Acidified Foods
In terms of food safety and the potential for hazardous microbial growth, foods are classified based on their acidity and water availability using two values: pH and water activity. The following from Cornell University’s Low Acid Foods Fact Sheet explains the two values: “The pH refers to the degree of acidity in a food and it is measured with a pH meter. Foods with a pH above 4.6 are classified as low acid. Examples are meats, milk, eggs, vegetables and formulated products such as soups, baked products and entrees. Water activity refers to the water in the food that is available (free) to support microbial growth. It is measured with a water activity meter in a scale from 0 to 1. Foods with values below 0.85 are considered non-hazardous regardless of their acidity, because they do not support the growth of harmful bacteria.”
Acidified foods are prepared foods to which some form of acid is added to make the food “acidified.” Since the food is not naturally acid, and therefore potentially hazardous if not handled properly, there are different regulations for “acidified foods.” The technical definition according to the US Food and Drug Administration states “An acidified food (AF) is a low-acid food to which acid(s) or acid food(s) are added and which has a finished equilibrium pH of 4.6 or below and a water activity (aw) greater than 0.85.”
According to SMADC’s Guide to On-Farm Processing of Acidified Foods, acidified foods “include, but are not limited to, beans, cucumbers, cabbage, artichokes, cauliflower, puddings, peppers, tropical fruits, and fish, singly or in any combination.” These foods may be called “pickles” or “pickled” but these terms are not technical terms for the purposes of regulation.
Agriculture Conservation Easement – Purchased or Donated
According to the American Farmland Trust, a conservation easement is “a deed restriction landowners voluntarily place on their property to protect resources such as productive agricultural land, ground and surface water, wildlife habitat, historic sites or scenic views.” An easement is used by landowners to allow third-party monitoring and enforcement of the restrictions covered by the easement, to better protect the land.
Conservation easements are specific to each property and are written in such a way to be flexible and best suit each individual landowner. An entire property can be covered by an easement, or just portions of the property. Commercial development related to farming and/or construction of farm buildings may or may not be permitted. Typically, farming activities are not limited, but it is common for an easement to require soil and water conservation practices to be implemented.
Easements can be purchased or donated. Purchased agricultural conservation easements compensate landowners for keeping their land available for agriculture. Programs for purchase vary by county in Maryland. Donated easements are typically entered into by the landowner in order to receive tax credit for the easement and facilitate passing the land on to future generations in a family. The Maryland Environmental Trust has a helpful information on their Frequently Asked Questions page.
Agriculture Marketing Professional or AMP
This title is an unofficial name given to an agriculture or economic development specialist who has dedicated authority to assist farmers in their county (and/or region) with matters relating to expansion of farm products and/or farm businesses. If your county has an AMP, this is the first person to contact if you are interested in developing a value-added agriculture product or venture for your farm, as they are familiar with county regulations and county officials in multiple departments. These specialists often do much more than “agriculture marketing” and are the go-to resource for value-added producers.
Agritourism or Agro-tourism
These terms refer to the increasingly popular recreational and educational activities that are now available on some farms, as a way to expand direct marketing and draw more visitors and supporters of the farm. According to the University of Maryland Extension, these activities include “retail sales, hay rides, corn mazes, pick-your-own operations, and use of woodlands on farms for hunting, hiking, horseback riding, and other activities.” The activities offered by farms can vary widely, and include only one of the above examples, or all of them. In addition, a farm may choose to offer educational programs for tour groups or schoolchildren. Some farms will take these activities to a deeper level, such as providing lodging accommodations through a bed and breakfasts or offering farm-stays.
Better Process Control Schools
If the product you intend to produce is an acidified food or a low-acid food, in Maryland, you may be required to become certified in the production of such foods. This is accomplished by attending a Better Process Control School, which were developed by the FDA specifically for this certification. If you are using a shared kitchen or other production space, you may not need certification, but only to confirm that the supervisor of the space is certified. It is best to confirm exactly what will be required before you begin production, and as the regulatory agency for MD, the MDH Center for Food Processing can advise you. More information can also be found on SMADC’s Guide to On-Farm Processing of Acidified Foods and the Grocery Manufacturers Association website.
