Complying with state and federal craft beverage law is crucial when going from homebrew to pro brew
In 2022 alone, over 300 breweries were operating in the state of Oregon. Yet from taproom-only neighborhood brewpubs to nationally distributed craft behemoths, savvy homebrewers continue going pro. They find untapped areas and markets, know how to innovate, and can match up pro-level brewing skills not only with business and marketing savvy, but with an understanding of the crucial state and federal legal compliance required to start a craft brewery in Oregon.
While starting a brewery is approachable, the industry is highly regulated, especially at the federal and state levels. When going from homebrew to pro brew, here are 7 craft beverage law considerations to keep in mind—and to consider seeking the help of a craft beverage attorney.
1. Choose a name and see if it’s available
A good first step to start a craft brewery in Oregon? You might have a great idea for a brewery name. It’s best to move forward only if that name isn’t in use. (And preferably has never been in use as an Oregon brewery.)
The Oregon Secretary of State website has a free tool for business name searches. Use it to search for business names and see if they are in use:
Business Name Availability Check
Does your business plan include other states? It may be a good idea to check business name availability in those states too.
2. Plan out your business strategy, startup, capital, and vision for the next 5 years
Speaking of your business plan, do you have one yet? It’s a key step on your path to start a craft brewery in Oregon. After all, in 2022 alone, over 9,500 breweries were in operation nationwide. A workable business plan encompasses your business, finances, marketing, and overall strategy. If seeking outside financing, you may also need to demonstrate plans and financial estimates. Depending on the funding source, you may need to develop timelines for 3 years or 5 years.
Brewing is highly regulated. Having the advice of a craft beverage lawyer can help you shore up the legal considerations you need to have in mind when planning your business. Compliance problems early on or down the road can at the least derail your day. They can also result in fines and other penalties.
The better you can plan your business, define your vision, and check that your vision aligns with the law, the more likely you are setting up your craft brewing startup for success in a competitive and tightly regulated industry.
3. Form the right business entity for your Oregon craft brewery
Setting up your business is like building a house’s foundation: You want to get right the first time around.
LLCs, S Corporations, C Corporations… People can organize businesses under different entities. Each type of business entity has positives and negatives in terms of ownership, operation, exit strategy, taxation, and more.
Different entities are better suited for some businesses than others. Ultimately, the right choice comes down to the particulars of your business. Discussing your circumstances and business outlook with an experienced Oregon attorney can help you make the right decision from the start.
4. Files trademarks for your brewery’s name, beer names, etc.
A craft brewery is also in the business of intellectual property, or IP. Beer names, icons, mascots, taglines, and other marketing and business content can all prove vital—and valuable—to the success of your brewery. Trademarks and other IP designations and classifications can help protect your IP, prevent misuse by others, and give you legal avenues to resolve problems.
You’ll develop your brewery’s name, names of key beers, marketing slogans, and other aspects of your business. Talk with your attorney about filing for trademarks and other IP protections.
5. Procure the right space for your brewery and other facilities
Brewing is also a real estate business. The right location for your production brewery is a space that not only contains your current brewing and packaging capacity, but can allow for future expansion. Over time, you’ll make crucial decisions about leases, real estate purchases, changing or adding locations, and much more.
Procuring the right space, negotiating an agreement or lease, and having the right locations for your various production and public facilities is part of the bedrock of your Oregon craft brewery. A craft beverage lawyer can help negotiate the terms of such agreements.
6. Set up operating agreements and employment agreements
Whether you are the sole owner or will share ownership with a key team of partners, an organizational document such as an operating agreement can set protocols for different scenarios, from the distribution of profits to how ownership will be managed in the event of the death or other exit of a partner.
Likewise, whether in the warehouse, brewhouse, or taphouse, odds are your brewery will work with various independent contractors and W2 employees. Contractor and employee legal compliance can be full of pitfalls. Ensuring that you have the right contractor and employment agreements in place protects your business and can shield you from liability.
7. File appropriate paperwork and licensure applications with the TTB, OLCC, and other state/local agencies
At the federal level, the Alcohol and Tobacco Tax and Trade Bureau (TTB) is a bureau under the Department of the Treasury. You’ll regularly interface with the TTB, on matters such as your brewer’s notice, approval of beer labels, taxes—and a whole lot more.
Compliance happens at the state level, too. The Oregon Liquor and Cannabis Commission (OLCC) is your state interface for liquor licenses, alcohol service permits, manufacturing, wholesaling, and more.
These agencies are the regulatory backbone for Oregon breweries. The local area where you set up your brewery will have its own local laws, regulations, and procedures to follow too.
Taking care of the law helps your brewery take care of the beer
Setting up a new craft brewery in Oregon takes time and requires compliance with various state, federal, and local laws. With the right craft beverage lawyer by your side, you too can handle the legal issues, start and grow your brewery, and take your place among Oregon’s innovative craft brewing scene.
