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$300K License to Fill



“They’re confiscating our rights and selling them back to us”.  That quote is from Tim Sandefur, author of ‘The Permission Society: How the Ruling Class Turns Our Freedoms into Privileges.’

Here’s a great example of that concept. The government has taken a fully legal activity:  selling cocktails …. and required you to pay tens and hundreds of thousands of dollars for the government’s permission to do so.   Requiring a license may be justified to have some control over zoning and neighborhoods, but it was turned into a racket decades ago due to a prohibitions of new licenses in San Francisco. In 1939, a new law was passed that mandated a cap of 1 bar per two thousand people. Because San Francisco was already well past that quota at the time the law passed, there have been NO, zero, new liquor licenses issued since 1939.   Just try ordering a martini in an up-and-coming neighborhood with those odds.  The secondary market of re-selling licenses has driven the price up to $300,000, making it impossible for a middle-class entrepreneur to sell a Cosmo.

While we are thankful that Mark Leno introduced a law that was signed by the Governor adding the right for more licenses, and at a bargain basement price of $13,800, only FIVE allowed under the law, and they are only allowed in a select few formerly low-income neighborhoods, according to this article in the SF Chronicle

So why pass a law for just five licenses?

As stated in the article, San Francisco’s Office of Economic and Workforce Development believes granting a few more licenses at a large discount in ‘chosen’ neighborhoods will ‘not only spur economic activity but also contribute to a neighborly feel.’  Hmmmmm.  If spurring economic activity in certain low-income neighborhoods is a good thing, why doesn’t the government ‘grant’ the right to sell alcoholic beverages to more entities without gouging them tens of thousands of dollars?   We suspect there’s a lobby preventing increased competition.  The various levels of government, as always, want their cut of the action at every turn, too.   Just the SUBMITTAL fee for turning in a license application can be up to $12,000.

Who’s to blame?

Encourage a re-write of that 1939 law by your state legislator or  contacting the Governor.