Hidden Dangers in the Liquor Licensing Process: Why Businesses Must Be Vigilant

In the complex and highly regulated world of liquor licensing, businesses face numerous challenges and risks that can have significant legal and financial repercussions. Recent events, such as the firing of a top Boston liquor lawyer for allegedly falsifying a license, underscore the importance of careful vetting when choosing who to work with in the licensing space. Moreover, these incidents also highlight the need for broader regulatory reform, particularly the repeal of municipal limits on liquor licenses, which often encourage corruption and stifle fair competition.

The Importance of Vetting Licensing Professionals

When it comes to securing a liquor license, businesses often turn to experts—consultants, attorneys, and other professionals—to navigate the intricate process. However, as the case of Lesley Hawkins, a prominent Boston liquor license lawyer, demonstrates, not all professionals are trustworthy. Hawkins, who had an impressive resume including serving as the general counsel for the Boston Licensing Board, was fired for allegedly providing a client with a fake liquor license. This incident not only cost the client significant business opportunities but also led to the closure of their newly opened food hall in Allston just two weeks after its launch​.

This case serves as a stark reminder that even highly regarded professionals can engage in unethical practices. Businesses must therefore conduct thorough due diligence before partnering with anyone in the licensing process. This includes checking credentials, seeking references, and being wary of any red flags that could indicate potential misconduct. Businesses seeking to hire professionals should make it a point to talk to more than one person. An ethical professional will be able to explain the process in detail, display an understanding of the regulatory landscape, and be up front and realistic about the risks of any business or licensing plan.

The Case for Repealing Municipal Limits on Liquor Licenses

Municipal limits on liquor licenses are often justified as a means to control the number of establishments selling alcohol in a given area. However, these caps create an artificial scarcity that can lead to corruption and unfair business practices. The situation in Boston is a prime example, where the limited number of available licenses has led to high-stakes, high-value transactions that can sell for as much as $600,000​. Similar situations exist in Maine and Vermont, which cap “agency” retailers (retailers that sell spirits) in artificial ways creating races to open and license in municipalities seeing commercial growth. Agency licenses are also the only transferable license class in Maine, meaning that whoever wins these races has a rare and lucrative investment.

This scarcity incentivizes unethical behavior, as seen in the Hawkins case and another notorious 2008 scandal involving state Senator Dianne Wilkerson, who accepted bribes to secure liquor licenses for businesses. Wilkerson's case, where she was caught on camera stuffing cash into her bra, resulted in a prison sentence and highlighted the vulnerability of the licensing process to corruption when artificial municipal limits are in place.

Allowing the Market to Regulate Itself

Repealing municipal limits on liquor licenses would help mitigate these issues by allowing market forces to determine the number of alcohol-selling establishments. In a more open and competitive market, businesses would have a fairer chance to secure licenses without resorting to underhanded tactics or paying exorbitant fees. This approach would also reduce the opportunities for corruption, as the value of licenses would no longer be artificially inflated by scarcity.

State regulators could then shift their focus from managing the number of licenses to ensuring the quality and integrity of license holders. By enforcing strict standards and swiftly addressing violations, regulators could help maintain a fair and competitive market while protecting consumers and the community from bad actors.

Conclusion

The liquor licensing process is fraught with challenges that require careful navigation. Businesses must be vigilant in selecting who they work with to avoid falling victim to unethical practices, as highlighted by the recent case in Boston. At the same time, state governments should consider repealing municipal limits on liquor licenses to foster a more open and competitive market. By focusing on shutting down bad actors and ensuring responsible businesses have a fair shot, regulators can create an environment that benefits both businesses and consumers. In the end, a market free from arbitrary limits will better serve everyone involved, reducing corruption and encouraging innovation and competition.