Most Massachusetts’ municipalities, including Boston, are limited to how many so-called “Pouring Licenses” and “Package Store Licenses” they can have issued at any one time depending upon their population, as determined by the last United States Census. This system of suppressing the number of available sources of alcohol is known as the so-called “Quota System,” which is rigidly controlled so a municipality does not go over its Quota. The number of both Package Store and Pouring Licenses a municipality is authorized to have issued at any one time are then further divided essentially into two types of licenses: “All-Alcohol Beverage Licenses,” which authorize the licensee to sell beer, wine & distilled spirits, and “Beer & Wine Licenses,” which authorize a license to just sell beer & wine.
A municipality that is subject to the Quota System and which at any given time has issued all its available Pouring Licenses and/or Package Store Licenses is considered to be “At Quota” for those two types of licenses, meaning it cannot issue any new licenses to any applicant. A municipality that is At Quota for its Pouring Licenses may or may not be At Quota for its Package Store Licenses, and a municipality that is At Quota for its All-Alcohol Pouring Licenses may or may not be At Quota for its Beer & Wine Pouring Licenses.
As Package Store and Pouring Licenses are generally transferable from one business owner to another business owner, and from one location within a municipality to a different location within the same municipality, any new prospective business in a municipality that is At Quota for both categories of its Pouring Licenses, for example, needs to locate on their own a current licensee who is willing to sell and transfer its Pouring License within that municipality to serve alcoholic beverages at its new business.
Due to the ever present market forces of supply & demand, therefore, when a municipality is At Quota for Pouring Licenses, for example, those restaurant and hotel businesses holding a current Pouring License can – and regularly do – sell their Pouring Licenses to buyers who view the option of selling alcohol as necessary for their new prospective restaurant or hotel business. When an existing restaurant business is selling its Pouring License to a buyer in a municipality that is At Quota for that category of license, it is generally considered to be a “Full Value” liquor license, as it valuable and often very expensive.
The price or value amount of a “Full Value” Pouring or Package Store License in At Quota municipalities in Massachusetts is assessed and determined by the buyer and seller of the liquor license on a municipality-by-municipality basis, often times with brokers and licensing lawyers providing their comment as to recent sales prices. These prices vary by At Quota municipalities as an All-Alcohol Pouring Licenses in the City of Boston, for example, which has been “At Quota” for most of the past couple of decades, is considered far more valuable than the same type and category of license located in Abington, also generally At Quota for Pouring Licenses. While the price of a Full Value Pouring or Package Store License has generally remained consistent over the years within municipalities that are generally always At Quota, as the number of them available are directly tied to the growth or loss of a municipality’s population, they generally have appreciated in Value over the decades in municipalities that remain consistently At Quota for the category of license being valued.
The City of Boston, in particular, however, has made significant efforts over the years to both increase the number of Pouring Licenses available but City officials and the Massachusetts Legislature, but also tend to guard against the “devaluation” of the already issued Pouring Licenses, as many hotels and restaurants in Boston, as in other municipalities, acquired these licenses at high prices and often with loans from commercial lenders, who regularly use the Pouring Licenses in At Value municipalities, as the collateral for the loan, a practice known as “Pledging” your license.
A sudden Governmental action to do away with the Quota System all together, for example, would cause commercial lenders to be suddenly under-collateralized if a loan were collateralized only with a Liquor License Pledge, which would then be the problem of the borrower-licensee, and devaluing licenses would also decimate the financial investment of all the current holders of Full Value licenses holders, many of whom have made a substantial investment in their businesses.
Trying to walk the tightrope of making more liquor licenses available to more potential applicants, while guarding against an intentional devaluing of the existing Full Value Liquor Licenses already issued, the City of Boston, in particular, and the Massachusetts Legislature have worked together over the years to provide for more Pouring Licenses that are not transferable and have to stay with the original licensee until such time as the licensee goes out of business, and are therefore known as “No Value” Pouring Licenses. As the Legislature has made hundreds of these No Value Pouring Licenses available to Boston in the last couple of years, they have somewhat diminished the value of Full Value licenses but have not substantially decreased their value. The obvious disadvantage to pursuing a No Value License is that it can never be used as collateral for a loan and can never be transferred, which essentially renders a restaurant business “owner” to a restaurant business “renter,” as one cannot sell his or her business should they want to retire, get out of the business or even leave the restaurant business (with its liquor license) to his or her children if that will ultimately change the ownership structure of the licensee by more than 50%.