Certified Food Service Manager
A Certified Food Service Manager is an individual who has the required training to operate or oversee a potentially hazardous food establishment. What qualifies as a food establishment varies, and the level of certification may vary depending on the foods prepared and sold. These may include restaurants, facilities at non-profit organizations, and mobile units. The requirements for this certification vary by county and food establishment – find out more by reviewing food safety information on your county’s health department website.
Co-packer
Also known as a contract manufacturer, a co-packer is a company that packages food for clients who produce raw or processed food products. A co-packer may be used if the food producer (client) does not have the expertise or capacity to package their own products.
Cottage Foods
Generally speaking, cottage foods are non-potentially hazardous foods that can be made or prepared in a home or farm kitchen and sold directly to consumers at public events, without a license from either the state or county. States have the authority to define cottage foods differently, based on the federal definition. Maryland defines a cottage food business as: “a business that a) Produces or packages cottage food products in a residential kitchen; and b) has annual revenues from the sale of cottage food products in an amount not exceeding $25,000.”
In addition, the state further defines cottage foods as “non-potentially hazardous food as specified in COMAR 10.15.03.27 that is offered for sale only at a farmers market or public event.” In May 2018, Maryland legislature passed a bill expanding where cottage food bakers can sell their products; in addition to public events, home bakers will now be allowed to sell directly from home or through mail deliveries. Further changes to the regulations are forthcoming.
The state provides a generic list of example foods that are considered “non-potentially hazardous”, including baked goods without hazardous fillings or toppings, canned naturally acid foods (from fruits with a natural pH of 4.6 or less), kettle corn, granola, dry spices, hard candies, chocolates made using commercially manufactured chocolate, and raw unflavored honey. The Maryland Department of Health provides additional information online.
Note – due to the limitations regarding sales (no more than $25,000 annually) and location (must sell at farmers markets or other public events, out of the home or online), the main advantage to the Cottage Food Law is that it provides an opportunity to try out a new product before obtaining a license. But there are fairly extensive packaging and labeling requirements for cottage foods, even without a license, so this option may be less appealing to a producer who may qualify for an On-Farm Home Processing license which allows for a wider range of foods and more flexibility in terms of where the food can be sold.
COMAR
The Code of Maryland Regulations, known as COMAR, includes regulations for food production and processing. Each regulation has a four part number that indicates the department and its agencies and subdivisions responsible for each regulation. For example, the number 10.15.03.27 tells you the title 10 is the Maryland Department of Health, the subtitle 15 is Food, and the chapter 03 is Food Service Facilities Authority. Lastly, 27 is the regulation specific to cottage foods. You can look up any regulation using COMAR online. In addition, there is more information about COMAR at the University of Maryland.
Hazardous Analysis Critical Control Point (HACCP) Plan
A HACCP Plan is a way to prevent contamination of food products during food processing, which can mean any stage of food preparation from production and canning or cooking to packaging and distribution. It is a management system aimed at addressing food safety hazards or risks at “critical control points” – points in the food manufacturing process when a food safety measure can be applied. A food safety hazard can be biological, chemical, or physical, and are specifically dependent on the food being manufactured. A HACCP plan may or may not be required for food processors, depending on the product and scale. Check with your local health department to determine if your food product will require a HACCP Plan at any stage of its production.
Home Rule
In Maryland, counties have the authority to create their own laws and effectively govern themselves, known as “home rule” and 13 counties have adopted home rule. In terms of food safety, these “home rule” counties may have regulations that are more restrictive than the state. However, most home rule counties follow the state regulations for food processing. Two counties – Charles and Prince George’s, as well as Baltimore City, have separate regulations for food processing and provide inspection and licensing, in addition to the state.
