Winery Permits and Licenses When Buying a Winery
A winery cannot legally produce, store, sell or ship wine without the right approvals. Those approvals are usually issued to a specific owner at a specific location, which means a change in ownership can require new applications, updates or approvals before the buyer can operate. Understanding winery permits and licenses early helps buyers plan the closing, the transition and the financing.
This article is general information for buyers and sellers of existing, operating wineries. It does not describe the requirements of any particular state or agency. Alcohol regulation varies by state and locality, rules change, and buyers should rely on qualified alcohol beverage counsel. Nothing here is legal or regulatory advice.
Layers of Approval
Wineries may hold approvals at several levels, which can include:
- Federal production approvals: covering production, storage and recordkeeping
- Label approvals: for wines sold across state lines
- State winery licenses: covering production, sales and sometimes on-site consumption
- Tasting room and retail approvals: which may limit hours, products or events
- Direct shipping permits: often required separately in each state where consumers receive wine
- Local approvals: zoning, use permits, health and building approvals
Do Permits Transfer?
Generally, permits and licenses should not be assumed to transfer to a buyer. Whether a buyer must apply for new approvals, or whether existing approvals can be amended, may depend on the deal structure and the rules of each jurisdiction. Some buyers purchase the entity that holds the permits, but that may still require notices or approvals for a change in ownership. Counsel should review each approval.
Timing and the Closing
Because new applications can take time, buyers and sellers sometimes structure the closing around approvals or use interim arrangements where permitted. The purchase agreement should address what happens if approvals are delayed or denied.
Direct-to-Consumer Shipping
Shipping permits and the related tax filings can be a significant part of how a winery reaches its club members. Buyers should learn which states the winery ships to, whether filings are current and what the buyer will need to continue. See our article on winery direct-to-consumer sales.
Wholesale and Distribution
Sales through distributors are subject to state laws that may affect what a new owner can change. See our article on winery distributor relationships.
Land Use and Events
Local use permits frequently determine whether a winery may host tastings, weddings or other events, and under what limits. See our article on winery zoning and event use.
What to Request in Diligence
- Copies of all permits, licenses and label approvals
- Compliance history, notices, audits and correspondence
- Tax filings related to production and shipping
- A list of states where the winery ships or sells
Our winery due diligence checklist covers the broader review.
For Lenders and Sellers
Lenders may require evidence that the buyer is pursuing the necessary approvals before closing. Sellers can help by organizing permit records in advance; see our guide on how to sell a winery.
US Professional Funding helps buyers finance the acquisition of existing, operating wineries and can help coordinate financing around the permit process. Learn more about our winery and vineyard acquisition financing.
