Alaska brewers sue state alcohol board on entertainment rules

a brewery
A sign for Grace Ridge Brewing on the side of its taproom on Feb. 27, 2024. (Jamie Diep/KBBI)

It’s a slow afternoon at Grace Ridge Brewing, but it’s hardly quiet. The sound of machinery whirred throughout the Homer taproom as co-owner Sherry Stead talked about starting the brewery eight years ago with her husband, Don.

“Don wanted to open a brewery to make good beer, but mostly to be part of the community and to be able to offer a few year-round jobs in Homer,” Stead said.

Grace Ridge is one of three breweries and wineries suing the Alaska Alcoholic Beverage Control Board and Joan Wilson, the director of the Alaska Alcohol & Marijuana Control Office, over rules on offering live entertainment. Up until the beginning of this year, state laws banned breweries and wineries from having live entertainment on site.

A Senate bill that took former state senator Peter Micciche — who is now the Kenai Peninsula Borough’s mayor — nearly 10 years to create allows breweries to hold four events a year with live entertainment. Businesses must spend $100 to apply for a permit every time and they must pay double that to apply for a permit within three days of an event.

Stead said Grace Ridge serves as a hub for community events and fundraisers but the restrictions limit what people can do there.

“We love being a community spot. And we’ve had singers want to come and practice. We’ve had play people want to come and practice and we’re just like, ‘no,’” she said.

Anchorage brewery Zip Kombucha is another plaintiff in the case. Owner Jessie Janes said he started the business in a Jewish synagogue by making kombucha, a fermented tea drink.

Over time, Zip got its own facility and staff added various alcoholic drinks including cider and hard kombucha. He said initially they had a restaurant license and held open mic events, dance classes and more. But, when they changed to a brewery license, the rules prevented them from holding those events.

“I think that the state government doesn’t really have the constitutional right to pick and choose which businesses they think should succeed and fail or have priorities over others,” he said. “And I think that’s all these laws are really meant to do is give one business type preference over another business type.”

Janes said some breweries apply for full-service licenses as well, but they are expensive. He said they can cost up to $300,000.

Pacific Legal Foundation is representing the breweries in the lawsuit. Attorney Donna Matias said that by not allowing live entertainment, the law is a clear violation of freedom of speech under the state and federal constitutions.

“It’s not just, ‘I’m speaking words,’ or ‘I’m writing words,’ it’s performances, it’s theater, it’s poetry, it’s all, all of that is considered protected by the First Amendment,” she said.

By only restricting entertainment for certain businesses that serve alcohol, Matias said the rules also violate the equal protection clause of the state constitution.

Alaska Assistant Attorney General Kevin Higgins said in an email statement the state is considering filing a motion to dismiss the case.

“We have seen a copy of the complaint and are considering whether to file a motion to dismiss before we file an answer,” Higgins wrote. The state will have 40 days to respond once it has officially been served.

The lawsuit doesn’t have the support of the Brewers Guild of Alaska. The guild works to develop craft brewing in the state through holding conferences and working to change laws. Board president Lee Ellis said that attempting to change things through a lawsuit takes a long time. It also only targets one issue breweries face.

“From our standpoint, the sooner we start looking at further legislative changes, to enhance privileges of manufacturers across the state, the sooner we’ll probably reach those goals,” he said.

But Jason Davis, owner of Sweetgale Meadworks & Cider House in Homer signed onto the lawsuit. He started his business three years ago and is known for sourcing most of his ingredients locally on the Kenai Peninsula. He said while they stay busy in the summer, the restrictions on live entertainment keep them from having events with performers to bring in more business.

“I’m often asked by musicians if they could perform out on my patio, or if they could announce to their fans that they’re going to be having a pop up live performance here,” he said. “And it’s something that would be fun for me, fun for my customers, and it would be a great way of bringing in more business, especially during the slower winter months.”

At the end of the day, Davis says winning the lawsuit would be a small step towards leveling the playing field between breweries and bars.

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