Booze Delivery Apps Drawing Attention of Regulators

In a world where it seems every other startup wants to be known as the “Uber for _______,” call these companies the “Ubers for booze.”  Tap an app on your phone, and have beer, wine or liquor delivered to your door by the likes of Ultra, Klink, and new entrant BrewDrop, which just launched in Austin.

And just as Uber drew government scrutiny as it moved from startup to industry upstart, it should not be surprising that some of these companies now being targeted by alcohol regulators. The first casualty is Ultra, whose operations have been shut down in Washington, DC, by the city’s Alcoholic Beverage Regulation Administration [ABRA].

The crux of the DC regulator’s argument against Ultra is that, while the booze orders are actually fulfilled by Ultra’s partners, which are licensed to sell liquor in DC, Ultra itself is also required to have a license because it is the one that processes and accepts the payments. ABRA set forth this position in an advisory opinion handed down in March in reference to another would-be competitor, Klink, for its part, notes that it does not actually involve itself in the transaction and remains in operation in Washington, DC.

So, for now, Ultra’s deliveries are grounded in DC, but remain ongoing in at least one DC suburb as well as several other cities including Chicago and New York. The company’s website indicates it also intends to expand soon to Boston and Los Angeles.  Expect regulators to pay attention when they do.


Launch of New Maryland Distillery Highlights Regulatory Hurdles

The Baltimore Sun had a great feature this weekend on the launch by two native Marylanders of the state’s first distillery in decades.   Blackwater Distilling, and its initial offering Sloop Betty hand-crafted vodka, aims to revive the Old Line State’s long dormant, but once proud, liquor industry.

I stumbled upon Blackwater’s website one evening back in the fall while researching whether anyone was still making Maryland Rye.  I was spurred by rye whiskey’s increasing popularity (dare I say trendiness?) and my memory of this scene from that great American novel, All the King’s Men:

The first afternoon I walked down the beach, past the Stanton place, which was cold and hollow-looking beyond the dripping leaves, and on out to the Irwin place, where Judge Irwin put me in a chair with my heels to the fire and opened a bottle of his choice old Maryland rye to give me a drink, and invited me to dinner the next night.

So it was with great pleasure that I learned someone was actually trying to bring distilling back to Maryland.  I managed to connect with Chris Cook and we had a great conversation about their vision, which involved starting with clear spirits like vodka and gin (which do not require aging) and ultimately offering a rye whiskey made right here in Maryland.

It is great to see that their vision is now becoming a reality, especially considering the regulatory hurdles described in the Sun article.  The story describes the “seemingly endless negotiations with federal and state regulators” the Blackwater guys had to endure and the fact that no one in recent memory had even applied for a Maryland distiller’s license, let alone get approved for one.  But Blackwater navigated these uncharted waters with apparent aplomb, and their license is now hanging on the wall of their Kent Island distillery, and at least one of the regulators responsible for issuing such licenses (and who has a memory of actually doing so) appears to be rooting for them (again, from the Sun article):

“No one can compete with the big boys,” [Lou] Berman [who started with the state’s alcohol and tobacco regulatory division in 1976] says. “They have to make a product with a local hook — they have to make something that’s excellent. And if it’s good, it will become part of my bar. Here in Maryland we don’t eat Virginia crab. We don’t eat Philippine crab. We try to drink local beer. Those of us that want to support the home team will be no small part of their market.”

Count me in as well.  I’ll buy Sloop Betty when it is ready, but I really can’t wait to offer my guests some Maryland Rye.