LOBBYIST REPORT

 Dear ALBA Members,

The  2025 session of the Arizona Legislature continues. While the formal  hearing process has ended, there is still a considerable amount of work  to be done. We are approaching the midway in legislative hearings on  various bills. Liquor is no exception, as there are five distinct bills  affecting the liquor industry, with some in the Arizona House of  Representatives and some in the Arizona State Senate.

Here is the status of this session’s bills related to spiritous liquors:

SB 1556: Adult Hemp Beverages; Policies; Procedures

This  bill was introduced in the Senate by Senator TJ Shope. It was passed by  the Senate Committee on Regulatory Affairs, passed the entire State  Senate, and then did not proceed further in the House. The bill would  have had a particular impact on the Arizona liquor industry, including  Arizona retailers.

Today,  there are few restrictions on the sale of hemp and hemp-derived  products, including beverages. You have probably seen hemp products for  sale, containing some form of THC, in liquor stores and numerous other  settings. SB 1556 would have changed that, in that going forward all  manufacturing, wholesaling, and retail sales of adult hemp beverages in  Arizona would have been required to be licensed by the Arizona DLLC. The  regulation of hemp beverages would have followed, nearly identically,  the regulation of spiritus liquors. However, there would have been no  mandatory participation by a manufacturer, a wholesaler or a retailer.  Arizona retailers could have decided, based on their own profile,  whether or not to sell adult hemp beverages side-by-side with liquor  products.

ALBA  early on supported this legislation. ALBA wants Arizona to follow the  lead of other states which created sales and regulatory structure for  low-dose hemp-derived THC beverages.

These  beverages often contain between five and 10 mg of hemp-derived THC.  This is because the product has similar characteristics to spirituous  beverages, and by all means requires limits on the sale and consumption  of the products as well as the age of customers.

Additionally,  the structure of the DLLC is already fully tested, accepted, and in  place. It seemed like it was a natural to have hemp products  manufactured and sold side-by-side with spiritless liquor products; it  also seems natural to have the supervising agency, the DLLC, also  supervise the manufacturer and sale of adult beverages.

Although  the sale and regulation of adult hemp beverages would have been nearly  identical to the sale and regulation of liquor products, there would  have been some differences:

• The bill placed limits on the amount of THC present in adult hemp beverages, to a lower dose
• The bill  required independent lab testing of products to ensure safety; the  testing must include the potency and amounts of substances listed as  pesticides, etc.
• No product could have exceeded the maximum amount of total THC aloud by per single serving.
• A single  serving of an adult beverage was required to have a volume of at least  200 mL or 6.76 ounces with not more than 10 mg of total THC per  container
• A multi  serve container of adult Hemp beverage would have been required to have a  volume of at least 3.75 mL or 12.68 ounces with not more than 30 mg/L  or .887 mg/ fluid ounces of the container
• No person could have sold any adult hemp beverage product in powdered form or as a concentrate for mixing.
• The bill limited serving sizes of adult hemp beverages
• The bill would have prohibited the mixing of alcohol and hemp beverages 
• Mixing of any food or beverage with an adult hemp beverage would have been prohibited
• No producer  could have used a concentrate containing any derivative of a THC  component that is not a naturally occurring cannabinoid to produce an  adult hemp beverage
• Each sealed  container of adult hand beverage would have been taxed at the rate of  $1.50 per gallon and a proportionate rate if less or greater than a  gallon. 

Although the bill  passed the Arizona Senate, it was not heard in committee in the Arizona  House of Representatives. It is likely that this bill will be  reintroduced in the 2026 legislative session.

SB 1467: Liquor; Consumption; Watercraft

This  bill, also introduced by Senator Shope, would make several changes to  boat-centered alcohol licensing. First, the new authority would only  apply to government licenses. Reportedly, the bill is directed at Tempe  town Lake and the City of Tempe.

The  second change is with respect to the hours for the sale and consumption  of spirituous liquor service on boats. Currently, the lawful hours of  sale are between the hours of 9 AM and 5 PM. The bill extends the time  from 9 AM until 11 PM. Third, currently liquor can only be sold in  conjunction with the consumption of food. That restriction is  eliminated, with the ability to sell solely liquor without any service  of food. Finally, the definition of “boat“ is modified to permit larger  boats; the new definition is between capacity of 15 to now 100.

SB 1467 has passed the State Senate, the House Commerce Committee and is now ready for a final vote by the entire House. 

HB 2741: Liquor Sampling; Reporting; Requirements

House  Bill 2741 was introduced at the request of Total Wine. HB 2741 cleared  the House of Representatives, and is ready for a full vote by the State  Senate.

The  bill deals with reporting requirements and recordkeeping for sampling  by a beer and wine, store retailer or a liquor store license retailer  that have sampling privileges. Instead of using a singular,  Department-maintained system for maintaining the records and reports  that are required by the statute, both types of licenses will be able to  use any reasonable means for maintaining the records and reports that  are required.

The  statute requires both types of licenses to report scheduled samplings  to the DLLC once every two weeks. The bill provides that reporting to  the Department by a retailer can be by any reasonable means.

HB 2905: Craft Producer; Festival; Fair; License

This  bill was introduced at the request of the craft brewer, craft  distillery and farm winery industries. The effect of the bill is to  consolidate the three types of festival license and the three types of  county or state fair license. Now, one basic license authority will  apply to all three types of sampling and sale settings. This bill passed  the House and Senate and has been signed into law by Governor Hobbs.

HB 2411; Alcohol Consumption; Golf Courses

HB  2411 would have permitted individuals at golf courses with yardage in  excess of 1000 yards to bring their own alcohol onto the golf course,  with the permission of the golf course liquor licensee. The bill would  have created an exception to the near-universal rule that a person  cannot bring alcohol onto a licensed premises. The bill was voted out of  the House of Representatives, but never received a hearing in the  Senate. Most likely, the bill is dead for the remainder of the  legislative session. 

 ALBA  will continue to monitor all five liquor bills that are proceeding  through the legislature. ALBA‘s ongoing goal is to preserve and protect  the rights of Arizona retail licenses and to continually look for new  retail opportunities for these licensees. 

Respectfully,

Don Isaacson
ISAACSON LAW FIRM, P.C.