In Executive Order 2020-46 issued April 13, 2020, Governor Whitmer authorized the Michigan Liquor Control Commission (“Commission”) to offer a licensee a cash buyback of any spirits a licensee ordered from the Commission and received and accepted from an Authorized Distribution Agent before March 16, 2020. When a licensee opts into this buyback program, the Commission must advance to the licensee 100% of the purchase price of those spirits that are in the licensee’s inventory.
The Commission may accept buyback requests, by email or on its website, only from licensees that hold one of the following license types: Class C, B-Hotel, G-1, Club, Continuing Care Retirement Center, Aircraft, Watercraft, and Train License. The Commission must begin accepting requests on its website as soon as reasonably possible, and must accept all requests made by 5:00 pm on April 17, 2020.
Upon advancing cash to a licensee pursuant to the buyback program, the Commission will hold legal title to all spirits purchased by the licensee before March 16, 2020 that are in the licensee’s inventory at the time the licensee opts into the buyback program. But, in recognition of the risks of COVID-19 infection and transmission associated with in-person contact, the Commission must not take physical possession of any such spirits except as provided in the Order or any Order that may follow from it. The licensee must take all reasonable care to account for and preserve the inventory of any such spirits.
A licensee that opts into this buyback program may, at any time until the Commission takes physical possession of spirits it owns, repay to the Commission the full amount advanced to the licensee. Upon repayment of the full buyback amount, the licensee will again hold title to the spirits in its possession.
The Commission may take physical possession of any spirits held by any licensee to which the Commission holds legal title at any time later than 90 days after the end of the declared states of emergency and disaster.
We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.
Edward J. Castellani is an attorney and CPA who represents clients involved with alcohol beverages as a manufacturer, wholesaler, or retailer. He may be contacted at firstname.lastname@example.org or 517-377-0845.