2016 | Government

As Denizens Eyes Brewery Expansion, Owner Says State Law Change Is Needed

Silver Spring brewery wants to build a new production facility

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The beer garden at Denizens Brewing Co. in Silver Spring

Denizens on Facebook

Denizens Brewing Co. co-owner Julie Verrati succinctly laid out the case Monday night for a state law change to allow the business to set up a second brewery location.

“Essentially we are going to reach our capacity to meet demand by the summer of 2017,” Verratti said about the Silver Spring brewery. “We can’t make as much beer as we need to sell.”

The problem, Verratti explained, is that state law doesn’t allow the holders of one brewery permit to also have a second permit for a second facility. She said amending the law would allow Denizens to open a production facility elsewhere to make more beer to sell to clients that include restaurants, bars and event venues.

The state bill is being sponsored by Del. Charlie Barkley (D-Germantown) and would allow the owner of a class 7 microbrewery license to also hold a class 5 brewery license in the state.

Verratti testified in front of the county’s state legislative delegation at a public hearing in Rockville on local bills under consideration for the 2017 General Assembly, which starts in January.

Brewing equipment inside the lower level of Denizens Brewing Co. in Silver Spring. Credit: Andrew Metcalf

On Tuesday, Verratti said in an interview with Bethesda Beat that there’s not enough space at the brewery on East West Highway, which also includes a restaurant, beer garden and downstairs bar, to produce enough beer to meet demand.

She said the new facility could potentially house more production space, tanks for making beer and storage space for kegs and empty cans. Having more space would also help the company sell its products to customers at lower prices and would also help meet the demand for more canned beer, which Denizens started selling earlier this year, she said. Verratti said about 80 percent of craft beer drinkers consume beer at home—so if the business can reach these consumers more effectively, the business can expand its customer base “immediately.”

She said the business hasn’t chosen a location for the new production facility, but is looking in Maryland and possibly Washington, D.C., or Virginia. There’s no timeline for the project.

“Right now, legally, we could build a second facility in D.C. or Virginia,” Verratti said.

The business would “prefer to stay in Maryland and Montgomery County,” but the County Council’s discussion about possibly further increasing the minimum wage and issues with the operation of the county’s Department of Liquor Control may “factor in to where we decide to do this,” she said.

She said the Silver Spring brewery will remain the flagship location of the business, regardless of where the owners pick to build the new facility.

Justin McInerney, who testified before the delegation about the proposed legislation on behalf of the Maryland State Licensed Beverage Association, which represents alcohol stores and restaurants, said the group would support the bill as long as Denizens’ new facility focused on production rather than brewpub amenities like providing food or a tasting room.

“I will simply say we’re trying to maintain the three-tier system so retailers get to remain retailers and producers remain producers,” McInerney said.

A class 5 license would allow Denizens to produce an unlimited amount of beer and provide guided tours and beer samples at a new facility, according to Maryland law. Verratti said Denizens hasn’t dediced on what they’ll offer at the second facility, other than using it to produce beer.

This isn’t Verratti’s first time seeking legislative changes to help her business. Before Denizens opened, Verratti helped promote successful efforts to change state laws to allow small breweries to serve alcohol without having to serve food and to allow them to self-distribute their beer. The changes were credited by others in the local brewing business with helping to kick-start the industry in the county.