FDA
The US Food and Drug Administration (FDA) shares federal oversight of food with the US Department of Agriculture (USDA). Together these administrations oversee food safety, food sold across state borders, wholesale markets, meat and egg products. The FDA specifically has oversight of Acidified and Low Acid Canned Foods, Color Additives, Dietary Supplements, Food Ingredients and Packaging, Foodborne Illness, Food Labeling and Nutrition, HACCP, Infant Formula, Pesticides and Chemical Contaminants, and Seafood.
As mentioned previously, a food process authority (see below) must approve acidified and low acid foods before production, using the resources mentioned above. The FDA maintains a registry of approved facilities.
Food Manufacturer
A food manufacturer is someone who produces a food product (or a component of a food product) and either packages it to sell to customers directly, or to sell to another business that will then sell your product.
Food Policy Council
A Food Policy Council (FPC) is a relatively new type of council that brings together many different stakeholders to address local issues around food in a collective manner. In the past, food issues like location of new grocery stores, establishing a farmers market, or changing regulations for farmers to sell more local foods, would have been addressed as independent issues often without input from other sectors of the food system. An FPC provides a forum for such changes in the food system to be addressed together as a system, so that different sectors can complement each other and strengthen the system as a whole. The structure and size of councils vary widely, but almost all have some relationship to local, city or state government, potentially making policy change easier. In Maryland, there is no state council, but there are many county-level councils, a few regional councils and Baltimore City has its own quasi-council, the Baltimore Food Policy Initiative, based in the Office of Sustainability. Participants often include farmers, grocers, chefs, workers, food processors and food distributors, as well as anti-hunger and food justice advocates, educators, nonprofit organizations, concerned citizens, and government officials. Councils are noted in the county information pages where applicable.
Food Process Authority
A Food Process Authority is a specialist that is either a food or chemical engineer, with expert knowledge of acidification, processing acidified foods, and thermal processing of low-acid foods. They will work with you to evaluate and approve the safety of your recipe and the specific production process, otherwise known as validating your “scheduled process.” Working with this Authority is typically only needed if you are developing a low acid or acidified food. This person will help you submit to the FDA for approval. Currently, SMADC recommends using a Process Authority from the Cornell Food Venture Center as Maryland does not have its own Process Authority. You can also contact the Center for Retail Food, Plan and Process within the MDH to help you find the right Process Authority to help you.
Land Preservation
Land preservation is another term for agricultural conservation easements, but is a broader term that includes all types of land preservation programs. Maryland has a state program, the Maryland Agricultural Land Preservation Foundation (MALPF), in addition to many county level programs (see county information pages for specific contact information).
Low Acid Canned Food
In terms of food safety and the potential for hazardous microbial growth, foods are classified based on their acidity and water availability using two values: pH and water activity. The following from Cornell University’s Low Acid Foods Fact Sheet explains the two values: “The pH refers to the degree of acidity in a food and it is measured with a pH meter. Foods with a pH above 4.6 are classified as low acid. Examples are meats, milk, eggs, vegetables and formulated products such as soups, baked products and entrees. Water activity refers to the water in the food that is available (free) to support microbial growth. It is measured with a water activity meter in a scale from 0 to 1. Foods with values below 0.85 are considered non-hazardous regardless of their acidity, because they do not support the growth of harmful bacteria.”
According to the FDA, a low-acid canned food (LACF) is any food (other than alcoholic beverages) with a finished equilibrium pH greater than 4.6 and a water activity greater than 0.85, excluding tomatoes and tomato products having a finished equilibrium pH less than 4.7. The FDA has a helpful online guide for producers of these products.
Similar to Acidified Foods, LACF are closely monitored and regulated because they can potentially support the growth of pathogens and lead to food safety risks, if not properly handled. There are preservation techniques that can be used, such as pasteurization (in combination with refrigeration), refrigeration, freezing, dehydration and high temperature canning. Typically, these foods are not allowed to be prepared in a home kitchen and sold through retail outlets; a regulated facility must be used.
