Alcoholic beverages: distilled spirits.

Out-of-state distillers that meet California craft distiller criteria (defined as 'qualifying out-of-state distiller') are now authorized to directly ship distilled spirits to California consumers, expanding the provision beyond only in-state licensed craft distillers.

A new 'distilled spirits direct shipper permit' is required for all direct shippers (in-state craft distillers and out-of-state qualifying distillers). Permit holders must file an application, pay Type 82 direct shipper fees, provide their license number or a copy of their out-of-state license, allow department audits, and consent to California jurisdiction.

The Department of Alcoholic Beverage Control may enforce the direct shipping provisions through administrative proceedings to suspend or revoke the permit, and may accept offers in compromise. Hearings against out-of-state permitholders must be held in Sacramento.

Selling and shipping distilled spirits directly to California consumers without a current direct shipper permit is now a misdemeanor under Section 25617, creating a new state-mandated local program (changed from 'no' to 'yes').

The sunset date for the direct shipping provisions was extended from January 1, 2026 to January 1, 2027.

A new Section 5 provides that no state reimbursement is required under Article XIII B of the California Constitution because the only local costs stem from the creation of a new crime or infraction.

The bill title was corrected to properly list all four amended sections (23358, 23502, 23504, and 23504.5) instead of listing 23504 twice.

Header changed from enrolled bill format (Assembly/Senate passage dates, clerk signatures, blank Governor receipt line) to chaptered law format with 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL,' Chapter 295 designation, and approval/filing date of October 3, 2025.

Page numbering changed from bill number 94 to chapter number 93, and running headers changed from 'AB 1246' to 'Ch. 295.'

Line wrapping and indentation throughout the legislative counsel's digest and statutory text were adjusted to fit the new page layout, with no changes to the actual language.

Corrected duplicated word in Section 23504.5: 'a licensed craft distiller distiller' was changed to 'a licensed craft distiller' in multiple places where the direct shipping requirements are listed.

Removed a stray '(b)' line that appeared as an artifact between subsections (e) and (f) of Section 23504.5.

Standard enrollment formatting: removed amendment date headers, line-number tracking prefixes, and fiscal notes summary line; added chapter number placeholder, governor approval block, and clean statutory text layout.

Added Section 23504.5, which extends the existing authority for licensed craft distillers to directly ship distilled spirits to consumers until January 1, 2027 (previously set to expire January 1, 2026). The direct shipping provision limits shipments to 2.25 liters per day per consumer and requires age verification at delivery.

Changed brandy transport language from 'transport brandy to the premises of a licensed winegrower' to 'transport brandy to and from the premises of a licensed winegrower,' allowing craft distillers to retrieve aged brandy from winegrower premises, not just deliver it there.

Removed the word 'deliver' from Section 23504's on-premises sale provision. The bill previously authorized craft distillers to 'sell and deliver to a consumer at its premises up to 4.5 liters'; now it only authorizes them to 'sell up to 4.5 liters...at its premises to a consumer.'

Fixed a drafting error where Section 2 was numbered twice in the original version. The Senate version correctly numbers the sections as SEC. 2, SEC. 3, and SEC. 4.

Section 23957, which required applications for retail alcohol licenses for premises under construction to include specified information, was removed entirely from the bill.

The on-premises sales limit for craft distillers in Section 23504 was increased from 2.25 liters to 4.5 liters of prepackaged containers per day per consumer, effectively doubling the amount consumers can purchase directly at a craft distillery.

The new Section 23502 authorizes a craft distiller to transport brandy to or from a licensed winegrower's premises for the purpose of storing and aging the brandy on the winegrower's premises, creating a new inter-facility logistics pathway.

A new Section 2 amending Business and Professions Code Section 23502 was added, defining what a craft distiller's license authorizes: manufacturing (actual distillation), producing (mixing, coloring, flavoring, blending), selling only to licensed intermediaries, dealing in warehouse receipts, and a 150,000-gallon annual production cap with a requirement that at least 65 percent of total volume be actually manufactured by the licensee.

The new Section 23502 adds reporting requirements: craft distillers must report volumes at renewal, and if they exceed the 150,000-gallon limit or fall below the 65 percent self-manufacture threshold, their license is automatically converted to a standard distilled spirits manufacturer's license.

The new Section 23502 prohibits issuing a craft distiller's license to any person affiliated with a producer of more than 150,000 gallons per year or with a wholesaler.

The fiscal committee designation changed from 'no' to 'yes,' indicating the bill now requires fiscal committee review due to its expanded scope and potential state fiscal impact.

The bill now amends three sections (23358, 23504, and 23957) instead of just one (23957), expanding its scope from a single technical fix to multiple substantive policy changes.

The daily per-consumer sales limit for licensed craft distillers at their premises was doubled from 2.25 liters to 4.5 liters of prepackaged containers of distilled spirits manufactured or produced by the licensee.

A new privilege (subsection 7) was added to Section 23358 authorizing winegrowers to possess and transport brandy for the purpose of storing it to age on the winegrower's premises.

The fiscal committee review requirement changed from 'no' to 'yes,' indicating the amendments may have state fiscal implications likely related to increased tax revenue from higher craft distiller sales.

In Section 23957, the phrase 'such other information' was changed to 'other information,' a minor nonsubstantive edit that was the original purpose of the bill.