In 2022, Alaska Governor Mike Dunleavy signed Senate Bill 9 (“SB 9”), an omnibus beverage alcohol bill that includes new requirements for direct to consumer (“DtC”) shipping. Starting January 1, 2024, in- and out-of-state manufacturers must apply for a Manufacturer Direct Shipment license to ship product directly to Alaska residents. Manufacturer Direct Shipment licensees may only ship holder’s product through approved common carriers, and may not ship to any address in a zip code that has adopted a local option rule prohibiting the sale of alcohol. The Alcohol and Marijuana Control Office (“AMCO”) will compile a list of zip codes that are located within local option areas and notify Manufacturer Direct Shipment licensees of changes to the list. The bill’s language suggests that a permit holder may only ship wines of its own production, but the wording is ambiguous on this issue.

Previously, Alaska was one of only a few states where DtC shipping was permitted without a license. In-state and out-of-state manufacturers were able to ship direct to consumers under a blanket letter from AMCO stating that Alaska does not regulate alcoholic beverages imported in to the state for personal use. With the passing of SB 9, licensees will need to apply for the Manufacturer Direct Shipment license to continue shipping DtC.

The Manufacturer Direct Shipment license authorizes Alaska brewery retail, winery retail, and distillery retail licensees, as well as holders of manufacturer licenses issued in other states, to sell and ship their product directly to Alaska consumers, subject to quantity limits:

• Distilled spirits: Licensees may not ship more than 1.5 liters in one transaction or more than 4.5 liters to a purchaser in a calendar year.
• Wine: Licensees may not ship more than 18 liters in one transaction or more than 108 liters to a purchaser in a calendar year.
  
• Beer: Licensees may not ship more than 288 ounces in one transaction or more than 13.5 gallons to a purchaser in a calendar year.

Manufacturer Direct Shipment licenses will not be issued to licensees that annually produce more than 300,000 barrels of brewed beverages or more than 50,000 proof gallons of distilled spirts. There are no production limits for winery licensees.

The new legislation also includes age verification requirements for Manufacturer Direct Shipment licensees. Prior to shipping, licensees must verify that the person submitting the order is at least 21 years of age using an age verification service or other method and require a signature by a person who is at least 21 years old upon delivery. Licensees must also label the shipping container as containing alcohol and include written or electronic information to the purchaser regarding fetal alcohol syndrome. Licensees should retain records relating to DtC sales for at least two years.

Manufacturer Direct Shipment licensees will also be subject to state excise tax starting in 2024. Licensees are required to file monthly statements and remit taxes to the Alaska Department of Revenue. Reports must include the total number of gallons sold, the name and Alaska address of each buyer, and the gallonage of each kind of beverage sold to the respective buyers.

The Manufacturer Direct Shipment license application will be available through AMCO and cost $200 biennially. We expect that AMCO will publish additional guidance soon. If you’re interested in applying for a license or have questions about the new legislation, contact an attorney at Strike Kerr & Johns.

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