MALPF
The Maryland Agricultural Land Preservation Foundation (MALPF) was established by the Maryland General Assembly in 1977 and is part of the Maryland Department of Agriculture. The Foundation purchases agricultural preservation easements that forever restrict development on prime farmland and woodland. MALPF settled on its first purchased easement in October 1980. More information can be found on its website, and there are county contacts in all counties of Maryland.
MET
The Maryland Environmental Trust (MET) is a land trust that acts a trustee on behalf of landowners who have land in agricultural conservation easements (i.e. land preservation). The mission statement specifies that MET “works with landowners, local communities, and citizen land trusts to protect Maryland’s most treasured landscapes and natural resources as a legacy for future generations.” For more information, visit their website. County contacts are provided on the county information pages.
MDA
The Maryland Department of Agriculture (MDA) is analogous to the USDA, in terms of jurisdiction over food quality, safety, sales and marketing within the state of Maryland. Therefore, the MDA provides regulatory services for value-added products similar to the USDA. This includes farming practices, post-harvest handling, how animals are grown and how illnesses are treated, and processing of animal products (meats, eggs and dairy).
The mission of the MDA is “to provide the maximum protection possible for the consumer as well as promote the economic well-being of farmers, food and fiber processors and businesses engaged in agricultural related operations.”
MDH
The Maryland Department of Health (MDH) is analogous to the US FDA, in terms of jurisdiction over protecting public health by assuring food safety for food produced and sold locally within the state of Maryland. This includes enforcing federal and state regulations. Similar to the FDA, the MDH is more closely involved with food processing, storage, sales and distribution and less involved with the agricultural side (over which MDA has jurisdiction).
The Office of Food Protection is the main channel within MDH for food licenses. This is the Office to go to for milk and dairy licenses, food processing licenses, plan and process review, and information about cottage foods in Maryland. An additional note – any food that is sold through wholesale channels is automatically under the jurisdiction of the MDA, whereas retail sales may be handled by local health departments.
Non-potentially Hazardous Foods
Using the same metrics for acidified and low acid canned foods, foods with a naturally low pH and low water activity are typically considered non-potentially hazardous. They do not need refrigeration or heat for food safety purposes, but may be refrigerated to extend shelf life. These foods are therefore less regulated and tend to be allowed for sale without permit or licensure, and allowed to be sold whole or prepared in a home kitchen.
Maryland’s Cottage Food Law provides a generic list of example foods that are considered “non-potentially hazardous”, including baked goods without hazardous fillings or toppings, canned naturally acid foods (from fruits with a natural pH of 4.6 or less), kettle corn, granola, dry spices, hard candies, chocolates made using commercially manufactured chocolate, and raw unflavored honey. In addition, fresh, whole, raw fruits and vegetables are considered non-potentially hazardous and may be sold without a license.
Potentially Hazardous Foods
Potentially hazardous foods are foods that could support the growth of bacteria, if not handled properly in terms of temperature or time before consumption. These foods must be kept either hot or cold prior to consumption. Generally speaking, potentially hazardous foods: contain moisture (have a high water activity of 0.86 or above), requires temperature control, or have a high pH (4.7-7.5) making them neutral to slightly acidic.
The U.S. Food Code (2009) identifies potentially hazardous food as “An animal food that is raw or heat-treated; a plant food that is heat-treated or consists of raw seed sprouts, cut melons, cut leafy greens, cut tomatoes or mixtures of cut tomatoes that are not modified in a way so that they are unable to support pathogenic microorganism growth or toxin formation, or garlic-in-oil mixtures that are not modified in a way so that they are unable to support pathogenic microorganism growth or toxin formation.”
These foods are heavily regulated for food safety and must be licensed and prepared in approved facilities.
