Article Pulled From the South Florida Business Journal
Applications to enter Florida’s annual quota liquor license drawing are now open, providing an opportunity for residents and businesses alike.
Each year, the Florida Department of Business and Professional Regulation’s (DBPR) Division of Alcoholic Beverages and Tobacco runs a lottery to award a set number of quota liquor licenses in different counties, depending on population growth in each county. This year, the DBPR is awarding 49 licenses statewide, including two in Miami-Dade County, one in Broward County and three in Palm Beach County.
The application process runs until Sept. 29, according to the DBPR.
While liquor licenses are common throughout Florida, these quota licenses stand out in how versatile – and therefore valuable – they are, said Valerie Haber, a shareholder at Miami-based GrayRobinson who specializes in alcohol-related law.
Quota licenses, she said, are not limited in how the owner of one of these licenses can use them. While a normal license may only apply to bottle sales or on-premise consumption, quota licenses can be used for any and all alcohol sales. Quota licenses also don’t have a requirement for food sales like standard beer and wine licenses do.
That, plus the limited supply, means whoever wins one of these licenses in the lottery drawing could be in for a six-digit sale of that transferable license, easily.
“Because they are limited, they’re sort of akin to the taxi medallions in New York City,” Haber said. “They have an inherit value because they’re in low supply and in high demand.”
The asking price for a Palm Beach County-applicable quota license, for example, is $385,000 on Florida License Auctioneers.
It costs just $100 per application to enter the drawing. Individuals can apply on behalf of themselves, as well as through business entities, allowing someone to submit multiple applications.
However, applicants must be at least 21 years old to enter and have a clean criminal history over the past 15 years to be eligible.
Chances of winning a quota license, much like in any lottery, are slim. In 2020, there were 23,655 entries deemed qualified by the DBPR, but there were only 62 available licenses. That’s a 0.003% chance to win.
Those who win must pay an initial fee of $10,750 to activate the license and claim it, Haber said. It comes with a $1,820-per-year license fee, and if any license owner wants to sell its license within 36 months of when it was issued, the owner must pay $27,300 to the state.
Those fees may seem steep, but depending on what county the license is designated to, it shouldn’t be difficult to more than triple the investment, she added.
The process to be approved for a license is long, Haber said, so small-scale mom-and-pop operators rarely apply for the license as a first resort.
For example, while the application process for the 2020 quota liquor license drawing opened in August 2020, the winners weren’t announced until late June 2021. Therefore, these quota licenses aren’t a speedy option for those who need a license in the near future.
VISIT DBPR’s website here for more details.