential for businesses to stay informed and comply with the relevant laws.

Only wine can be shipped directly to consumers in Colorado

Colorado has some unique laws regarding the sale of beer, wine, and spirits, which differ from most other states. Until recently, liquor stores were the only establishments able to sell beer, wine, and liquor. Grocery stores could only sell low-strength beer (3.2% ABV), which few people bought. However, in the last few years, there have been some changes to these laws.

In Colorado, you can buy beer and malt beverages in grocery stores, and liquor is typically sold through package stores. Gas stations can also sell beer, but only between the hours of 8:00 am and 12:00 am.

When it comes to shipping alcohol, Colorado has specific regulations in place. Only wine may be shipped directly to consumers from suppliers, while shipping spirits and malt beverages, such as beer, is prohibited. This means that wine can be delivered to residential homes, but beer cannot. However, there are some licensed retailers that are permitted to deliver beer and other alcoholic beverages to consumers off the licensed premises, such as restaurants and taverns. This temporary law was passed during the COVID-19 pandemic and is in effect until June 30, 2025.

It is important to note that there are strict requirements and restrictions for shipping wine directly to consumers in Colorado. For example, the package must be clearly marked as containing alcohol, and an adult over the age of 21 must be present to sign for the delivery. Additionally, individuals without a proper license who attempt to ship alcohol through carriers such as USPS, UPS, or FedEx may face legal consequences.

Colorado's alcohol excise tax varies depending on the type of beverage

The tax is collected only once within the state, and the liability for payment falls on the beverage manufacturer or the licensee that first receives the alcoholic beverages. These businesses are responsible for collecting and remitting the tax to the Department of Revenue and must file a report for each month's sales by the 20th of the following month.

The tax rates for different types of alcoholic beverages are as follows:

• Fermented malt beverages with not more than 3.2% alcohol by weight or between 0.5% and 4.0% alcohol by volume are taxed at 13.33 cents per liter.
• Beverages containing between 0.5% and 7.0% alcohol by volume made from the fermentation of natural juice from apples or pears are taxed at 8.33 cents per liter.
• Beer and beverages obtained from the fermentation of barley, malt, hops, or similar products with more than 3.2% alcohol by weight or 4.0% alcohol by volume are taxed at 8 cents per gallon.
• Wine and fortified wines containing between 0.5% and 21.0% alcohol by volume are taxed at 28 cents per gallon.
• Distilled spirits, including brandy, rum, whiskey, and gin, are taxed at $2.28 per gallon.

It is important to note that Colorado has some of the lowest alcohol excise taxes in the country, and there have been discussions about increasing these taxes to address the state's high drinking death rates. However, lawmakers have shown little interest in making alcohol more expensive, and the alcohol industry holds significant influence in Colorado politics.

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