Processing Licenses:
On-Farm Home Processing License
A Food Processing Plant License for farm owners to process food in a home kitchen located on farm property. Annual revenues from the sale of products processed under this license may not exceed $40,000 annually. Allowable foods include the same non-potentially hazardous foods that are approved under the Cottage Food Law – breads and baked goods without potentially hazardous fillings, canned acid foods, raw unflavored honey, etc. In addition, On-Farm Home Processors may also produce acidified foods (with Better Process School training), dried fruits and vegetables, finfish, and meats (beef, pork, and lamb) that are commercially slaughtered at a USDA regulated facility and sold from the farm only. Other than for meat products, there are no limitations on where these foods can be sold, they can be sold at any venue within Maryland. This license is issued by MDH’s Center for Food Processing.
Food Service Facility
A Permanent or Temporary facility license for any place where food or drink is prepared for sale or service. While these facilities are typically restaurants and grocery stores, they also include such facilities as mobile food carts, market stalls, bakeries, and church kitchens. The food prepared may be served or provided with or without charge, so non-profit organizations offering prepared foods for free will also require this license, but there are reduced fees to license a non-profit. Temporary licenses are used for short-term special events, often using a licensed kitchen that is not connected to the site of food service, or a mobile food cart for actual food preparation. These licenses are issued by your local department of health.
Mobile Food Service Facility
Similar to the above Food Service Facility License, a Mobile Facility is specifically for those facilities that travel mechanically, electrically, or manually to gather food supplies, prepare food, and sell food. This includes food trucks, push carts, and similar water-operated “trucks” or carts. These licenses are issued by your local health department. Some jurisdictions may require additional licensing for mobile vendors.
In April 2017, the Maryland Legislature passed a bill which streamlines the health inspection process for food trucks operating in multiple counties. The bill allows a mobile food vendor to operate within 90 miles of its home base without having to obtain a separate health department license for each county it visits. The new law requires a county health department to issue a mobile reciprocity license to Maryland mobile food service facilities that meet the requirements set forth in the bill.
Retail
To sell a food product “retail” means that you are selling the food yourself, directly to the final consumer. The venue for these sales can vary and include farmers market stands, on-farm stores, online sales, and special events. These businesses are licensed by the local health department where your retail establishment is located. Contact your local health department for more information.
“Right to Farm”
Right to Farm statutes are laws that protect qualifying farmers and ranchers from nuisance lawsuits filed by non-farming residents new to rural areas or residents who later try to restrict farm activities. To be a qualifying farm or ranch, you must use accepted and standard farm practices, in accordance with state guidelines. There are two main resources to help explain right-to-farm in Maryland and the specific protections that are provided county by county: the fact sheet Understanding Agricultural Liability: Maryland’s Right-to-Farm Law, and Maryland’s Right to Farm Statute and County Ordinances. In addition, you can contact the Maryland Agricultural Conflict Resolution Service for help and information.
Rural Legacy
Another type of land preservation in Maryland, the Rural Legacy Program “provides funding to preserve large, contiguous tracts of land and to enhance natural resource, agricultural, forestry and environmental protection while supporting a sustainable land base for natural resource based industries.” The program encourages local governments and land trusts to work together and determine how best to protect their vital working landscapes.
USDA
The US Department of Agriculture (USDA) shares federal oversight of food with the US Food and Drug Administration (FDA). Together these administrations oversee food sold across state borders, food markets, meat products, egg products, and food safety. The USDA specifically has oversight of agricultural and on-farm programs through three departments: Agriculture Marketing Service (AMS) covers dairy, poultry, fruits and vegetables, livestock and seed, organic standards; Animal and Plant Health Inspection Service (APHIS) covers how animals and plants are grown, where they come from, how illnesses are treated, how identified and labeled; and Food Safety Inspection Service (FSIS) covers domestic and imported meat, poultry and eggs (including where these food are an ingredient), HACCP, and meat and poultry sold through direct sales.
Maryland no longer offers inspection of slaughterhouses, so if farmers producing and processing meat products (cattle, swine, sheep, goats and more than 20,000 poultry), they will be required to use USDA-inspected slaughter facilities. However, Maryland has its own inspection and processing programs for farmers producing less than 20,000 poultry annually. Certain animal species can be processed and sold on-farm without USDA inspection, for example: bison, rabbits, emu, but the farms must have an On-Farm Storage License from the Maryland Department of Health.
