By Greg Bassett

Wicomico County Executive Julie Giordano’s hope of shaking up the county’s dispensary system appears stymied for now.

In January, the County Council reacted skeptically to the changes proposed by Giordano, and in the weeks since there has been little progress for a resolution.

Now, the window for introducing legislation that would permit the changes has essentially closed.

Even an 11-hour move to apply law changes that would enable bars, restaurants and retail alcohol businesses to purchase from the open market – as opposed to the dispensary – failed because of unanticipated questions for which there were no easy answers.

Seeking to inject more private-enterprise opportunities into the system, Giordano put forth a plan that would have up to 10 liquor stores approved for operation across the county.

More importantly, Giordano also called for allowing businesses to bypass the dispensary as the ultimate seller, thereby eliminating the 15 percent upcharge the dispensary collects.

In their regular meeting last week, the County Council seemed ready to support a change in legal language to say retailers and bar owners “may” purchase from the dispensary, rather than the current “shall.”

The notion was that a more-simplified plan could be introduced quickly for approval in Annapolis and become law after the current General Assembly session.

The plan to license up to 10 stores would have been placed on hold for now, but debated in advance of the 2024 assembly.

That seemed to fall apart at the council table because how other license classes of alcohol could be purchased was not addressed.  

Currently, the county system is operated by the three-member Liquor Control Board with members appointed by the governor and overseen by the State Ethics Commission. The board controls three stores and hires its own employees. Although the board doesn’t answer to the county, it turns over financial reports and profits to the local government.

Liquor licenses and alcohol sales permits are handed out by the separate five-member Board of License Commissioners

What now?

 Bill Chambers, President and CEO of the Salisbury Area Chamber of Commerce, has offered to help lead a panel of business owners and officials to further study the alcohol dilemma, with the idea of building support for approval in 2023.

“This is not rocket science,” said Chambers, who pointed out that liquor bills are viewed differently than other local legislation in Annapolis, and they frequently fail when there is not 100 percent support.

“It needs to be clean, tight and have everybody on board,” Chambers said.

State Sen. Mary Beth Carozza, a Republican who represents Wicomico, agrees that liquor bills face steep hurdles in Annapolis.

“I have experience on committees that consider these types of legislation,” she said. “I have learned there are no simple alcohol bills.”

Putting together a panel to study the issue is not a new idea in Wicomico County. In 2008 a review committee appointed by the County Council recommended numerous changes, although none were acted upon.

One issue the 2008 panel looked at was how to replace the lost revenue from the dispensaries, which averaged more than $1 million a year that was turned over to the county over the past two years. The committee at that time thought some of the money could be recouped by a license fee restructuring.

The committee recommended the county introduce legislation to allow for a binding referendum, saying the system is “an autonomous monopoly … not in the best interests of the public.”

However, County Council members voted 6-1 the following month against a referendum, saying the issue needed more discussion.

Liquor dispensary systems were put in place after the end of Prohibition and they once operated across the state of Maryland. Wicomico is now the lone county on the Eastern Shore that has not replaced its system with privatized stores.

Last year, Somerset was the most recent county to make the switch. Worcester County also changed over to private liquor stores in recent years. Dispensary systems in both of those counties were phased out following incidents of mismanagement and theft.

But corruption and scandal are not the case in Wicomico County where members of the Liquor Control Board point to a well-run system that makes a handsome profit for the county.

“Each and every year, we’ve increased the amount of money to the county,” said Board Chairman Don Ewalt.

If the county decides to operate a hybrid system with both county and private stores, the dispensary will be forced to go back to selling beer and more wine to make up the money, he said.

Currently, private stores in the county can get licenses to sell beer and wine. There are also three private stores that are allowed to sell hard liquor because they are attached to restaurants with liquor licenses.

Justin Collis, General Manager of the dispensaries, said some restaurant and bar owners are under the impression they can get a better price by buying alcohol through distributors rather than the dispensary.

That is especially true for a small bar or restaurant that may only purchase a few bottles at a time. As an example, Collis said a 1.75-liter bottle of Crown Royal costs them $48.44 if purchased through the dispensary. If they buy it from a distributor, it will cost $49.49 per bottle, plus a $1.55 bottle charge if they don’t buy a whole case. They can save $2.60 per bottle by purchasing through the dispensary, he said.

Some local restaurant and bar owners who attended the Jan. 17 council meeting dispute Collis’ claim. Tom Knorr, who with his brother owns Evolution Craft Brewing and several other local restaurants, said he pays 15 percent more on every bottle than businesses in Somerset and Worcester counties who are able to buy alcohol directly from distributors.

“We’ve got a competition problem here,” he said.

The Liquor Control Board has been absent from discussions about changes to the system, and they plan to oppose any legislation introduced this year. Ewalt said board members will go to Annapolis along with their attorney, auditor and business supporters if necessary.

The board’s accountant sends monthly financial statements to Giordano’s office, but Collis said the executive’s office keeps asking for customized reports that his accounting software is unable to produce.

“My system is designed to run a business, not help fishing expeditions,” he said. “They’re saying, ‘give me your bullets so I can shoot you’.”

According to numbers provided by the dispensary, the alcohol revenue contribution to county coffers has been $3.65 million over the last four years, ranging from an annual low of $666,400 in 2018, to an annual high of $1.094 million in 2020.