Brewery, Craft Beverage & Alcohol Law
Montague Law advises breweries, distilleries, wineries, cideries, and craft beverage companies on the regulatory, corporate, and transactional challenges unique to the alcohol industry. From startup taproom operations navigating their first federal and state permits to established producers pursuing distribution expansion and M&A transactions, our team brings deep familiarity with the three-tier system, TTB compliance, and the commercial dynamics that define the craft beverage sector.
The alcohol industry is one of the most heavily regulated sectors of the U.S. economy, governed by overlapping federal, state, and local regulatory frameworks that touch every aspect of operations — production, labeling, distribution, retail sales, marketing, and taxation. Successfully operating in this environment requires counsel that understands both the regulatory requirements and the business realities of craft beverage production. Montague Law provides that combination.
Federal & State Licensing
Operating a legal alcohol production or sales business requires a web of federal and state permits and licenses. Montague Law advises on TTB (Alcohol and Tobacco Tax and Trade Bureau) permit applications for breweries, distilleries, and wineries, state manufacturer and retailer license applications, local business permits and zoning approvals, and the ongoing compliance obligations that attach to each license. We manage the application process from initial filing through approval, and we advise on the operational restrictions and reporting requirements that apply to each license type.
Distribution & Three-Tier System Compliance
The three-tier system — which separates production, distribution, and retail into distinct licensed tiers — is the foundational regulatory framework for alcohol in the United States. Montague Law advises producers on distribution agreement negotiation and termination, franchise law compliance in states with protective distribution statutes, self-distribution options where available, alternating proprietorship and contract brewing arrangements, and the regulatory implications of direct-to-consumer shipping. We help producers design distribution strategies that comply with the three-tier system while maximizing market reach.
Taproom, Tasting Room & Retail Operations
On-premise consumption at the production facility has become a critical revenue channel for craft beverage producers. We advise on the licensing, zoning, and regulatory requirements for taproom and tasting room operations, including local permitting, occupancy and health code compliance, entertainment licensing, food service requirements, and the increasingly complex rules governing to-go sales, growler fills, and on-site consumption of products made by other producers.
Labeling, Marketing & TTB Compliance
Alcohol labeling and advertising are subject to detailed TTB regulations, state-specific requirements, and FDA food labeling rules that vary by product type. Montague Law advises on Certificate of Label Approval (COLA) applications, mandatory and voluntary labeling content, health and environmental claims, digital marketing and social media compliance, promotional event regulations, and the rules governing branded merchandise and sponsorship arrangements. We help producers navigate the labeling approval process efficiently while avoiding enforcement actions.
Craft Beverage M&A & Investment
The craft beverage industry has experienced significant M&A activity as large beverage companies acquire craft brands and private equity firms invest in growth-stage producers. Montague Law advises on the unique considerations in alcohol industry transactions — including TTB license transfers, state license change-of-ownership requirements, distribution agreement assignment and termination implications, brand and trademark valuation, and the regulatory approvals required for changes in control of licensed businesses. We represent both buyers and sellers in transactions that require navigating alcohol-specific regulatory requirements alongside standard M&A deal mechanics.
Contract Brewing & Alternating Proprietorships
Contract brewing and alternating proprietorship arrangements allow beverage companies to scale production without investing in their own facilities. We draft and negotiate contract brewing agreements, alternating proprietorship arrangements, and co-packing agreements that address production scheduling, quality control, ingredient sourcing, intellectual property protection for proprietary recipes, regulatory compliance responsibilities, and the allocation of liability for production-related issues. We also advise on the TTB and state regulatory requirements that govern these arrangements.
Cannabis-Infused & Non-Alcoholic Beverages
The growing market for cannabis-infused beverages, CBD drinks, and functional non-alcoholic beverages has created new opportunities — and new regulatory complexity — for beverage producers. We advise on the regulatory frameworks governing THC and CBD beverages, the intersection of alcohol and cannabis licensing restrictions, FDA compliance for functional ingredient claims, and the commercial arrangements needed to bring these products to market through appropriate distribution channels.
Illustrative Engagement: Regional Craft Brewery Expansion
A craft brewery with strong local brand recognition and taproom revenue engaged Montague Law to advise on a multi-state distribution expansion and a minority investment from a strategic beverage industry investor. Our team negotiated distribution agreements in three new states — each with different franchise protection statutes and termination requirements — structured the minority investment to preserve the founders’ operational control while providing the investor with board representation and information rights, secured TTB approval for updated labels designed for broader retail distribution, and advised on the licensing requirements for interstate direct-to-consumer shipping to the brewery’s existing customer base.
This illustrative engagement is a hypothetical composite and does not represent any specific client matter. It is provided to demonstrate the types of work Montague Law handles for craft beverage clients.
Frequently Asked Questions
What licenses do I need to open a brewery?
At minimum, you will need a federal Brewer’s Notice from the TTB and the applicable state manufacturing license. Depending on your state and business model, you may also need a state retail license for taproom sales, a local business license, zoning approval, health department permits, and potentially a food service license if you serve food. We conduct a comprehensive licensing assessment for each new brewery project and manage the application process.
Can I self-distribute my beer/spirits?
Self-distribution availability varies significantly by state. Some states allow manufacturers to self-distribute without restriction, others permit it up to certain volume thresholds, and others require all distribution to flow through licensed wholesalers. Additionally, some states have franchise protection laws that make it very difficult to terminate a distribution relationship once established. We advise on the distribution options available in each target market.
What happens to my distribution agreements if I sell my brewery?
Distribution agreement assignment in an acquisition depends on the agreement’s terms and the applicable state’s franchise laws. Many states require distributor consent to assignment or provide the distributor with termination rights upon change of control. These provisions can significantly affect deal structure and valuation. We advise both buyers and sellers on the distribution implications of brewery transactions and negotiate with distributors as part of the M&A process.