University of Maryland Extension
The University of Maryland Extension (UME) is a statewide education system within the college of Agriculture and Natural Resources and the University of Maryland Eastern Shore. The education provided is non-formal and available to all state citizens, tailored to specific groups across food and agriculture topics such as food production (including all crops and animals), natural resource management, youth leadership (4-H), nutrition, home gardening, and health and wellness. The information provided is based upon the research conducted at the University of Maryland, College Park, a land grant university.
Value-Added
A term used to describe farm food or fuel products that have been altered or processed, such that they can be sold for a greater value than the original raw product. Alterations and processing include segregation along production characteristics (i.e. Organic), physical processing including fermentation for alcohol, and conversion of raw products into biofuels or other consumer products (i.e. Emu oil).
In addition, agritourism activities are typically considered value-added activities since they can bring additional income to a farm. As described above, these activities include recreational and educational activities.
Warehouse
A facility used expressly for storage and/or distribution of food products. Any plans to warehouse food and distribute to retail outlets will require a Food Processing License from the MDH. For more information, check out the MDH Center for Food Processing.
Wholesale
The term “Wholesale” means to sell something to another individual, company, store (i.e. grocery store, convenient stores, restaurants, etc.), for the purpose of *resale (*serve or sell to customers). These businesses are licensed by the State of Maryland. For more information, check out the MDH Center for Food Processing.
ALCOHOL TERMS:
Alcohol Classes, Manufacturer:
IMPORTANT NOTE: anyone who wants to manufacture alcohol in Maryland should read the entire text of the license class for which they are applying. Links to the Alcohol Code can be found below. Producing wine, beer and spirits requires federal, state and—potentially—a local license. Producing cider or mead requires a federal winery permit, and a state winery license for all mead and cider. A state-licensed brewery may produce apple or pear cider under 8.5% alcohol, but is still required to hold a federal winery permit.
Class 1 Distillery License: A license holder may establish and operate a plant for distilling, rectifying, blending, and bottling, at the location described in the license. They may also sell and deliver the manufactured alcoholic beverages. Additionally, they may provide samples, and sell product, to anyone of legal age who has taken a tour of the facility. A Class 1 distillery may operate from 10am-10pm, 7 days a week.
Class 2 Distillery / Rectifying License: A license holder may establish and operate a plant for rectifying, blending, and bottling alcoholic beverages at the location described in the license. The Class 2 license may also rectify, blend, bottle, and store alcoholic beverages in the name of another person or under a trade name if the other person or trade name also holds a Class 2 rectifying license. Additionally, the license holder may offer no more than three, one-half ounce samples to an individual of drinking age, if they have taken a tour of the manufacturing facility. The license holder may operate 7 days a week.
Class 3 Winery License: A Class 3 Winery may ferment and bottle wine, and also import bulk wine; there is no Maryland ingredient requirement. This Class may not self-distribute through the Class 6 Limited Wine Wholesaler license; they may only sell to retailers and restaurants through a wholesaler. This license holder may offer a tour of the facility, and offer samples, but may sell no more than one quart annually to an individual of legal age.
Class 4 Limited Winery License: A Class 4 Limited Winery may ferment and bottle wine, and distill and bottle pomace brandy (in order to distill brandy, a TTB distilling license is also required). The license holder shall use 51% Maryland-grown ingredients, or have under its control at least 20 acres. The Class 4 may offer samples, and on- and off-premise sales. Additionally, a Class 4 may sell or serve a specific list of foods. The license holder may host planned promotional events or other organized activities.
Class 5 Brewery License: The Class 5 Brewery license holder may establish and operate a plant for brewing and bottling malt beverages at the location described in the license; import beer from a holder of a nonresident dealer’s permit; contract brew; and sell and deliver beer to a holder of a wholesaler’s license that is authorized to acquire beer.