Against this backdrop of these hundreds of new “No Value” Pouring Licenses made available in Boston over the past year and continuing into 2026, a “Full Value” All-Alochol Pouring License in Boston was selling for as high as $650,000 just a year or two ago, and now they sell at about $550,000.00, on the high side. Beer & Wine Full Value pouring licenses have remained more stable during this time frame, still selling for about $150,000, depending on various other factors. Other factors weighing on general restaurant economics may have also had a role in the decreased value of a Boston’s All Alcohol pouring licenses but the hundreds of new “No Value” licenses for Boston cannot be overlooked to discern why the price of a Boston All-Alcohol License has dropped by more than 15% in just a few years, post-COVID.
Now, there is a new significant factor in assessing the market price of a Full Value Pouring License in an At Quota municipality: on June 30, 2025, Massachusetts Governor Healy signed into law a new statute, G.L. c. 138, sec. 12D, which became effective July 1, 2025. This law, if adopted by a municipality, authorizes the current holder of a Full Value Beer & Wine Pouring License (the new law is not appliable to package stores) to “trade in” that license to the local licensing authority for the municipality and in return receive a No-Value All-Alcohol Pouring License.
For each municipality that adopts this new law (and Boston has adopted this new law), the local licensing authority for that municipality is free to adopt and generate many of its own “local rules” on this “trade in” process, including applicant qualifications, community support and all the similar issues that come with the additional basic state-wide requirements for license applications. Many local licensing authorities, including the Boston Licensing Board, are now doing their own community outreach and studies as to how best to roll out this “trade in” process, with the Boston Licensing Board expected to roll out its new local rules by January 2026.
Thus far, it appears that Boston will allow a current Beer & Wine Full Value License to trade in that license for a New No-Value All-Alcohol License, but will allow the licensee to “transfer back” into the status of a Full Value Beer & Wine Pouring License if and when the licensee ever wants to sell that licenses, sell its restaurant business or allow new investors comprising more than 50% of the ownership with a simple application to essentially reverse the upgrade. Whether to allow a licensee to have this Transfer Back option – as a matter of policy – will be an issue decided on a municipality-by-municipality basis.
The reasoning for allowing a Transfer Back option to licensees that have chosen this upgrade is that it will, in theory, preserve the value of the ultimate Full Value Beer & Wine License so one is not faced with the choice of giving up for good what one probably originally purchased for in excess of a $100,000 in exchange for the expected added income that will be generated by the new No-Value All-Alcohol License, but which would be a license the licensee could never sell if and when it came time to get out of the business.
However, by building in this Transfer Back option, one would think that if a current Full-Value All-Alcohol Pouring License costs $550,000 and a current Full Value Beer & Wine License costs $150,000, and now that latter Beer & Wine license is essentially the same in all other aspects as the All-Alcohol license after completing an upgrade, a prospective new business would be far better off paying $150,000 for the Beer & Wine License, add the expense of upgrading it and then subsequently Transfer Back to a Full Value Beer & Wine License when the licensee was ready to sell their business and license, and save the $400,000 difference in the meantime.
If this view prevailed in the marketplace, it would seem to reason that the current value of an already issued Full Value All-Alcohol Pouring License would decrease, and the value of a current already issued Full Value Beer & Wine Pouring License would increase, and perhaps the two prices meet somewhere in the middle. The Boston Licensing Board is currently working with existing licensees to address these issues and to develop its own “local rules,” with some in the industry calling for a minimum period of time – say a year – that one must use a Full Beer & Wine License before being able to “trade it in,” as one purchasing such a license could, if allowed, “trade it in” with the same application as the transfer application, making the Full Value Beer & Wine License for all other intents and purposes the exact same license of its traditionally more expense “big brother” All-Alcohol Pouring License.
By John P. Connell, Esq.
Upton Connell & Devlin, LLP
Attorney John P. Connell is a partner with Upton Connell & Devlin, a Boston law firm that represents prospective and existing licensees in all areas and at all levels of the hospitality industry, from airlines, hotels and manufacturers to national restaurant chains and local package stores and restaurants located all across the Commonwealth of Massachusetts.
©Upton Connell & Devlin, LLP, 2025
