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New Mexico’s New Liquor Laws Make Licensing More Affordable | Legislature | New Mexico Legislative Session


New on the Café Pasqual’s menu: Prickly Pear Margarita, Bloody Maria Especial, Naughty Martini.

(You might have to try the martini to find out why it’s nasty.)

Under the state’s revised liquor license system, the popular downtown restaurant is able to offer liquor for the first time in more than 40 years of operation.

“It’s something we wanted from day one, to have a full dining experience,” said owner Katherine Kagel. “So many customers have been disappointed over the years – they couldn’t get a drink. And now they can.

A bill signed into law by Governor Michelle Lujan Grisham in 2021, which took effect July 1, opened the door to spirits sales for small restaurant businesses like Café Pasqual’s, which previously could obtain a license issued by the ‘state at an affordable price to sell beer and wine, but would have had to pay up to $500,000 to get a liquor sales license, or rent one, from someone who already had a license.

Kagel said it was a price she couldn’t afford.

Restaurateurs with new and long-term businesses can now purchase liquor licenses from the state for as little as $1,550 or as much as $10,000 per year.

The new law also allows home delivery of alcohol with food orders from restaurants.

Many New Mexico restaurants are embracing the new business plan.

According to data from the state Department of Regulation and Licensing, more than 100 dining establishments have been licensed since July 1 to offer wine, beer and spirits, including Joe’s Dining in Santa Fe, which offers a cocktail menu featuring New Mexico spirits.

Under the new system, a business that has held a beer and wine license for at least a year, which costs $1,050, can obtain a license to sell New Mexico spirits for an additional $500. The option has proven popular. So far, 62 restaurants in the state have been approved for this license, compared to 56 approved for the full liquor license for $10,000.

As of Friday, there were 16 license applicants awaiting approval, while 34 restaurants were allowed to deliver alcohol with food orders.

It’s a big change from a decades-old system long criticized as prohibitively expensive for business and a monopoly controlled by a small number of licensees who rented and traded a limited number of state liquor licenses. like high-priced real estate. Proponents say the new system provides a fairer deal for restaurateurs looking to thrive after nearly two years of business operations disrupted by the coronavirus pandemic.

“It was designed for economic development, said Andrew Vallejos, director of alcohol control for the Department of Regulation and Licensing.

Based on conversations he’s had with restaurateurs, Vallejos said, “It really gives the restaurateur the ability to give the customer exactly what they want.”

The new liquor license for restaurants in the state allows businesses to serve a customer only three alcoholic beverages with dinner, he said. Restaurants must also show that at least 60% of their profits come from the sale of food products.

Most restaurants “average 10-20% of alcohol sales,” he added.

Roland Richter, owner of Joe’s Dining on Rodeo Road, said his longtime restaurant recently got approval to offer New Mexico spirits. And there are plenty of quality products in the state, he added, citing “good rye” from a Taos distillery and apple brandy from Santa Fe Spirits.

The new license achieves at least two goals, he said: It supports New Mexico’s distilleries and makes his restaurant more appealing to diner customers, especially those who dine in groups. If only one person in a group of six wants an aperitif, he said, the whole group is more likely to choose a place that serves alcohol over another.

He estimates that his business sees an increase in profits of $100 to $200 a day from the sale of alcohol.

Several Santa Fe restaurants are gearing up to sell booze, including El Palacio on Palace Avenue downtown, a small, family-run establishment known for its breakfast and lunch offerings. The change will allow the restaurant to expand into dinner service.

“Breakfast is a lot of work for little money,” says owner Damian Muñoz. “Dinner is a better deal. When you go out to dinner, you – even me – want a beer.

The Santa Fe City Council recently approved his application for a full liquor license. He is working with a bartender friend to design a drinks menu and hopes to start offering dinner and drinks within a month or so.

Other local businesses, such as the soon-to-open Mexican restaurant Dos Amigos Sport, are still awaiting city approval to offer spirits.

Caley Shoemaker, founder and chief distiller of Altar Spirits in the Railyard, said the restaurant, which opened in December, has seen business pick up after securing a liquor license and city approval . When people come for fajitas and want a drink that complements them, “a wine margarita isn’t as good as an actual margarita,” she said.

“If we have people visiting [Santa Fe] who want a good cocktail, they will look ahead and see who has a margarita,” Shoemaker said. “Having this ability to have more choices available to customers is an economic boon.”

Sam Gerberding, who manages the Inn of the Governors restaurant and Del Charro, served as president of the New Mexico Restaurant Association when the new law went into effect in July. He said it may be too early to see the full economic effects of the liquor licensing overhaul because it happened in the midst of the pandemic when businesses were just trying to survive. This might have delayed the licensing of many restaurateurs.

“We were all so preoccupied with other situations,” he said. “I think people are just starting to say, ‘We can relax and start thinking about how to invest money in the future.’ “

Despite the value of a liquor license — “especially in a city that’s so big for margaritas,” Gerberding said — it comes with built-in challenges. Most restaurants that add spirits will need to hire more employees and ensure they are properly trained.

“Pouring draft beer and pouring a glass of wine is much easier than making cocktails,” he said. “It adds another dynamic on top of everything. You can take a 20-year-old, who is pretty sharp, and teach them a few beers and a good, focused wine list, but hiring someone who can make every drink under the sun that people want is a huge change.

Servers must also be prepared to recognize and deal with an intoxicated customer, he added.

Kagel said his restaurant had a two-drink limit for diners and no bar was set up for those who only wanted drinks.

Richter also said he doesn’t have a bar and isn’t pushing the new liquor option at Joe’s Dining.

“We’ve never had people come and sit at the counter to drink, and that hasn’t changed since we got the license,” he said. “We don’t encourage it.”

Kagel recalled that visitors from outside New Mexico had previously expressed surprise that Café Pasqual’s did not serve alcohol.

“Finally, New Mexico State has caught up with the real world,” she said.

One of his regular customers, Bill Fisher of Santa Fe, said he liked the new state law. He couldn’t understand why, for years, he hadn’t been able to buy a cocktail to go with his lunch or dinner at Café Pasqual’s.

About a month ago, when he discovered margaritas were on the menu, he ordered one at brunch.

“It was pretty amazing,” he said. “Awesome, just awesome.”