Class 6 Pub-Brewery License: This license may be issued only to the holder of a County/City Class B beer, wine, and liquor (on–sale) license that is issued for use on the premises of a restaurant. The pub–brewery shall be located immediately adjacent to the restaurant where the beer is to be sold to the public. A license holder may brew malt beverages at a single location for consumption on the restaurant premises, but may not brew more than 2,000 barrels of beer each calendar year. A Class 6 may sell beer for off–premises consumption in a sealed refillable container. There is only one license of this type in the state.
Class 7 Micro-Brewery License: This license may be issued only to the holder of a county Class B beer, wine, and liquor (on–sale) license that is issued for use on the premises of a restaurant. The license holder may brew and bottle beer at the licensed location. A Class 7 Micro-Brewery can sell beer for on- and off-premise consumption.
Class 8 Farm Brewery License: A Farm Brewery License holder may sell and deliver beer manufactured in a facility on the licensed farm or in a facility other than one on the licensed farm. The beer to be sold and delivered shall be manufactured with an ingredient from a Maryland agricultural product, including hops, grain, and fruit, produced on the licensed farm. The license holder may provide samples, and sell beer for on- and off-premise consumption. There is a 15,000 barrel limit each calendar year on the brewing, bottling, or contract brewing of beer. The license holder may sell food, and may operate 7 days a week. A Farm Brewery may host multi-brewery events at the licensed farm.
Class 9 Limited Distillery License: The Limited Distillery License may be issued only to a holder of a Class D beer, wine, and liquor license where sales for both on– and off–premises consumption are permitted for use on the premises for which the Class D county license was issued; or a Class B county beer, wine, and liquor license where sales for both on– and off–premises consumption are permitted for use on the premises for which the Class B license was issued. A holder of the limited distillery license may establish and operate a plant in the State for distilling, rectifying, and bottling brandy, rum, whiskey, alcohol, and neutral spirits if the holder: maintains only one brand at any one time for each product of brandy, rum, whiskey, alcohol, and neutral spirits that is distilled, rectified, and sold; and does not manufacture or rectify product of any other brand for another entity.
Alcohol Classes, Wholesaler:
Class 6 Limited Wine Wholesaler License: This wholesaler license allows Class 4 Wineries to sell their product to retail outlets and restaurants if they produce less than 35,000 gallons annually. If a winery produces more than 35,000 gallons annually, they must use a wholesaler, and are not eligible for this license. The license holder may use an additional location for the warehousing, sale, and delivery of wine.
Class 7 Limited Beer Wholesaler License: This wholesaler license allows Class 5, 7, or 8 Breweries to sell their product to retail outlets and restaurants. If a brewery produces more than 22,500 barrels annually, they must use a wholesaler, and are not eligible for this license. There is a 3,000 annual barrel distribution limit, after which a brewery may only sell to retailers and restaurants through a wholesaler. The license holder may use an additional location for the warehousing, sale, and delivery of beer.
Class 8 Liquor Wholesaler License: This wholesaler license allows Class 1 Distillery to sell its product to retail outlets and restaurants. If a distillery produces more than 100,000 gallons annually, they must use a wholesaler, and are not eligible for this license. There is a 27,500 annual gallon distribution limit, after which a distillery may only sell to retailers and restaurants through a wholesaler. The license holder may use an additional location for the warehousing, sale, and delivery of liquor.
The application for all manufacturer and wholesaler licenses can be found here.
Alternating Proprietorship – An “alternating proprietorship” is a term used to describe an arrangement in which two or more people take turns using the physical premises of a brewery. Generally, the proprietor of an existing brewery, the “host brewery,” agrees to rent space and equipment to a new “tenant brewer.” (TTB)
The alternating proprietor arrangement is considerably more complex FOR WINERIES. Two or more wineries share (alternate) use of part of a bonded winery’s facility. The host is a bonded winery, but the alternating proprietors are also bonded wineries. They take turns using the equipment for a 24-hour minimum period. The exception is crushing equipment not on the bond. It’s normally owned by the host, who crushes for its clients (the grapes aren’t yet wine in this case). The host winery is responsible for all its records and filing, but not for that of its clients. The alternating proprietor must qualify as a winery on its own, however. Though it has lower investment in equipment and premises, it is responsible for all its own production, records, reporting, labeling and taxes.
