Colorado Halts New Liquor Licenses in Blow to Big Retail, Boost for Local Shops

Governor Jared Polis may have signed the bill, but he’s not exactly thrilled about it. A controversial new law in Colorado just put the brakes on new liquor licenses for grocery chains, marking a win for local liquor stores — and sparking debate over fairness, competition, and what it really means to “support small business.”

The bill, known as SB25-033, passed with strong backing in the legislature and has been celebrated by many mom-and-pop liquor stores. But it’s not without backlash — and even the governor who signed it made sure people knew he wasn’t clapping too hard.

A Shift That Hit Small Shops Hard

When Colorado voters approved a 2023 ballot measure allowing grocery stores to sell wine, it sounded like a convenience win for customers. But for independent liquor stores? It was brutal.

Josh Matteson, General Manager at Fishers Liquor Barn in Grand Junction, saw the damage up close.

“Thirty percent. That’s how much wine sales dropped after grocery stores got in,” he said. “And that didn’t just stay in the wine aisle — it took down our total sales by around 20 to 25 percent.”

That’s a quarter of a business wiped out overnight. No time to prepare. No easing in.

“People think it’s just wine,” he added, “but for us, it’s survival.”

What the New Law Actually Does

SB25-033 bans state and local authorities from issuing any new Liquor-Licensed Drug Store (LLDS) permits — the type of license that allows grocery chains to sell beer and wine.

That’s it. No more expansion.

So if your local Safeway, Kroger, or Target already has a license, they’re fine. But any new ones? Forget it.

This freeze doesn’t affect existing license holders — it’s future applications that get locked out. That includes out-of-state chains hoping to break into the market, or local ones trying to grow.

And supporters say that’s exactly the point.

Who’s Cheering — and Why

Matteson isn’t alone in calling this a win. Small liquor store owners from Fort Collins to Durango are breathing a little easier.

Why?

Because the new law levels the field, at least temporarily. Here’s what supporters argue:

Local shops tend to stock local booze — think small-batch bourbon or your neighbor’s microbrew.
Big chains often bypass Colorado producers for national suppliers.
Smaller stores have nowhere near the negotiating power to compete on price or volume with massive corporations.

“This bill isn’t just saving liquor stores,” Matteson said. “It’s saving Colorado distilleries, wineries, breweries. Everyone upstream.”

One-sentence paragraph? Sure.
That upstream part matters a lot.

Liquor stores form a distribution backbone for hundreds of small beverage producers across the state — producers who might otherwise get squeezed out of shelf space if chains dominate.

Polis Signs — But Doesn’t Smile

Governor Jared Polis, who’s usually on board with free-market changes, didn’t exactly pop a bottle after inking the legislation.

In fact, his public statement read like a regretful sigh.

“While the pro-free market and pro-consumer evolution over recent years might have been a burden on small, independently run liquor stores,” Polis wrote, “a permanent freeze on the LLDS license type puts the state government in the position of picking winners and losers.”

That phrase — picking winners and losers — hit hard.

To be clear: Polis signed it. But his messaging was basically, “I had to.”

This is rare. Governors don’t usually sign bills they think are “anti-competitive.” But the overwhelming support from both the state legislature and small business lobbyists left little wiggle room.

And it wasn’t just the House or Senate — the public sentiment, particularly in rural areas, was too strong to ignore.

What This Means for Shoppers

Okay, so what happens now if you’re a consumer in Colorado?

Not much changes if you’re already shopping wine at a grocery store. But for folks in areas where stores don’t yet have LLDS licenses, don’t hold your breath for new ones.

The grocery wine wave has officially crested.

Here’s a look at how it breaks down:

Type of Store	Can Sell Wine?	Can Get New LLDS License?
Existing Grocery Stores with LLDS	Yes	No
New Grocery Store Applicants	No	No
Independent Liquor Stores	Yes	Yes
Convenience Stores	No	No

Expect more of the same for now — unless lawmakers revisit the law in future sessions. But that’s unlikely in the short term.

One-sentence paragraph? Right here.
This law isn’t temporary.

Tensions Between Convenience and Community

The heart of the debate is about more than booze. It’s about what kind of economy Colorado wants.

Polis champions a freer market, one where consumers have more choice and competition drives prices down.

But liquor stores argue this version of “freedom” feels more like being pushed off a cliff while big chains parachute in with billion-dollar budgets.

There’s a cultural side too.

Grocery stores might be convenient, sure. But they’re not going to recommend a funky orange wine from a vineyard 30 miles away. They don’t know your name. They don’t care if your nephew just turned 21 and you want to celebrate with something special and local.

Liquor stores do.

“This bill might look like protectionism to some,” said one Fort Collins store owner, “but to us, it’s just staying alive.”