Read more at Wines & Vines, “Custom Crush or Alternating Proprietorship” Copyright © Wines & Vines
TTB Industry Circular 2008-4, “Alternating Proprietors at Bonded Wine Premises” does a good job of explaining the differences between alternating proprietorship and custom crush.
Bonded/Bonds – An alcohol surety bond, also known as a liquor license bond or alcohol tax bond, is a type of compliance license bond. These bonds provide a guarantee that the licensee will abide by all applicable statutes, laws and regulations that apply to their alcohol license.
Different states feature various types of alcohol bonds. Some of these are: Alcohol manufacturing, warehousing, wholesaling, and transporting bonds as well as liquor license bonds for retailers that serve alcoholic beverages. The Maryland Office of the Comptroller requires that all alcohol manufacturer secure an annual bond of $2,000.00.
Each of these liquor bonds involves three parties.
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The principal is the business purchasing the alcohol bond to guarantee that they will pay their liquor taxes.
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The obligee is the beneficiary party who requires the bond. In the case of liquor tax bonds, it is usually a government entity.
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The surety underwrites and issues the bond.
A bond can be secured from a surety company or an insurance agent.
Custom Crush –Legally, a custom crush facility is just a winery that makes wine to order for clients, and sells the wine to the clients who then resell it. It can use the customers’ grapes or procure them elsewhere. Because the custom crush facility is a regular winery, it is responsible for all product, records, labeling and taxes. It contracts with clients to produce wine, and the clients receive finished, tax-paid wines. The wine merely bears the client’s name, rather than that of the producer, which is also responsible for all equipment and costs of production.
To the TTB, the custom crush clients are the same as wholesalers. They have minimal recordkeeping requirements, and don’t have to file reports to the TTB. They take no responsibility for production, recordkeeping, reporting, labeling or taxes, and they don’t make any investment in winemaking equipment or premises.
Read more at Wines & Vines, “Custom Crush or Alternating Proprietorship” Copyright © Wines & Vines
TTB Industry Circular 2008-4, “Alternating Proprietors at Bonded Wine Premises” does a good job of explaining the differences between alternating proprietorship and custom crush.
Liquor Board/Commission – each County’s Liquor Board (or other office handling liquor licensing and regulations affairs) is happy to answer your questions concerning what you need to do in order to stay compliant with liquor laws. You can use the menu in the sidebar on this site to find county information and helpful links for state information.
Maryland Office of Comptroller – in addition to being the chief financial officer and collector of revenue for Maryland, the Office of Comptroller regulates the state’s alcohol, tobacco and motor fuel industries. The agency collects taxes on alcohol and controls the smuggling of untaxed alcohol into the state. Your business will need to be registered with the office, and anyone who wants to manufacture or distribute alcohol in the state must file an application with, and receive approval from, the Comptroller’s office before engaging in business.
On-Premise/ Off-Premise
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On-Premise: An establishment in which liquor is meant to be consumed on site. Examples include bars, restaurants, hotels, casinos, etc. Think pints of beer for here, not bottles to-go.
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Off-Premise: An establishment in which liquor is meant to be consumed off site. Liquor stores are the obvious example here, but if a state allows groceries and drug stores to sell booze, those are also off-premise establishments.
TTB – The Alcohol and Tobacco Tax and Trade Bureau, frequently shortened to TTB, is a bureau of the United States Department of the Treasury, which regulates and collects taxes on trade and imports of alcohol, tobacco, and firearms within the United States.[1] TTB enforces the provisions of the Federal Alcohol Administration Act (FAA Act) to ensure that only qualified persons engage in the alcohol beverage industry. Certain alcohol businesses must file an application with, and receive approval from, TTB before engaging in business. The TTB website provides extensive resources and tutorials regarding the application process and the manufacture and transport of alcohol.
